[Federal Register Volume 89, Number 71 (Thursday, April 11, 2024)]
[Rules and Regulations]
[Pages 25507-25514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07675]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

[Docket No. SSA-2023-0010]
RIN 0960-AI82


Expansion of the Rental Subsidy Policy for Supplemental Security 
Income (SSI) Applicants and Recipients

AGENCY: Social Security Administration.

ACTION: Final rule.

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SUMMARY: We are finalizing our proposed regulation to apply nationwide 
the In-Kind Support and Maintenance (ISM) rental subsidy exception that 
has until now been available only for SSI applicants and recipients 
residing in seven States. This final rule provides that a ``business 
arrangement'' exists, such that the SSI applicant or recipient is not 
considered to be receiving ISM in the form of room or rent, when the 
amount of monthly required rent for the property equals or exceeds the 
presumed maximum value (PMV).

DATES: This final rule will be effective September 30, 2024.

FOR FURTHER INFORMATION CONTACT: Tamara Levingston, Office of Income 
Security Programs, 6401 Security Blvd., Robert M. Ball Building, Suite 
2512B, Woodlawn, MD 21235, 410-966-7384. 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 https://www.ssa.gov.

SUPPLEMENTARY INFORMATION:

Background

    The SSI program provides monthly payments to: (1) adults and 
children with a disability or blindness; and (2) adults aged 65 or 
older. Eligible individuals must meet all the requirements set forth in 
the Social Security Act (Act), including having resources and income 
below specified amounts.\1\ Resources are cash or other liquid assets 
or any real or personal property that individuals (or their spouses, if 
any) own and could convert to cash to be used for their support and 
maintenance.\2\ Income is anything individuals receive in cash or in-
kind that they can use to meet their food and shelter needs.\3\ An 
individual's resources may affect their eligibility to receive SSI, 
while their income may affect both their eligibility for payments and 
the amount of payments they are eligible to receive.
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    \1\ See 42 U.S.C. 1382 and 20 CFR 416.202 for a list of the 
eligibility requirements. See also 20 CFR 416.420 for general 
information on how we compute the amount of the monthly payment by 
reducing the benefit rate by the amount of countable income as 
calculated under the rules in subpart K of 20 part 416.
    \2\ 20 CFR 416.1201(a).
    \3\ 20 CFR 416.1102. See also 20 CFR 416.1103 for examples of 
items that are not considered income.
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    The Act and our regulations \4\ define income as ``earned,'' such 
as wages from work, and ``unearned,'' such as gifted cash.\5\ Both 
earned income and unearned income include items received in-kind.\6\ 
This final rule pertains to rental subsidy, which is a type of ISM 
under the broader umbrella of unearned income. Generally, we value in-
kind items at their current market value, and we apply various 
exclusions for both earned and unearned income.\7\ However, we have 
special rules for valuing ISM that is received as unearned income.\8\
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    \4\ See 42 U.S.C. 1382a and 20 CFR 416.1102 through 416.1124.
    \5\ See 20 CFR 416.1104.
    \6\ See 20 CFR 416.1110 and 416.1120.
    \7\ See 20 CFR 416.1111(d), 416.1112, 416.1123(c), and 416.1124.
    \8\ See 20 CFR 416.1123(c) and 416.1131 through 416.1147.
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    ISM includes shelter that is given to an individual or that the 
individual receives because someone else pays for it.\9\ For example, 
an SSI applicant or recipient whose friend allows them to live rent-
free at an investment property owned by the friend, or whose friend 
pays their rent, receives ISM in the form of shelter. Shelter includes 
room, rental payments, mortgage payments, real property taxes, heating 
fuel, gas, electricity, water, sewerage, and garbage collection 
services.\10\
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    \9\ See 20 CFR 416.1130(b). We recently published a final rule 
to remove food from the calculation of ISM. See Omitting Food From 
In-Kind Support and Maintenance Calculations, 89 FR 21199 (Mar. 27, 
2024). The amendatory language shown below reflects changes to 20 
CFR 416.1130 made by that final rule, since it has been published, 
although the change will not be effective until September 30, 2024.
    \10\ See 20 CFR 416.1130(b).
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Rental Subsidy

    Our regulations clarify that an individual is not receiving ISM in 
the form of room or rent if they are paying the monthly required rent 
charged under a ``business arrangement.'' \11\ Under our general 
regulatory definition prior to this final rule, a ``business 
arrangement'' existed when the amount of monthly required rent equaled 
or exceeded the current market rental value (CMRV)--that is, the price 
of rent on the open market in the individual's locality.\12\ To 
illustrate, if the owner of an apartment would rent that property to 
any potential tenant for $800 per month, then the CMRV is $800 per 
month. Consequently, in this example, if an SSI applicant or recipient 
agrees to pay the landlord rent in the amount of $800 per month, a 
``business arrangement'' would exist and the SSI applicant or recipient 
would not be receiving ISM in the form of room or rent. The SSI 
applicant or recipient in this example would thereby--absent any other 
countable income or resources--receive the Federal Benefit Rate 
(FBR).\13\ Conversely, if the SSI applicant or recipient agrees to pay 
the landlord less than the CMRV of $800 per month (for example, $400 
per month), we would impute the difference between the CMRV and the 
monthly required rent as ISM received by the applicant or recipient in 
the form of room or rent (up to the PMV, which is $334.33 in 2024).\14\ 
In this example, the landlord agrees to accept a rent of $400 per month 
instead of the CMRV of $800. The rental subsidy amount is $400. 
However, the PMV is $334.33 in 2024, so only $314.33 would be counted 
as ISM (after we subtract the $20 general income exclusion from the PMV 
and assuming there is no other income). Consequently, in this example 
the SSI recipient would receive $628.67 as a monthly payment in 2024 
\15\ (the 2024 FBR ($943) minus the PMV and minus the general income 
exclusion ($314.33 (or $334.33-$20)) = $628.67).
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    \11\ 20 CFR 416.1130(b).
    \12\ See id. See also 20 CFR 416.1101.
    \13\ See 20 CFR 416.1101. Federal Benefit Rate (FBR) means the 
maximum Federal monthly payment rate for an eligible individual or 
couple. It is the figure from which we subtract countable income to 
find out how much your Federal SSI benefit should be. The FBR does 
not include the rate for any State supplement paid by us on behalf 
of a State. The FBR for 2024 is $943 for an individual or $1,415 for 
an eligible individual with an eligible spouse.
    \14\ When an SSI applicant or recipient receives ISM and the 
one-third reduction rule does not apply, we use the presumed value 
rule (PMV). Instead of determining the actual dollar value, we 
presume that the ISM received is worth a maximum value. This maximum 
value (or PMV) is one-third of the FBR plus the amount of the 
general income exclusion ($20). See 20 CFR 416.1140 and POMS SI 
00835.300. In 2024, the PMV is $334.33 for an individual.
    \15\ For the purposes of this exercise, we are assuming there is 
no other countable income. In a real-world case, at times there are 
other countable income sources, and in such cases those income 
sources would factor into the monthly payment amount as well.

