[Federal Register Volume 59, Number 103 (Tuesday, May 31, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13166]


[[Page Unknown]]

[Federal Register: May 31, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Social Security Administration

20 CFR Part 416

[Regulations No. 16]
RIN 0960-AD10

 

Supplemental Security Income for the Aged, Blind, and Disabled; 
Financial Institution Account Policy in the Supplemental Security 
Income Program

AGENCY: Social Security Administration, HHS.

ACTION: Final rules.

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SUMMARY: We are codifying in regulations, certain procedures which 
currently appear in our internal operating instructions regarding how 
we attribute ownership of financial institution accounts for purposes 
of determining eligibility for supplemental security income (SSI). 
Existing regulations do not contain the rules we use to determine 
ownership of financial institution account funds.

EFFECTIVE DATES: These final regulations are effective May 31, 1994.

FOR FURTHER INFORMATION CONTACT: Henry D. Lerner, Legal Assistant, 
Office of Regulations, Social Security Administration, 6401 Security 
Boulevard, Baltimore, MD 21235 (410) 965-1762.

SUPPLEMENTARY INFORMATION: These regulations codify present SSI 
procedures with respect to attributing ownership of financial 
institution account funds for SSI eligibility purposes. These 
procedures appear in our operating instructions. Title XVI of the 
Social Security Act and existing regulations are silent on the issue of 
how funds in financial institution accounts are attributed for SSI 
resource eligibility purposes. Regulations at Sec. 416.1201 define 
resources as ``cash or other liquid assets or any real or personal 
property that an individual (or spouse, if any) owns and could convert 
to cash to be used for his or her support and maintenance.'' The term 
``bank account'' as used in Sec. 416.1201(b) has been replaced by the 
term ``financial institution account'' because, in the past, the use of 
the term ``bank'' has been criticized as too restrictive. For example, 
credit unions and savings and loan institutions are not technically 
``banks,'' but our savings, checking, and time deposit account 
procedures apply to investments held in those institutions as well. So 
that our rules for determining ownership of financial institution 
account funds may be consistently used and relied upon as authority by 
our adjudicators at all administrative levels, and by the courts, and 
may be better understand by SSI claimants, recipients, representatives, 
and others, we are codifying those rules in the regulations.

    Financial institution accounts (including savings, checking, and 
time deposits, also known as certificates of deposit) may either be 
individually-held or jointly-held. Funds held in a financial 
institution account are an individual's resource if the individual owns 
the account and can use the funds for his or her support and 
maintenance. We determine whether an individual owns the account and 
can access the funds by looking at how the individual holds the 
account. This is reflected in the way the account is titled.

Individually Held Accounts

    If an individual is designated as sole owner by the account title 
and can withdraw funds and use them for his or her support and 
maintenance, all of the funds, regardless of their sources, are that 
individual's resource for SSI purposes. This applies even if the 
individual does not consider the funds as belonging to him or her, has 
never made deposits to or withdrawals from the account, and has never 
used any of the funds for personal needs or benefit. Unless legal 
restrictions preclude the owner from using the funds for support and 
maintenance (e.g., under the terms of a divorce decree, the recipient 
must use all funds in the account to maintain a home for the former 
spouse), all of the funds are attributed to the owner as indicated on 
the account title.
    We do not provide an opportunity for the owner of an individually-
held account to rebut the presumption of 100 percent ownership. For 
example, as a result of an interface with the records of the Internal 
Revenue Service (IRS), we could learn that an SSI recipient owns a 
previously undisclosed solely-titled financial institution account. The 
recipient might allege that none of the funds in the account actually 
belong to him or her. However, for as long as the recipient is shown as 
sole owner and the account is not legally restricted, we determine that 
the funds are available for his or her support and maintenance and that 
the funds are a resource for SSI purposes.

