[Federal Register Volume 59, Number 155 (Friday, August 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19712]


[[Page Unknown]]

[Federal Register: August 12, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
20 CFR Part 416

[Regulations No. 16 ]
RIN 0960-AC22

 

Supplemental Security Income for the Aged, Blind, and Disabled; 
Continuation of Benefits and Special Eligibility for Certain Severely 
Impaired Recipients Who Work

AGENCY: Social Security Administration, HHS.

ACTION: Final rules.

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SUMMARY: These regulations reflect changes in the law made by the 
Employment Opportunities for Disabled Americans Act and the Omnibus 
Budget Reconciliation Act of 1990. These statutes made permanent, 
simplified, and liberalized the incentives in the Social Security Act 
(the Act) for disabled and blind supplemental security income (SSI) 
recipients who attempt to work. They also liberalized the provision 
that provides an impairment-related work expense exclusion from the 
regular SSI income counting rules. In addition, we are making related 
administrative policy changes necessary to carry out these provisions.

EFFECTIVE DATE: These rules are effective August 12, 1994.

FOR FURTHER INFORMATION CONTACT:
Regarding this Federal Register document--Richard M. Bresnick, Legal 
Assistant, Office of Regulations, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235, (410) 965-1758; regarding 
eligibility or filing for benefits--our national toll-free number, 1-
800-772-1213.

SUPPLEMENTARY INFORMATION: 

General

    SSI payments are designed to provide a basic level of support for 
certain aged, blind, or disabled individuals. Work incentive provisions 
in the SSI program generally enable blind and disabled individuals to 
return to work or increase their level of work activity without losing 
SSI disability or blindness status. Certain work incentives provide 
them some protection from having their SSI benefits reduced based on 
their increased earnings. In most States, some provisions also permit 
continued Medicaid coverage for qualified individuals even if their 
earnings preclude any SSI cash payments.
    Under the law in effect before July 1, 1987, regular SSI benefits 
(section 1611 benefits) were payable to a disabled SSI recipient who 
worked at the substantial gainful activity (SGA) level after a 9-month 
trial work period. Work at the SGA level resulted in the cessation of 
disability status and, thus, an inability to requalify for regular SSI 
benefits without filing a new application if the work continued after a 
15-month extended period of eligibility (EPE). Section 1619, in effect 
from January 1, 1981, through June 30, 1987, permitted payment of 
special SSI cash benefits (section 1619(a) benefits) to disabled 
recipients who lost eligibility for section 1611 benefits because of 
SGA. Section 1619(b) provided special SSI eligibility status for 
Medicaid purposes to working disabled or blind individuals whose 
earnings made them ineligible for SSI cash payments. Transitions 
between the various statuses, particularly after the EPE, were 
complicated. Many felt that the complexity deterred people from 
participating in the section 1619 program.
    Amendments to section 1619 addressed these concerns. Sections 2 and 
4 of the Employment Opportunities for Disabled Americans Act, Public 
Law (Pub. L.) 99-643, effective November 10, 1986 and July 1, 1987, 
respectively, made permanent and provided several improvements to 
sections 1619 (a) and (b). Section 5032 of the Omnibus Budget 
Reconciliation Act of 1990, Pub. L. 101-508, effective May 1, 1991, 
further amended section 1619(b) by eliminating the 65-year age limit 
for special SSI eligibility status for Medicaid purposes. Section 5033 
of Pub. L. 101-508, effective December 1, 1990, liberalized the 
impairment-related work expense exclusion of section 1612(b)(4)(B)(ii) 
of the Act.
    These regulations were published in the Federal Register (58 FR 
52458) as a notice of proposed rulemaking (NPRM) on October 8, 1993. 
Interested parties were given 60 days to submit comments. The comment 
period closed on December 7, 1993. We received two letters containing 
comments. One commenter supported the proposed changes without 
modification. The other generally supported the proposed changes, but 
suggested that we add one clarifying statement. We explain below in the 
Public Comments section of this preamble the nature of those comments 
and how we accommodated the suggested revision. This commenter also 
discussed matters that were not relevant to the proposed regulations. 
We referred those matters to the appropriate component of the Social 
Security Administration and do not address them in this preamble. In 
addition, on December 3, 1993 (58 FR 63888) we published final rules 
which added a new paragraph (c)(1) to Sec. 416.1112 governing the 
exclusion from earned income of the earned income tax credit refund an 
individual receives, and redesignated existing paragraphs of 
Sec. 416.1112. Therefore, we have revised the references to paragraphs 
of Sec. 416.1112 in these final rules to be consistent with the new 
paragraph numbering. Further, we inadvertently did not provide a 
complete reference to all the relevant income exclusions in 
Sec. 416.1112 as we apply them in determining the State threshold 
amount for purposes of determining section 1619(b) eligibility. We have 
made this technical correction to Sec. 416.269 of these final rules. 
Therefore, except for adding the requested clarifying statement, 
updating regulatory references, and correcting typographical and 
technical errors in the NPRM, we adopted the rules as proposed.