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[[Page 25508]]

Exception

    Following court cases that challenged how we applied these ISM 
rules for rental subsidy, we provided an exception for residents of the 
Seventh Circuit (in our regulations),\16\ residents of the Second 
Circuit (in an Acquiescence Ruling),\17\ and residents of Texas (in the 
Program Operations Manual System (POMS)).\18\ For residents of these 
seven excepted States (Connecticut, New York, Vermont, Illinois, 
Indiana, Wisconsin, and Texas), a ``business arrangement'' exists when 
the monthly required rent equals or exceeds the PMV (instead of the 
CMRV). Application of this rental subsidy exception tends to reduce or 
eliminate the amount of ISM counted towards an individual's SSI 
payment, which generally results in a higher SSI payment amount. In the 
example, discussed above, an SSI applicant or recipient living in one 
of the seven excepted States who agrees to pay $400 per month for an 
apartment with a CMRV of $800 per month would not be charged ISM 
because their monthly required rent is more than the PMV ($334.33 for 
2024). Consequently, the SSI applicant or recipient would continue to 
receive the FBR (provided they did not have any other countable income 
or resources for SSI purposes).
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    \16\ See 20 CFR 416.1130(b); Jackson v. Schweiker, 683 F.2d 1076 
(7th Cir. 1982).
    \17\ See Acquiescence Ruling (AR) 90-2(2): Ruppert v. Bowen, 871 
F.2d 1172 (2d Cir. 1989)--Evaluation of a Rental Subsidy as In-Kind 
Income for Supplemental Security Income (SSI) Benefit Calculation 
Purposes--Title XVI of the Social Security Act. When this final rule 
becomes effective, we will rescind AR 90-2(2) as obsolete, in 
accordance with 20 CFR 416.1485(e)(4).
    \18\ See Diaz v. Chater, No. 3:95-cv-01817-X (N.D. Tex. Apr. 17, 
1996); POMS SIDAL 00835.380.
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Proposed Rule

    Consistent with the Social Security Administration's Agency 
Strategic Plan for Fiscal Years 2022-2026, and with the stated goal of 
simplifying the SSI program, advancing equality, and promoting uniform 
treatment of rental assistance, we published a notice of proposed 
rulemaking (NPRM) in the Federal Register on August 24, 2023, entitled 
Expansion of the Rental Subsidy Policy for Supplemental Security Income 
(SSI) Applicants and Recipients.\19\ In the NPRM, we proposed to revise 
our regulations by making the rental subsidy exception our nationwide 
policy. Under the proposed rule, all SSI applicants and recipients 
would be held to the same standard; that is, a ``business arrangement'' 
exists, and the applicant or recipient is not considered to be 
receiving ISM in the form of room or rent, if the applicant or 
recipient has a monthly required rent equal to or exceeding the PMV.
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    \19\ 88 FR 57910.
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    We are making these changes based on the Commissioner of Social 
Security's rulemaking authority specified in sections 205(a), 
702(a)(5), 1631(d)(1), 1631(e)(1)(A), and 1633(a) of the Social 
Security Act. These sections of the Act give the Commissioner the 
authority to adopt rules relating to, among other things, what data the 
Commissioner determines is necessary for the agency to collect for the 
effective and efficient administration of the SSI program, as well as 
the nature and extent of the evidence applicants and recipients need to 
provide to establish benefit eligibility. The modifications to our 
policy regarding how we will determine rental subsidy are a proper 
exercise of the Commissioner's rulemaking authority under the Act.
    The NPRM includes a discussion of the ISM policy \20\ as well as 
the rationale for and analysis of this policy change,\21\ which in this 
final rule we are adopting in full. As discussed in the NPRM, the 
rationale underlying the exception that has been in place in the seven 
excepted States was based largely on the court decisions from the 
Second and Seventh Circuit Courts of Appeal.\22\ In Jackson, the 
Seventh Circuit reasoned that it is not enough for a claimant to be 
provided shelter at a rate below market value for that difference to be 
counted as ``income'' for SSI purposes; rather, to be counted as 
``income,'' the difference between the market value and the monthly 
required rent must result in increased purchasing power to meet an 
applicant's or recipient's basic needs.\23\ In Ruppert, the Second 
Circuit similarly found that the difference between the market value 
and the monthly required rent should constitute an ``actual economic 
benefit'' to be counted as ``income'' for SSI purposes.\24\ In 
implementing Ruppert for residents of the Second Circuit, we announced 
in our Acquiescence Ruling that an applicant or recipient does not 
receive an ``actual economic benefit'' from a rental subsidy when the 
amount of monthly required rent equals or exceeds the PMV.\25\
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    \20\ See 88 FR 57910, 57910-12 (Aug. 24, 2023).
    \21\ Id. at 57912-13.
    \22\ Id. at 57911-12. See also Ruppert v. Bowen, 871 F.2d 1172 
(2d. Cir. 1989); Jackson v. Schweiker, 683 F.2d 1076 (7th Cir. 
1982).
    \23\ See 88 FR 57912. See also Jackson, 683 F.2d at 1082-87.
    \24\ See 88 FR 57912. See also Ruppert, 871 F.2d at 1079-81.
    \25\ See 88 FR 57912. See also AR 90-2(3), 55 FR 28947, 28949 
(July 16, 1990).
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    Thus, applying nationally the definition of ``business 
arrangement'' based on the PMV rather than the CMRV focuses on the SSI 
applicant's or recipient's purchasing power or the actual economic 
benefit they receive and ensures that all SSI applicants and 
recipients, regardless of where they reside, will have the same policy 
applied to them regarding the definition of a business arrangement. 
This policy change therefore supports our goal of enhancing equality in 
the programs we administer for all applicants and recipients.

