[Federal Register Volume 70, Number 200 (Tuesday, October 18, 2005)]
[Proposed Rules]
[Pages 60463-60470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20803]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AG10


Rules for the Issuance of Work Report Receipts, Payment of 
Benefits for Trial Work Period Service Months After a Fraud Conviction, 
Changes to the Student Earned Income Exclusion, and Expansion of the 
Reentitlement Period for Childhood Disability Benefits

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: We are proposing to amend our rules to reflect and implement 
sections 202, 208, 420A, and 432 of the Social Security Protection Act 
of 2004 (the SSPA). Section 202 of the SSPA requires us to issue a 
receipt each time you or your representative report a change in your 
work activity or give us documentation of a change in your earnings if 
you receive benefits based on disability under title II or title XVI of 
the Social Security Act (the Act). Section 208 changes the way we pay 
benefits during the trial work period if you are convicted by a Federal 
court of fraudulently concealing your work activity. Section 420A 
changed the law to allow you to become reentitled to childhood 
disability benefits under title II at any time if your previous 
entitlement to childhood disability benefits was terminated because of 
the performance of substantial gainful activity. Section 432 changes 
the way we decide if you are eligible for the student earned income 
exclusion. We also propose to change the SSI student policy to include 
home schooling as a form of regular school attendance. Additionally, we 
are proposing to apply the student earned income exclusion when 
determining the countable income of an ineligible spouse or ineligible 
parent.

DATES: To be sure that your comments are considered, we must receive 
them by December 19, 2005.

[[Page 60464]]


ADDRESSES: You may give us your comments by: using our Internet 
facility (i.e., Social Security Online) at http://policy.ssa.gov/pnpublic.nsf/LawsRegs or the Federal eRulemaking Portal: http://www.regulations.gov: e-mail to [email protected]; telefax to (410) 
966-2830; or letter to the Commissioner of Social Security, PO Box 
17703, Baltimore, MD 21235-7703. You may also deliver them to the 
Office of Regulations, Social Security Administration, 107 Altmeyer 
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8 
a.m. and 4:30 p.m. on regular business days. Comments are posted on our 
Internet site, or you may inspect them physically on regular business 
days by making arrangements with the contact person shown in this 
preamble.
    Electronic Version: The electronic file of this document is 
available on the date of publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html. It is also available on the Internet 
site for SSA (i.e., Social Security Online) at http://www.socialsecurity.gov/regulations/.

FOR FURTHER INFORMATION CONTACT: Cindy Duzan, Policy Analyst, Social 
Security Administration, 6401 Security Boulevard, Baltimore, Maryland 
21235-6401, (410) 965-4203, or TTY (410) 966-5609 for information about 
these proposed rules. For information on eligibility or filing for 
benefits, call our national toll-free number 1 (800) 772-1213 or TTY 1 
(800) 325-0778. You may also contact Social Security Online, at http://www.socialsecurity.gov/.

SUPPLEMENTARY INFORMATION:

What is the purpose of this notice of proposed rulemaking (NPRM)?

    In this NPRM, we propose to amend our rules to reflect and codify 
sections 202, 208, 420A, and 432 of the SSPA. These proposed changes 
apply to you if you engage in work activity while entitled to or 
eligible for benefits based on disability under title II or title XVI 
of the Act.
    We also propose to change the SSI student policy to include home 
schooling as a form of regular school attendance. This may allow more 
individuals to benefit from the student earned income exclusion. This 
change, which is separate from the changes being made to reflect and 
implement the SSPA, will make the title II and title XVI programs 
uniform with respect to home schooling. The title II program currently 
recognizes home schooling as a form of school attendance. We also 
propose to apply the student earned income exclusion when determining 
the countable income of an ineligible spouse or ineligible parent.

When will we start to use these rules?

    The effective date of the provisions of the SSPA that are the 
subject of these proposed rules are set forth below and will take 
effect on the dates mandated by statute. The changes regarding home 
schooling will not take effect until we evaluate the public comments we 
receive and issue final rules in the Federal Register. If we publish 
final rules, we will state in the notice the date on which they go into 
effect, explain in the preamble how we will apply them, and summarize 
and respond to the substantive public comments.

What is the purpose of section 202?

