[Federal Register Volume 73, Number 237 (Tuesday, December 9, 2008)]
[Proposed Rules]
[Pages 74663-74666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-28618]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

[Docket No. SSA 2008-0034]
RIN 0960-AG66


Technical Revisions to the Supplemental Security Income (SSI) 
Regulations on Income and Resources

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: We propose to amend our Supplemental Security Income (SSI) 
regulations by making technical revisions to our rules on income and 
resources. Many of these revisions reflect legislative changes found in 
the Consolidated Appropriations Act of 2001, the Economic Growth and 
Tax Relief Reconciliation Act of 2001 (EGTRRA), an amendment to the 
National Flood Insurance Act of 1968, the Energy Employees Occupational 
Illness Compensation Program Act of 2000, and the Social Security 
Protection Act of 2004 (SSPA). We further propose to amend the SSI home 
exclusion rules to extend the home exclusion to individuals who, 
because of domestic abuse, leave a home that would otherwise be an 
excludable resource. Finally, we propose to update our ``conditional-
payment'' rule to eliminate the liquid resource requirement as a 
prerequisite to receiving conditional payments.

DATES: To be sure that we consider your comments, we must receive them 
no later than February 9, 2009.

ADDRESSES: You may submit comments by any one of four methods--
Internet, facsimile, regular mail, or hand-delivery. Commenters should 
not submit the same comments multiple times or by more than one method. 
Regardless of which of the following methods you choose, please state 
that your comments refer to Docket No. SSA 2008-0034 to ensure that we 
can associate your comments with the correct regulation:
    1. Federal eRulemaking portal at http://www.regulations.gov. (This 
is the most expedient method for submitting your comments, and we 
strongly urge you to use it.) In the ``Search Documents'' section of 
the Web page, type ``SSA 2008-0034'', select ``Go,'' and then click 
``Send a Comment or Submission.'' The Federal eRulemaking portal issues 
you a tracking number when you submit a comment.
    2. Telefax to (410) 966-2830.
    3. Letter to the Commissioner of Social Security, P.O. Box 17703, 
Baltimore, MD 21235-7703.
    4. Deliver your comments to the Office of Regulations, Social 
Security Administration, 922 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, Maryland 21235-6401, between 8 a.m. and 4:30 p.m. 
on regular business days.
    All comments are posted on the Federal eRulemaking portal, although 
they may not appear for several days after receipt of the comment. You 
may also inspect the comments on regular business days by making 
arrangements with the contact person shown in this preamble.
    Caution: All comments we receive from members of the public are 
available for public viewing on the Federal eRulemaking portal at 
http://www.regulations.gov. Therefore, you should be careful to include 
in your comments only information that you wish to make publicly 
available on the Internet. We strongly urge you not to include any 
personal information, such as your Social Security number or medical 
information, in your comments.

FOR FURTHER INFORMATION CONTACT: Donna Gonzalez, Social Insurance 
Specialist, Social Security Administration, Office of Income Security 
Programs, 252 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 
21235-6401, (410) 965-7961, for information about this notice. For 
information on eligibility or filing for benefits, call our national 
toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our 
Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

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.

Background

    The primary goal of the SSI program is to ensure a minimum level of 
income to people who are age 65 or older, blind, or disabled, and who 
have limited income and resources. The law provides that SSI payments 
can be made only to people who have income and resources below 
specified amounts. Therefore, an individual's income and resources are 
major factors in deciding whether the individual is eligible to receive 
SSI payments and in computing the amount of those payments.

Consolidated Appropriations Act of 2001, Public Law 106-554

    This law amended section 1612(a)(1) of the Social Security Act (the 
Act) (42 U.S.C. 1382a(a)(1)) to change how we treat statutory employees 
under the SSI program. See Public Law 106-554, app. A, Sec.  519 (Dec. 
21, 2000). Statutory employees are certain independent contractors, 
including agent-drivers or commission-drivers, certain full-time life 
insurance salespersons, home workers, and traveling or city 
salespersons. Act at Sec.  210(j)(3) (42 U.S.C. 410(j)(3)). We consider 
such individuals, by statute, to be employees, rather than self-
employed independent contractors, for wage and income purposes. 
Previously, we treated statutory employees the same as employees for 
SSI eligibility and payment-amount purposes. For such employees, we 
considered their wages as their earned income. After this change to the 
Act, we now count as earned income the net earnings of self-employed 
individuals, including statutory employees, thereby allowing them to 
deduct business expenses before calculating their income. This 
provision became effective for tax years beginning on or after January 
1, 2001.

Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 
107-16 (EGTRRA)

    The EGTRRA excludes the payment of a refundable child tax credit 
(CTC) from income for purposes of eligibility for public benefits 
funded in whole or part with Federal funds. Public Law 107-16, Sec.  
203, 115 Stat. 49 (June 7, 2001) (referring to Internal Revenue Code 
Sec.  24, 26 U.S.C. 24). Such a payment is also excluded from resources 
for these purposes during the month the payment is received and the 
following month. This change became effective for SSI purposes for 
taxable years beginning on or after January 1, 2001.

Social Security Protection Act of 2004 (SSPA), Public Law 108-203

    The SSPA amended the Act to create a uniform 9-month resource 
exclusion period for certain tax refunds and for any unspent portion of 
past-due Social Security and SSI payments. Act at Sec.  1613(a)(7) (42 
U.S.C. 1382b(a)(7)), as amended by Public Law 108-203, Sec.  431 (Mar. 
2, 2004). This amendment

[[Page 74664]]

expands the exclusion established by the EGTRRA discussed above. In 
accordance with this provision, we published final rules in the Federal 
Register at 70 FR 41,135 (July 18, 2005), amending our resource 
exclusion rules at title 20, chapter III, part 416, subpart L of the 
Code of Federal Regulations. When we amended the regulations, we 
included this exclusion under Sec.  416.1236(a), titled ``Exclusions 
from resources; provided by other statutes'' and added a new paragraph 
(24). As this exclusion is now required by the Act itself, we propose 
to amend our rules so that they correctly reflect the source of this 
exclusion.

Amendment to the National Flood Insurance Act of 1968, Public Law 109-
64

    The National Flood Insurance Act provides that payments made for 
flood mitigation activities are not counted as income or resources when 
determining eligibility and benefit amounts for any Federal means-
tested program. National Flood Insurance Act, Sec.  1324, as amended by 
Public Law 109-64, Sec.  1 (Jan. 7, 2005). Effective October 1, 2005, 
this provision applies to SSI eligibility and payment-amount 
determinations.

Floyd D. Spence National Defense Authorization Act for Fiscal Year 
2001, Public Law 106-398

    In October 2000, the Energy Employees Occupational Illness 
Compensation Program Act (EEOICPA) was established. Public Law 106-398, 
Sec.  1, app., title XXXVI (Oct. 30, 2000) (section 1 adopting as 
Appendix H.R. 5408). Section 3646 of the Appendix provided that medical 
benefits and compensation payments made under the EEOICPA are not 
counted as income or resources for purposes of determining eligibility 
to receive, or for determining the amount of, certain Federal benefits, 
including SSI. This provision became effective on July 31, 2001.

Domestic Violence Resource Exclusion

    Section 1613(a)(1) of the Act excludes from resources an 
individual's home and associated land. Regulations provide that the 
home is excluded so long as it serves as the individual's principal 
place of residence or the individual maintains an active intent to 
return to the residence. The home also is not counted as a resource, 
regardless of the individual's intent to return, if the individual 
resides in an institution and a spouse or dependent relative continues 
to maintain residence in the home during the period of 
institutionalization.
    Advocacy groups have expressed concern regarding the counting of a 
home as a resource in instances where a victim of domestic abuse leaves 
the home and resides elsewhere. We agree with these concerns because, 
currently, an individual fleeing from domestic abuse may return to a 
potentially dangerous home environment simply to avoid losing SSI 
because of an ownership interest in the home. Therefore, we intend to 
amend our rules to address these concerns and provide that, when an 
individual has fled his or her home and provides evidence of domestic 
abuse, the home would remain an excludable resource despite the fleeing 
individual's physical absence from, and continuing ownership interest 
in, the home. This exclusion would continue until such time as the 
individual establishes a new principal place of residence or otherwise 
takes action rendering the home no longer excludable. This change would 
eliminate the need for SSA to develop a domestic abuse victim's intent 
to return and eliminate a potential financial disincentive to those 
attempting to leave an abusive situation.

