[Federal Register Volume 63, Number 208 (Wednesday, October 28, 1998)]
[Rules and Regulations]
[Pages 57590-57594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28707]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 404

RIN 0960-AE30


Application of State Law in Determining Child Relationship

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: These final regulations revise our rules on determining 
whether a natural child has inheritance rights under appropriate State 
law and therefore may be entitled to Social

[[Page 57591]]

Security benefits as the child of an insured worker. Specifically, they 
revise our rules to explain which version of State law we will apply, 
depending on whether the insured is living or deceased, how we will 
apply State law requirements on time limits for determining inheritance 
rights, and how we will apply State law requirements for a court 
determination of paternity. They also clarify our current rule on 
determining an applicant's status as a legally adopted child of an 
insured individual.

EFFECTIVE DATE: These regulations are effective November 27, 1998.

FOR FURTHER INFORMATION CONTACT: Lois Berg, Legal Assistant, Office of 
Process and Innovation Management, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235, (410) 965-1713 or TTY (410) 
966-5609. For information on eligibility, claiming benefits, or 
coverage of earnings, call our national toll-free number, 1-800-772-
1213 or TTY 1-800-325-0778.

SUPPLEMENTARY INFORMATION:

Time for Determining Relationship of Natural Child

    Section 216(h)(2)(A) of the Social Security Act (the Act) states in 
part that in determining whether an applicant is the child of a 
deceased insured individual, the Commissioner of Social Security (the 
Commissioner) shall apply such law as would be applied in determining 
the devolution of intestate personal property by the courts of the 
State in which the insured individual was domiciled at the time of his 
or her death.
    A child of a valid marriage has inheritance rights under the laws 
of all States. When determining the relationship of a child born out of 
wedlock to a deceased insured person under section 216(h)(2)(A), we 
have always looked to the law that was in effect in the insured's State 
of domicile at the time he or she died. Some Federal courts have also 
interpreted the provision this way. See Schaefer on behalf of Schaefer 
v. Heckler, 792 F.2d 81 (7th Cir. 1986); Ramon v. Califano, 493 F. 
Supp. 158 (W.D. Tex. 1980); and Allen v. Califano, 452 F. Supp. 205 (D. 
Md. 1978).
    Other courts have adopted different interpretations. For example, 
in Owens v. Schweiker, 692 F.2d 80 (9th Cir. 1982), the court held that 
section 216(h)(2)(A) should be read to require the use of the State law 
of domicile that was in effect at the time of our determination on the 
child's claim. We, therefore, published a final rule (49 FR 21512) on 
May 22, 1984, amending Sec. 404.354 of our regulations to clarify and 
reinforce our policy on applying State inheritance laws. However, after 
we amended our regulations, we also published Acquiescence Ruling (AR) 
86-17(9) to clarify that we would apply the Owens decision to claims of 
children residing in the 9th Circuit. (We are publishing a notice today 
to rescind AR 86-17(9) effective with the effective date of these final 
regulations.)
    Still other courts have held that the relevant law is the law in 
force at the time the child applies for benefits (see Cox on behalf of 
Cox v. Schweiker, 684 F.2d 310 (5th Cir. 1982); and Hart by and through 
Morse v. Bowen, 802 F.2d 1334 (11th Cir. 1986)).
    Recognizing that the language in section 216(h)(2)(A) could be 
viewed as ambiguous and has not been interpreted the same by all 
courts, we are amending our policy as stated in Sec. 404.354(b). We 
believe that a policy that permits us to apply any of several 
potentially applicable State inheritance laws would best effectuate 
Congress' intent with regard to serving the interests of a surviving 
child born out of wedlock. Therefore, when the insured is deceased, we 
will determine the status of such a child by applying the State 
inheritance law that is in effect when we adjudicate the child's claim 
for benefits. If the child does not have inheritance rights under that 
version of State law, we will apply the State law that was in effect 
when the insured died, or any version of State law in effect from the 
time the child first could be entitled to benefits based on his or her 
application until the time we make our final decision on the claim, 
whichever version is more beneficial to the child.
    We also explain in these final regulations how we will determine 
which law was in effect as of the date of death. First we will look to 
the inheritance law that was in effect on the date of the insured's 
death. Then, if a law enacted after the insured's death is retroactive 
to the date of his or her death, we will apply that law. However, if a 
law in effect at the time of death was later declared unconstitutional, 
we will apply the State law which superseded the unconstitutional law.
    Regarding the child of a living insured worker, our rule in 
Sec. 404.354(b) provided that the Commissioner will apply the 
inheritance law that was in effect when the child's claim was filed. We 
are amending Secs. 404.354 and 404.355 to clarify that we will look to 
the versions of State inheritance laws that were in effect from the 
first month for which the child could be entitled to benefits up to and 
including the time of our final decision and we will apply the version 
most beneficial to the child.