    Section 202 of the SSPA requires us to issue a receipt to you or 
your representative each time you or your representative report a 
change in your work activity or give us evidence of a change in your 
earnings, such as your pay stubs, if you receive benefits based on 
disability under title II or title XVI of the Act. The law provides 
that we issue a receipt each time you or your representative report to 
us at least until we establish a centralized computer file that will 
electronically record the information about the change in your work 
activity and the date that you make your report. After the centralized 
computer file is implemented, we will continue to issue receipts to you 
upon your request.
    In the past, the reports you gave to us about your work activity 
may not have been processed timely, resulting in processing delays. 
This might have caused us to pay benefits to you incorrectly, without 
considering the effect your work and earnings may have had on your 
benefits, causing you to become overpaid. We are implementing a new 
centralized computer system which will create an electronic record of 
the work information that you report to us. This will help us ensure 
that we fulfill our responsibility to process your earnings reports and 
pay benefits to you correctly. We expect this centralized computer 
system to be operational in the fall of 2005. Issuing a receipt to you 
when you report your work or earnings will provide you with proof that 
you properly fulfilled your responsibility to report your earnings to 
us until such time as the electronic record is established.

Why must you report your work activity?

    If you receive benefits based on disability under title II of the 
Act or are eligible for benefits under title XVI, you are required to 
report changes in your work activity and earnings to us. (See 
Sec. Sec.  404.1588 and 416.708.)
    Your earnings can affect your eligibility for benefits or the 
amount of your benefits.
    You can report your work to us:
     By phone to our toll free number;
     In person or by phone to your local office; or
     By mailing your pay stubs to your local office.
    We are also making efforts to expand the ways you can report 
information to us.

What is the effective date of section 202?

    The statutory change that requires us to issue receipts every time 
you or your representative report a change in your work activity or 
give us documentation of a change in your earnings is effective as soon 
as possible, but no later than March 2, 2005. We are currently issuing 
receipts to you or your representative and will continue to do so at 
least until we establish a centralized computer file to record the 
information that you give us and the date that you make your report. 
Once the centralized computer file is in place, we will continue to 
issue receipts to you or your representative if you request us to do 
so.

What is the purpose of section 208?

    Section 208 of the SSPA provides that if you are convicted by a 
Federal court of fraudulently concealing your work activity during the 
trial work period, no benefits are payable for any trial work period 
service month (generally a month of work activity, see Sec.  404.1592) 
that occurred on or after March 2004 and before the date of your 
conviction. Section 208 of the SSPA will help to deter fraud within the 
Social Security program by prohibiting payment for trial work period 
service months to disabled individuals who fraudulently conceal work 
activity.

What is the trial work period?

    The trial work period allows a title II beneficiary to test his or 
her ability to work for at least 9 months and still be considered 
disabled. During your trial work period, you continue to be entitled to 
receive your Social Security disability insurance benefits regardless 
of how high your earnings might be so long as you continue to have a 
disabling impairment. The trial work period continues until you 
accumulate 9 months (not necessarily consecutive) in which you 
performed ``services'' (i.e., work activity) within a rolling 60-
consecutive-month period. We use this ``services'' rule to count trial 
work

[[Page 60465]]

period months. Under section 222(c)(2) of the Act and Sec.  404.1592(b) 
of the regulations, services means any activity (whether legal or 
illegal), which is done in employment or self-employment for pay or 
profit, or is the kind normally done for pay or profit. We generally 
use earnings guidelines to evaluate whether the work activity you are 
performing as an employee or self-employed person is services for the 
trial work period. We consider your work in a particular month to be 
services if you earn more than $590 in that month for the year 2005, or 
work more than 80 self-employed hours in that month. The dollar amount 
can be adjusted each year based on the national average wage.

What is the effective date of section 208?

    The statutory change provides that an individual is not entitled to 
receive title II disability benefits for trial work period service 
months that occur on or after March 2004 and before the date of 
conviction by a Federal court of fraudulently concealing work activity 
during that trial work period.

What is the purpose of section 420A?

    Section 420A of the SSPA provides that, if your previous 
entitlement to childhood disability benefits under title II of the Act 
ended due to the performance of substantial gainful activity, you may 
become reentitled to childhood disability benefits at any time if you 
become disabled again and you meet other requirements for entitlement. 
Prior to the effective date of section 420A, if childhood disability 
benefits were terminated because disability ceased, you could become 
reentitled to benefits only if you became disabled again within 7 years 
of the most recent termination. Section 420A removes a significant 
disincentive to work for childhood disability beneficiaries by removing 
the 7-year restriction on reentitlement for individuals whose 
entitlement to childhood disability benefits was terminated due to the 
performance of substantial gainful activity. The 7-year restriction 
continues to apply to beneficiaries whose previous entitlement to 
childhood disability benefits terminated because of medical 
improvement.