Conditional Payments

    Section 1613(b) of the Act, titled ``Disposition of Resources,'' 
gives the Agency broad authority to establish conditional-payment rules 
by regulation. Under this authority, we have created an exception to 
our ordinary resource rules. Part 416, subpart L, Sec.  416.1240--Sec.  
416.1245. This exception allows us to pay monthly SSI payments in 
certain circumstances when an individual possesses excess non-liquid 
resources. Individuals who meet all but the resource requirements for 
SSI may have little or nothing on which to live if most of their 
resources are non-liquid and difficult to convert to cash. The 
conditional-payment provision is used to provide individuals a period 
of time in which to sell such non-liquid resources and convert them to 
cash. We condition these payments on the individual's written agreement 
to sell excess non-liquid resources during that period and repay the 
conditional payments with the proceeds.
    A prerequisite for receiving conditional payments is that the 
individual may not have countable liquid resources in excess of one-
fourth the annual Federal benefit rate (FBR), which we commonly refer 
to as ``3 times the monthly FBR.'' The original purpose of the liquid-
resource limit was to ensure that the individual truly needed the 
conditional-payment period. Because the disposal period for non-liquid 
resources other than real property is 3 months, we assumed that if the 
individual did not have liquid resources equal to 3 months worth of SSI 
payments, he had inadequate resources for day-to-day expenses and 
needed to dispose of some non-liquid resources for support. Conversely, 
if the individual had liquid resources worth more than three times the 
FBR, then he had adequate resources and did not need conditional 
payments.
    Originally, 3 months worth of SSI payments was equal to only about 
32% of the resource limit. However, since we established this rule over 
30 years ago, the FBR has increased annually and the resource limit has 
grown slowly or not at all. The difference between the statutory 
resource limit and 3 times the FBR is now negligible--3 times the FBR 
now equals $1,911 or 96% of the resource limit. In 2009 the limit on 
liquid resources for conditional payments will exceed the statutory 
limit on total resources and therefore become meaningless. Accordingly, 
we are proposing to eliminate the liquid-resource test as a 
prerequisite for receiving conditional payments. Eliminating this 
requirement will simplify our conditional-payments provision.

Explanation of Proposed Changes

    We propose the following changes to our rules on determining income 
and resources under the SSI program.

Revisions to Subpart K--Income

    We propose revising Sec.  416.1110(b) to update the definition of 
net earnings from self-employment to include the earnings of statutory 
employees, as provided under section 519 of the Consolidated 
Appropriations Act of 2001.

Revisions to Appendix Subpart K--Income Excluded by Federal Laws Other 
Than the Act

    At the end of part 416, subpart K, we maintain an appendix, which 
lists types of income excluded under the SSI program as provided by 
Federal laws other than the Act. We update this list periodically; 
however, we apply the law in effect due to changes in Federal statutes, 
whether or not the list in the appendix has been amended to reflect the 
statutory changes. We propose revising the appendix to subpart K by 
adding three new paragraphs under the heading ``V. Other,'' which set 
forth SSI income exclusions as follows:
     New paragraph (m) would reflect the exclusion of a payment 
of a refundable CTC made to an individual under section 24 of the 
Internal Revenue Code of 1986, as provided in section 203

[[Page 74665]]

of the EGTRRA, Public Law 107-16, 26 U.S.C. 24 note;
     New paragraph (n) would reflect the exclusion of payments 
made for flood mitigation activities pursuant to section 1324 of the 
National Flood Insurance Act of 1968 (42 U.S.C. 4031), as added by 
Public Law 109-64;
     New paragraph (o) would reflect the exclusion of payments 
made to individuals under the EEOICPA of 2000 (42 U.S.C. 7385e).

Revisions to Subpart L--Resources and Exclusions

    We propose amending Sec.  416.1235, which currently refers to an 
exclusion of the earned income tax credit, by revising this section to 
read ``Exclusion of certain payments related to tax tax credits.'' This 
section would contain exclusions for payments related to the earned 
income credit and a new paragraph describing the exclusion for the 
payment of a refundable CTC, which is currently in our rules at Sec.  
416.1236(a)(24).
    Section 416.1210 provides a list of general resources that we do 
not count when determining SSI eligibility. We propose adding a new 
paragraph (v) to describe the exclusion for the payment of a refundable 
CTC, with a reference to Sec.  416.1235.
    Section 416.1236(a) lists resource exclusions in the SSI program 
provided by other statutes. We propose removing current paragraph (24) 
from this section, which excludes from resources the payment of a 
refundable CTC, and we propose adding this exclusion to Sec.  416.1235. 
We propose adding a new paragraph (24) and adding paragraph (25) to 
respectively reflect the exclusions of payments for flood mitigation 
activities made pursuant to section 1324 of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4031) and payments made to individuals 
under the EEOICPA of 2000 (42 U.S.C. 7385e).
    We also propose adding a new paragraph to Sec.  416.1212 to extend 
the home exclusion to victims of domestic abuse who flee an abusive 
situation, but maintain an ownership interest in an otherwise excluded 
home. This exclusion would continue until the individual establishes a 
new principal place of residence or takes other action rendering the 
home no longer excludable.
    Finally, our current rule at Sec.  416.1240(a)(1) provides that, as 
a prerequisite to qualifying for conditional payments, an individual's 
total countable liquid resources may not exceed one-fourth the annual 
FBR. We propose amending Sec.  416.1240(a) to eliminate the limitation 
on liquid resources within our SSI conditional-payment rule.

