Rescinded 1984

SSR 80-23: Section 1612(a) (42 U.S.C. 1382a(a)) Supplemental Security Income—Unearned Income—Gifts from Religious Organization

20 CFR 416.1136

SSR 80-23

The claimant for supplemental security income (SSI) benefits received funds from a religious organization in the same month he filed for SSI benefits and in the following month. The claimant contended the funds were a loan and not a gift and should not count as unearned income to him in determining his eligibility for SSI benefits. Held, in accordance with section 416.1136 of Social Security Regulations No. 16, the funds received by the claimant represent a gift to him from a philanthropic organization since there was no legal obligation to repay the organization. Accordingly, the funds constitute unearned income for SSI purposes.

It has been determined that the claimant met all factors of eligibility for supplemental security income and he has been awarded benefits beginning April 1978. However, the claimant disputes the date of eligibility determined by the Social Security Administration. Accordingly, the issue is whether the monies received by the claimant from a religious association for the months of February and March 1978 constitute loans or unearned income.

The claimant applied for supplemental security income benefits on February 24, 1978, on the basis of age. On his application he admitted receipt of $356 from a religious association which provides services for aged persons. The claimant received approximately the same amount of money for the same source the following month.

The claimant contends that this money was in the form of loans, thereby eliminating it from inclusion as unearned income. It is the position of the Social Security Administration, on the other hand, that these funds were given to the claimant as a gift and that until the payments stopped, effective April 1978, the claimant was not eligible for supplemental security income.

Section 1612(a) of the Social Security Act states that "income" means both earned and unearned income. "Earned income" means only wages and net earnings from self-employment as defined in sections 203 and 211 of the Act, respectively, (with exceptions as provided in section 1612(a)).

Section 46.1136 of Social Security Regulations No. 16 states, in pertinent part, that unearned income includes gifts. "Gifts", as defined in this section, means anything given to an individual which is not compensation for services or other consideration and is given without legal obligation on the donor's part.

The evidence reveals that the association is a philanthropic organization providing services for the aged. The claimant, a man of 77, is an appropriate beneficiary of its services. Although a letter dated February 8, 1978, signed by the claimant and written on association stationery purports to indicate a loan arrangement, it is clear that a loan was not intended. The letter states that "pending determination from the Social Security Administration, I will negotiate possible repayment" (emphasis supplied). Implicit in any loan must be a promise to repay. The clear inference in this letter is that there has been no promise to repay. Repayment is only a possibility that will become a reality under circumstances that are entirely speculative. Accordingly, it is held that the money received by the claimant from the association in February and March 1978 represented a gift to him from a philanthropic organization and therefore unearned income which rendered him ineligible for supplemental security income for those 2 months.

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