What is the effective date of section 420A?

    The statutory change that removed the 7-year restriction on 
reentitlement to childhood disability benefits under title II of the 
Act if the previous entitlement terminated due to the performance of 
substantial gainful activity became effective with respect to benefits 
payable for months beginning October 2004.

What is the purpose of section 432?

    Section 432 of the SSPA changes who is eligible for the student 
earned income exclusion under title XVI of the Act. The law increases 
the number of persons eligible for the exclusion by eliminating the 
requirement that you must meet the definition of a child under our SSI 
rules to be eligible for this exclusion. Specifically, section 432 of 
the SSPA removes the restriction that you must be unmarried and not 
head of your own household to qualify. You no longer need to be 
considered a ``child'' to get the student earned income exclusion, you 
only must be under the age of 22, and, as before, regularly attending a 
school, college, or university, or a course of vocational or technical 
training to prepare for gainful employment.

What is the student earned income exclusion?

    The student earned income exclusion is a provision that allows us 
to exclude a greater amount of your earned income if you are a student 
than we do under our usual income counting rules. If you meet the 
definition of child for SSI and you are regularly attending school, we 
exclude a greater amount of your earned income when determining your 
eligibility for, and the amount of, benefits. For the year 2005, we do 
not count up to $1,410 of earned income per month up to a maximum 
yearly exclusion of $5,670. These dollar amounts are adjusted each year 
by the cost-of-living adjustment (COLA) that is used to adjust the SSI 
Federal Benefit Rate. Section 432 eliminates the requirement that you 
meet the definition of a child to be eligible for the student earned 
income exclusion.

Who can use the student earned income exclusion for the period before 
April 1, 2005?

    Before April 1, 2005, (that is, before the changes made by section 
432), you could have qualified for the student earned income exclusion 
if you were:
     Under age 22;
     Unmarried;
     Not head of your own household; and
     Regularly attending school, college, or university, or a 
course of vocational or technical training designed to prepare you for 
gainful employment.
    Section 416.1861 currently provides that you are a student 
regularly attending school or college, or training that is designed to 
prepare you for a paying job, if you are enrolled for one or more 
courses of study and attend class (1) in a college or university for at 
least 8 hours a week under a semester or quarter system, (2) in grades 
7-12 for at least 12 hours a week, or (3) in a course of training to 
prepare for a paying job, and attending that training for at least 15 
hours a week if the training involves shop practice or 12 hours a week 
if it does not involve shop practice. These rules do not specifically 
address home schooling as a form of regular school attendance. However, 
Sec.  404.367 currently recognizes as full-time school attendance 
students who are instructed at home in accordance with a home school 
law of the State or other jurisdiction in which they reside.

How do section 432 and the revision regarding home schooling change the 
student earned income exclusion?

    Section 432 of the SSPA eliminates the requirement that you must be 
a child to qualify for the student earned income exclusion. 
Specifically, it removes the requirement that you must be unmarried and 
not head of your own household.
    These proposed rules regarding home schooling would allow you to be 
considered a student regularly attending school if you are instructed 
at home in grades 7-12 for at least 12 hours a week in accordance with 
a home school law of the State or other jurisdiction in which you live. 
Allowing home schooling as a form of regular school attendance would 
make the title II and title XVI programs uniform with respect to home 
schooling. We hope that our proposed rule change to consider home 
schooling, and the statute's removal of the child requirement, will 
increase the number of persons who can use the student earned income 
exclusion.

Will the student earned income exclusion apply to deemors?

    Yes. Section 1614(f) of the Act requires that when we determine an 
individual's eligibility for SSI benefits, we must consider the income 
and resources of an ineligible spouse living in the same household, or, 
in the case of a child under the age of 18, the income and resources of 
an ineligible parent living in the same household. We use the term 
``deeming'' to describe this process of considering part of an 
ineligible spouse's or parent's income and resources to be the 
individual's own income and resources. Deeming an ineligible parent's 
income and resources to a child eligible for SSI benefits is only done 
if the child is under age 18 and the child is living in the same 
household as the ineligible parent. Section 1614(f) also grants the 
Commissioner the

[[Page 60466]]

discretion to not deem the income and resources of an ineligible spouse 
or parent to an eligible individual when the Commissioner determines 
that deeming would be inequitable under the circumstances.
    In addition to adding to our regulations the change in how we 
determine an eligible individual's income required by section 432 of 
the SSPA, we propose to apply this earned income exclusion when 
determining the countable income of an ineligible spouse or ineligible 
parent who is a student.
    Extending this student earned income exclusion to the deeming 
process, as authorized by section 1614(f) of the Act, is consistent 
with the SSI program's longstanding treatment of income and resources 
of spouses and parents comparably to the way that income and resources 
of an eligible individual would be treated. It will also provide 
incentives to encourage work and education to ineligible individuals 
living with beneficiaries.

