[Federal Register Volume 75, Number 166 (Friday, August 27, 2010)]
[Rules and Regulations]
[Pages 52619-52621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21341]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 404

[Docket No. SSA-2006-0154]
RIN 0960-AF78


Entitlement and Termination Requirements for Stepchildren

AGENCY: Social Security Administration.

ACTION: Final rule.

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SUMMARY: We are revising our regulations to reflect changes made in the 
Contract with America Advancement Act of 1996 (CAAA) to the entitlement 
and termination requirements for Social Security child's benefits to 
stepchildren. Under the CAAA, we consider a stepchild as dependent on a 
stepparent to receive child's benefits based on the stepparent's 
earnings only if the stepchild receives at least one-half support from 
the stepparent. Also, we terminate a stepchild's benefits that are 
based on the stepparent's earnings if the stepchild's parent or 
adoptive parent and the stepparent divorce, unless the stepparent 
adopted the stepchild and the stepchild can qualify for benefits as the 
stepparent's adopted child.

DATES: This final rule will be effective September 27, 2010.

FOR FURTHER INFORMATION CONTACT: Peter White, Office of Income Security 
Programs, Social Security Administration, 6401 Security Boulevard, 
Baltimore, MD 21235-6401, (410) 594-2041. 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.

Determining Stepchild Dependency

    A stepchild may be entitled to receive Social Security child's 
benefits based on a stepparent's Social Security earnings record if the 
stepchild is dependent on a stepparent and the stepparent is entitled 
to Social Security benefits because he or she is disabled, retires, or 
dies.\1\ In those situations, the stepchild's benefits help replace the 
lost support from the stepparent. Prior to the CAAA,\2\ we considered a 
stepchild to be dependent on a stepparent if the stepchild was either 
``living with'' or receiving at least one-half support from the 
stepparent. The CAAA revised the Social Security Act (Act) so that a 
stepchild's living with a stepparent is not a basis for determining 
that a stepchild is dependent on the stepparent.\3\ Now, we consider a 
stepchild to be dependent on a stepparent only if the stepchild is 
receiving at least one-half support from the stepparent.\4\
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    \1\ 42 U.S.C. 402(d)(1)(C).
    \2\ Public Law 104-121.
    \3\ Section 104(a) of the CAAA.
    \4\ 42 U.S.C. 402(d)(4).

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[[Page 52620]]

    The House Committee on Ways and Means explained that the change 
``would result in the payment of benefits only to stepchildren who are 
truly dependent on the stepparent for their support, and only as long 
as the natural parent and stepparent are married. As a result, other 
children entitled on the worker's record will not be unnecessarily 
disadvantaged by entitlement of stepchildren who have other means of 
support.'' \5\
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    \5\ H.R. Rep. No. 104-379 at 14 (1995), as reprinted in 1995 WL 
717402.
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    Consequently, we published a notice of proposed rulemaking (NPRM) 
in the Federal Register on August 12, 2003, 68 FR 47877, and proposed 
to eliminate the reference to the ``living with'' dependency standard 
for child's benefits to stepchildren. We are adopting our proposed 
language, with minor changes for clarity, in final section 404.363.

Termination of Child's Benefits When the Stepparent Divorces the Parent 
or Adoptive Parent

    Although the CAAA requires us to terminate child's benefits to a 
stepchild if the stepparent and the stepchild's ``natural'' parent 
divorce,\6\ it did not explicitly state that we should terminate a 
stepchild's benefits if the stepparent and the stepchild's adoptive 
parent divorce. Nevertheless, we are revising our rules in final 
section 404.352(b)(7) to clarify that we will terminate child's 
benefits to a stepchild if the stepparent and the stepchild's parent or 
adoptive parent divorce. We believe that there is clear support for 
this approach.
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    \6\ Section 104(b) of the CAAA, amending section 202(d)(1) of 
the Act (42 U.S.C. 402(d)(1)).
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    First, the CAAA's context supports treating parents and adoptive 
parents equally in this situation. The CAAA states that when a 
stepchild's parents divorce, ``each stepparent shall notify the 
Commissioner of Social Security of any divorce upon such divorce 
becoming final * * *'' \7\ We interpret the use of the terms ``each 
stepparent'' and ``any divorce'' to include divorces between a 
stepchild beneficiary's insured stepparent and the stepchild's parent 
or adoptive parent.
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    \7\ Section 104(b)(2) of the CAAA, adding section 202(d)(10) to 
the Act (42 U.S.C. 402(d)(10)).
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    Second, the legislative history shows a preference for equal 
treatment of children and adopted children under the stepchild benefit 
rules. A report by the House Committee on Ways and Means suggests that 
Congress did not intend to treat children and adopted children 
differently.\8\ The report discusses the new stepchild dependency 
rules, which are applicable to all stepchildren, and states that ``[in] 
cases of a subsequent divorce * * * benefits to stepchildren terminate 
* * *'' \9\ Although the legislative history also refers to a divorce 
between a child's ``natural parent'' and stepparent, we interpret the 
use of the term ``natural parent'' in the report in the same way we do 
in our rules--to distinguish the stepparent from the other parent in a 
divorce.\10\ We do not believe that the report suggests any basis for 
excluding adopted children of stepparents' spouses from our stepchild 
rules.
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    \8\ H.R. Rep. 104-872 at 36 (1996), as reprinted in 1996 WL 
760037.
    \9\ Id.
    \10\ See, for example, 20 CFR 404.355.
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    Finally, several other benefit eligibility sections treat child-
parent and adoptive child-parent relationships equally.\11\ For 
example, a child can become entitled to child's benefits if the child's 
parent or adoptive parent marries an insured person who subsequently 
dies or if the stepparent becomes entitled to benefits.\12\ Also, the 
change to the dependency test discussed earlier applies the test to 
both children and adoptive children of the stepparent's spouse.\13\ 
This inclusion of a child whose parent or adoptive parent married the 
insured stepparent is consistent with the definition in our existing 
regulations.\14\
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    \11\ See, for example, sections 202(d)(1), 202(d)(3), 202(d)(8), 
and 216(e) of the Act (42 U.S.C. 402(d)(1), 402(d)(3), 402(d)(8), 
and 416(e)).
    \12\ See section 202(d)(1) of the Act; see also 20 CFR 404.357.
    \13\ Section 202(d)(4) of the Act (42 U.S.C. 402(d)(4)).
    \14\ 20 CFR 404.363, referencing 20 CFR 404.357.
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    For these reasons, we are adding new final section 404.352(b)(7) to 
allow us to terminate child's benefits to a stepchild if the stepparent 
and the stepchild's parent or adoptive parent divorce. However, the 
stepchild may still be entitled to child's benefits if the stepparent 
adopted the stepchild.