Regulatory Changes

1. Expiration Date of Section 1619

    We revised Secs. 416.260 and 416.261 to remove the expiration date 
to reflect the change made by section of Pub. L. 99-643 that made 
section 1619 permanent.

2. Section 1619(a)--Special SSI Cash Benefits

    Section 4 of Pub. L. 99-643 amended section 1619(a) of the Act to 
provide special SSI cash benefits to an individual whose earnings 
exceed the amount designated by the Secretary of Health and Human 
Services (the Secretary) to represent SGA despite a disabling 
impairment, provided that individual meets certain eligibility 
requirements. We discuss below the changes we made to reflect the 
changes in the law, as well as related policy changes.
    We revised Sec. 416.262(a) to reflect that an individual must have 
been eligible to receive a regular SSI benefit or federally 
administered State supplementary payment based on disability in ``a,'' 
rather than ``the,'' month before the month for which section 1619(a) 
eligibility is being determined. The statutory change removed the 
former requirement that the individual must have been eligible for 
regular SSI benefits, special SSI cash benefits, or State supplementary 
payments in the month immediately prior to the month of eligibility 
under section 1619(a). The month the individual was eligible for a 
regular SSI benefit or federally administered State supplementary 
payment may not be in a prior period of eligibility which has 
terminated according to Secs. 416.1331-416.1335.
    We revised Sec. 416.262(d) to reflect the statutory change that an 
individual must ``meet,'' rather than ``continue to meet,'' all 
nondisability requirements for SSI eligibility in the month for which 
the determination is being made.
    These two changes permit eligibility for special SSI cash benefits 
following one or more months of suspension.
    We revised Secs. 416.260, 416.261, and 416.262(b) to reflect that 
an individual is eligible for benefits under section 1619(a) when his 
or her ``gross earned income,'' rather than ``earnings'' as described 
in Sec. 416.1110, exceeds the designated SGA amount (currently $500 per 
month). Because actual monthly determinations of SGA are not required 
before an individual moves from section 1611 to 1619(a) status, we will 
use gross earned income rather than earnings. This is consistent with 
Congress' intent, as shown in the legislative history of section 1619, 
to simplify transitions between benefit statuses, limit actual 
determinations of eligibility, and ease administration of the section 
1619 program. In response to a public comment, we added a new sentence 
to Sec. 416.260 clarifying that the calculation of this gross earned 
income amount is not to be considered an actual SGA determination. We 
discuss this clarification below. For disabled individuals otherwise 
eligible for a cash benefit, the only distinction between regular 
benefit status under section 1611 and section 1619(a) status will be 
whether or not their gross earned income exceeds the SGA level. Section 
1619(a) does not apply to the blind because earnings of blind 
individuals are not subject to an SGA test under the SSI program.