What is the effective date of section 432 and the revision regarding 
home schooling?

    The statutory changes that allow those who are married and the head 
of a household to also qualify for the student earned income exclusion 
are effective with benefits payable April 1, 2005. The changes to allow 
home schooling as a form of regular school attendance will be effective 
30 days after publication of the final rules.

Explanation of Changes

    We propose to revise several of our rules in subparts D, E, J, and 
P of part 404 and subparts G, K, N, and R of part 416 to:
     Reflect the statutory change that requires us to issue 
receipts to you or your representative when you or your representative 
report changes in your work activity or earnings or give us 
documentation of those changes at least until we establish a 
centralized computer file to record the information you report to us 
and the date you report;
     Explain that disability benefits are not payable for trial 
work period service months if you are convicted by a Federal court of 
fraudulently concealing your work activity during that trial work 
period;
     Reflect the statutory change that expands the number of 
persons who can use the student earned income exclusion by removing the 
requirement that you must be a child, unmarried and not head of 
household;
     Expand the number of persons who can use the student 
earned income exclusion by allowing home schooling as a form of regular 
school attendance;
     Extend application of the student earned income exclusion 
to the income of an ineligible spouse and ineligible parent for deeming 
purposes; and
     Reflect the statutory change that eliminates the 7-year 
time limit on reentitlement to childhood disability benefits when the 
prior entitlement terminated due to the performance of substantial 
gainful activity.
    The following is an explanation of the specific changes we are 
proposing and our reasons for making these proposals.

Section 404.351 Who May Be Reentitled to Child's Benefits

    We are proposing to add a new paragraph (d) to explain that, 
effective with respect to benefits payable for months beginning October 
2004, you can be reentitled to childhood disability benefits at any 
time if your prior entitlement terminated because you ceased to be 
under a disability due to the performance of substantial gainful 
activity.

Section 404.401a When We Do Not Pay Benefits Because of a Disability 
Beneficiary's Work Activity

    We are proposing to revise the last sentence in current Sec.  
404.401a to clarify that earnings from work activity during a trial 
work period will not stop benefits except as provided in Sec.  404.471.

Section 404.471 Nonpayment of Disability Benefits for Trial Work Period 
Service Months Upon a Conviction of Fraudulently Concealing Work 
Activity

    We are proposing to add a new Sec.  404.471 to explain that 
disability benefits will not be payable for trial work period service 
months if you are convicted by a Federal court of fraudulently 
concealing your work activity during the trial work period. As 
explained in Sec.  404.1592, the trial work period is a period during 
which you may test your ability to work and still continue to receive 
disability benefits if you still have a disabling impairment, no matter 
how much you are earning. Under this proposed change, which reflects 
section 208 of the SSPA of 2004, if you are convicted in Federal court 
of fraudulently concealing your work activity during your trial work 
period, disability benefits are not payable for any trial work period 
service months beginning March 2004 that occur prior to that 
conviction. Benefits already received that are determined not payable 
because of the Federal court decision are considered an overpayment on 
the record. Consistent with section 208, we explain in Sec.  404.471(b) 
what is meant by fraudulently concealing work activity. You can be 
found to be fraudulently concealing work activity if you provide false 
information concerning the amount of your earnings, engage in work 
activity under another identity while receiving disability benefits, or 
take actions to conceal your work activity with the intent of obtaining 
benefits in excess of amounts due.

Section 404.903 Administrative Actions That Are Not Initial 
Determinations

    We are proposing to add a new paragraph (x) to Sec.  404.903 to 
explain that the receipt we give you or your representative as a result 
of a report of a change in your work activity or earnings is not an 
initial determination. As explained in existing Sec.  404.903, 
administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative review 
process provided by subpart J of part 404, and they are not subject to 
judicial review. The receipt will summarize the information that you 
give us, and we will ask you to review the information contained in the 
receipt for accuracy and to tell us if the information is wrong. If our 
information is wrong, we will correct our records based on the new 
information that you give us.
    In addition, we will give you advance notice if we determine that 
you are not now disabled based on what you told us about your work 
activity, as explained in Sec.  404.1595.