State Law Time Limits

    As previously stated, section 216(h)(2)(A) of the Act provides 
that, in determining whether an applicant is the child of a deceased 
insured individual, the Commissioner shall apply such law as would be 
applied in determining the devolution of intestate personal property by 
the courts of the State in which the insured individual was domiciled 
at the time of his or her death. That section further states that an 
applicant who, according to such law, would have the same status 
relative to taking intestate personal property as a child or parent 
shall be deemed such respective child or parent.
    Many State laws impose time limits within which someone must act to 
establish paternity for purposes of intestate succession. Such time 
limits are intended to provide for an orderly and expeditious 
settlement of estates. Since this is not the purpose of Social Security 
benefits for children, we provide in these final regulations that we 
will not apply a State's time limits within which a child's 
relationship must be established when we determine the child's status 
under section 216(h)(2)(A). Not applying time limits is consistent with 
our belief that such a policy on applying State inheritance laws will 
best serve the interests of the children Congress sought to protect 
when it enacted section 216(h)(2)(A) of the Act.

Court Order Requirements

    Some State laws require a court determination of paternity for a 
child born out of wedlock to have inheritance rights. In determining a 
child's status under section 216(h)(2)(A), our policy has been to 
require that a claimant submit a court determination of paternity if 
one is required under State inheritance law. However, we are revising 
this policy by stating in these rules that, regarding a State that 
requires a court determination of paternity, we will use the standard 
of proof that the State court would use as the basis for such a 
determination, but we will not actually require a determination by a 
State court. Of course, if a State court with jurisdiction over the 
matter declares that a child can take a child's share of an insured 
individual's estate under intestate inheritance laws, or if a State 
court determines a child's paternity and such determination would 
prevail in that State's intestacy proceedings, SSA could generally rely 
on such State court findings. So, while we will not require an 
applicant to

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obtain a State court's determination, we will be guided by such 
determination that an applicant has obtained, subject to the 
prerequisites stated in Social Security Ruling 83-37c for accepting 
State court determinations. Those prerequisites are: (1) an issue in a 
claim for Social Security benefits previously has been determined by a 
State court of competent jurisdiction; (2) this issue was genuinely 
contested before the State court by parties with opposing interests; 
(3) the issue falls within the general category of domestic relations 
law; and (4) the resolution by the State trial court is consistent with 
the law enunciated by the highest court in the State.
    If we evaluate paternity by using the same standards that the 
appropriate State court would use if the issue were properly before it, 
we believe we will satisfy the intent of section 216(h)(2)(A) that we 
apply ``such law as would be applied'' by the State court to determine 
inheritance rights. We believe that the requirement of section 
216(h)(2)(A) to apply State law will be satisfied if we apply the same 
substantive standard as a State court would apply to determine 
paternity.