3. Section 1619(b)--Special SSI Eligibility Status

    Section 4 of Pub. L. 99-643 and section 5032 of Pub. L. 101-508 
amended section 1619(b) of the Act to provide changes in the 
eligibility requirements for special SSI eligibility status. We discuss 
below the changes we made to reflect the changes in the law, as well as 
related policy changes.
    We revised Sec. 416.264 to provide that special SSI eligibility 
status applies for purposes of reacquiring status as eligible for 
regular or special SSI cash benefits, as well as establishing or 
maintaining eligibility for Medicaid.
    We revised Sec. 416.265 to remove the 65-year age limit for section 
1619(b) eligibility status effective May 1, 1991.
    We also revised Sec. 416.265 to reflect that an individual must 
have been eligible for a regular SSI benefit or a federally 
administered State supplementary payment in ``a month before the 
month,'' rather than ``the month before the first month,'' for which 
eligibility for special SSI eligibility status is being determined. The 
month the individual was eligible for a regular SSI benefit or 
federally administered State supplementary payment may not be in a 
prior period of eligibility which has terminated according to 
Secs. 416.1331-416.1335.
    We revised Sec. 416.265(b) to reflect that an individual, except 
for earnings, must ``meet,'' rather than ``continue to meet,'' all 
nondisability requirements for SSI eligibility in the month for which 
the determination is being made.
    These two changes permit special SSI eligibility status for 
Medicaid purposes following one or more months of suspension.
    We revised Sec. 416.265(d) to add that we will consider publicly 
funded attendant care services, in addition to SSI benefits, federally 
administered State supplementary payments, and Medicaid, when 
determining whether an individual's earnings are sufficient to allow 
the individual to provide a reasonable equivalent of the benefits which 
would be available if the individual did not have those earnings.
    We revised Sec. 416.268 to add that an individual may establish the 
need for Medicaid eligibility to continue working (see Sec. 416.265(c)) 
by showing that Medicaid benefits would be needed to pay for unexpected 
medical expenses in the next 12 months. Previously, we considered only 
past or expected Medicaid use. This policy change adds consideration of 
the individual's ability to pay for unexpected medical expenses to the 
factors that can meet the statutory provision that termination of 
Medicaid would seriously inhibit the individual's ability to continue 
working. We believe the proposed change is consistent with the intent 
of Pub. L. 99-643 because such individuals, if not accorded section 
1619(b) status, might be forced to stop working in order to get 
Medicaid to pay for unexpected medical expenses. This change enables 
individuals without recurring medical expenses or expectation of 
expenses to meet the requirement if they cannot provide for their own 
medical care.
    We also deleted former paragraphs (b) and (c) of Sec. 416.268, 
which required an individual's signed statement about use or expected 
use of Medicaid and verification, as necessary, of past services with 
the service providers or the State agency administering the Medicaid 
program. This change permits us to determine the need for Medicaid in 
order to continue working based on information provided by the 
individual. Our operational experience shows that the individual's 
knowledge about use or expected use of Medicaid is almost always valid 
and, therefore, verification results in unnecessary administrative 
burdens and costs.
    We revised Sec. 416.269 to reflect the statutory expansion of the 
factors considered in determining the sufficiency of a person's 
earnings to provide a reasonable equivalent of the benefits which would 
be available absent those earnings (see Sec. 416.265(d)). We determine 
insufficiency of earnings by comparing actual and/or anticipated gross 
earnings for the 12-month period, beginning with the month for which 
special SSI eligibility status is being determined, with a threshold 
amount for the individual's State of residence. We determine the 
threshold amount using the amount of gross earnings that it would take 
to reduce to zero the Federal SSI benefit and State supplementary 
payment for an individual with no other income living in his or her own 
household and the average Medicaid expenditures for disabled SSI cash 
recipients for the State of residence. If an individual's gross 
earnings exceed the State threshold amount, we do a second comparison 
to compare the earnings with an individualized threshold. In making 
this determination, we will consider any amounts excluded as 
impairment-related work expenses or work expenses of the blind, amounts 
used or set aside for use under an approved plan for achieving self-
support, and the value of any publicly funded attendant care services.
    We also added Sec. 416.269(d), which explains that we will consider 
the value of attendant care services for purposes of sufficiency of 
earnings determinations if the services are provided by a paid 
attendant, needed to assist with work-related and/or individual 
functions, and paid from Federal, State, or local funds.
    We also added Sec. 416.269(e) to reflect that we will base 
determinations of sufficiency of earnings on information and data 
updated no less frequently than annually.
    Also, because Sec. 416.269 predated retrospective monthly 
accounting, we further revised it. For sufficiency of earnings 
determinations, we will use the calendar month, rather than quarter, 
for which we are determining eligibility for special SSI eligibility 
status as the beginning of the 12-month period.