Comment Summary

    We solicited comments on the proposed rule and received 179 public 
comments on our NPRM from August 24, 2023, through October 23, 2023. 
All comments are available for public viewing at https://www.regulations.gov/document/SSA-2023-0010-0001/comment. These comments 
were received from:
     Individuals; and
     Advocacy groups, such as the National Organization of 
Social Security Claimants' Representatives and the Consortium for 
Constituents with Disabilities.
    We carefully considered the public comments we received. A 
significant majority of commenters (170 comments) supported the policy 
we proposed in the NRPM--to extend the rental subsidy exception 
nationwide--without reservation or suggestions for modifications. Some 
commenters agreed with the proposal, but recommended further amendments 
to ensure the greatest number of SSI applicants and recipients could 
avail themselves of the benefits provided by the new policy. Only one 
commenter disagreed with the proposal altogether.
    We received several comments suggesting changes that are not 
feasible for us to make or are outside the scope of the proposed rule 
and the final rule. For example, some commenters recommended changes to 
the statutorily set resource limits, and others recommended that we do 
away with counting ISM altogether. Even though these comments are 
outside the scope of the NPRM and final rule, we address them in a 
general manner to help the public better understand the SSI program. We 
note that commenters frequently compared or conflated the concepts of 
rental subsidy and rental liability, which are not the same thing under 
our policies. An individual receives ISM in the form of rental subsidy 
when the monthly required rent (including a flat fee payment) is less 
than the amount charged under a

[[Page 25509]]

business arrangement.\26\ We develop for rental subsidy by contacting 
the landlord when necessary \27\ to verify (1) the monthly required 
rent (2) and the reason for accepting a reduced rent, if that is at 
issue.\28\ In developing rental subsidy, we also obtain information 
about the CMRV from the landlord or another knowledgeable source (and 
will continue to do so) to determine if the CMRV is less than the 
PMV.\29\
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    \26\ See POMS SI 00835.380.
    \27\ Based on the new rule, if the lease presented by the 
individual contains all necessary information (rent charged is 
higher or equal to the PMV), contacting the landlord is unnecessary 
to develop rental subsidy.
    \28\ See id.
    \29\ See id. See also 20 CFR 416.1130(b).
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    In contrast, rental liability is an oral or written agreement 
between an individual (or the individual's spouse with whom they live 
or a person whose income may be deemed to the individual) and a 
landlord that the landlord will provide shelter in return for rent.\30\ 
Rental liability is generally verified through oral evidence from the 
landlord or written evidence of the rental agreement. Rental liability 
is related to the development of an applicant's or recipient's living 
arrangement which is necessary to understand before determining if an 
applicant or recipient receives ISM in the form of a rental 
subsidy.\31\ Otherwise stated, the establishment of rental liability 
must precede a determination of rental subsidy. When an applicant or 
recipient demonstrates rental liability, we find that they are living 
in their own household (not the household of another).\32\ This 
determination, in turn, is central to whether we apply the value of the 
one-third reduction (VTR) \33\ rule or PMV rule to value any ISM they 
receive--if an applicant or recipient is living in their own household, 
then the PMV rule applies to valuing ISM.\34\ In other words, 
establishing rental liability is one of the threshold issues in 
determining an applicant's or recipient's living arrangement, which 
determines whether we use the VTR rule or PMV rule to value any ISM 
received; rental subsidy, on the other hand, is one type of ISM that 
may be applicable and developed for applicants and recipients who are 
not subject to the VTR rule.
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    \30\ See POMS SI 00835.020; POMS SI 00835.120.
    \31\ See POMS SI 00835.120A; POMS SI 00835.380B6.
    \32\ See POMS SI 00835.120A.
    \33\ When a claimant or couple lives throughout a month in 
another person's household and receives both food and shelter from 
others living in the household, we reduce the applicable FBR by one-
third. This reduction in the FBR has an income value, known as the 
VTR or the value of the one-third reduction. See POMS SI 00835.200A.
    \34\ See id.
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Comments and Responses

