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[Federal Register Volume 63, Number 118 (Friday, June 19, 1998)]
[Rules and Regulations]
[Pages 33545-33546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16206]

[[Page 33545]]

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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

RIN 0960-AD82

Supplemental Security Income for the Aged, Blind, and Disabled; 
Valuation of In-Kind Support and Maintenance With Cost-of-Living 
Adjustment

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: These regulations implement section 13735 of the Omnibus 
Budget Reconciliation Act of 1993 (OBRA 1993). This statutory provision 
amends the Social Security Act (the Act) and requires that the new 
supplemental security income (SSI) benefit rate, as increased by a 
cost-of-living adjustment (COLA), be used in determining the value of 
the statutory one-third reduction and the regulatory presumed maximum 
value for the computation of Federal SSI benefit payments for the first 
2 months for which the COLA is in effect. These rules provide that we 
value the statutory one-third reduction and the regulatory presumed 
maximum value using the benefit rate as increased by a COLA to 
determine the amount of in-kind support and maintenance received by an 
individual which is to be counted for those months. This precludes a 
decrease in the benefit amount the third month after a COLA, a 
situation which occurred under the prior law. The legislation is 
effective for benefits paid for months after calendar year 1994.

EFFECTIVE DATE: These final rules are effective July 20, 1998.

FOR FURTHER INFORMATION CONTACT: Daniel T. Bridgewater, Legal 
Assistant, Office of Process and Innovation Management, L2109 West Low 
Rise Building, Social Security Administration, 6401 Security Boulevard, 
Baltimore, MD 21235-0001, (410) 965-3298 for information about these 
rules. For information on eligibility or claiming benefits, call our 
national toll-free number, 1-800-772-1213.

SUPPLEMENTARY INFORMATION: Under retrospective monthly accounting 
(RMA), an individual's current SSI benefit amount is usually determined 
based upon the individual's income in the second preceding month 
(``budget month'') before the current month. For example, January's SSI 
benefit amount is based on the individual's November income. In some 
instances, an individual receives income in the form of in-kind support 
and maintenance and it is counted using the value of the one-third 
reduction (VTR) or the presumed maximum value (PMV) rule. Under the law 
prior to the effective date of section 13735 of Public Law 103-66, the 
VTR and the PMV were based on the applicable benefit rates in effect in 
the ``budget month.'' Because of RMA principles, when an annual COLA to 
the SSI benefit rate became effective in January, we used the VTR/PMV 
amount from November of the previous year to determine the individual's 
benefit for January if an individual had in-kind support and 
maintenance in the ``budget month.'' For example, in figuring an 
individual's January 1994 benefit, we used November 1993 as the 
``budget month.'' Thus, in a computation using the VTR, we would 
subtract the 1993 VTR amount of $144.66 from the 1994 benefit rate of 
$446.00, giving the individual an SSI benefit of $301.34. February's 
benefit amount would also be computed using the new benefit rate and 
the 1993 VTR amount. However, in computing March's benefit amount, we 
used the benefit rate of $446.00 less the January 1994 VTR amount of 
$148.66, resulting in an SSI benefit amount of $297.34. Thus, the 
individual's January and February payments exceeded the March payment 
because of the increased amount of the new VTR used when January was 
the ``budget month.'' Notices were then released to these individuals 
notifying them of the decrease in their March payment. This was 
confusing to SSI recipients because their payment amounts increased and 
then decreased even if there was no change in their living 
arrangements.
    We are changing the method of valuation of the VTR/PMV to reflect 
section 13735 of Public Law 103-66 for benefits paid after calendar 
year 1994, by using the new benefit rate as increased by a COLA in 
determining the VTR or PMV for the computation of SSI benefits for the 
first 2 months for which the COLA is in effect. Thus, beginning with 
the COLA effective January 1, 1995, both the new increased benefit rate 
and new increased VTR or PMV amounts are being used in computing a 
January and February benefit amount. Unlike the example used 
previously, the individual's January, February, and March payments 
calculated by using the VTR amount will be the same assuming all other 
income remains constant--i.e., there will be no decrease in the SSI 
benefit amount the third month after a COLA. This eliminates confusion 
for recipients and also eliminates the need for issuance of notices 
informing affected recipients of the decrease in their March payment.
    We state in the final regulations at Sec. 416.420(a) that we will 
use the benefit rate, as increased by a COLA, in determining the value 
of certain in-kind support and maintenance used to compute an 
individual's SSI benefit amount for the first 2 months in which the 
COLA is in effect. We have added a third example to Sec. 416.420(a) to 
further clarify the regulatory intent.
    We state in the final regulations at Sec. 416.1130 how we value in-
kind support and maintenance when a COLA applies, and we have altered 
the example to reflect the situation when a COLA becomes effective.
    On August 9, 1995, we published these rules as a notice of proposed 
rulemaking in the Federal Register at 60 FR 40542 with a 60-day comment 
period. We received comments from only one source, and the commenter 
fully supported the proposed rule because it eliminates a significant 
anomaly in the SSI program. Therefore, we are publishing the final 
rules essentially unchanged from the proposed rules.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these final rules do not meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, they 
were not subject to OMB review.