4. Impairment-Related Work Expense Change

    In enacting Pub. L. 99-643, Congress recognized that disabled 
individuals who make work attempts may not be able to follow a steady 
progression from regular SSI status under section 1611 to special SSI 
cash benefit status under section 1619(a), to special SSI eligibility 
status under section 1619(b), and then to a status of complete 
independence. In reality, such individuals tend to have setbacks which 
may cause a drop in earnings and, therefore, a change in eligibility 
status. According to the legislative history of Pub. L. 99-643, it was 
Congress' intent to provide for easy transition, in either direction, 
between the various categories of benefits. Therefore, we revised 
Sec. 416.1112(c)(6) to facilitate easier movement between different 
benefit statuses. For periods prior to December 1, 1990, an individual 
who remained continuously eligible for a benefit under section 1611, 
1616 (if supplementation is federally administered), 1619(a), or 
1619(b), continued to qualify for the impairment-related work expense 
exclusion in determining financial eligibility for SSI. Also, to 
reflect section 5033 of Pub. L. 101-508, for periods after November 30, 
1990, we removed the requirement that an individual must establish 
eligibility without benefit of the impairment related work expense 
exclusion.

5. Administrative Actions Under Section 1619(a)

    In addition to the changes already discussed, these regulations 
contain changes which we believe are consistent with the legislative 
intent of Pub. L. 99-643 to simplify administration of section 1619 and 
facilitate transition among the various categories of benefits. We 
revised Secs. 416.1402 and 416.1403 with regard to initial 
determinations in order to state our policy on determinations involving 
transitions between sections 1611, 1619(a), and 1619(b).
    We revised Sec. 416.1402(a) to clarify that initial determinations 
regarding SSI benefits include, but are not limited to, determinations 
about eligibility for or the amount of SSI benefits or special SSI cash 
benefits, except actions solely involving transitions to eligibility 
between these types of benefits. We revised Sec. 416.1402(b) to clarify 
that the administrative actions of ``suspension'' and ``termination'' 
pertain to special SSI eligibility status under section 1619(b) as well 
as SSI cash benefits under section 1611 or section 1619(a).
    We deleted former Sec. 416.1402(h), which provided that a 
determination about whether an individual is eligible for special SSI 
cash benefits under Sec. 416.262 (section 1619(a) status) is an initial 
determination, and redesignated the subsequent paragraphs. The change 
recognizes that transition alone from eligibility for regular SSI 
benefits under section 1611 to eligibility for special SSI cash 
benefits under section 1619(a) and vice versa generally has little 
practical effect on an individual. The change allows movement between 
the statuses to be made with fewer steps, saving time and 
administrative expense. We believe this change is consistent with 
Congress' intent to simplify transitions between benefit statuses.
    In addition, we revised Sec. 416.1403(a) to include in the list of 
administrative actions that are not initial determinations, transitions 
from section 1611 to 1619(a) eligibility or section 1619(a) to 1611 
eligibility. If a recipient's section 1611 or 1619(a) benefits are 
adversely affected (i.e., reduced, suspended, or terminated) for a 
reason unrelated to his or her medical condition at the time of the 
shift, such planned action(s) will continue to be subject to advance 
notice of benefit reduction, suspension, or termination and be covered 
as initial determinations under Sec. 416.1402(b). If an individual's 
benefit amount increases, an initial determination is made under 
Sec. 416.1402(a). Determinations about an individual's disability are 
also initial determinations under Sec. 416.1402.
    Redesignated Sec. 416.1402(h) (former Sec. 416.1402(i)) provides 
that a determination about whether an individual is eligible for 
special SSI eligibility status under Sec. 416.265 is an initial 
determination. Section 416.265 describes the eligibility requirements 
for special SSI eligibility status under section 1619(b).
    Because we must make a threshold calculation and a finding that an 
individual needs Medicaid to continue working in order to determine 
eligibility under section 1619(b), we will continue to provide an 
initial determination. Movement from special SSI eligibility status 
under section 1619(b) back to regular SSI benefit status under section 
1611 or special SSI cash benefit status under section 1619(a) is 
defined to be an initial determination under Sec. 416.1402(a).