Section 404.1588 Your Responsibility To Tell Us of Events That May 
Change Your Disability Status

    We are proposing to designate the undesignated current paragraph as 
paragraph (a) and add a title: Your responsibility to report changes to 
us, and redesignate paragraphs (a), (b), (c), and (d) as (1), (2), (3), 
and (4). We also propose to add a new paragraph (b), Our responsibility 
when you report your work to us, that clarifies how we will respond 
when you or your representative report a change in your work activity 
to us. Section 404.1588(a) explains that if you receive benefits based 
on disability, you must report to us when there is a change in your 
work activity; for example, you return to work, or there is an increase 
in your earnings or the amount of work you are doing. New paragraph (b) 
explains that we will issue a receipt to you or your representative 
when you or your representative report a change in your work activity 
or earnings, until a centralized computer file that records

[[Page 60467]]

the information that you give us and the date that you make your report 
is in place. Once the centralized computer file is in place, we may 
continue to issue receipts to you or your representative if you request 
us to do so.

Section 404.1592 The Trial Work Period

    In Sec.  404.1592 we are proposing to add a new paragraph (f), 
Nonpayment of benefits for trial work period service months, to clarify 
that benefits will not be payable for trial work period service months 
if you have been convicted by a Federal court of fraudulently 
concealing your work activity. We also added a cross-reference to new 
Sec.  404.471.

Section 416.708 What You Must Report

    We are proposing to amend the last paragraph of paragraph (c) by 
adding two new sentences to explain how we will respond when you report 
a change in your earned income. Section 416.708 (c) explains that if 
you receive SSI benefits, you must report to us when there is a change 
in your income. The proposed new sentences which would be added to 
paragraph (c) explain that if you receive SSI benefits based on 
disability, we will issue a receipt to you or your representative when 
you or your representative report a change in your work activity or 
your earned income, at least until we establish a centralized computer 
file to record the information that you give us and the date that you 
make your report. Once the centralized computer file is in place, we 
will continue to issue receipts to you or your representative if you 
request us to do so.

Section 416.1112 Earned Income We Do Not Count

    We are proposing to amend paragraph (c)(3) to reflect the statutory 
change eliminating the requirement that you must be a child to qualify 
for the student earned income exclusion.

Section 416.1161 Income of an Ineligible Spouse, Ineligible Parent, and 
Essential Person for Deeming Purposes

    We are proposing to amend Sec.  416.1161 by adding a new paragraph 
(a)(27) to exclude certain earned income of a student as provided by 
section 432 from the income of an ineligible spouse and ineligible 
parent for deeming purposes.

Section 416.1403 Administrative Actions That Are Not Initial 
Determinations

    We are proposing to add a new paragraph (a)(22) to Sec.  416.1403 
to explain that the receipt we give you or your representative as a 
result of your report of work activity or earnings is not an initial 
determination. As explained in Sec.  416.1403(a), administrative 
actions that are not initial determinations may be reviewed by us, but 
they are not subject to the administrative review process provided by 
subpart N, and they are not subject to judicial review. The receipt 
will summarize the information that you or your representative give us 
and we will ask you to review the information contained in the receipt 
for accuracy and tell us if the information is wrong. If our 
information is wrong, we will correct our records based on the new 
information that you give us.
    In addition, we will give you advance notice if we suspend or 
reduce your benefit amount based on what you told us about your 
earnings as explained in Sec.  416.1336.

Section 416.1861 Deciding Whether You Are a Child: Are You a Student?

    We are proposing to add a new paragraph (b) to Sec.  416.1861 to 
add home schooling conducted in accordance with a home school law of 
the State or other jurisdiction in which you live as a form of regular 
school attendance for purposes of title XVI. We are proposing to 
redesignate paragraphs (b), (c), (d), (e), and (f) as paragraphs (c), 
(d), (e), (f), and (g). We also are proposing to amend current 
paragraph (e) to remove references to earnings because we discuss 
student earnings in a new section.
    We are proposing to add a new undesignated centered heading to 
read, Who is Considered A Student For Purposes of The Student Earned 
Income Exclusion.

Section 416.1870 Effect of Being Considered a Student

    We are proposing to add a new Sec.  416.1870 to explain that if we 
consider you to be a student, we will not count all of your earned 
income when we determine your SSI eligibility and benefit amount.