Legally Adopted Child

    The provisions for paying benefits to children of an insured 
individual were added to the Act by the Social Security Act Amendments 
of 1939 (Public Law 76-379). Our policy for determining whether an 
applicant qualifies as the ``child'' of an insured individual has 
always been that we apply State law on inheritance rights to determine 
the status under the Act of a natural child, i.e., biological child, 
and State law on adoption to determine the status of a child legally 
adopted by the insured. To avoid any uncertainty about our policy, we 
are amending our regulations to state more clearly how we determine a 
child's status as an individual's natural child or adopted child.
    Section 202(d)(1) of the Act provides for benefits to a child as 
defined in section 216(e) of the Act. Section 216(e) states, in part, 
that the term ``child'' means the child or legally adopted child of an 
individual. Section 216(e) further states the requirements for a person 
to be deemed the legally adopted child of a deceased individual. 
Section 216(e) thus distinguishes between a natural child and an 
adopted child.
    Further, section 216(h)(2)(A) provides that the status of an 
applicant for benefits as a child (as opposed to a legally adopted 
child, a stepchild, or other type of individual who can qualify under 
section 216(e) of the Act as a ``child'' for purposes of section 202(d) 
of the Act) is determined by applying the law on devolution of 
intestate personal property that would be applied by the courts in the 
State of the insured individual's domicile. This is a test for the 
status of a natural child.
    The legislative history of sections 216(e) and 216(h)(2)(A) shows 
that Congress intended us to use section 216(h)(2)(A) to determine the 
status of natural children. Section 209(k), enacted in 1939, provided 
the first definition of ``child'' by stating in part that the term 
means the child of an individual, the stepchild of an individual, and a 
child legally adopted by an individual before the adopting individual 
attained age 60 and prior to the beginning of the twelfth month before 
the month in which he or she died. Section 209(m), also enacted in 
1939, contained language that is the same as the present section 
216(h)(2)(A) and described how we determine whether an applicant is the 
child of the insured individual.
    Then in 1946, Congress amended section 209(k) to allow some 
children adopted by individuals aged 60 or older to receive benefits. 
Congress' explanation of the amended section 209(k) was that under 
existing provisions of the Act, a stepchild or an adopted child is not 
a ``child'' for benefit purposes unless certain conditions are met. 
H.R. Rep. No. 2526, 79th Cong., 2d Sess. 26 (1946); S. Rep. No. 1862, 
79th Cong., 2d Sess. 34 (1946). Thus, since the first provision for 
paying benefits to children of an insured worker, there has been a 
clearly defined distinction between natural children and adopted 
children and clearly defined conditions for determining the status of 
an adopted child, which conditions are not affected by section 
216(h)(2)(A).
    Along with the structure of the Act and the legislative history of 
provisions defining ``child,'' we have consistently interpreted the 
State intestacy law provisions of section 216(h)(2)(A) as not applying 
to children legally adopted by the insured individual. Our first 
regulation on the status of a child was published in 1940. That 
regulation defined a ``child'' as a son or daughter (by blood) of a 
wage earner and then went on to define ``adopted children.'' 5 FR 1880 
(May 21, 1940). We have maintained that position from the first 
regulation to the present. In the present Sec. 404.354, we state that a 
child may be related to the insured as a natural child, legally adopted 
child, stepchild, grandchild, stepgrandchild, or equitably adopted 
child. In Sec. 404.355, we explain the conditions for eligibility as a 
natural child, which include applying State inheritance law, and in 
Sec. 404.356 we state the requirement for eligibility as a legally 
adopted child.
    In these final regulations, we are amending Sec. 404.356 to 
explicitly provide that we will determine an applicant's status as a 
legally adopted child by applying the adoption laws of the State or 
foreign country where the adoption took place.

Addition of Northern Mariana Islands

    Further, we are adding the Northern Mariana Islands to the names of 
entities whose laws we will use to determine a child's relationship to 
the insured individual, depending on his or her permanent home.