Clarity of These Proposed Rules

    Executive Order (E.O.) 12866, as amended, requires each agency to 
write all rules in plain language. In addition to your substantive 
comments on these final 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 is 
not 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?

When Will We Start To Use These Rules?

    We will not use these rules until we evaluate the public comments 
we receive on them, determine whether they should be issued as final 
rules, and issue final rules in the Federal Register. If we publish 
final rules, we will explain in the preamble how we will apply them, 
and summarize and respond to the public comments. Until the effective 
date of any final rules, we will continue to use our current rules.

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. 
Thus, they were subject to OMB review.

Regulatory Flexibility Act

    We certify that these final rules will not have a significant 
economic impact on a substantial number of small entities as they 
affect individuals only. Therefore, a regulatory flexibility analysis 
as provided in the Regulatory Flexibility Act, as amended, is not 
required.

Paperwork Reduction Act

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

(Catalog of Federal Domestic Assistance Program No. 96.006, 
Supplemental Security Income)

List of Subjects in 20 CFR Part 416

    Administrative practice and procedure; Aged, Blind, Disability 
benefits; Public Assistance programs; Reporting and recordkeeping 
requirements; Supplemental Security Income (SSI).

    Dated: September 17, 2008.
Michael J. Astrue,
Commissioner of Social Security.
    For the reasons set forth in the preamble, we propose to amend 
subparts K and L of part 416 of chapter III of title 20 of the Code of 
Federal Regulations as follows:

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

Subpart K--[Amended]

    1. The authority citation for subpart K of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
1621, 1631, and 1633 of the Social Security Act (42 U.S.C. 
902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 
1383b); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    2. Revise Sec.  416.1110 paragraph (b) to read as follows:


Sec.  416.1110  What is earned income.

* * * * *
    (b) Net earnings from self-employment. Net earnings from self-
employment are your gross income from any trade or business that you 
operate, less allowable deductions for that trade or business. Net 
earnings also include your share of profit or loss in any partnership 
to which you belong. For taxable years beginning before January 1, 
2001, net earnings from self-employment under the SSI program are the 
same net earnings that we would count under the social security 
retirement insurance program and that you would report on your Federal 
income tax return. (See Sec.  404.1080 of this chapter.) For taxable 
years beginning on or after January 1, 2001, net earnings from self-
employment under the SSI program will also include the earnings of 
statutory employees. In addition, for SSI purposes only, we consider 
statutory employees to be self-employed individuals. Statutory 
employees are agent- or commission-drivers, certain full-time life 
insurance salespersons, home workers, and traveling or city 
salespersons. (See Sec.  404.1008 of this chapter for a more

[[Page 74666]]

detailed description of these types of employees.)
* * * * *

Appendix to Subpart K of Part 416--[Amended]

    3. Amend the appendix to subpart K of part 416 by adding new 
paragraphs (m), (n), and (o) under Part V as follows:

Appendix to Subpart K of Part 416--List of Types of Income Excluded 
Under the SSI Program as Provided by Federal Laws Other Than the Social 
Security Act

* * * * *

V. Other

* * * * *
    (m) Payments of the refundable child tax credit made under 
section 24 of the Internal Revenue Code of 1986, pursuant to section 
203 of the Economic Growth and Tax Relief Reconciliation Act of 
2001, Public Law 107-16 (115 Stat. 49, 26 U.S.C. 24 note).
    (n) Assistance provided for flood mitigation activities as 
provided under section 1324 of the National Flood Insurance Act of 
1968, pursuant to section 1 of Public Law 109-64 (119 Stat. 1997, 42 
U.S.C. 4031).
    (o) Payments made to individuals under the Energy Employees 
Occupational Illness Compensation Program Act of 2000, pursuant to 
section 1 [Div. C, Title XXXVI, section 3646] of Public Law 106-398 
(114 Stat. 1654A-510, 42 U.S.C. 7385e).