Jointly Held Accounts

1. Account Holders Include One or More SSI Claimants or Recipients

    If there is only one SSI claimant or recipient account holder on a 
jointly-held account, we presume that all of the funds in the account 
belong to that individual.
    If there is more than one claimant or recipient account holder, we 
presume that all of the funds in the account belong to those 
individuals in equal shares. By allocating funds equally among 
claimant/recipient co-owners, we avoid double counting.

2. Account Holders Include One or More Deemors

    If none of the account holders is a claimant or recipient, we 
presume that all of the funds in a jointly-held account belong to the 
deemor(s), in equal shares if there is more than one deemor. A deemor 
is a person whose income and resources are required to be considered 
when determining eligibility and computing the SSI benefit amount for 
an eligible individual (see Secs. 416.1160 and 416.1202).

3. Right to Rebut Presumption of Ownership

    If the claimant, recipient, or deemor objects or disagrees with an 
ownership presumption described in 1 or 2 above, we give the individual 
the opportunity to rebut the presumption. Rebuttal is a procedure which 
permits an individual to furnish evidence and establish that some or 
all of the funds in a jointly-held account do not belong to him or her. 
Successful rebuttal establishes that the individual does not own some 
or all of the funds.
    The effect of successful rebuttal may be retroactive as well as 
prospective. To successfully rebut the ownership presumption on a 
retroactive and/or prospective basis, the individual must submit 
evidence showing:
     Who owns the funds in the joint account, why there is a 
joint account, who made deposits to or withdrawals from the account, 
and how the withdrawals have been spent;
     Any records of deposits, withdrawals, and interest in the 
months for which ownership is at issue; and
     The individual can no longer withdraw funds from the 
account (if he or she owns none of the funds); or
     The individual's funds have been removed from the account, 
or the other person's funds have been removed, and the account title 
has been redesignated.
    Example: The recipient's first month of eligibility is January 
1993. In May 1993, the recipient successfully establishes that none of 
the funds in a 5-year old jointly-held account belong to her. We do not 
count any of the funds as resources for the month of January 1993 and 
continuing.
    The application of a presumptive finding that some or all of the 
funds in a jointly-held account belong to the SSI claimant or recipient 
could inconvenience that individual. However, we believe the current 
requirements are reasonable and any burdens on SSI claimants or 
recipients are minimal.
    Our procedures with respect to jointly-held accounts reflect the 
legal reality that funds in a jointly-held account are available to 
meet a co-owner's day-to-day needs. However, the rebuttal process 
allows us to evaluate individual circumstances and not create 
administrative barriers to eligibility.
    We believe the joint account rebuttal process minimizes the burden 
on individuals with respect to establishing SSI resource eligibility.
    When an individual presents a jointly-held account, or when we 
become aware of such an account through interface with the nonwage 
records of the IRS, we inform the individual of the applicable 
ownership presumptions (described above) and of his or her right to 
provide evidence rebutting those presumptions. We assist the 
individual, where necessary, in establishing that some or all of the 
funds do not belong to him or her.
    The administrative requirements with respect to rebuttal are not 
complicated or unreasonable. We obtain the individual's statement and 
corroborating statements from other account holders. We document 
account deposits and withdrawals. If the individual alleges owning none 
of the funds in the account, we ask that the title of the account be 
corrected so that the individual is no longer shown as a co-owner. If 
the individual owns only a portion of the funds, we ask that any solely 
owned funds be maintained separately from funds that do not belong to 
him or her.
    We considered a change in our procedures whereby we would apply 
State laws in determining how much of the funds in a jointly-owned 
financial institution account an individual owns for SSI purposes. 
However, applying State laws to the ownership determination would not 
benefit all SSI claimants and recipients, since the current SSI joint 
ownership presumptions are rebuttable, whereas some State laws on 
ownership contain nonrebuttable presumptions. A practice of applying 
State laws would result in dozens of disparate rules on the SSI 
treatment of funds in joint accounts, and could serve as a barrier to 
the public's understanding of, and participation in, the SSI program.
    These regulations were published in the Federal Register (57 FR 
22187) on May 27, 1992, as a Notice of Proposed Rulemaking (NPRM). 
Interested parties were given 60 days to submit comments. Comments were 
received from four organizations in response to the NPRM.