Section 416.1872 Who Is Considered a Student

    We are proposing to add a new Sec.  416.1872 to explain that we 
consider you to be a student if you are under 22 years old and you are 
regularly attending school or college or training that is designed to 
prepare you for a paying job.

Section 416.1874 When We Need Evidence That You Are a Student

    We are proposing to add a new Sec.  416.1874 to explain what 
evidence we need if you are a student and you expect to earn over $65 
in any month.

Clarity of These Proposed Rules

    Executive Order 12866, as amended by Executive Order 13258, 
requires each agency to write all rules in plain language. In addition 
to your substantive comments on these proposed rules, we invite your 
comments on how to make them easier to understand.
    For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that 
isn't clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the rules easier to 
understand?

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed rules meet the criteria for a 
significant regulatory action under Executive Order 12866, as amended 
by Executive Order 13258. Thus, they were reviewed by OMB.

Regulatory Flexibility Act

    We certify that these proposed regulations would not have a 
significant economic impact on a substantial number of small entities 
because they would affect only individuals. Thus, a regulatory 
flexibility analysis as provided in the Regulatory Flexibility Act, as 
amended, is not required.

Paperwork Reduction Act

    These proposed rules contain reporting requirements as shown in the 
table below. Where the public reporting burden is accounted for in 
Information Collection Requests for the various forms that the public 
uses to submit the information to SSA, a 1-hour placeholder burden is 
being assigned to the specific reporting requirement(s) contained in 
these rules; we are seeking clearance of these burdens because they 
were not considered during the clearance of the forms.

[[Page 60468]]



----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                                                  Annual  number   Frequency of     burden per       Estimated
                     Section                       of  responses     response      response  (in   annual burden
                                                                                     minutes)       (in hours)
----------------------------------------------------------------------------------------------------------------
404.1588(a).....................................  ..............  ..............  ..............               1
416.708.........................................  ..............  ..............  ..............               1
416.1861(f).....................................          15,000               1              10            2500
                                                 -----------------
    Total.......................................          15,000  ..............  ..............            2500
----------------------------------------------------------------------------------------------------------------

    An Information Collection Request has been submitted to OMB for 
clearance. We are soliciting comments on the burden estimate; the need 
for the information; its practical utility; ways to enhance its 
quality, utility and clarity; and on ways to minimize the burden on 
respondents, including the use of automated collection techniques or 
other forms of information technology. Comments should be submitted 
and/or faxed to the Office of Management and Budget and the Social 
Security Administration at the following addresses/numbers: Office of 
Management and Budget, Attn: Desk Officer for SSA, New Executive Office 
Building, Room 10230, 725 17th St., NW., Washington, DC 20530, Fax 
Number: 202-395-6974. Social Security Administration, Attn: SSA Reports 
Clearance Officer, Rm. 1338 Annex Building, 6401 Security Boulevard, 
Baltimore, MD 21235-6401, Fax Number: 410-965-6400.
    Comments can be received for between 30 and 60 days after 
publication of this notice and will be most useful if received by SSA 
within 30 days of publication. To receive a copy of the OMB clearance 
package, you may call the SSA Reports Clearance Officer on 410-965-
0454.

(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; 96.006, 
Supplemental Security Income)

List of Subjects

20 CFR Part 404

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

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 11, 2005.
Jo Anne B. Barnhart,
Commissioner of Social Security.
    For the reasons set out in the preamble, we propose to amend 
subparts D, E, J, and P of part 404 and subparts G, K, N, and R of part 
416 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 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 404.351 is amended by removing ``; or'' at the end of 
paragraph (b) and replacing it with a period; removing the period at 
the end of paragraph (c) and replacing it with ``; or'', and adding a 
new paragraph (d) to read as follows:


Sec.  404.351  Who may be reentitled to child's benefits.

* * * * *
    (d) The first month on or after October 2004 you are under a 
disability that began after the end of the 84th month following the 
month in which your entitlement to benefits had ended because your 
previous disability ended due to the performance of substantial gainful 
activity.

Subpart E--[Amended]

    3. The authority citation for subpart E is revised to read as 
follows:

    Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c), 
216(l), 222(c), 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), 
416(l), 422(c), 423(e), 425, 902(a)(5), and 1320a-8a and 48 U.S.C. 
1801).

