PURPOSE: To provide policy with respect to the value of support and maintenance furnished to an individual or spouse by private nonprofit institutions when an express obligation exists on the part of such institution to furnish full support and maintenance to the individual or spouse without any current or future payment therefor.
CITATION (AUTHORITY): Section 1612(a)(2)(A)(ii) of the Social Security Act; Regulations No. 16, Sections 416.231(b), 416.1125(f) and (h); Public Law 93-484.
PERTINENT HISTORY: The law provides that, in determining supplemental security income (SSI) eligibility and payment amounts, the value of support and maintenance is excluded from countable income when it is provided by a nonprofit institution or when other nonprofit organizations make payments to such institutions on behalf of the resident(s); the law further provides that this income exclusion does not apply when the ". . . institution has expressly undertaken an obligation to furnish full support and maintenance to such individual or spouse without any current or future payment therefor . . . ."
Regulations (§ 416.1125(f)(1) and (2)) define nonprofit institutions and nonprofit organizations for purposes of this provision as institutions and organizations which are not public and are tax exempt under Section 501(c) or (d) of the Internal Revenue Code of 1954. In addition, they must be institutions (as defined in § 416.231(b)) which do not provide educational or medical services. Full support and maintenance means at least all of an individual's food and shelter. However, the regulations do not define what constitutes " an express obligation" to provide full support and maintenance without any current or future payment.
The legislative history of this provision indicates that the exclusion of support and maintenance was not intended to apply when a nonprofit institution or nonprofit organization has an enforceable contract with an individual in which it agrees to provide him with full support and maintenance and the individual is not required to make any current or future payments therefor.
POLICY DIRECTIVE STATEMENT: The value of support and maintenance provided by a private nonprofit institution is counted as income, even though all other requirements in Section 1612(a)(2)(A)(ii) are met, if either that institution or another private nonprofit organization has an express obligation to provide full support and maintenance to the individual without receiving any current or future payment therefor.
A private nonprofit institution or organization has an express obligation to provide full support and maintenance to an individual without any current or future payment therefor when there is a legally enforceable contract in effect setting forth such an obligation. A legally enforceable contract of this nature specifies the institution's or organization's obligation to provide at least all of an individual's food and shelter and does not require that any payment be made for the support and maintenance either by the individual or by someone on his or her behalf. This obligation is not negated even if funds should become available at some future time to make such payments.
For purposes of this provision, the transfer of property or the making of payment prior to an individual's admission to a nonprofit institution is a lump-sum prepayment. Such actions do not constitute "current payment" for support and maintenance. The term "future payment" means payments which must be made (or property which must be transferred) in the future when and if an individual is financially able to do so.
A religious order which requires its members to take a vow of poverty, and which receives assets from a member as a consequence of such a vow, is receiving such assets in fulfillment of the vow and not as payment for support and maintenance. In such situations, any support and maintenance provided by the order to its members is provided out of an express obligation to do so, and the value of that support and maintenance is counted as income.
DOCUMENTATION: A legally enforceable contract setting forth an express obligation as described herein must exist in writing. This will usually take the form of an agreement, executed between an individual and a nonprofit institution or organization, governing the individual's residence in the institution. If such an agreement is lacking or is not clear with respect to payment requirements, the by-laws or membership rules of the appropriate organization or institution should be consulted.
If there is a positive allegation by the individual, institution, or organization that an express obligation exists, a signed statement is sufficient evidence of the absolute obligation which makes the statutory exclusion from income inapplicable.
CROSS-REFERENCES: Claims Manual Sections 12351 and 12354.
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