Discussion of Comments

    A summary of the comments and our responses follow. For ease of 
reference, we have grouped the comments according to the issues raised.
    Comment: Four commenters believed that the proposed rules 
concerning solely-titled accounts were inequitable and did not take 
into consideration arrangements whereby funds may not actually belong 
to, or be accessed by, the titled individual. One of the commenters 
indicated that the preamble and the proposed rule at Sec. 416.1208(b) 
conflict in that the preamble would allow rebuttal of the ownership 
presumption for individually-held accounts in cases where a legal 
restriction precludes the owner from using the funds for support and 
maintenance, but the proposed rule indicates that the ownership 
presumption is non-rebuttable. Several commenters stated that these 
rules could discourage family members or other concerned individuals 
from attending to the needs of SSI claimants and recipients.
    Response: Unlike situations involving jointly-titled accounts--
where a titled owner can submit evidence supporting an ownership 
allegation (for example, evidence of who has made account deposits and 
withdrawals in the past)--there would be no objective way for SSA to 
establish that funds in a solely-titled account did not belong to the 
titled owner. To permit rebuttal of the ownership presumption with 
respect to a solely-titled account, SSA would have to rely on 
potentially self-serving allegations regarding ownership. The 
possibility of program abuse under such a procedure would be 
unacceptably high.
    With respect to the comment regarding a purported conflict between 
the preamble and the proposed rule at Sec. 416.1208(b), that rule does 
not allow rebuttal of the ownership presumption in instances in which 
the individual is designated as sole owner of the account and can 
withdraw funds and use them for his or her support and maintenance. If 
the individual is so designated by the account title but cannot use the 
funds for his or her support and maintenance due to a legal 
restriction, the funds are not considered to be the individual's 
resource and the nonrebuttable presumption is inapplicable.
    Current SSI financial institution account policy does not 
discourage family members or other concerned individuals from attending 
to the needs of SSI claimants and recipients. An individual who acts 
only in a fiduciary capacity on behalf of the owner of a financial 
institution account, and who is so designated by the account title, is 
not presumed to own any of the funds in the account. For example, if an 
account is titled ``In Trust for John Jones, Subject to Sole Order of 
Mary Smith,'' SSA does not consider Mary Smith to own any of the 
account funds. We believe that current procedures in this area 
represent a balanced approach to administering the SSI program in a 
fair, yet responsible, manner.
    Comment: Two commenters stated that the proposed rules should be 
amended to reflect legal realities regarding the ability to use funds 
for support and maintenance. They noted that under State law, funds may 
be legally unavailable for a titled owner's support and maintenance. 
One of these commenters believes that the proposed rules are 
inconsistent with the definition of resources at Sec. 416.1201.
    Response: As discussed in the proposed rules, we considered a 
change in our procedures whereby State law would be applied in 
determining ownership of funds in financial institution accounts. 
However, we rejected that approach because, due to the variance in 
State laws on property ownership, such a change would not benefit all 
individuals and would introduce unacceptable complexity into the SSI 
program.
    In establishing the SSI program, Congress intended to improve the 
effectiveness of adult assistance programs by replacing then existing 
State-administered programs of assistance with one combined program 
with nationally uniform eligibility requirements, including the level 
and types of resources allowed (H.R. Rep. No. 231, 92d Cong., 1st Sess. 
383(1971)). We believe that the proposed rules are consistent with 
Congress' mandate for nationally uniform eligibility requirements, 
since the rules clearly delineate controlling Federal standards and 
thereby, obviate the need to refer to a myriad of varying State laws in 
order to determine ownership rights in financial institution account 
funds. This is consistent with the need to administer a national 
program in a consistent manner.
    These rules do not supersede or conflict with the definition of a 
``resource'' in the SSI program (Sec. 416.1201). In order for a 
property right to be considered an individual's resource for SSI 
purposes, the individual must be able to liquidate the right and use 
the cash for support and maintenance. However, if an individual 
establishes that a property right cannot be liquidated, or that funds 
cannot be used for support and maintenance, the property right is not 
considered a resource for SSI purposes.
    Comment: Two commenters stated that implementation of the rules 
will harm individuals whose cases come before administrative law judges 
(ALJ's). Absent the proposed rules, ALJ's can give claimants an 
opportunity to rebut financial institution account ownership by 
conducting ``de novo'' hearings and assessing the evidence in light of 
applicable law.
    Response: Procedures with respect to financial institution accounts 