    4. Section 404.401a is amended by revising the last sentence to 
read as follows:


Sec.  404.401a  When we do not pay benefits because of a disability 
beneficiary's work activity.

    * * * Except as provided in Sec.  404.471, earnings from work 
activity during a trial work period will not stop your benefits.
    5. Add a new Sec.  404.471 to read as follows:


Sec.  404.471  Nonpayment of disability benefits for trial work period 
service months upon a conviction of fraudulently concealing work 
activity.

    (a) Nonpayment of benefits during the trial work period. Beginning 
with work activity performed in March 2004 and thereafter, if you are 
convicted by a Federal court of fraudulently concealing your work 
activity and the concealment of the work activity occurred while you 
were in a trial work period, monthly disability benefits under title II 
of the Social Security Act are not payable for months in which you 
performed services during that trial work period prior to the 
conviction (see Sec.  404.1592 for a definition of a trial work period 
and services). Benefits already received for months of work activity in 
the trial work period prior to the conviction and in the same period of 
disability during which the fraudulently concealed work activity 
occurred, will be considered an overpayment on the record.
    (b) Concealment of work activity. You can be found to be 
fraudulently concealing work activity if--
    (1) You provide false information to us concerning the amount of 
earnings you received or are receiving for a particular period;
    (2) You received or are receiving disability benefits while 
engaging in work activity under another identity (this would include 
working under another Social Security number or a forged Social 
Security number); or
    (3) You take other actions to conceal work activity with the intent 
of fraudulently obtaining benefits in excess of amounts that are due.

Subpart J--[Amended]

    6. The authority citation for subpart J is revised to read as 
follows:

    Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 
221, 225, and 702(a)(5) of the

[[Page 60469]]

Social Security Act (42 U.S.C. 401(j), 404(f), 405(a), (b), (d)-(h), 
and (j), 421, 425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 
2500 (42 U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-
460, 98 Stat. 1802 (42 U.S.C. 421 note); sec. 202, Pub. L. 108-203, 
118 Stat. 509 (42 U.S.C. 902 note).

    7. Section 404.903 is amended by removing the word ``and'' at the 
end of paragraph (v), replacing the period at the end of paragraph (w) 
with ``; and'', and adding a new paragraph (x) to read as follows:


Sec.  404.903  Administrative actions that are not initial 
determinations.

* * * * *
    (x) Issuing a receipt in response to your report of a change in 
your work activity.

Subpart P--[Amended]

    8. The authority citation for subpart P is revised to read as 
follows:

    Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a) 
and (i), 222(c), 223, 225, and 702(a)(5) of the Social Security Act 
(42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a) and (i), 
422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 
Stat. 2105, 2189; sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 
U.S.C. 902 note).

    9. Section 404.1588 is revised to read as follows:


Sec.  404.1588  Your responsibility to tell us of events that may 
change your disability status.

    (a) Your responsibility to report changes to us. If you are 
entitled to cash benefits or to a period of disability because you are 
disabled, you should promptly tell us if--
    (1) Your condition improves;
    (2) You return to work;
    (3) You increase the amount of your work; or
    (4) Your earnings increase.
    (b) Our responsibility when you report your work to us. When you or 
your representative report changes in your work activity to us under 
paragraphs (a)(2), (a)(3), and (a)(4) of this section, we will issue a 
receipt to you or your representative, at least until a centralized 
computer file that records the information that you give us and the 
date that you make your report is in place. Once the centralized 
computer file is in place, we will continue to issue receipts to you or 
your representative if you request us to do so.
    10. Section 404.1592 is amended by adding a new paragraph (f) to 
read as follows:


Sec.  404.1592  The trial work period.

* * * * *
    (f) Nonpayment of benefits for trial work period service months. 
See Sec.  404.471 for an explanation of when benefits for trial work 
period service months are not payable if you are convicted by a Federal 
court of fraudulently concealing your work activity.

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

Subpart G--[Amended]

    11. The authority citation for subpart G is revised to read as 
follows:

    Authority: Secs. 702(a)(5), 1611, 1612, 1613, 1614, and 1631 of 
the Social Security Act (42 U.S.C. 902(a)(5), 1382, 1382a, 1382b, 
1382c, and 1383); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 
1382 note); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 
note)

    12. Section 416.708 (c)(4) and the paragraph following (c)(4) are 
revised to read as follows:


Sec.  416.708  What you must report.

* * * * *
    (c) * * *
    (4) An ineligible child who lives with you.


