[Federal Register Volume 69, Number 24 (Thursday, February 5, 2004)]
[Notices]
[Pages 5643-5646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2561]


=======================================================================
-----------------------------------------------------------------------

SOCIAL SECURITY ADMINISTRATION


Supplemental Security Income (SSI) Demonstration: Work Incentives 
for Participants in the Florida Freedom Initiative

AGENCY: Social Security Administration (SSA).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Commissioner of Social Security (the Commissioner) will 
exercise her authority under section 1110(b) of the Social Security Act 
to conduct a demonstration and is publishing this notice in accordance 
with regulations at 20 CFR 416.250(e).
    The demonstration, called Work Incentives for Participants in the 
Florida Freedom Initiative, will test whether the modification of 
certain SSI program rules fosters greater self-sufficiency among SSI 
beneficiaries participating in the Florida Freedom Initiative. The 
Florida Freedom Initiative is a demonstration being undertaken by the 
Florida Department of Children and Families through a Systems Change 
grant from the Department of Health and Human Services (DHHS), Centers 
for Medicare & Medicaid Services (CMS).

EFFECTIVE DATES: It is anticipated that the Florida Freedom Initiative 
will begin no later than March 1, 2004. According to the demonstration 
plan, beneficiaries may participate throughout the period of the 
demonstration for up to three years. Thus, the anticipated ending date 
for participation will be no later than February 28, 2007. In some 
cases, however, the modified SSI program rules that the Commissioner is 
creating relative to individual development accounts and plans for 
achieving self-support (see below) may continue to apply for a limited 
time after an individual's participation in the Florida Freedom 
Initiative ends.

FOR FURTHER INFORMATION CONTACT: Stephen Fear by e-mail at 
[email protected], by telephone at (410) 966-0265, or by mail at 
Social Security Administration, Office of Program Development and 
Research, 3516 Annex Building, 6401 Security Boulevard, Baltimore, MD 
21235.

SUPPLEMENTARY INFORMATION:

Florida Freedom Initiative and Consumer Directed Care Plus 
Demonstrations

    The Florida Freedom Initiative will attempt to build on the success 
of an ongoing ``Cash and Counseling'' demonstration, Consumer Directed 
Care Plus, that the State has been conducting with partners that 
include: CMS, the Office of the Assistant Secretary for Planning and 
Evaluation at DHHS, the National Program Office at the University of 
Maryland Center on Aging, the Robert Wood Johnson Foundation, the 
National Council on Aging, and Mathematica Policy Research (as the 
evaluator).
    For Consumer Directed Care Plus, the Secretary of DHHS (the 
Secretary) exercised his authority under section 1115 of the Act to 
waive certain Medicaid program rules. The Medicaid waivers permit 
Medicaid beneficiaries using personal-attendant, supported-employment, 
or certain other services, to receive a cash allowance in lieu of those 
services, along with information support that enables them to select 
and purchase the specific services they need from providers of their 
choosing.
    The Commissioner, to enable SSI beneficiaries to participate in the 
Consumer Directed Care Plus demonstration and to test the effect of 
modified SSI program rules in the demonstration's Medicaid-waiver 
environment, waived SSI rules regarding how long an individual can 
retain certain cash received for medical and social services before 
they count toward the SSI resources limit. The Commissioner also waived 
SSI rules that would require interest earned on such retained funds to 
count as income. See 63 FR 58802 (November 2, 1998).
    For the Florida Freedom Initiative, the Secretary will expand the 
types of services for which Medicaid beneficiaries can receive a cash 
allowance. The demonstration also will incorporate, to a greater extent 
than was possible in Consumer Directed Care Plus, the principles of 
self-determination, one of which emphasizes the generation of personal 
income through work, often through the development of a 
microenterprise. To aid in the removal of systemic barriers to work 
that were identified in the course of the Consumer Directed Care Plus 
demonstration, the Commissioner

[[Page 5644]]

will provide the following waivers of SSI program requirements for the 
Florida Freedom Initiative.

1. Exclusion From Resources of Medicaid Payments Being Saved for the 
Purchase of Medical or Social Services and Exclusion From Income and 
Resources of Interest Earned by Such Savings