are currently contained only in SSA's operating instructions. The final 
rules will codify those procedures in the SSI regulations, not change 
the procedures.
    The operating instructions do not have the same force and effect as 
the SSI statute or regulations; therefore, they are frequently not 
relied upon as authority by ALJ's Appeals Council members or the 
courts. In the past, this has resulted in inconsistent decisions 
involving similarly-situated individuals. One reason for promulgating 
these rules is to ensure those procedures are consistently applied at 
all administrative levels.
    Comment: Two commenters questioned the differential treatment 
accorded an individual who holds an account jointly with persons who 
are neither applying for, nor recipients of, SSI. Such an individuals 
is considered to own 100 percent of the funds in the account, whereas 
funds held jointly with other SSI claimants or recipients are 
considered to be owned by those persons in equal shares.
    Response: We attribute equal shares when there is more than one 
claimant or recipient account holder in order not to count the same 
funds twice for SSI program purposes. When only one SSI claimant/
recipient is a titled owner, the issue of double counting does not 
exist.
    As described in the proposed rules, the SSI ownership presumption 
with respect to jointly-held accounts is rebuttable. The effect of 
successful rebuttal may be retroactive as well as prospective.
    Comment: One commenter stated that SSA's presumptions regarding 
ownership of jointly-held funds is contrary to Third Circuit law 
(Cannuni v. Schweiker, 740 F.2d 260 (3rd Cir. 1984)). With Cannuni, the 
Court of Appeals recognized the importance of the intent of the parties 
with respect to jointly-held accounts.
    Response: In Cannuni, the court ruled that it was appropriate to 
apply Pennsylvania property law to determine the extent of an 
individual's ownership interest in a jointly-held bank account. That 
decision conflicted with longstanding SSI procedures as set forth in 
operating instructions. However, as discussed above, SSA is not bound 
by State law when it determines ownership of financial institution 
account funds. These final rules will ensure that our procedures for 
determining ownership of financial institution accounts can be 
consistently used and relied upon as authority by the courts.
    Comment: Three commenters stated that the rules should not require 
the retitling of, or the removal of funds from, jointly-titled accounts 
when a titled individual does not have actual ownership or use of funds 
in the account. For example, the rules should permit an individual to 
rebut the ownership presumption by submitting a signed statement from 
the other owner(s) or a power-of-attorney document indicating that the 
individual acts in a fiduciary capacity only.
    Response: We recognize that the rebuttal procedures may 
inconvenience some individuals. However, we believe that generally the 
current procedures minimize the burden on individuals with respect to 
establishing SSI resource eligibility. Moreover, we believe that the 
alternate rebuttal procedures suggested by the commenters--procedures 
which, for the most part, would require SSA to rely on potentially 
self-serving allegations concerning ownership of funds--could 
significantly increase the incidence of SSI program abuse.
    The retitling requirement for jointly-held accounts is based on the 
same principle used in determining ownership of solely-held accounts--
namely, the principle that we determine whether an individual owns an 
account by looking at how he or she holds the account. Accordingly, if 
some of the funds in a jointly-titled account do not, in fact, belong 
to the SSI claimant or recipient, SSI procedures require that the 
account be redesignated to reflect that fact.
    Comment: One commenter believed that the proposed rules 
unconstitutionally deny equal protection of the laws to similarly 
situated SSI claimants. In contrast to the rebuttal procedure for 
jointly-held accounts, the commenter pointed out that the holder of a 
solely-titled account is not permitted to rebut the 100 percent 
ownership presumption.
    Response: SSA'ss practice of determining ownership based on how an 
account is titled applies equally in all cases. To determine ownership 
of a solely or jointly-titled account, we look at how the account is 
titled. SSI procedures do not prevent an individual who acts only in a 
fiduciary role from being so designated by the account title. Provided 
the account title reflects the fiduciary role, such an individual is 
not presumed to own any of the funds in the account.
    As discussed above, in order to permit rebuttal of the ownership 
presumption for solely-titled accounts, SSA would have to rely on 
potentially self-serving ownership allegations. Such a change in 
procedures would introduce an unacceptably high possibility of program 
abuse and would not reflect our obligation to administer the SSI 
program in a responsible manner.
    Comment: Two commenters suggested that the rules include the 
procedures for rebutting the joint account ownership presumption.
    Response: We have revised the rules to include rebuttal procedures, 
which were briefly described in the proposed rules under 
``Supplementary Information.'' A complete description of the procedure 
for rebuttal is now included at Sec. 416.1208(c)(4).
    The proposed rules with the above noted changes are adopted as 
final regulations.