    Note to paragraph (c): However, you need not report an increase 
in your Social Security benefits if the increase is only a cost-of-
living adjustment. (For a complete discussion of what we consider 
income, see subpart K. See subpart M, Sec.  416.1323 regarding 
suspension because of excess income.) If you receive benefits based 
on disability, when you or your representative report changes in 
your earned income, we will issue a receipt to you or your 
representative until we establish a centralized computer file to 
record the information that you give us and the date that you make 
your report. Once the centralized computer file is in place, we will 
continue to issue receipts to you or your representative if you 
request us to do so.

* * * * *

Subpart K--[Amended]

    13. The authority citation for subpart K continues to read as 
follows:

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
1621, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 
1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, and 1383); sec. 211, 
Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    14. Section 416.1112 is amended by revising paragraph (c)(3) 
introductory text to read as follows:


Sec.  416.1112  Earned income we do not count.

* * * * *
    (c) * * *
    (3) If you are under age 22 and a student who is regularly 
attending school as described in Sec.  416.1861:
* * * * *
    15. Section 416.1161 is amended by adding a new paragraph (a)(26) 
to read as follows:


Sec.  416.1161  Income of an ineligible spouse, ineligible parent, and 
essential person for deeming purposes.

* * * * *
    (a) * * *
    (26) Earned income of a student as described in Sec.  
416.1112(c)(3).
* * * * *

Subpart N--[Amended]

    16. The authority citation for subpart N is revised to read as 
follows:

    Authority: Secs. 702(a)(5), 1631, and 1633 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b); sec. 202, Pub. 
L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).

    17. Section 416.1403 is amended by removing the word ``and'' at the 
end of paragraph (a)(20), replacing the period at the end of paragraph 
(a)(21) with ``; and'', and adding new paragraph (a)(22) to read as 
follows:


Sec.  416.1403  Administrative actions that are not initial 
determinations.

    (a) * * *
    (22) Issuing a receipt in response to your report of a change in 
your earned income.
* * * * *

Subpart R--[Amended]

    18. The authority citation for subpart R is revised to read as 
follows:

    Authority: Secs. 702(a)(5), 1612(b), 1614(b), (c), and (d), and 
1631(d)(1) and (e) of the Social Security Act (42 U.S.C. 902(a)(5), 
1382a(b), 1382c (b), (c), and (d) and 1383 (d)(1) and (e)).

    19. Section 416.1861 is amended by redesignating paragraphs (b), 
(c), (d), (e) and (f) as (c), (d), (e), (f) and (g), and revising newly 
redesignated paragraph (f), and adding a new paragraph (b) to read as 
follows:


Sec.  416.1861  Deciding whether you are a child: Are you a student?

* * * * *
    (b) If you are instructed at home. You may be a student regularly 
attending school if you are instructed at home in grades 7-12 for at 
least 12 hours a week in accordance with a home school law of the State 
or other jurisdiction in which you reside.
* * * * *
    (f) When we need evidence that you are a student. We need evidence 
that you are a student if you are 18 years old or older but under age 
22, because we will not consider you to be a child unless we consider 
you to be a student.
* * * * *

[[Page 60470]]

    20. Add a new undesignated centered heading and Sec.  416.1870 to 
read as follows:
Who Is Considered a Student for Purposes of the Student Earned Income 
Exclusion


Sec.  416.1870  Effect of being considered a student.

    If we consider you to be a student, we will not count all of your 
earned income when we determine your SSI eligibility and benefit 
amount. If you are an ineligible spouse, ineligible parent or an 
essential person for deeming purposes and we consider you to be a 
student, we will not count all of your income when we determine how 
much of your income to deem. Section 416.1110 tells what we mean by 
earned income. Section 416.1112(c)(3) tells how much of your earned 
income we will not count. Section 416.1161(a)(27) explains how the 
student earned income exclusion applies to deemors.
    21. Add a new Sec.  416.1872 to read as follows:


Sec.  416.1872  Who is considered a student.

    We consider you to be a student if you are under 22 years old and 
you regularly attend school or college or training that is designed to 
prepare you for a paying job as described in Sec.  416.1861(a) through 
(e).
    22. Add a new Sec.  416.1874 to read as follows:


Sec.  416.1874  When we need evidence that you are a student.

    We need evidence that you are a student if you are under age 22 and 
you expect to earn over $65 in any month. Section 416.1861(g) explains 
what evidence we need.
[FR Doc. 05-20803 Filed 10-17-05; 8:45 am]
BILLING CODE 4191-02-P