Category I: Support for the Proposed Rule With No Request for Further 
Changes
    Comment: We received 170 comments from advocacy groups and 
interested citizens unreservedly stating their support for our proposal 
to apply the rental subsidy exception nationwide. These comments did 
not suggest modifications to the proposed rule.
    Response: We acknowledge and appreciate the support for the 
proposal.
    Comment: Of note, many of these 170 commenters opined that adoption 
of the proposed rule would simplify the SSI program, advance equity, 
and promote uniform treatment of rental assistance for SSI recipients.
    Response: As we expressed in the NPRM, these three outcomes were 
our primary aims in developing this rulemaking. Accordingly, we 
appreciate that many commenters also highlighted them as benefits of 
the rule.
    Comment: Multiple commenters identified administrative efficiencies 
associated with the adoption of the proposed rule. For example, several 
commenters expressed that the rule would save SSA staff time, time 
which, in the words of one commenter, could be used to ``run the SSI 
program better.'' Other commenters opined on the overall positive 
effect the rule would have on the administrative efficiency of our 
programs.
    Response: Since the rule will result in nationwide uniformity and 
require less information from some SSI applicants and recipients, we 
agree that, after an initial implementation period, it will increase 
administrative efficiency.
    Comment: Many commenters urged us to move quickly to finalize and 
implement the regulation. They further indicated support for our 
efforts to update our ``financial rules'' in other ways that benefit 
disabled people and older adults.
    Response: We are finalizing this rule and will implement it on the 
date specified herein. Also, as indicated by our Fall 2023 Unified 
Agenda,\35\ we are contemplating other regulatory actions aimed at 
benefiting vulnerable populations.
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    \35\ See https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST&currentPub=true&
agencyCode=&showStage=active&agencyCd=0960&csrf_token=3FE7BC5F46AC436
24D85A63227874C0C8BCF6ED346AD43F4DC50FD05D9B63DC5C7005A531663BBC086DD
F17A8F74A3C016A0.
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Category II: Opposition to the Rule
    Comment: We received one comment opposing any changes in SSI, 
including this rule, because, per the commenter, a change in SSI would 
``be a hardship for my family.''
    Response: The commenter did not explain specifically why they 
perceived that changes to the SSI program would be a hardship. 
Nonetheless, we note that the change will not decrease payment amounts 
for any individuals and might increase payment amounts for some 
individuals. Also, we expect the change to be simpler to understand and 
reduce burden for individuals reporting information.
Category III: Support for the Proposed Rule, But With Request for 
Additional Changes
    Comment: Another commenter wrote that they ``believe that ISM rules 
disproportionately penalize people of color, including refugees and 
other recent immigrants.''
    Response: SSA administers the nation's largest social welfare 
programs, including the SSI program that is designed to lift millions 
out of poverty. Our vision is to provide income security for the 
diverse populations we serve, including those in underserved 
communities, people with disabilities, workers, their families, and 
people who communicate primarily in languages other than English, as 
laid out in Social Security's Equity Action Plan 2023 Update.\36\ Our 
intent is to serve all who apply for and all who are eligible for SSI 
payments, and apply our rules equally to all SSI applicants and 
recipients. To the extent the commenter believes ISM should be 
eliminated from the SSI program, that change would require 
Congressional action.
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    \36\ See https://www.ssa.gov/equity/assets/materials/2023.pdf.
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    Comment: Multiple commenters opined on our already-existing rental-
liability evidentiary requirements, which are laid out in our POMS 
instructions. One commenter recommended that we accept SSI applicants' 
and recipients' self-attestations regarding rental agreements rather 
than requiring formal rental agreement documentation that we then 
verify. Similarly, multiple commenters recommended that we not require 
written verification of a rental agreement because they find many 
agreements to be oral in nature, and it can be difficult to compel 
landlords to cooperate with the verification process. In that vein, 
many commenters encouraged us to ``follow the lead'' of the USDA Food 
and Nutrition Service,

[[Page 25510]]