Regulatory Procedures

Paperwork Reduction Act of 1980

    These regulations contain an information collection requirement in 
Sec. 416.1208(c)(4). We would normally request clearance of this 
requirement (under the Paperwork Reduction Act) by the Office of 
Management and Budget (OMB). However, we are not doing so in this 
situation because we have already obtained OMB clearance to collect 
this information using Form SSA-2574, Joint Checking/Savings Account 
Rebuttal Statement, under OMB control number 0960-0461.
    Public reporting burden for this collection of information is 
estimated to average 7 minutes per response. This includes the time it 
will take to read the instructions, gather the necessary facts, and 
fill out the form. We estimate that there will be 200,000 responses 
yearly, making the annual burden approximately 23,333 hours. If you 
have any comments or suggestions on this estimate, or on any other 
aspect of this collection of information, write to the Social Security 
Administration, ATTN: Reports Clearance Officer, 1-A-21 Operations 
Building, Baltimore, MD 21235, and to the Office of Management and 
Budget, Paperwork Reduction Project (0960-0461), Washington, DC 20503.

Regulatory Flexibility Act

    We certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
affect eligibility for or the amount of SSI payments of individuals. 
Therefore, a regulatory flexibility analysis as provided in Public Law 
96-354, the Regulatory Flexibility Act, is not required.

(Catalog of Federal Domestic Assistance Program No. 93.807, 
Supplementary Security Income)

List of Subjects in 20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplementary Security Income.

    Dated: November 3, 1993.
Shirley Chater,
Commissioner of Social Security.

    Approved: February 22, 1994.
Donna E. Shalala,
Secretary of Health and Human Services.

    Part 416 of Chapter III of Title 20 of the Code of Federal 
Regulations is amended to read as follows:

PART 416--[AMENDED]

    1. The authority citation for subpart L of part 416 continues to 
read as follows:

    Authority: Secs, 1102, 1602, 1611, 1612, 1613, 1614(f), 1621 and 
1631 of the Social Security Act; 42 U.S.C. 1302, 1381a, 1382, 1382a, 
1382b, 1382c(f), 1382j, and 1383; sec. 211 of Public Law 93-66, 87 
Stat. 154.

    2. Section 416.1201 is amended by revising paragraph (b) to read as 
follows:


Sec. 416.1201  Resources; general.