Subpart L--[Amended]

    4. The authority citation for subpart L of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
1621, 1631, and 1633 of the Social Security Act (42 U.S.C. 
902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 
1383b); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    5. Amend Sec.  416.1210 by adding a comma in the introductory 
sentence after ``(and spouse, if any)'', removing ``and'' from the end 
of paragraph (t), replacing the period at the end of paragraph (u) with 
a semicolon followed by ``and'', and adding a new paragraph (v) as 
follows:


Sec.  416.1210  Exclusions from resources; general.

* * * * *
    (v) Payment of a refundable child tax credit, as provided in Sec.  
416.1235.
    6. Amend Sec.  416.1212 by:
    A. Redesignating current paragraphs (d) through (g) as (e) through 
(h);
    B. Adding a new paragraph (d) to read as set forth below;
    C. Amending newly designated paragraph (e)(2)(ii), by removing the 
reference ``paragraph (e)'' and adding the reference ``paragraph (f)'' 
in its place;
    D. Amending newly designated paragraph (e)(2)(iii), by removing the 
reference ``paragraph (f)'' and adding the reference ``paragraph (g)'' 
in its place; and
    E. Amending newly designated paragraph (f), by removing the 
reference ``paragraph (d)(2)(ii) of this section'' and adding the 
reference, ``paragraph (e)(2)(iii) of this section'' in its place, and 
by removing the reference ``paragraph (f)'' and adding the reference 
``paragraph (g)'' in its place.


Sec.  416.1212  Exclusion of the home.

* * * * *
    (d) If an individual leaves the principal place of residence due to 
domestic abuse. If an individual moves out of his or her home without 
the intent to return, but is fleeing the home as a victim of domestic 
abuse, we will not count the home as a resource in determining the 
individual's eligibility to receive, or continue to receive, SSI 
payments. In that situation, we will consider the home to be the 
individual's principal place of residence until such time as the 
individual establishes a new principal place of residence or otherwise 
takes action rendering the home no longer excludable.
* * * * *
    7. Revise Sec.  416.1235 to read as follows:


Sec.  416.1235  Exclusion of certain payments related to tax credits.

    (a) In determining the resources of an individual (and spouse, if 
any), we exclude for the 9 months following the month of receipt the 
following funds received on or after March 2, 2004, the unspent portion 
of:
    (1) Any payment of a refundable credit pursuant to section 32 of 
the Internal Revenue Code (relating to the earned income tax credit);
    (2) Any payment from an employer under section 3507 of the Internal 
Revenue Code (relating to advance payment of the earned income tax 
credit); or
    (3) Any payment of a refundable credit pursuant to section 24 of 
the Internal Revenue Code (relating to the child tax credit).
    (b) Any unspent funds described in paragraph (a) that are retained 
until the first moment of the tenth month following their receipt are 
subject to resource counting at that time.
    (c) Exception: For any payments described in paragraph (a) received 
before March 2, 2004, we will exclude for the month following the month 
of receipt the unspent portion of any such payment.
    8. Amend Sec.  416.1236 by revising paragraph (a) (24) and adding 
new paragraph (a) (25) to read as follows:


Sec.  416.1236  Exclusions from resources; provided by other statutes.

    (a) * * *
    (24) Assistance provided for flood mitigation activities under 
section 1324 of the National Flood Insurance Act of 1968, pursuant to 
section 1 of Public Law 109-64 (119 Stat. 1997, 42 U.S.C. 4031).
    (25) Payments made to individuals under the Energy Employees 
Occupational Illness Compensation Program Act of 2000, pursuant to 
section 1 [Div. C. Title XXXVI, section 3646] of Public Law 106-398 
(114 Stat. 1654A-510, 42 U.S.C. 7385e).
* * * * *
    9. Amend Sec.  416.1240 by revising paragraph (a) to read as 
follows:


Sec.  416.1240  Disposition of resources.

    (a) Where the resources of an individual (and spouse, if any) are 
determined to exceed the limitations prescribed in Sec.  416.1205, such 
individual (and spouse, if any) shall not be eligible for payment 
except under the conditions provided in this section. Payment will be 
made to an individual (and spouse, if any) if the individual agrees in 
writing to:
    (1) Dispose of, at current market value, the nonliquid resources 
(as defined in Sec.  416.1201(c)) in excess of the limitations 
prescribed in Sec.  416.1205 within the time period specified in Sec.  
416.1242; and
    (2) Repay any overpayments (as defined in Sec.  416.1244) with the 
proceeds of such disposition.
* * * * *
[FR Doc. E8-28618 Filed 12-8-08; 8:45 am]
BILLING CODE 4191-02-P