which, according to the commenters, does not require written 
verification of rent for those applying specifically for Supplemental 
Nutrition Assistance Program (SNAP) benefits. In contrast, one 
commenter asserted that our proposed rule would not work unless 
individuals were still required to report proof of their rental 
payments.
    Response: As discussed above, rental liability and rental subsidy 
are two distinct policies. Rental liability relates to determining an 
applicant's or recipient's living arrangement and whether they have 
demonstrated that they live in their own household (and are subject to 
the PMV rule) or in the household of another (and potentially subject 
to the VTR rule). Rental subsidy, on the other hand, is a type of ISM 
that may be applicable depending on an applicant's or recipient's 
circumstances.
    Regarding the comments on our development criteria for rental 
liability, we acknowledge the diverse viewpoints on our existing 
requirements. We note that we do accept statements from an applicant or 
recipient to establish rental liability in some circumstances--if the 
individual lives alone or if the only other household members are the 
spouse, a deemor,\37\ or a child.\38\ As discussed above, the purpose 
of verifying rental liability is to establish whether an applicant or 
recipient is living in their own household or the household of another 
(as this affects whether they are subject to the PMV rule or the VTR 
rule).\39\ If an applicant or recipient lives alone (or only with their 
spouse, deemor, or any child), they live in their own household, not 
the household of another. However, per our current POMS policy, if the 
applicant or recipient lives with others, then we need additional 
evidence of rental liability to verify that they are not living in 
another person's household (and potentially subject to the VTR rule). 
Because the living arrangement determination is critical to how we 
value an applicant's or recipient's ISM, we currently do not accept 
self-attestations when it is not already clear from the individual's 
circumstances that they are living in their own household.
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    \37\ ``Deeming'' is the process of considering one person's 
income to be counted as another person's (in this case, the SSI 
applicant's or recipient's) income as well. There are four 
categories of deemors: (1) ineligible spouse; (2) ineligible parent; 
(3) sponsor of an alien; and (4) essential person, as defined in 20 
CFR 416.222. See https://www.ecfr.gov/current/title-20/chapter-III/part-416/subpart-K/subject-group-ECFRdaeb44ef4120053/section-416.1160.
    \38\ See POMS SI 00835.120C.
    \39\ See POMS SI 00835.120A.
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    As for the possibility of oral rental agreements, we note that our 
existing rental liability verification does not require written 
evidence of all rental agreements. For example, we accept verbal 
confirmation from a landlord of a rental agreement or submission of 
rent receipts to establish rental liability, as long as the rent 
receipts satisfy certain criteria.\40\
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    \40\ See POMS SI 00835.120D.
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    Regarding the comments on the FNS policies for implementing their 
SNAP program, we note that the eligibility requirements for SSI and 
SNAP are not the same. Thus, it is difficult to compare point-for-point 
the eligibility and verification requirements for the two programs. For 
example, as discussed above, a critical factor that we need to 
determine for SSI purposes is whether an applicant or recipient is 
living in their own household or another person's household, as that 
affects whether we use the PMV rule or the VTR rule to value the 
individual's ISM. Our rental liability policy is designed to ensure we 
get the information we need to verify whether an applicant or recipient 
is living in their own household or the household of another person. In 
contrast, for example, there are SNAP requirements that appear to be 
more focused on verifying State residency, which is a factor more 
important for SNAP eligibility.\41\ We note that SNAP applicants and 
recipients must also verify ``factors affecting the composition of a 
household, if questionable;'' and applicants ``who claim to be a 
separate household from those with whom they reside shall be 
responsible for proving that they are a separate household to the 
satisfaction of the State agency.'' \42\ While the SNAP regulations do 
not appear to specify the type of evidence required for every 
eligibility factor, we note that documentation such as ``rent 
receipts'' and contacts with collateral sources such as ``landlords'' 
are included in the examples of ``sources of verification'' for SNAP 
eligibility requirements as well.\43\ Overall, because of the 
differences between the programs, we are not adopting the same 
development processes that FNS uses to determine and verify the 
eligibility requirements for SNAP.
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    \41\ See 7 CFR 273.2(f)(1)(vi); 7 CFR 273.3.
    \42\ See 7 CFR 273.2(f)(1)(x).
    \43\ See 7 CFR 273.2(f)(4)(i) and (ii).
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    Finally, as to the commenter's statement that our rental subsidy 
rule ``would not work unless individuals were still required to report 
proof of their rental payments,'' we agree that we will continue to 
require information about applicants' and recipients' monthly required 
rent for the purposes of calculating rental subsidy ISM, when it 
applies.
    Comment: Many commenters recommended that we accept proof of rent 
regardless of the format (e.g., money order copies, cancelled checks, 
and proof of electronic payments) for purposes of rental liability 
verification.
    Response: The NPRM and this final rule address only the definition 
of a business arrangement in the context of rental subsidy--not the 
development criteria for establishing rental liability for purposes of 
determining an applicant's or recipient's living arrangement. This rule 
does not address the evidentiary requirements associated with 
developing rental subsidy or rental liability, and, in fact, all 
current requirements are contained exclusively in our POMS. In 
addition, under this rule, we do not require submission of rent 
receipts--to make a rental subsidy determination, we can obtain verbal 
verification from the landlord of the monthly required rent.\44\
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    \44\ See POMS SI 00835.380C.
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    However, we note that under our current rental liability policy, we 
accept electronic payments, such as rent receipts, if they satisfy all 
of the criteria that we believe are necessary to adequately document 
rental liability. To establish rental liability, a rent receipt needs 
to contain the following: the individual's name, amount paid, period 
covered by payment, and the signature of the landlord or authorized 
representative.\45\ We require this information for rent receipts 
because it enables us to confirm that the payment being made is for the 
individual's monthly required rent and provides sufficient information 
to establish a rental agreement between the individual and the 
landlord. Electronic payments (such as Zelle, Venmo, and PayPal) may 
not always satisfy the criteria. For example, these electronic payment 
receipts may not indicate the period covered by the payment.
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    \45\ See POMS SI 00835.120.
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    Comment: One commenter recommended that we consider using the U.S. 
Department of Housing and Urban Development's (HUD) fair market rent 
data set \46\ to establish market prices.
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    \46\ HUD compiles and lists Fair Market Rents (FMR). FMRs are 
statistics developed by HUD to determine payments for housing 
assistance programs like the Section 8 housing choice voucher 
program. For more information, please see: https://www.hud.loans/hud-loans-blog/what-is-fair-market-rent/.
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    Response: We considered the recommendation but decided not to adopt 
it at this time. The HUD fair market rent data set might be considered

[[Page 25511]]

a knowledgeable source for the purpose of establishing the CMRV for the 
applicant's or recipient's rental property.\47\ However, there would be 
advantages and disadvantages. For example, on one hand, information 
provided by a government agency generally is reliable, and it would be 
helpful to have another knowledgeable source from which to obtain 
relevant evidence--though, under this final rule, we will develop CMRV 
in the rental-subsidy context only for the limited purpose of ensuring 
that it is not less than the PMV, which we expect will be rare. On the 
other hand, due to the input requirements for the HUD database, 
utilizing the HUD fair market rent data set would require technicians 
to obtain more information from the SSI applicant or recipient--such as 
the number of rooms or square footage of the rental unit--which may not 
be readily available and is not otherwise required for SSI purposes. 
Therefore, instead of simplifying the development process, using the 
HUD database would add another layer of development that could be 
burdensome to the SSI applicant or recipient and cause a delay in the 
case being processed. We believe that those disadvantages outweigh the 
apparent advantages, and so we decided not to adopt the recommendation 
at this time.
---------------------------------------------------------------------------

    \47\ See id.
---------------------------------------------------------------------------

Category IV: Comments Relating to ISM, but Outside the Scope of This 
Rule
    Comment: One commenter suggested that SSA could use the 
Supplemental Nutrition Assistance Program (SNAP) standard allotment, 
based on family size, to determine if the amount paid for food is at 
market value.
    Response: These comments are beyond the scope of the NPRM and final 
rule, as they relate to food, and the NPRM and final rule relate to 
rent. We note, however, that we recently published a final rule 
relating to the food element of ISM \48\ which addresses the relevant 
comments that were submitted in response to the associated NPRM.
---------------------------------------------------------------------------

    \48\ Omitting Food From In-Kind Support and Maintenance 
Calculations, 89 FR 21199 (March 27, 2024).
---------------------------------------------------------------------------

    Comment: Many commenters encouraged us to ensure the rental subsidy 
policy extends to all SSI recipients who pay at least the PMV towards 
their monthly required rent.
    Response: When we apply our rental subsidy policy, all SSI 
applicants and recipients who pay a monthly required rent, under a 
rental agreement, equaling or exceeding the PMV will receive the 
benefit of this rule (or at least will not be disadvantaged by it). As 
we discussed in the NPRM, one of our goals in implementing this rule is 
to bring nationwide uniformity to the application of our rental subsidy 
policy.\49\
---------------------------------------------------------------------------