* * * * *
    (b) Liquid resources. Liquid resources are cash or other property 
which can be converted to cash within 20 days, excluding certain 
nonwork days as explained in Sec. 416.120(d). Examples of resources 
that are ordinarily liquid are stocks, bonds, mutual fund shares, 
promissory notes, mortgages, life insurance policies, financial 
institution accounts (including savings, checking, and time deposits, 
also known as certificates of deposit) and similar items. Liquid 
resources, other than cash, are evaluated according to the individual's 
equity in the resources. (See Sec. 416.1208 for the treatment of funds 
held in individual and joint financial institution accounts.)
* * * * *
    3. Section 416.1208 is added to read as follows:


Sec. 416.1208  How funds held in financial institution accounts are 
counted.

    (a) General. Funds held in a financial institution account 
(including savings, checking, and time deposits, also known as 
certificates of deposit) are an individual's resource if the individual 
owns the account and can use the funds for his or her support and 
maintenance. We determine whether an individual owns the account and 
can use the funds for his or her support and maintenance by looking at 
how the individuals holds the account. This is reflected in the way the 
account is titled.
    (b) Individually-held account. If an individual is designated as 
sole owner by the account title and can withdraw funds and use them for 
his or her support and maintenance, all of the funds, regardless of 
their source, are that individual's resource. For as long as these 
conditions are met, we presume that the individual owns 100 percent of 
the funds in the account. This presumption is non-rebuttable.
    (c) Jointly-held account--(1) Account holders include one or more 
SSI claimants or recipients. If there is only one SSI claimant or 
recipient account holder on a jointly held account, we presume that all 
of the funds in the account belong to that individual. If there is more 
than one claimant or recipient account holder, we presume that all the 
funds in the account belong to those individuals in equal shares.
    (2) Account holders include one or more deemors. If none of the 
account holders is a claimant or recipient, we presume that all of the 
funds in a jointly-held account belong to the deemor(s), in equal 
shares if there is more than one deemor. A deemor is a person whose 
income and resources are required to be considered when determining 
eligibility and computing the SSI benefit for an eligible individual 
(see Secs. 416.1160 and 416.1202).
    (3) Right to rebut presumption of ownership. If the claimant, 
recipient, or deemor objects or disagrees with an ownership presumption 
as described in paragraph (c)(1) or (c)(2) of this section, we give the 
individual the opportunity to rebut the presumption. Rebuttal is a 
procedure as described in paragraph (c)(4) of this section, which 
permits an individual to furnish evidence and establish that some or 
all of the funds in a jointly-held account do not belong to him or her. 
Successful rebuttal establishes that the individual does not own some 
or all of the funds. The effect of successful rebuttal may be 
retroactive as well as prospective.

    Example: The recipient's first month of eligibility is January 
1993. In May 1993 the recipient successfully establishes that none 
of the funds in a 5-year-old jointly-held account belong to her. We 
do not count any of the funds as resources for the months of January 
1993 and continuing.

    (4) Procedure for rebuttal. To rebut an ownership presumption as 
described in paragraph (c)(1) or (c)(2) of this section, the individual 
must:
    (i) Submit his/her statement, along with corroborating statements 
from other account holders, regarding who owns the funds in the joint 
account, why there is a joint account, who has made deposits to and 
withdrawals from the account, and how withdrawals have been spent;
    (ii) Submit account records showing deposits, withdrawals, and 
interest (if any) in the months for which ownership of funds is at 
issue; and
    (iii) Correct the account title to show that the individual is no 
longer a co-owner if the individual owns none of the funds; or, if the 
individual owns only a portion of the funds, separate the funds owned 
by the other account holder(s) from his/her own funds and correct the 
account title on the individual's own funds to show they are solely-
owned by the individual.

[FR Doc. 94-13166 Filed 5-27-94; 8:45 am]
BILLING CODE 4190-29-M