    Cash from a government source to pay for medical or social services 
does not count as income to an SSI beneficiary when received. However, 
if the cash is not reimbursement for expenses already paid, and the 
beneficiary retains it, current rules require counting it as a resource 
beginning with the second calendar month after the month in which is 
received. See regulations at 20 CFR 416.1103(a) and (b) and 20 CFR 
416.1201(a)(3).
    The Commissioner is waiving this requirement in order to permit 
beneficiaries to save for future purchases of medical and social 
services as long as they continue to participate in the Florida Freedom 
Initiative and the funds are retained in a form that is separately 
identifiable from other assets. Under current rules, any interest 
earned by such savings would count as income in the month it is earned 
and as a resource thereafter. The Commissioner also is waiving these 
requirements. The Commissioner provided the same waivers for the 
Consumer Directed Care Plus demonstration project.
    Cash received for medical or social services during participation 
in the demonstration and retained after participation in the 
demonstration ends will be excluded from resources for the first full 
calendar month after participation ends and will be subject to regular 
SSI resources rules beginning with the second full calendar month after 
participation ends. For example, if participation in the demonstration 
were to end on February 28, 2007, cash received for medical or social 
services prior to that date, if retained, would be subject to regular 
SSI resources rules beginning April 2007. Interest earned by such cash 
once it becomes subject to regular SSI resources rules is subject to 
regular SSI income rules.

2. Expansion of Exclusions Related to Individual Development Accounts 
(IDA)

    An IDA is a trust or custodial account created to help low-income 
individuals and families save for certain expenses. Except for certain 
emergencies, IDA funds can be used only for going to college, buying a 
first home, or starting a business. The account holder makes deposits 
to an IDA from his or her earned income. Each dollar the account holder 
deposits is matched at rates varying from one to eight dollars, usually 
depending on the availability of funding.
    Individual development accounts are used in two Federal programs: 
temporary assistance to needy families (TANF) and an Assets for 
Independence Act (AFIA) demonstration program. In these programs, 
matching contributions are drawn from a combination of TANF funds or 
AFIA grant monies and entities such as foundations and Community 
Development Credit Unions. Federal matching dollars are limited to 
$2,000 per individual or $4,000 per household over the five-year life 
of the IDA demonstration program.
    Section 415 of the AFIA (title IV of Pub. L. 105-285 as amended by 
section 610 of Pub. L. 106-55, App. A) and section 404(h)(4) of the 
Social Security Act provide that funds in an AFIA or TANF IDA are to be 
disregarded in determinations of eligibility for, or the amount of, a 
Federal benefit that takes into account financial circumstances. SSA 
thus excludes these IDAs when it determines whether someone's resources 
exceed the SSI limit. It also excludes matching contributions when it 
determines countable income, and deducts the beneficiary's own deposits 
from countable income. As a result, SSI benefits allow the beneficiary 
to meet living expenses while saving for the specified qualifying 
purposes.
    Numerous non-federally supported IDA or ``IDA-like'' programs have 
emerged nationwide. These other programs usually adopt AFIA IDA program 
rules, but permit an individual to save for one or more purposes, such 
as transportation or assistive technology, in addition to the three 
mentioned above. Under current SSI program rules, the exclusions that 
apply to federally supported IDAs do not extend to these programs. For 
the Florida Freedom Initiative, the Commissioner will extend the 
exclusions to these other programs, subject to her approval of their 
rules.
    To ensure that participants are able to benefit fully from the 
savings opportunity afforded by an IDA, the exclusions related to IDAs, 
other than those accounts involving AFIA grant monies or Federal TANF 
dollars, will continue to apply until the individual's participation in 
the IDA program has ended, in accordance with the IDA program's rules. 
It thus is possible that such IDA exclusions will continue for a 
limited time after participation in the Florida Freedom Initiative 
ends.

3. Increased Exclusion for Earned Income

    Social Security Act section 1612(b)(3) and 20[acute]CFR 416.1112 
provide for excluding the first $65 a month, plus half the remainder of 
earned income not previously excluded by other provisions. To further 
encourage work and earnings, SSA will exclude the first $280 of earned 
income, and half of any earnings over that amount, for SSI 
beneficiaries participating in the Florida Freedom Initiative.
    The exclusion of the first $280 (instead of $65) of an individual's 
earnings each month ends with the month in which his or her 
participation in the Florida Freedom Initiative demonstration project 
ends.

4. Modified Goal for a Plan for Achieving Self-Support (PASS)

    Under current rules, although education can be part of a PASS, the 
PASS must in all cases specify an occupational goal (Social Security 
Act section 1633 and 20 CFR 416.1181). For the Florida Freedom 
Initiative, SSA will approve an otherwise satisfactory PASS that 
specifies postsecondary education as its goal, as long as the PASS 
includes a step for specifying a work goal at least six months prior to 
completion of course requirements.
    A PASS, with a goal of postsecondary education, should take into 
account the time it ordinarily would take the individual to complete 
the coursework involved. Approval of such a PASS will not require that 
the coursework be completed before the Florida Freedom Initiative ends. 
A PASS approved as part of the Work Incentives for Participants in the 
Florida Freedom Initiative demonstration subsequently will be treated 
like any other PASS.