    \49\ See 88 FR 57912-13.
---------------------------------------------------------------------------

    Comment: Many commenters opined that we should revise our sub-
regulatory guidance related to rental liability and simplify rental 
liability determinations ``to maximize the simplification effects of 
the rental subsidy rule.'' Specifically, they suggested that we 
streamline our rental liability policy, particularly for applicants and 
recipients who ``rent from someone with whom they live'' because ``SSI 
recipients who live in the same residence as their landlord must first 
establish rental liability before the proposed rental subsidy rule 
would apply.''
    Response: As we noted at the outset of the comment section, 
simplifying the rental liability determination is separate from the new 
rental subsidy policy (or ensuring that it extends to all SSI 
applicants and recipients who pay at least the PMV). Specifically, the 
commenters recommend we revise our pertinent guidance to find, 
``without additional development, that rental liability (emphasis 
added) exists'' for an applicant or recipient who rents from someone 
with whom they live ``unless the landlord is a parent or child'' of the 
applicant or recipient. However, this recommendation concerns our 
determinations about an individual's living arrangement and whether an 
individual has rental liability--not our rental subsidy policy, which 
was the intended subject of this rulemaking. Under our current POMS 
instructions, in certain circumstances we can rely on self-allegation 
of rental liability by the applicant or recipient consistent with 
commenters' suggestions, which we refer to in a process called 
``curtailed development.'' Under curtailed development, we accept an 
individual's statement of rental liability in limited circumstances 
where it is otherwise already clear that they live in their own 
household, such as when an applicant or recipient lives alone.\50\ 
However, we acknowledge that in most other circumstances we currently 
require additional evidence of rental liability, and we will consider 
commenters' feedback again if we make changes to our rental liability 
POMS in the future.
---------------------------------------------------------------------------

    \50\ See POMS SI 00835.120C.
---------------------------------------------------------------------------

    Comment: One commenter urged us to ``modernize the processes and 
systems used to make ISM determinations and calculations.''
    Response: We will make the necessary systems changes to implement 
the final rule.
    Comment: Several commenters suggested that when SSI recipients rent 
from someone with whom they live, SSA should find, without any 
additional development, that rental liability exists unless SSA has 
evidence to the contrary, or the landlord is a parent or child of the 
SSI recipient.
    Response: It appears that the commenter is suggesting we accept the 
applicant's or recipient's allegation of rental liability without more 
development. However, when an applicant or recipient alleges that they 
are renting from someone with whom they live, under our current POMS 
instructions we consider this to be a ``room rental'' situation and 
must determine whether the applicant or recipient is in a ``separate 
household'' from the person from whom they are renting a room.\51\ A 
``separate household'' (within one home) is one that functions as a 
separate economic unit--if the applicant or recipient and the landlord 
do not function as separate economic units, the applicant or recipient 
is not considered to be living in a separate household, cannot have 
rental liability, and may be subject to the VTR rule.\52\ Again, this 
distinction is important because whether an applicant or recipient is 
living in their own (separate) household or in another person's 
household will affect whether the VTR rule or the PMV rule applies in 
valuing their ISM. When an applicant or recipient is living with the 
person from whom they rent (i.e., renting a room), under our current 
rental liability policy we obtain information sufficient to enable us 
to verify and make an accurate determination regarding the individual's 
living arrangement, such as contacting the landlord and obtaining 
information about the household organization, rent, meals, and access 
to the property.\53\
---------------------------------------------------------------------------

    \51\ See POMS SI 00835.120A4 & 00835.120E.
    \52\ See POMS SI 00835.120A4.
    \53\ See POMS SI 00835.120E.
---------------------------------------------------------------------------

    Comment: Several commenters recommended that we update the rules 
applicable to the Value of the One-Third Reduction (VTR). They 
suggested that we should consider that if an SSI recipient spends more 
than one-third of their benefits on shelter costs, the recipient should 
not be subject to ISM reductions. They further stated that the NPRM as 
written did not affect those who live in another person's household and 
receive both food and shelter from within that household (that is, 
those currently subject to ISM under the VTR rule).

[[Page 25512]]

    Response: This comment is outside the scope of the NPRM and final 
rule. We note that the VTR is established in the Social Security 
Act.\54\
---------------------------------------------------------------------------

    \54\ 42 U.S.C. 1382a(a)(2)(A).
---------------------------------------------------------------------------

    Comment: One commenter recommended that we educate beneficiaries 
and the public on the new rules and instruct field office staff to help 
individuals secure the benefits of the new rule.
    Response: Prior to implementation, we will provide our front-line 
technicians with training and policy updates that state the new rule 
and instructions for administering the change. In addition, we are 
working on updating publicly accessible POMS instructions, 
publications, and forms.
    Comment: One commenter opined that we should revise our policies on 
assessing ISM when calculating back awards. Specifically, the commenter 
expressed that we should never deduct ISM from back payments we 
calculate, because even people who provide food and shelter on a non-
loan basis probably expect that they will be paid back once the 
claimant is awarded back payments. The commenter asserted that we 
should make this policy change via rulemaking and update our 
regulations, sub-regulatory guidance, and associated paperwork to apply 
this new policy.
    Response: This commenter is asking us to revise our past ISM loan 
policy,\55\ and this is outside the scope of the current rulemaking.
---------------------------------------------------------------------------

    \55\ The commenter seemed to be referencing the policy found at 
https://secure.ssa.gov/poms.nsf/lnx/0500835482. Again, this is 
outside the scope of the current rulemaking.
---------------------------------------------------------------------------

    Comment: Several commenters encouraged us to go further and 
eliminate the ISM deduction altogether, because, in the view of these 
commenters, it unfairly penalizes people with disabilities for getting 
help obtaining shelter when they are already struggling to meet their 
basic needs on an insufficient income.
    Response: The elimination of ISM from the SSI program would require 
Congressional action to change existing statutory law because ISM is 
established in the Social Security Act.\56\ Therefore, the comment is 
outside the scope of the NPRM and final rule.
---------------------------------------------------------------------------