Comments on Notice of Proposed Rulemaking (NPRM)

    On January 30, 1997, we published proposed rules in the Federal 
Register at 62 FR 4494 and provided a 60-day period for interested 
individuals to comment. We received three letters with comments. One 
commenter said the proposed regulations' use of the law most beneficial 
to the interests of the child is a positive change which is consistent 
with the Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996 (Public Law 104-193). Following are summaries of the other 
two comments and our responses to them.
    Comment: One commenter suggested that a mechanism be implemented 
whereby SSA would notify the State Child Support Enforcement agency of 
all paternity determinations we make.
    Response: A determination of paternity made by SSA is not the 
equivalent of an administrative order of paternity required by the 
States. Paternity determinations made by SSA are used only for SSA 
purposes.
    Comment: One commenter was concerned that proposed Sec. 404.355 
might be interpreted such that a child born out of wedlock for whom 
paternity was not established while the insured was alive would not 
qualify as the child of the insured. The commenter suggested that we 
add clarifying language to Sec. 404.355(a)(3) to address this issue.
    Response: We have revised Sec. 404.355(a) to clarify that 
paragraphs 1 through 4 are alternative means of establishing a child's 
status under the Act. As revised, subsection (a) provides that a child 
may be eligible for benefits as the insured's natural child if the 
child qualifies under any of the four paragraphs.
    After considering the comments on the proposed regulations, we have 
revised Sec. 404.355(a), as discussed in the response to the public 
comment. We

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have also revised paragraph (b)(3) of Sec. 404.355 to clarify the rule 
on selecting the State law that we apply in determining the 
relationship between a child and an insured individual when the insured 
is alive at the time the child applies for benefits on the insured's 
earnings record. As revised, paragraph (b)(3) provides that we 
determine the State where the insured individual had his or her 
permanent home when the child applies for child's insurance benefits, 
and we apply the law of that State. In addition, we have made several 
minor, nonsubstantive revisions to the rules. With these exceptions, we 
are publishing the proposed regulations unchanged as final regulations.

Regulatory Procedures

Regulatory Flexibility Act

    We certify that these final 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 the Regulatory Flexibility Act, as amended, is not 
required.

Executive Order 12866

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

Paperwork Reduction Act

    These final regulations impose no additional reporting or 
recordkeeping requirements necessitating clearance by OMB.

List of Subjects in 20 CFR Part 404

    Administrative practice and procedure, Blind, Disability benefits, 
Old-Age, Survivors and Disability Insurance, Reporting and 
recordkeeping requirements, Social Security.

(Catalog of Federal Domestic Assistance Program Nos. 96.001 Social 
Security-Disability Insurance; 96.002 Social Security-Retirement 
Insurance; 96.004 Social Security-Survivors Insurance)

    Dated: October 20, 1998.
Kenneth S. Apfel,
Commissioner of Social Security.

    For the reasons set out in the preamble, we are amending subpart D 
of part 404 of chapter III of title 20 of the Code of Federal 
Regulations as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-  )

Subpart D--[Amended]

    1. The authority citation for subpart D of part 404 continues to 
read as follows:

    Authority: Secs. 202, 203(a) and (b), 205(a), 216, 223, 225, 
228(a)-(e), and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 
403(a) and (b), 405(a), 416, 423, 425, 428(a)-(e), and 902(a)(5)).

    2. Section 404.354 is revised to read as follows:


Sec. 404.354  Your relationship to the insured.

    You may be related to the insured person in one of several ways and 
be entitled to benefits as his or her child, i.e., as a natural child, 
legally adopted child, stepchild, grandchild, stepgrandchild, or 
equitably adopted child. For details on how we determine your 
relationship to the insured person, see Secs. 404.355 through 404.359.
    3. Section 404.355 is revised to read as follows:


Sec. 404.355  Who is the insured's natural child?

