[Federal Register Volume 68, Number 62 (Tuesday, April 1, 2003)]
[Rules and Regulations]
[Pages 15658-15659]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7756]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 404

[Reg. No. 4]
RIN 0960-AE02


Federal Old-Age, Survivors and Disability Insurance; Repeal of 
the Facility-of-Payment Provision

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: We are revising our rules on benefit reduction for the family 
maximum to reflect enactment of two self-implementing provisions in the 
Social Security Independence and Program Improvements Act of 1994. The 
provisions repealed the facility-of-payment provision of the Social 
Security Act (the Act) and provided that reduction for the family 
maximum will be made prior to a temporary suspension for work when a 
non-working auxiliary or survivor beneficiary resides in a separate 
household from a working auxiliary or survivor beneficiary. These 
revisions are necessary to conform our regulations to current law. We 
have been paying benefits under these self-implementing provisions 
since January 1996.

EFFECTIVE DATE: The rule is effective April 1, 2003.

FOR FURTHER INFORMATION CONTACT: Jerry Strauss, Social Insurance 
Specialist, Office of Payment Policy, Office of Income Security 
Programs, Social Security Administration, 6401 Security Boulevard, 
Baltimore, MD 21235-6401, 410-965-7930, TTY 410-966-5609, or 
[email protected] for information about these rules. For information 
on eligibility or filing for benefits, contact our national toll free 
number at 1-800-772-1213 or TTY at 1-800-325-0778, or visit our 
Internet Web site, Social Security Online, at http://www.ssa.gov.
    Electronic Version: The electronic file of this document is 
available on the date of publication in the Federal Register at http://www.access.gpo.gov/su_docs/aces/aces140.html. It is also available on 
the Internet site for SSA (i.e., Social Security Online) at http://www.ssa.gov/regulations/.

SUPPLEMENTARY INFORMATION: 
    The facility-of-payment provision established a simplified method 
to use in paying benefits when all of the following conditions applied:
    [sbull] An individual receiving benefits as an auxiliary or 
survivor of an insured individual incurred a deduction in his or her 
benefits (for example, his or her earnings exceeded the earnings test 
exempt amount); and
    [sbull] The maximum family benefit applied (the maximum family 
benefit is a limit on the total amount of monthly benefits which may be 
paid for any month to an insured individual and his or her auxiliaries 
or survivors); and
    [sbull] All of the auxiliaries or survivors lived in the same 
household.
    The facility-of-payment provision permitted us to continue paying 
the same amount to the household instead of withholding the amount of 
the deduction from the beneficiary who incurred the deduction and 
recalculating and redistributing the same amount of total family 
benefits to the other auxiliaries or survivors. The provision was 
enacted to relieve SSA of the need to engage in costly, time-consuming 
manual recalculations of benefits when the family would continue to 
receive the same amount of benefits.
    However, because these recalculations are now automated, the 
withholding of benefits and redistribution to other family members is 
no longer a burdensome procedure and the simplified method is no longer 
needed.
    Section 309(a) of the Social Security Independence and Program 
Improvements Act of 1994, Public Law 103-296, repealed the facility-of-
payment provision effective with benefits payable for months after 
December 1995. Deductions are now made from the monthly benefit of the 
beneficiary who is affected by the deductions, and the benefits are 
recalculated and redistributed to the other beneficiaries living in the 
same household. We are, therefore revising Sec.  408.458 of our 
regulations to reflect that repeal.
    In addition, we are revising our regulations at Sec.  404.402 to 
reflect section 309(b) of Public Law 103-296 which provides that 
benefits will be reduced to meet the family maximum before benefits are 
suspended to a working auxiliary or survivor beneficiary who lives in a 
separate household from a non-working auxiliary or survivor 
beneficiary. This prevents potential overpayments to those in separate 
households and the need to recover them in the event that the working 
auxiliary stops working.

Regulatory Procedure

    Pursuant to section 702(a)(5) of the Act, 42 U.S.C. 902(a)(5), we 
follow the Administrative Procedure Act (APA) rulemaking procedures 
specified in 5 U.S.C. 553 when developing our regulations. The APA 
provides exceptions to its notice and comment procedures when an agency 
finds there is good cause for dispensing with such procedures on the 
basis that they are impracticable, unnecessary, or contrary to the 
public interest. We have determined that under 5 U.S.C. 553(b)(B), good 
cause exists for dispensing with the notice and public comment 
procedures for these rules. Good cause exists because these regulations 
simply reflect self-implementing statutory changes and do not involve 
the making of any discretionary policy. Therefore, we have determined 
that opportunity for prior comment is unnecessary and we are issuing 
these changes to our regulations as final rules.
    In addition, we find good cause for dispensing with the 30-day 
delay in the effective date of a substantive rule, provided by 5 U.S.C. 
553(d). As explained above, these regulations merely reflect self-
implementing statutory changes that were effective for all benefits 
payable after 1995.

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, as amended 
by Executive Order 13258. Thus, they were not subject to OMB review.

[[Page 15659]]

Paperwork Reduction Act

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

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.

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

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.

    Dated: March 24, 2003.
Jo Anne B. Barnhart,
Commissioner of Social Security.

0
For the reasons set out in the preamble, we are amending subpart E 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 E--[Amended]

0
1. The authority citation for subpart E of part 404 continues to read 
as follows:

    Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c), 
222(b), 223(e), 224, 225, 702(a)(5) and 1129A of the Social Security 
Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c), 422(b), 
423(e), 424a, 425, 902(a)(5) and 1320a-8a).

0
2. Section 404.402 is amended by removing the word ``and'' after 
paragraph (b)(1)(v), by removing the period after paragraph (b)(1)(vi) 
and adding in its place a semi-colon and the word ``and'', and by 
adding a new paragraph (b)(1)(vii) to read as follows:


Sec.  404.402  Interrelationship of deductions, reductions, 
adjustments, and nonpayment of benefits.

* * * * *
    (b) * * *
    (1) * * *
    (vii) Before suspension of benefits due to earnings (see Sec.  
404.456), for benefits payable or paid for months after December 1995 
to a non-working auxiliary or survivor who resides in a different 
household than the working auxiliary or survivor whose benefits are 
suspended.
* * * * *

0
3. Section 404.458 is amended by adding a new first sentence to read as 
follows:


Sec.  404.458  Limiting deductions where total family benefits payable 
would not be affected or would be only partly affected.

    The provisions of this section apply only to benefits payable or 
paid for months before January 1996. * * *

[FR Doc. 03-7756 Filed 3-31-03; 8:45 am]
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