Public Comments

    The following is a summary of the substantive comments we received 
on the proposed rules and our response to them.
    Comment: The commenter was concerned about using gross earned 
income, rather than actual countable earnings, in transitions between 
benefit statuses as described in Secs. 416.260, 416.261, and 
416.262(b). The commenter was not so much concerned with using the 
gross earned income amount at the time of the transition between 
benefit statuses, but rather how that amount might be interpreted in 
other determinations in the SSI program. The commenter suggested adding 
a clarifying statement indicating that the gross income amount used in 
the transition process is not to be considered an SGA determination.
    Response: Although in the preamble to the proposed rules (58 FR 
52458, 52459) we stated that we would not make actual SGA 
determinations on whether an individual is eligible for section 1619 
status, we agree with the suggestion to add the clarifying statement to 
these final rules. We have added the statement to Sec. 416.260, which 
deals specifically with transitions between benefit statuses under 
sections 1611 and 1619.

Regulatory Procedures

Executive Order (E.O.) 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these rules do not meet the criteria for a 
significant regulatory action under E.O. 12866. Thus, they were not 
subject to OMB review.
    All program changes reflected in these regulations related to Pub. 
L. 99-643 and Pub. L. 101-508 were implemented on their respective 
effective dates. As of December 1993, there were 20,028 section 1619(a) 
participants and 35,299 section 1619(b) participants.

Paperwork Reduction Act

    These regulations contain information collection requirements in 
Sec. 416.268. As required by the Paperwork Reduction Act of 1980, 44 
U.S.C. 3504(h), we submitted a copy to OMB for its review and we 
received clearance to collect this information under OMB No. 0960-0267.
    Public reporting burden for this collection of information is 
estimated to average 3 minutes per response. This includes the time it 
will take to read the instructions, gather the necessary facts, and 
provide the information. Since we estimate that 25,000 SSI recipients 
will provide this information, the total annual burden is estimated to 
be 1,250 hours.
    Organizations or individuals desiring to submit comments on these 
information collection requirements should direct them to the Social 
Security Administration, 6401 Security Boulevard, Baltimore, Maryland 
21235, Attention: Reports Clearance Officer, 1-A-21 Operations 
Building, and to the Office of Information and Regulatory Affairs, OMB, 
New Executive Office Building, Room 3208, Washington, D.C. 20503, 
Attention: Desk Officer for HHS.

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 only individuals and States. Therefore, a regulatory flexibility 
analysis as provided in Pub. L. 96-354, the Regulatory Flexibility Act, 
is not required.

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

List of Subjects in 20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Supplemental Security Income 
(SSI), Reporting and recordkeeping requirements.

    Dated: June 27, 1994.
Shirley Chater,
Commissioner of Social Security.

    Approved: August 5, 1994.
Donna E. Shalala,
Secretary of Health and Human Services.

    Subparts B, K, and N of part 416 of chapter III of title 20 of the 
Code of Federal Regulations are amended as follows:
    1. The authority citation for subpart B of part 416 is revised to 
read as follows:

    Authority: Secs. 1102, 1110(b), 1602, 1611, 1614, 1615(c), 
1619(a), 1631, and 1634 of the Social Security Act; 42 U.S.C. 1302, 
1310(b), 1381a, 1382, 1382c, 1382d(c), 1382h(a), 1383, and 1383c; 
secs. 211 and 212 of Pub. L. 93-66, 87 Stat. 154 and 155; sec. 
502(a) of Pub. L. 94-241, 90 Stat. 268; and sec. 2 of Pub. L. 99-
643, 100 Stat. 3574.

