[Federal Register Volume 60, Number 153 (Wednesday, August 9, 1995)]
[Proposed Rules]
[Pages 40542-40543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19502]



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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

RIN 0960-AD82


Supplemental Security Income for the Aged, Blind, and Disabled; 
Valuation of In-Kind Support and Maintenance With Cost-of-Living 
Adjustment

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: These proposed regulations would implement section 13735 of 
the Omnibus Reconciliation Act of 1993 (OBRA 1993). This statutory 
provision amends the Social Security Act (the Act) and requires that 
the new benefit rate, as increased by a cost-of-living adjustment 
(COLA), be used in determining the value of the statutory one-third 
reduction and the regulatory presumed maximum value for the computation 
of Federal supplemental security income (SSI) benefit payments for the 
first 2 months for which the COLA is in effect. These rules will 
provide that we will value the statutory one-third reduction and the 
regulatory presumed maximum value using the benefit rate as increased 
by a COLA to determine the amount of in-kind support and maintenance 
received by an individual which is to be counted for those months. This 
will preclude a decrease in the benefit amount the third month after a 
COLA, a situation which occurred under the present regulations. The 
legislation is effective for benefits paid for months after calendar 
year 1994.

DATES: To be sure that your comments are considered, we must receive 
them no later than October 10, 1995.

ADDRESSES: Comments should be submitted in writing to the Commissioner 
of Social Security, P.O. Box 1585, Baltimore, MD 21235, sent by telefax 
to (410) 966-2830, sent by e-mail to [email protected]., or delivered 
to the Division of Regulations and Rulings, Social Security 
Administration, 3-B-1 Operations Building, 6401 Security Boulevard, 
Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on regular 
business days. Comments received may be inspected during these same 
hours by making arrangements with the contact person shown below.
    The electronic file of this document is available on the Federal 
Bulletin Board (FBB) at 9:00 a.m. on the date of publication in the 
Federal Register. To download the file, modem dial (202) 512-1387. The 
FBB instructions will explain how to download the file and the fee. 
This file is in Wordperfect and will remain on the FBB during the 
comment period.

FOR FURTHER INFORMATION CONTACT: Lawrence V. Dudar, Legal Assistant, 
Division of Regulations and Rulings, Social Security Administration, 
6401 Security Boulevard, Baltimore, MD 21235, (410) 965-1759.

SUPPLEMENTARY INFORMATION: Under retrospective monthly accounting 
(RMA), an individual's current SSI benefit amount is usually determined 
based upon the individual's income in the second preceding month 
(``budget month'') before the current month. For example, January's SSI 
benefit amount is based on the individual's November income. In some 
instances, an individual receives income in the form of in-kind support 
and maintenance and it is counted using the value of the one-third 
reduction (VTR) or the presumed maximum value (PMV) rule. Under the law 
prior to the effective date of section 13735 of Public Law 103-66, the 
VTR and the PMV were based on the applicable benefit rates in effect in 
the ``budget month.'' Because of RMA principles, when an annual COLA to 
the SSI benefit rate became effective in January, we used the VTR/PMV 
amount from November of the previous year to determine the individual's 
benefit for January if an individual had in-kind support and 
maintenance in the ``budget month.'' For example, in figuring an 
individual's January 1994 benefit, we used November 1993 as the 
``budget month.'' Thus, in a computation using the VTR, we would 
subtract the 1993 VTR amount of $144.66 from the 1994 benefit rate of 
$446.00, giving the individual an SSI benefit of $301.34. February's 
benefit amount would also be computed using the new benefit rate and 
the 1993 VTR amount. However, in computing March's benefit amount, we 
used the benefit rate of $446.00 less the January 1994 VTR amount of 
$148.66, resulting in an SSI benefit amount of $297.34. Thus, the 
individual's January and February payments exceeded the March payment 
because of the increased amount of the new VTR used when January was 
the ``budget month.'' Notices were then released to these individuals 
notifying them of the decrease in their March payment. This was 
confusing to SSI recipients because their payment amounts increased and 
then decreased even if there is no change in their living arrangements.
    We propose to change the method of valuation of the VTR/PMV to 
reflect section 13735 of Public Law 103-66 for benefits paid after 
calendar year 1994, by using the new benefit rate as increased by a 
COLA in determining the VTR or PMV for the computation of SSI benefits 
for the first 2 months for which the COLA is in effect. Thus, with a 
COLA effective January 1, 1995, both the new increased 1995 benefit 
rate and new increased VTR or PMV amounts are being used in computing a 
January and February 1995 benefit amount. Unlike the example used 
previously, the individual's January, February, and March payments 
calculated by using the VTR amount will be the same assuming all other 
income remains constant--i.e., there will be no decrease in the SSI 
benefit amount the third month after a COLA. This will eliminate 
confusion for recipients and also eliminate the need for issuance of 
notices informing affected recipients of the decrease in their March 
payment.
    We state in the proposed regulations at Sec. 416.420(a) that we 
will use the benefit rate, as increased by a COLA, in determining the 
value of certain in-kind support and maintenance used to compute an 
individual's SSI benefit amount for the first 2 months in which the 
COLA is in effect. We also propose to add a third example to 
Sec. 416.420(a) to further clarify the regulatory intent.
    We state in the proposed regulations at Sec. 416.1130 how we value 
in-kind support and maintenance when a COLA applies and have altered 
the example to reflect the situation when a COLA becomes effective.