Paperwork Reduction Act of 1980

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

Regulatory Flexibility Act

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

(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: June 9, 1998.
Kenneth S. Apfel,
Commissioner of Social Security.

    For the reasons set out in the preamble, subparts D and K of part 
416 of chapter III of title 20 of the Code of

[[Page 33546]]

Federal Regulations are amended as follows:

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

Subpart D--[Amended]

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

    Authority: Secs. 702(a)(5), 1611(a), (b), (c), and (e), 1612, 
1617, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 
1382(a), (b), (c), and (e), 1382a, 1382f, and 1383).

    2. Section 416.420 is amended by revising paragraph (a) to read as 
follows:

Sec. 416.420  Determination of benefits; general.

* * * * *
    (a) General rule. We generally use the amount of your countable 
income in the second month prior to the current month to determine how 
much your benefit amount will be for the current month. We will use the 
benefit rate (see Secs. 416.410 through 416.414), as increased by a 
cost-of-living adjustment, in determining the value of the one-third 
reduction or the presumed maximum value, to compute your SSI benefit 
amount for the first 2 months in which the cost-of-living adjustment is 
in effect. If you have been receiving an SSI benefit and a Social 
Security insurance benefit and the latter is increased on the basis of 
the cost-of-living adjustment or because your benefit is recomputed, we 
will compute the amount of your SSI benefit for January, the month of 
an SSI benefit increase, by including in your income the amount by 
which your Social Security benefit in January exceeds the amount of 
your Social Security benefit in November. Similarly, we will compute 
the amount of your SSI benefit for February by including in your income 
the amount by which your Social Security benefit in February exceeds 
the amount of your Social Security benefit in December.

    Example 1. Mrs. X's benefit amount is being determined for 
September (the current month). Mrs. X's countable income in July is 
used to determine the benefit amount for September.
    Example 2. Mr. Z's SSI benefit amount is being determined for 
January (the current month). There has been a cost-of-living 
increase in SSI benefits effective January. Mr. Z's countable income 
in November is used to determine the benefit amount for January. In 
November, Mr. Z had in-kind support and maintenance valued at the 
presumed maximum value as described in Sec. 416.1140(a). We will use 
the January benefit rate, as increased by the COLA, to determine the 
value of the in-kind support and maintenance Mr. Z received in 
November when we determine Mr. Z's SSI benefit amount for January.
    Example 3. Mr. Y's SSI benefit amount is being determined for 
January (the current month). Mr. Y has Social Security income of 
$100 in November, $100 in December, and $105 in January. We find the 
amount by which his Social Security income in January exceeds his 
Social Security income in November ($5) and add that to his income 
in November to determine the SSI benefit amount for January.
* * * * *

Subpart K--[Amended]

    3. 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, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 
1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, and 1383); sec. 211, 
Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    4. Section 416.1130 is amended by revising paragraph (a) to read as 
follows:

Sec. 416.1130  Introduction

    (a) General. Both earned income and unearned income include items 
received in kind (Sec. 416.1102). Generally, we value in-kind items at 
their current market value and we apply the various exclusions for both 
earned and unearned income. However, we have special rules for valuing 
food, clothing, or shelter that is received as unearned income (in-kind 
support and maintenance). This section and the ones that follow discuss 
these rules. In these sections (Secs. 416.1130 through 416.1148) we use 
the in-kind support and maintenance you receive in the month as 
described in Sec. 416.420 to determine your SSI benefit. We value the 
in-kind support and maintenance using the Federal benefit rate for the 
month in which you receive it. Exception: For the first 2 months for 
which a cost-of-living adjustment applies, we value in-kind support and 
maintenance you receive using the VTR or PMV based on the Federal 
benefit rate as increased by the cost-of-living adjustment.

    Example: Mr. Jones receives an SSI benefit which is computed by 
subtracting one-third from the Federal benefit rate. This one-third 
represents the value of the income he receives because he lives in 
the household of a son who provides both food and shelter (in-kind 
support and maintenance). In January, we increase his SSI benefit 
because of a cost-of-living adjustment. We base his SSI payment for 
that month on the food and shelter he received from his son two 
months earlier in November. In determining the value of that food 
and shelter he received in November, we use the Federal benefit rate 
for January.
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[FR Doc. 98-16206 Filed 6-18-98; 8:45 am]
BILLING CODE 4190-29-P
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