    2. The undesignated center heading immediately above Sec. 416.260 
is revised to read as follows:

Special Provisions for People Who Work Despite a Disabling 
Impairment

    3. Section 416.260 is revised to read as follows:


Sec. 416.260  General.

    The regulations in Secs. 416.260 through 416.269 describe the rules 
for determining eligibility for special SSI cash benefits and for 
special SSI eligibility status for an individual who works despite a 
disabling impairment. Under these rules an individual who works despite 
a disabling impairment may qualify for special SSI cash benefits and in 
most cases for Medicaid benefits when his or her gross earned income 
exceeds the applicable dollar amount which ordinarily represents SGA 
described in Sec. 416.974(b)(2). The calculation of this gross earned 
income amount, however, is not to be considered an actual SGA 
determination. Also, for purposes of determining eligibility or 
continuing eligibility for Medicaid benefits, a blind or disabled 
individual (no longer eligible for regular SSI benefits or for special 
SSI cash benefits) who, except for earnings, would otherwise be 
eligible for SSI cash benefits may be eligible for a special SSI 
eligibility status under which he or she is considered to be a blind or 
disabled individual receiving SSI benefits. We explain the rules for 
eligibility for special SSI cash benefits in Secs. 416.261 and 416.262. 
We explain the rules for the special SSI eligibility status in 
Secs. 416.264 through 416.269.
    4. The undesignated center heading immediately above Sec. 416.261 
is removed.
    5. Section 416.261 is amended by revising the first sentence to 
read as follows:


Sec. 416.261  What are special SSI cash benefits and when are they 
payable.

    Special SSI cash benefits are benefits that we may pay you in lieu 
of regular SSI benefits because your gross earned income in a month of 
initial eligibility for regular SSI benefits exceeds the amount 
ordinarily considered to represent SGA under Sec. 416.974(b)(2). * * *
    6. Section 416.262 is amended by revising the introductory text and 
paragraphs (a), (b), and (d) to read as follows:


Sec. 416.262  Eligibility requirements for special SSI cash benefits.

    You are eligible for special SSI cash benefits if you meet the 
following requirements--
    (a) You were eligible for a regular SSI benefit or a federally 
administered State supplementary payment (see Sec. 416.2001) in a month 
before the month for which we are determining your eligibility for 
special SSI cash benefits as long as that month was not in a prior 
period of eligibility which has terminated according to Secs. 416.1331 
through 416.1335;
    (b) In the month for which we are making the determination, your 
gross earned income exceeds the amount ordinarily considered to 
represent SGA under Sec. 416.974(b)(2);
    (c) * * *
    (d) You meet all the nondisability requirements for eligibility for 
SSI benefits (see Sec. 416.202).
    7. Section 416.264 is revised to read as follows:


Sec. 416.264  When does the special SSI eligibility status apply.

    The special SSI eligibility status applies for the purposes of 
establishing or maintaining your eligibility for Medicaid. For these 
purposes we continue to consider you to be a blind or disabled 
individual receiving benefits even though you are in fact no longer 
receiving regular SSI benefits or special SSI cash benefits. You must 
meet the eligibility requirements in Sec. 416.265 in order to qualify 
for the special SSI eligibility status. Special SSI eligibility status 
also applies for purposes of reacquiring status as eligible for regular 
SSI benefits or special SSI cash benefits.
    8. Section 416.265 is amended by revising the heading to the 
section, introductory paragraph and paragraphs (b) and (d) to read as 
follows:


Sec. 416.265  Requirements for the special SSI eligibility status.