[[Page 40543]]


Regulatory Procedures

Executive Order No. 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed rules do not meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, they 
are not subject to OMB review.

Paperwork Reduction Act of 1980

    These proposed regulations impose no new reporting or recordkeeping 
requirements subject to OMB clearance.

Regulatory Flexibility Act

    We certify that these proposed regulations will not have a 
significant economic impact on a substantial number of small entities 
because they affect only 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. 96.006, 
Supplemental 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, Supplemental Security Income (SSI).

    Dated: July 27, 1995.
Shirley Chater,
Commissioner of Social Security.

    For the reasons set out in the preamble, subparts D and K of part 
416 of chapter III of title 20 of the Code of Federal Regulations are 
amended to read as follows:

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

Subpart D--Amount of Benefits

    1. The authority citation for Part 416, Subpart D continues to read 
as follows:

    Authority: Secs. 1102, 1611(a), (b), (c), and (e), 1612, 1617, 
and 1631 of the Social Security Act; 42 U.S.C. 1302, 1382(a), (b), 
(c), and (e), 1382a, 1382f, and 1383.

    2. Section 416.420 is amended by revising paragraph (a) to read as 
follows:


Sec. 416.420  Determination of benefits; general.

* * * * *
    (a) General rule. We generally use the amount of your countable 
income in the second month prior to the current month to determine how 
much your benefit amount will be for the current month. We will use the 
benefit rate (see Secs. 416.410 through 416.414), as increased by a 
cost-of-living adjustment, in determining the value of the one-third 
reduction or the presumed maximum value, to compute your SSI benefit 
amount for the first 2 months in which the cost-of-living adjustment is 
in effect. If you have been receiving an SSI benefit and a Social 
Security insurance benefit and the latter is increased on the basis of 
the cost-of-living adjustment or because your benefit is recomputed, we 
will compute the amount of your SSI benefit for January, the month of 
an SSI benefit increase, by including in your income the amount by 
which your social security benefit in January exceeds the amount of 
your social security benefit in November. Similarly, we will compute 
the amount of your SSI benefit for February by including in your income 
the amount by which your social security benefit in February exceeds 
the amount of your social security benefit in December.

    Example 1. Mrs. X's benefit amount is being determined for 
September (the current month). Mrs. X's countable income in July is 
used to determine the benefit amount for September.
    Example 2. Mr. Z's SSI benefit amount is being determined for 
January (the current month). There has been a cost-of-living 
increase in SSI benefits effective January. Mr. Z's countable income 
in November is used to determine the benefit amount for January. In 
November, Mr. Z had in-kind support and maintenance valued at the 
presumed maximum value as described in Sec. 416.1140(a). We will use 
the January benefit rate, as increased by the COLA, to determine the 
value of the in-kind support and maintenance Mr. Z received in 
November when we determine Mr. Z's SSI benefit amount for January.
    Example 3. Mr. Y's SSI benefit amount is being determined for 
January (the current month). Mr. Y has Social Security income of 
$100 in November, $100 in December, and $105 in January. We find the 
amount by which his Social Security income in January exceeds his 
Social Security income in November ($5) and add that to his income 
in November to determine the SSI benefit amount for January.
* * * * *

Subpart K--Income

    3. The authority citation for part 416, subpart K 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 Pub. L. 93-66, 
87 Stat. 154.

    4. Section 416.1130 is amended by revising paragraph (a) to read as 
follows:

In-Kind Support and Maintenance


Sec. 416.1130  Introduction.

    (a) General. Both earned income and unearned income include items 
received in kind (Sec. 416.1102). Generally, we value in-kind items at 
their current market value and we apply the various exclusions for both 
earned and unearned income. However, we have special rules for valuing 
food, clothing, or shelter that is received as unearned income (in-kind 
support and maintenance). This section and the ones that follow discuss 
these rules. In these sections (Secs. 416.1130 through 416.1148) we use 
the in-kind support and maintenance you receive in the month as 
described in Sec. 416.420 to determine your SSI benefit. We value the 
in-kind support and maintenance using the Federal benefit rate for the 
month in which you receive it. Exception: For the first 2 months for 
which a cost-of-living adjustment applies, we value in-kind support and 
maintenance you receive using the VTR or PMV based on the Federal 
benefit rate as increased by the cost-of-living adjustment.

    Example: Mr. Jones receives an SSI benefit which is computed by 
subtracting one-third from the Federal benefit rate. This one-third 
represents the value of the income he receives because he lives in 
the household of a son who provides both food and shelter (in-kind 
support and maintenance). In January, we increase his SSI benefit 
because of a cost-of-living adjustment. We base his SSI payment for 
that month on the food and shelter he received from his son two 
months earlier in November. In determining the value of that food 
and shelter he received in November, we use the Federal benefit rate 
for January.
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[FR Doc. 95-19502 Filed 8-8-95; 8:45 am]
BILLING CODE 4190-29-P