    (a) Eligibility as a natural child. You may be eligible for 
benefits as the insured's natural child if any of the following 
conditions is met:
    (1) You could inherit the insured's personal property as his or her 
natural child under State inheritance laws, as described in paragraph 
(b) of this section.
    (2) You are the insured's natural child and the insured and your 
mother or father went through a ceremony which would have resulted in a 
valid marriage between them except for a ``legal impediment'' as 
described in Sec. 404.346(a).
    (3) You are the insured's natural child and your mother or father 
has not married the insured, but the insured has either acknowledged in 
writing that you are his or her child, been decreed by a court to be 
your father or mother, or been ordered by a court to contribute to your 
support because you are his or her child. If the insured is deceased, 
the acknowledgment, court decree, or court order must have been made or 
issued before his or her death. To determine whether the conditions of 
entitlement are met throughout the first month as stated in 
Sec. 404.352(a), the written acknowledgment, court decree, or court 
order will be considered to have occurred on the first day of the month 
in which it actually occurred.
    (4) Your mother or father has not married the insured but you have 
evidence other than the evidence described in paragraph (a)(3) of this 
section to show that the insured is your natural father or mother. 
Additionally, you must have evidence to show that the insured was 
either living with you or contributing to your support at the time you 
applied for benefits. If the insured is not alive at the time of your 
application, you must have evidence to show that the insured was either 
living with you or contributing to your support when he or she died. 
See Sec. 404.366 for an explanation of the terms ``living with'' and 
``contributions for support.''
    (b) Use of State Laws--(1) General. To decide whether you have 
inheritance rights as the natural child of the insured, we use the law 
on inheritance rights that the State courts would use to decide whether 
you could inherit a child's share of the insured's personal property if 
the insured were to die without leaving a will. If the insured is 
living, we look to the laws of the State where the insured has his or 
her permanent home when you apply for benefits. If the insured is 
deceased, we look to the laws of the State where the insured had his or 
her permanent home when he or she died. If the insured's permanent home 
is not or was not in one of the 50 States, the Commonwealth of Puerto 
Rico, the Virgin Islands, Guam, American Samoa, or the Northern Mariana 
Islands, we will look to the laws of the District of Columbia. For a 
definition of permanent home, see Sec. 404.303. For a further 
discussion of the State laws we use to determine whether you qualify as 
the insured's natural child, see paragraphs (b)(3) and (b)(4) of this 
section. If these laws would permit you to inherit the insured's 
personal property as his or her child, we will consider you the child 
of the insured.
    (2) Standards. We will not apply any State inheritance law 
requirement that an action to establish paternity must be taken within 
a specified period of time measured from the worker's death or the 
child's birth, or that an action to establish paternity must have been 
started or completed before the worker's death. If applicable State 
inheritance law requires a court determination of paternity, we will 
not require that you obtain such a determination but will decide your 
paternity by using the standard of proof that the State court would use 
as the basis for a determination of paternity.
    (3) Insured is living. If the insured is living, we apply the law 
of the State where the insured has his or her permanent home when you 
file your application for benefits. We apply the version of State law 
in effect when we make our final decision on your

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application for benefits. If you do not qualify as a child of the 
insured under that version of State law, we look at all versions of 
State law that were in effect from the first month for which you could 
be entitled to benefits up until the time of our final decision and 
apply the version of State law that is most beneficial to you.
    (4) Insured is deceased. If the insured is deceased, we apply the 
law of the State where the insured had his or her permanent home when 
he or she died. We apply the version of State law in effect when we 
make our final decision on your application for benefits. If you do not 
qualify as a child of the insured under that version of State law, we 
will apply the version of State law that was in effect at the time the 
insured died, or any version of State law in effect from the first 
month for which you could be entitled to benefits up until our final 
decision on your application. We will apply whichever version is most 
beneficial to you. We use the following rules to determine the law in 
effect as of the date of death:
    (i) If a State inheritance law enacted after the insured's death 
indicates that the law would be retroactive to the time of death, we 
will apply that law; or
    (ii) If the inheritance law in effect at the time of the insured's 
death was later declared unconstitutional, we will apply the State law 
which superseded the unconstitutional law.
    4. Section 404.356 is amended by adding a sentence at the end to 
read as follows:


Sec. 404.356  Who is the insured's legally adopted child?

    * * * We apply the adoption laws of the State or foreign country 
where the adoption took place, not the State inheritance laws described 
in Sec. 404.355, to determine whether you are the insured's legally 
adopted child.

[FR Doc. 98-28707 Filed 10-27-98; 8:45 am]
BILLING CODE 4190-29-P