    In order to be eligible for the special SSI eligibility status, you 
must have been eligible to receive a regular SSI benefit or a federally 
administered State supplementary payment (see Sec. 416.2001) in a month 
before the month for which we are making the special SSI eligibility 
status determination. The month you were eligible for a regular SSI 
benefit or a federally administered State supplementary payment may not 
be in a prior period of eligibility which has been terminated according 
to Secs. 416.1331 through 416.1335. For periods prior to May 1, 1991, 
you must be under age 65. Also, we must establish that:
    (a) * * *
    (b) Except for your earnings, you meet all the nondisability 
requirements for eligibility for SSI benefits (see Sec. 416.202);
    (c) * * *
    (d) Your earnings after the exclusions in Sec. 416.1112(c) (6), 
(8), and (9) are not sufficient to allow you to provide yourself with a 
reasonable equivalent of the benefits (SSI benefits, federally 
administered State supplementary payments, Medicaid, and publicly-
funded attendant care services, including personal care assistance 
under Sec. 416.269(d) which would be available to you if you did not 
have those earnings (see Sec. 416.269).
    9. The undesignated center heading immediately above Sec. 416.267 
is removed.
    10. Section 416.268 is revised to read as follows:


Sec. 416.268  What is done to determine if you must have Medicaid in 
order to work.

    For us to determine that you need Medicaid benefits in order to 
continue to work, you must establish:
    (a) That you are currently using or have received services which 
were paid for by Medicaid during the period which began 12 months 
before our first contact with you to discuss this use; or
    (b) That you expect to use these services within the next 12 
months; or
    (c) That you would need Medicaid to pay for unexpected medical 
expenses in the next 12 months.
    11. Section 416.269 is revised to read as follows:


Sec. 416.269  What is done to determine whether your earnings are too 
low to provide comparable benefits and services you would receive in 
the absence of those earnings.

    (a) What we determine. We must determine whether your earnings are 
too low to provide you with benefits and services comparable to the 
benefits and services you would receive if you did not have those 
earnings (see Sec. 416.265(d)).
    (b) How the determination is made. In determining whether your 
earnings are too low to provide you with benefits and services 
comparable to the benefits and services you would receive if you did 
not have those earnings, we compare your anticipated gross earnings (or 
a combination of anticipated and actual gross earnings, as appropriate) 
for the 12-month period beginning with the month for which your special 
SSI eligibility status is being determined to a threshold amount for 
your State of residence. This threshold amount consists of the sum for 
a 12-month period of two items, as follows:
    (1) The amount of gross earnings including amounts excluded under 
Sec. 416.1112(c) (4), (5) and (7) that would reduce to zero the Federal 
SSI benefit and the optional State supplementary payment for an 
individual with no other income living in his or her own household in 
the State where you reside. This amount will varry from State to State 
depending on the amount of the State supplementary payment; and
    (2) The average expenditures for Medicaid benefits for disabled and 
blind SSI cash recipients, including recipients of federally 
administered State supplementary payments only, in your State of 
residence.
    (c) How the eligibility requirements are met.
    (1) You meet the requirements in Sec. 416.265(d) if the comparison 
shows that your gross earnings are equal to or less than the applicable 
threshold amount for your State, as determined under paragraphs (b) (1) 
and (2) of this section. However, if the comparison shows that these 
earnings exceed the applicable threshold amount for your State, we will 
establish (and use in a second comparison) an individualized threshold 
taking into account the total amount of:
    (i) the amount determined under paragraph (b)(1) of this section 
that would reduce to zero the Federal SSI benefit and State 
supplementary payment for your actual living arrangement;
    (ii) the average Medicaid expenditures for your State of residence 
under paragraph (b)(2) of this section or, if higher, your actual 
medical expenditures in the appropriate 12-month period;
    (iii) any amounts excluded from your income as impairment-related 
work expenses (see Sec. 416.1112(c)(6)), work expenses of the blind 
(see Sec. 416.1112(c)(8)), and income used or set aside for use under 
an approved plan for achieving self support (see Sec. 416.1112(c)(9)); 
and
    (iv) the value of any publicly-funded attendant care services as 
described in paragraph (d) of this section (including personal care 
assistance).
    (2) If you have already completed the 12-month period for which we 
are determining your eligibility, we will consider only the 
expenditures made in that period.
    (d) Attendant care services. Expenditures for attendant care 
services (including personal care assistance) which would be available 
to you in the absence of earnings that make you ineligible for SSI cash 
benefits will be considered in the individualized threshold (as 
described in paragraph (c)(1) of this section) if we establish that 
they are:
    (1) Provided by a paid attendant;
    (2) Needed to assist with work-related and/or personal functions; 
and
    (3) Paid from Federal, State, or local funds.
    (e) Annual update of information. The threshold amounts used in 
determinations of sufficiency of earnings will be based on information 
and data updated no less frequently than annually.
    12. The authority citation for subpart K of part 416 is revised 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 Pub. L. 93-66, 
87 Stat. 154.