5. Suspension of Continuing Disability Reviews (CDR)

    Section 221(i) of the Act requires that SSA periodically review 
medical and/or other evidence to determine whether an individual 
continues to meet the requirements for benefits, and section 1633(c.) 
contemplates that SSA will undertake similar reviews with respect to 
SSI recipients. Our regulations at 20 CFR 416.989, 416.989(a) and 
416.990 explain when we will conduct these CDRs for SSI recipients. If 
the evidence shows that the individual no longer meets these 
requirements, benefits stop. The Commissioner will suspend CDRs for 
Florida Freedom Initiative participants while they are participating in 
the project.

[[Page 5645]]

Objectives of the Work Incentives for Participants in the Florida 
Freedom Initiative Demonstration

    Through Work Incentives for Participants in the Florida Freedom 
Initiative, the Commissioner will:
     Support the efforts of CMS, the State of 
Florida, and other partners to conduct the Florida Freedom Initiative;
     Further test the appropriateness of current SSI 
rules requiring that cash received for the purchase of medical or 
social services be counted as a resource if retained for more than one 
calendar month after the month of receipt;
     Empower Florida Freedom Initiative participants 
to use their earnings to save toward purchasing a home, capitalizing a 
small business or micro-enterprise, attending college, or other 
approved purpose; e.g., the purchase of assistive technology or 
transportation;
     Permit a determination of whether the 
combination of altered policies and procedures used for the Florida 
Freedom Initiative can generate SSI and/or Medicaid program savings by 
more effectively enabling participants to maximize their self-
sufficiency.
    SSA will work with CMS and the State of Florida to develop 
appropriate measurements for these objectives and to make arrangements 
for necessary data collection.

Additional Background: Cash Received for Medical or Social Services

    Section 1612(a) of the Act defines income for purposes of the SSI 
program, while section 1612(b) specifies exclusions from income. As 
explained in regulations at 20 CFR 416.1102, income includes anything 
an individual receives in cash or in kind that can be used to meet 
food, clothing, and shelter needs. Regulations at 20 CFR 416.1103(a)(3) 
and (b)(1) explain that assistance provided in cash or in kind under a 
Federal, State, or local government program, whose purpose is to 
provide medical care or services or social services, including 
vocational rehabilitation, is not income.
    Section 1613 of the Act specifies exclusions from resources for 
purposes of the SSI program. Regulations at 20 CFR 416.1201(a) define 
resources as cash, or other liquid assets, or any real or personal 
property, that an individual (or spouse) owns and could convert to cash 
to be used for support and maintenance. Regulations at 20 CFR 
416.1207(d) explain that items received in cash or in kind during a 
month are evaluated first under the rules for counting income. If they 
are retained until the first moment of the following month, they then 
are evaluated under the rules for counting resources.
    Regulations at 20 CFR 416.1201(a)(3) explain that, except for 
reimbursement of expenses already paid, cash an individual receives for 
medical or social services, that is neither income under 20 CFR 
416.1103(a) or (b) nor a retroactive cash payment excluded from deeming 
under 20 CFR 416.1161(a)(16), is not a resource for the calendar month 
following the month of its receipt if it is separately identifiable 
from other resources. If retained after that time, it becomes a 
countable resource.
    SSI regulations recognize that cash payments made specifically to 
enable people to pay for medical or social services are not income for 
SSI purposes because they are assumed to not be available for support 
and maintenance. Recognizing that the recipient is not always able to 
use the cash for payment for medical or social services in the month of 
receipt, SSI regulations provide for not counting as resources any cash 
received to pay for medical and social services which is retained one 
full calendar month following the month of receipt, so long as it is 
separately identifiable from other resources. The rule permitting not 
counting such cash as resources does not encompass cash received as 
reimbursement for medical or social service bills the individual has 
already paid. The rule which permits not counting cash as resources, if 
retained into the month following the month of receipt, is consistent 
with the purpose of the SSI program, which is to meet the current needs 
of beneficiaries for food, clothing and shelter.