    \56\ See 42 U.S.C. 1382a(a)(2)(A).
---------------------------------------------------------------------------

    Commenter: The same commenter opined that, if ISM is not abolished 
altogether, it should only be used in cases where an equivalent market-
based price is practicable to establish.
    Response: See our response directly preceding this comment. Any 
such change would require Congressional action to amend existing 
statutory law.
    Comment: Several commenters opined that we must increase resource 
and asset limits for individuals and couples.
    Response: This recommendation is outside the scope of the proposed 
rule and the final rule, and Congressional action would be required to 
change the existing statutory law.\57\
---------------------------------------------------------------------------

    \57\ See 42 U.S.C. 1382(a)(3)(A) & (a)(3)(B).
---------------------------------------------------------------------------

Regulatory Procedures

Executive Order 12866, as Supplemented by Executive Order 13563 and 
Executive Order 14094

    We consulted with the Office of Management and Budget (OMB), and 
OMB determined that this final rule meets the criteria for a 
significant regulatory action under Executive Order 12866, as 
supplemented by Executive Order 13563 and Executive Order 14094. 
Therefore, OMB reviewed it.
Anticipated Transfers to Our Program
    Our Office of the Chief Actuary estimates that implementation of 
this final rule would result in a total increase in Federal SSI 
payments of $837 million over fiscal years 2024 through 2033, assuming 
implementation of this rule on September 30, 2024. These transfers 
reflect an estimation that approximately 41,000 individuals who would 
be eligible under our current rules will have their Federal SSI payment 
increased by an average of $132 per month in 2024 attributable to 
implementation of this rule. There would also be an annual average of 
an additional 14,000 individuals from fiscal year 2024 through 2033 who 
are not eligible under current rules who would be newly eligible and 
would receive payments under the final rule.\58\
---------------------------------------------------------------------------

    \58\ Implementation of this final rule will cause the ISM amount 
charged to some individuals to decrease. If such individuals are 
already receiving an SSI payment under current rules, their SSI 
payment will increase. Individuals whose ISM under current rules 
causes them to be ineligible for SSI because of excess income may 
become eligible under this final rule, assuming they meet all other 
eligibility criteria.
---------------------------------------------------------------------------

Anticipated Net Administrative Cost Savings to the Social Security 
Administration
    Our Office of Budget, Finance, and Management estimates that this 
regulation will result in net administrative savings of $10 million for 
the 10-year period from FY 2024 to FY 2033. The net administrative 
savings are mainly a result of unit time savings as field office 
employees will not have to spend time developing CMRV for all rental 
subsidy calculations during initial claims, pre-effectuation reviews, 
redeterminations, and post-eligibility actions. The savings are offset 
by costs to update our systems, costs to send notices to inform current 
recipients of the policy changes, costs to address inquiries from the 
notices, and costs because of more individuals being eligible for SSI 
benefits, which increases claims, reconsiderations, appeals, 
redeterminations, and post-eligibility actions.
Anticipated Time-Savings and Qualitative Benefits to the Public
    We anticipate the following qualitative benefits generated from 
this policy:
     Saving time and effort for claimants and third parties who 
may have evidence related to a claimant's application because they 
would need to submit less information. We estimate at a minimum that 
this will result in more than 7,000 hours of time saved in annual 
reduced paperwork burden, representing an opportunity cost of 
$1,140,526 (see the Paperwork Reduction Act section of the preamble 
below for specifics).
     Potentially get faster determinations or decisions 
regarding SSI eligibility, payment amount, or both, which would have 
both quantitative effects financially and qualitatively may alleviate 
stress for applicants and recipients associated with the length of time 
it may take to obtain SSI.
     Administratively easier to apply the same policy 
nationwide.
Anticipated Qualitative Costs
    We do not anticipate more than de minimis costs associated with 
this rulemaking. We do not anticipate that this final rule would affect 
labor market participation in any significant way, in part because of 
the limited understanding of the current policy in the SSI applicant 
and recipient community.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as meeting the criteria in 5 U.S.C. 804(2).

Executive Order 13132 (Federalism)

    We analyzed this final rule in accordance with the principles and 
criteria established by Executive Order 13132 and determined that this 
final rule will not have sufficient federalism implications to warrant 
the preparation of a federalism assessment. We also determined that 
this final rule will not preempt any State law or State regulation or 
affect the States' abilities

[[Page 25513]]

to discharge traditional State governmental functions.

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 individuals only. Therefore, a regulatory flexibility analysis 
is not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

    This final rule does not require any new collections or revisions 
to existing collections. However, we anticipate the application of the 
revisions based on this rule will cause a burden change to our 
currently approved information collections under the following 
information collection requests: 0960-0174, the SSA-8006, Statement of 
Living Arrangements, In-Kind Support and Maintenance; and 0960-0454, 
the SSA-L5061, Letter to Landlord Requesting Rental Information. Based 
on our current management information data from the seven states 
currently implementing these changes, we anticipate these changes will 
allow for verbal responses from landlords in place of the current form 
in some situations, thus reducing the overall burden as SSA will not 
require those respondents to complete the entirety of Form SSA-L5061. 
In addition, we note that for those who use the paper form, we will 
send a revised version with question #5 removed. We also anticipate a 
slight burden reduction to Form SSA-8006, as the respondents may not 
need to provide as much detail pertaining to their rental subsidy 
agreement due to the proposed rule.
    We published a notice of proposed rulemaking on August 24, 2023, at 
88 FR 75910. In that NPRM, we solicited comments under the Paperwork 
Reduction Act (PRA) 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. The comments section above 
includes our responses to the PRA-related public comments we received 
under the NPRM.
    The following chart shows the time burden information associated 
with the final rule:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   Anticipated  Anticipated
                                                                                           Current      Current     new burden   estimated
                                                                                           average     estimated       per         total      Estimated
                        OMB #; Form #                           Number of    Frequency    burden per     total       response      burden       burden
                                                               respondents  of response    response      burden       under        under       savings
                                                                                          (minutes)     (hours)     regulation   regulation    (hours)
                                                                                                                    (minutes)     (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0960-0174 SSA-8006 (Paper Form)..............................       12,160            1            7        1,419            6        1,216          203
0960-0174 SSA-8006 (SSI Claims System).......................      109,436            1            7       12,768            6       10,944        1,824
0960-0454 SSA-L5061 (Paper Form).............................       35,640            1           10        5,940            8        4,752        1,188
0960-0454 SSA-L5061 (Phone Call).............................       35,640            1           10        5,940            3        1,782        4,158
                                                              ------------------------------------------------------------------------------------------
    Totals...................................................      192,876  ...........  ...........       26,067  ...........       18,694        7,373
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The following chart shows the theoretical cost burdens associated 
with the final rule:

----------------------------------------------------------------------------------------------------------------
                                                    Anticipated                       Average
                                                     estimated        Average      combined wait
                                                   total burden     theoretical    time in field   Total annual
          OMB #; Form #              Number of         under        hourly cost    office and/or    opportunity
                                    respondents     regulation        amount        teleservice   cost (dollars)
                                                    from chart      (dollars) *       centers           ***
                                                   above (hours)                   (minutes) **
----------------------------------------------------------------------------------------------------------------
0960-0174 SSA-8006 (Paper Form).          12,160           1,216        * $13.30           ** 19     *** $67,391
0960-0174 SSA-8006 (SSI Claims           109,436          10,944         * 13.30           ** 24     *** 727,749
 System)........................
0960-0454 SSA-L5061 (Paper Form)          35,640           4,752         * 31.48           ** 24     *** 598,372
0960-0454 SSA-L5061 (Phone Call)          35,640           1,782         * 31.48  ..............      *** 56,097
                                 -------------------------------------------------------------------------------
    Totals......................         192,876          18,694  ..............  ..............   *** 1,449,609
----------------------------------------------------------------------------------------------------------------
* We based this figure on the average disability insurance (DI) payments based on SSA's current FY 2024 data
  (2024FactSheet.pdf (ssa.gov)); on the average U.S. citizen's hourly salary, as reported by Bureau of Labor
  Statistics data (https://www.bls.gov/oes/current/oes_nat.htm).
** We based this figure on the average FY 2024 wait times for field offices and hearings office, as well as by
  averaging both the average FY 2024 wait times for field offices and teleservice centers, based on SSA's
  current management information data.
*** This figure does not represent actual costs that SSA is imposing on recipients of Social Security payments
  to complete this application; rather, these are theoretical opportunity costs for the additional time
  respondents will spend to complete the application. There is no actual charge to respondents to complete the
  application.

    SSA submitted a single new Information Collection Request which 
encompasses the revisions to both information collections (currently 
under OMB Numbers 0960-0174, and 0960-0454) to OMB for the approval of 
the changes due to the final rule. After approval of this information 
collection, we will adjust the figures associated with the current OMB 
numbers for these forms to reflect the new burden.
    As we have revised the associated burdens for the above-mentioned 
forms since we made revisions to the final rule which were not included 
at the NPRM stage, we are currently soliciting comment on the burden 
for the forms as shown in the charts above. If you would like to submit 
comments, please send them to the following locations:

Office of Management and Budget, Attn: Desk Officer for SSA, Fax 
Number: 202-395-6974
Social Security Administration, OLCA, Attn: Reports Clearance Director, 
3100 West High Rise, 6401 Security Blvd., Baltimore, MD 21235, Fax: 
410-966-

[[Page 25514]]

2830, Email address: ssa.gov">OR.Reports.Clearance@ssa.gov

    You can submit comments until May 13, 2024, which is 30 days after 
the publication of this document. To receive a copy of the OMB 
clearance package, contact the SSA Reports Clearance Officer using any 
of the above contact methods. We prefer to receive comments by email or 
fax.

(Catalog of Federal Domestic Assistance Programs No 96.006 Supplemental 
Security Income)

List of Subjects in 20 CFR Part 416

    Administrative practice and procedure, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI).

    The Commissioner of Social Security, Martin O'Malley, having 
reviewed and approved this document, is delegating the authority to 
electronically sign this document to Faye I. Lipsky, who is the primary 
Federal Register Liaison for SSA, for purposes of publication in the 
Federal Register.

Faye I. Lipsky,
Federal Register Liaison, Office of Legislation and Congressional 
Affairs, Social Security Administration.
    For the reasons stated in the preamble, we amend 20 CFR part 416 as 
set forth below:

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

Subpart K--Income

0
1. The authority citation for subpart K of part 416 is revised to read 
as follows:

    Authority:  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).


0
2. In Sec.  416.1130, revise paragraph (b)(1) to read as follows:


Sec.  416.1130  Introduction.

* * * * *
    (b) * * *
    (1) We calculate in-kind support and maintenance considering any 
shelter that is given to you or that you receive because someone else 
pays for it. Shelter includes room, rent, mortgage payments, real 
property taxes, heating fuel, gas, electricity, water, sewerage, and 
garbage collection services. You are not receiving in-kind support and 
maintenance in the form of room or rent if you are paying the amount 
charged under a business arrangement. A business arrangement exists 
when the amount of monthly required rent to be paid equals or exceeds 
the presumed maximum value described in Sec.  416.1140(a)(1). If the 
required amount of rent is less than the presumed maximum value, we 
will impute as in-kind support and maintenance the difference between 
the required amount of rent and either the presumed maximum value or 
the current market rental value (see Sec.  416.1101), whichever is 
less. In addition, cash payments to uniformed service members as 
allowances for on-base housing or privatized military housing are in-
kind support and maintenance.
* * * * *
[FR Doc. 2024-07675 Filed 4-10-24; 8:45 am]
BILLING CODE 4191-02-P