SSR 82-31: TITLE XVI: SSI TREATMENT OF VETERANS ADMINISTRATION PAYMENTS TO SSI ELIGIBLES/FIDUCIARIES

(PPS-65)

(Supersedes PPS-46 (SSR 80-18))

SSR 82-31

This supersedes Program Policy Statement No. 46 (SSR No. 80-18), Title

XVI: SSI Treatment of Veterans Administration Payments to SSI

Eligibles/Fiduciaries

PURPOSE: To state supplemental security income (SSI) policy with

respect to (1) Veterans Administration (VA) payments made to SSI eligibles

where VA augments the payments because the recipient has dependents, and

(2) VA payments made to fiduciaries.

CITATIONS (AUTHORITY): Section 1612(a)(2)(B) of the Social

Security Act; Regulations No. 16, sections 416.1102 and 416.1121, 38

U.S.C. Veterans Benefits, Commissioner's Decision dated October 29,

1981.

PERTINENT HISTORY: 1. Social Security Administration (SSA) policy

provides that VA disability compensation or pension benefits received by

an eligible individual is unearned income to that individual (and is a

resource if held to the next quarter). The income or resource is used in

determining eligibility and amount of benefits under the SSI program.

Under VA law, a veteran or widow may receive an increased amount if there

is a dependent. Before November 1981, SSA policy provided that the

additional (augmented) portion of a VA benefit when included in the VA

payment to the designated beneficiary (person to whom the check is

actually made payable and thus, who may negotiate the check) was unearned

income to that individual. There were continuing challenges in the courts

on SSA's policy of counting the additional (augmented) payments as income

to the designated beneficiary. In three such cases, the courts held (1)

that the portion of the VA benefit computed on the basis of the existence

and number of dependents could not be counted as income to the veteran as

payee of the benefits and (2) to consider it as such would obviate

Congressional intent which was to increase the basic VA benefit to cover

additional expenses incurred for the care and maintenance of dependents

uch cases, the courts held (1)

that the portion of the VA benefit computed on the basis of the existence

and number of dependents could not be counted as income to the veteran as

payee of the benefits and (2) to consider it as such would obviate

Congressional intent which was to increase the basic VA benefit to cover

additional expenses incurred for the care and maintenance of dependents. A

reevaluation of the VA benefit structure by SSA's Office of General

Counsel together with VA's legal counsel found support for excluding the

additional (augmented) portion of the VA benefit as income to the

designated beneficiary. A change in policy was approved by the

Commissioner on October 29, 1981. Effective November 1981, SSA policy

provides that the additional (augmented) portion of a VA benefit when

included in the VA payment to the designated beneficiary is not income to

that individual. The additional (augmented) portion is income to the

dependent.

2. Benefits which are paid to an individual as a fiduciary (a party who

receives and manages the benefits for another) are not available for the

fiduciary's own use and, therefore, are not counted as unearned income of

the fiduciary in the quarter of receipt or as a resource thereafter for

the purpose of determining the fiduciary's eligibility for or amount of

SSI benefits.

There are situations where a person may be receiving VA benefits as a

beneficiary and also as a fiduciary for another person(s). For example: A

World War II disabled veteran in receipt of his own VA compensation may

also be in receipt of VA benefits in a separate check as a fiduciary on

behalf of his incompetent Vietnam veteran son; a widow in receipt of her

own VA pension may also be in receipt of VA benefits in a separate check

as a fiduciary on behalf of her grandchild; or the child of a deceased

veteran may be in receipt of dependent's indemnity compensation as a

fiduciary on behalf of his or her brother or sister.

f VA benefits in a separate check as a fiduciary on

behalf of his incompetent Vietnam veteran son; a widow in receipt of her

own VA pension may also be in receipt of VA benefits in a separate check

as a fiduciary on behalf of her grandchild; or the child of a deceased

veteran may be in receipt of dependent's indemnity compensation as a

fiduciary on behalf of his or her brother or sister.

POLICY STATEMENT: 1. VA payments, excluding those augmented

portions which are payable because of dependents, are income to the

designated beneficiary for the purposes of determining eligibility and

payment amount under the SSI program. The augmented portion is unearned

income to the dependent.

2. Payments made by the VA to an individual in his or her capacity as

fiduciary for another are not income or resources to the fiduciary for the

purpose of determining his or her eligibility for or amount of benefits

under the SSI program. For SSI purposes, such VA payments are income or

resources of the individual for whom the VA payments are made.

EFFECTIVE DATE: The new policy in 1. is effective November 1981.

The policy in 2. has been in effect for a number of years.

DOCUMENTATION: Appointment of a fiduciary and the amounts being

paid must be documented. When a person is receiving payment as a fiduciary

the check legend will show the name of the fiduciary followed by a phrase

which indicates the fiduciary's relationship. The most common phrases are

"wife of," "guardian of," and "custodian of the child(ren) of." Other

documentation may include a VA award letter which shows the same name and

phraseology cited above or a copy of VA Form 27-4703, Fiduciary Agreement.

The Veterans Administration issues separate checks for any benefits to

which a payee is eligible in his or her own right.

CROSS REFERENCES: Program Operations Manual System SI

00810.120.A-00810.120.B.