Additional Background: Plans for Achieving Self-Support

    Sections 1612(b)(4) and 1613(a)(4) of the Act provide for excluding 
such income and resources of an individual, if he or she has a plan for 
achieving self-support approved by the Commissioner, as may be 
necessary for the fulfillment of such plan. A plan for achieving self-
support, or PASS, is a self-directed plan in which individuals 
identify:
     The job they want or business they want to 
start;
     what they need in order to achieve their goal, 
such as training or education, transportation, assistive technology or 
business inventory, and how much it will cost; and
     the income or assets they will use for these 
expenses, such as savings, wages from an existing job, or Social 
Security Disability Insurance (SSDI) benefits.
    Several ``ownership'' factors make the PASS program a particularly 
effective work incentive. There is a personal investment in the 
attainment of plan goals because the individuals themselves create 
those goals and use their own income or assets to pay for expenses, 
although SSI benefits replace those funds. Although the plan must be 
realistic, and expenses must be reasonable, the individuals themselves 
decide what goods, equipment, services, training, and education they 
will purchase, and from whom, in order to reach their goals.
    A PASS can help an individual pay for expenses such as:
     PASS preparation fees, which can include the 
cost of vocational evaluations and similar assessments;
     education or training, including tuition, books, 
supplies, and associated fees and costs, such as fees for tutoring, 
testing, and counseling;
     meals and lodging while temporarily absent from 
one's permanent residence to attend educational, training, employment, 
trade, or business activities, if there is also a cost associated with 
maintaining the permanent residence;
     transportation, including the lease, rental, or 
purchase of a vehicle and associated costs for fuel, insurance, 
maintenance, registration, taxes, etc., modifications to a vehicle, the 
hire of private or commercial carriers, and the hire of someone to 
drive one's vehicle;
     business start-up costs, including equipment, 
supplies, operating capital, and inventory required to establish and 
carry on a trade or business;
     assistive technology, including assistive 
technology mobility devices (power chairs and scooters) and/or 
upgrades;
     modifications to buildings for operational or 
access purposes for persons with disabilities;
     childcare;
     attendant care;
     basic living skills training;
     dues and subscription costs for publications for 
academic or professional purposes;
     equipment and tools, including safety equipment, 
whether specific to the individual's condition or designed for use by 
someone who does not have a disability;
     job coaching/counseling services;
     uniforms, specialized clothing, safety 
equipment, and appropriate attire, such as suits or dresses needed for 
job interviews or to begin working in an office or professional 
setting; and
     job search or relocation expenses.
    If approved, a PASS can help SSI beneficiaries pay for these and 
other expenses in a number of ways:
     First, SSA excludes income and resources that 
will be used for plan

[[Page 5646]]

expenses when it determines SSI eligibility and payment amount. In some 
cases, this permits SSI eligibility where it would otherwise not exist.
     Eligibility for SSI generally results in 
eligibility for Medicaid, as well. Medicaid can cover the cost of 
medicines and other items not presently covered by Medicare.
     If an individual is eligible for SSI, a PASS may 
permit a higher benefit.
     Income excluded under a PASS also is excluded 
from consideration in determinations of eligibility for Food Stamps and 
Federal housing assistance.
    An important way in which a PASS can help pay for a major purchase 
is by its use to obtain and pay off a loan. People with disabilities 
who have little income or credit rarely have the option to save for a 
major purchase or obtain financing. Approval of a PASS that has loan 
payments built into it has made it possible for some individuals to 
obtain financing for major purchases. This can have the added advantage 
of enabling someone to establish or rebuild credit, which can be 
critical to running a business.

Who May Participate in the Work Incentives for Participants in the 
Florida Freedom Initiative Demonstration?

    To take part in the Work Incentives for Participants in the Florida 
Freedom Initiative, an individual must be receiving SSI benefits based 
on disability or blindness and be enrolled in the Florida Freedom 
Initiative demonstration.

Consent Required

    The consent of an SSI beneficiary to participate in this 
demonstration project is required under section 1110(b)(2)(b) of the 
Act and 20 CFR 416.250(d). The State of Florida will obtain written 
consent from every participant who is an SSI beneficiary. The consent 
will ensure that participation is voluntary and participants will be 
informed that they can stop participating at any time.

New or Additional Program Costs

    We anticipate that the Work Incentives for Participants in the 
Florida Freedom Initiative demonstration will involve no, or minimal, 
new or additional program costs to the Federal government under title 
XVI of the Act or to the State of Florida under section 1616 of the 
Act. If the Commissioner decided not to exercise her authority under 
section 1110(b) of the Act to provide the waivers described in this 
announcement, we believe that few if any SSI beneficiaries would 
participate in the Florida Freedom Initiative since to do so could 
result in a reduction or loss of SSI benefits. Continued SSI 
eligibility for beneficiaries who choose to participate in the 
demonstration project is not a new or additional cost related to the 
Commissioner's demonstration project.
    Statutory and Regulatory Provisions Waived: The Commissioner waives 
for the duration of an individual's participation in the Cash and 
Counseling demonstration project certain SSI resources counting rules 
where application of those rules would otherwise affect the eligibility 
of an individual for SSI. The specific statutory and regulatory 
provisions waived are those described in the preceding section.

    Authority: Section 1110(b) of the Social Security Act.

    Dated: January 30, 2004.
Jo Anne B. Barnhart,
Commissioner of Social Security.
[FR Doc. 04-2561 Filed 2-4-04; 8:45 am]
BILLING CODE 4191-02-P