    13. Section 416.1112 is amended by revising paragraph (c)(6) to 
read as follows:


Sec. 416.1112  Earned income we do not count.

* * * * *
    (c) * * *
    (6) Earned income you use to pay impairment-related work expenses 
described in Sec. 416.976, if you are disabled (but not blind) and 
under age 65 or you are disabled (but not blind) and received SSI as a 
disabled individual (or received disability payments under a former 
State plan) for the month before you reached age 65.
    (i) For periods prior to December 1, 1990, you must be able, 
however, to establish your initial eligibility for Federal benefits 
without the use of the impairment-related work expense exclusion. Once 
you establish your initial eligibility without the use of the 
impairment-related work expense exclusion, the exclusion applies for 
determining your eligibility for all subsequent consecutive months for 
which you are eligible for regular SSI benefits, federally administered 
optional State supplementary payments, special SSI cash benefits or 
special SSI eligibility status. If, in a subsequent month, you are not 
eligible for any of these benefits, you cannot reestablish your 
eligibility for Federal SSI benefits or federally administered optional 
State supplementary payments before December 1, 1990, using the 
impairment-related work expense exclusion.
    (ii) For periods after November 30, 1990, you may also use the 
impairment-related work expense exclusion to establish initial 
eligibility and reeligibility following a month in which you were not 
eligible for regular SSI benefits, a federally administered optional 
State supplementary payment, special SSI cash benefits or special SSI 
eligibility status.
* * * * *
    14. The authority citation for subpart N of part 416 is revised to 
read as follows:

    Authority: Secs. 1102, 1631, and 1633 of the Social Security 
Act; 42 U.S.C. 1302, 1383, and 1383b.

    15. Section 416.1402 is amended by revising paragraphs (a) and (b), 
removing paragraph (h), and redesignating paragraphs (i) through (n) as 
paragraphs (h) through (m), respectively, to read as follows:


Sec. 416.1402  Administrative actions that are initial determinations.

* * * * *
    (a) Your eligibility for, or the amount of, your supplemental 
security income benefits or your special SSI cash benefits under 
Sec. 416.262, except actions solely involving transitions to 
eligibility between these types of benefits (see Secs. 416.1403 (a)(13) 
and (a)(14)).
    (b) Suspension, reduction, or termination of your SSI benefits or 
special SSI cash benefits (see Secs. 416.261 and 416.262) or suspension 
or termination of your special SSI eligibility status (see 
Secs. 416.264 through 416.269);
* * * * *
    16. Section 416.1403 is amended by adding new paragraphs (a)(13) 
and (a)(14) to read as follows:


Sec. 416.1403  Administrative actions that are not initial 
determinations.

    (a) * * *
    (13) Transition to eligibility for special SSI cash benefits 
(Sec. 416.262) in a month immediately following a month for which you 
were eligible for regular SSI benefits; and
    (14) Transition to eligibility for regular SSI benefits in a month 
immediately following a month for which you were eligible for special 
SSI cash benefits (Sec. 416.262).
* * * * *
[FR Doc. 94-19712 Filed 8-11-94; 8:45 am]
BILLING CODE 4190-29-P