Termination of Child's Benefits by Prospective or Ab Initio Marriage 
Annulments

    In the NPRM, we proposed to revise 20 CFR 404.352 to add a rule 
about prospective and ab initio marriage annulments. Specifically, we 
proposed that a prospective marriage annulment would terminate child's 
benefits to a stepchild in the month in which a court issues the final 
annulment decree. We also proposed that an ab initio marriage annulment 
would terminate child's benefits to a stepchild in the month before the 
month in which a court issues a final annulment decree. However, we are 
not adopting these proposals in final at this time because we now 
believe that we should change policy about annulments in the context of 
marriage policy, not in regulations regarding stepchildren.

Other Revisions

    In the NPRM, we proposed to correct a cross-reference in section 
404.339 and to clarify the section headings in 404.339, 404.363, and 
404.364. We are adopting our proposed revision to the section heading 
in final section 404.363. We adopted the other proposed revisions in 
the final rule we published at 73 FR 40965 (July 17, 2008). We also are 
adding references to ``an adoptive parent'' and ``insured stepparent'' 
in section 404.352(b)(7) to clarify that we treat child-parent and 
adoptive child-parent relationships equally.

Public Comments

    We gave the public 60 days to comment on the NPRM. We received 
three comment letters. We have carefully read and considered each of 
them. They are available for public viewing at http://www.regulations.gov. Because some of the comments we received were 
detailed, we have condensed, summarized, and paraphrased them in the 
discussion below. We address below the issues raised by the commenters 
that are within the scope of the NPRM.
    Comment: One commenter expressed general disagreement with the 
proposed changes to stepchild entitlement and termination requirements 
and stated that stepchildren will ``now have to prove something totally 
irrelevant to get and keep benefits.''
    Response: Although the comment is unclear, to the extent that the 
commenter is discussing the stepchild dependency test, we must apply 
the CAAA's stepchild benefit entitlement and termination provisions. 
The CAAA specifically provided that living with a stepparent would no 
longer be a basis for finding a stepchild dependent on a stepparent. 
Now, we consider a stepchild to be dependent on a stepparent only if 
the stepchild is receiving at least one-half support from the 
stepparent. The one-half support requirement existed prior to the CAAA 
and is not a new requirement.
    Comment: Two commenters expressed concern that we will apply our 
proposed child's benefit termination rules for annulments retroactively 
and collect overpayments from stepchildren affected by this rule. They 
commented that we should not penalize families who relied on the 
regulations in effect at the time of the stepparent's disability or 
death and that we should waive any

[[Page 52621]]

resulting overpayments. One commenter recommended that we clarify that 
an annulment ab initio will not affect the eligibility for child's 
benefits to stepchildren prior to annulments. One of these commenters 
asked us to notify families affected by this final rule.
    Response: As we stated above, we are not adopting our proposed 
rules about ab initio or prospective marriage annulments at this time.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that this final rule meets the criteria for a 
significant regulatory action under Executive Order 12866. Thus, OMB 
reviewed it.

Regulatory Flexibility Act

    We certify that this final rule will not have a significant 
economic impact on a substantial number of small entities because it 
affects only individual persons. Therefore, the Regulatory Flexibility 
Act, as amended, does not require us to develop a regulatory 
flexibility analysis.

Paperwork Reduction Act

    This final rule does not impose reporting or recordkeeping 
requirements subject to OMB clearance.

(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)

List of Subjects in 20 CFR Part 404

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

    Dated: June 7, 2010.
Michael J. Astrue,
Commissioner of Social Security.

0
For the reasons stated in the preamble, we are amending 20 CFR part 404 
subpart D as set forth below:

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

Subpart D--[Amended]

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

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


0
2. Amend Sec.  404.352 by adding paragraph (b)(7) to read as follows:


Sec.  404.352  When does my entitlement to child's benefits begin and 
end?

* * * * *
    (b) * * *
    (7) With the month in which the divorce between your parent 
(including an adoptive parent) and the insured stepparent becomes final 
if you are entitled to benefits as a stepchild and the marriage between 
your parent (including an adoptive parent) and the insured stepparent 
ends in divorce.
* * * * *

0
3. Amend Sec.  404.363 by revising the section heading and introductory 
text to read as follows:


Sec.  404.363  When is a stepchild dependent?

    If you are the insured's stepchild, as defined in Sec.  404.357, we 
consider you dependent on him or her if you were receiving at least 
one-half of your support from him or her at one of these times--
* * * * *
[FR Doc. 2010-21341 Filed 8-26-10; 8:45 am]
BILLING CODE 4191-02-P