SSR 81-22: SECTION 1612 (42 U.S.C. 1382a) SUPPLEMENTAL SECURITY INCOME -- DEFINITION OF INCOME -- A CHECK FROM A RELATIVE FOR TAXES ON THE CLAIMANT'S HOME
20 CFR 416.1121(g) and 416.1124
- The claimant applied for Supplemental Security Income (SSI) benefits as an aged individual in April 1980. Besides receiving monthly income of $126 in Social Security benefits, $42 in rent from an apartment, and $1.69 in interest from a savings account, the claimant received a check from her daughter in April 1980 for $844.99, the amount due the city for taxes on the claimant's home. The claimant endorsed this check over to the City. When the Social Security Administration (SSA) determined that her income exceeded the allowable amount and denied her application, the claimant appealed, protesting the inclusion of the amount of check that she received from her daughter as countable income. Held, the check for $844.99 was a gift, as defined in 20 CFR 416.1121(g); and under section 1612(a)(2)(E) of the Social Security Act (the Act), it was includable as unearned cash income in determining the claimant's countable income. Consequently, the claimant was ineligible for SSI benefits because her income exceeded the limit provided by statute.
The general issue is whether SSA's decision to deny the claimant's application for SSI benefits was correct. The specific issue is whether $844.99, the amount of the check received from her daughter, should be included in determining if the claimant's countable unearned cash income exceeded the limit prescribed by the Act.
The claimant, who was born on March 5, 1899, filed an application for SSI benefits on April 28, 1980. She had monthly income of $126 in Social Security benefits and $1.69 in interest from a savings account. The claimant also owns a house with five apartments. She lives in one apartment and her daughter lives in another. The claimant pays all of her daughter's utilities and receives rent of $42 a month. The other three apartments are empty, and she does not foresee renting them for some time. The claimant has another daughter living in California. In April 1980, that daughter sent the claimant a check made out to her in the amount of $844.99 to pay the taxes due the city on the claimant's house. The claimant endorsed the check over to the city.
When SSA counted the check as unearned cash income and based thereon found her ineligible for SSI benefits, the claimant filed a request for reconsideration. She stated that when her daughter from California sent her a check to pay her taxes, the daughter was unaware that it would make a difference if she paid the city directly or made payment to the claimant. The claimant stated that she never had any intention of using the money for any purpose other than to pay the taxes due on her home.
The claimant was sent a Notice of Reconsideration stating that it had been found that she was ineligible for SSI benefits because of her excess in income. In computing her income, SSA considered her interest from savings of $1.69 per month, her rental income of $42 per month, her Social Security benefits of $126 per month and the one-time payment made to her by her daughter of $844.29 as unearned income. The claimant protested this determination and filed a request for a hearing.
Section 1611(a)(1) of the Act provides that each aged, blind, or disabled individual who has income within certain specified limitations and whose resources (other than those excluded pursuant to section 1613(a)) are not more than, in case the individual has no spouse with whom he is living, $1500, is an eligible individual for SSI benefit purposes.
Section 416.1102 of Social Security Regulations No. 16 defines income as "anything you receive in cash or in kind that you can use to meet your needs for food, clothing, or shelter."
Section 416.1103(g) of Social Security Regulations No. 16 provides that the payment of an individual's bills by someone else directly to the supplier is not income. However, the value of anything that the individual receives because of the payment is counted if it is in-kind income as defined in § 416.1102.
Section 416.1140(a) of Social Security Regulations No. 16 provides that in-kind income, not received because the individual lives in the household of another, is presumed to have a maximum value. This presumed maximum value is one-third the applicable Federal benefit rate plus the amount of the general income exclusion described in § 416.1124(c)(10).
Section 416.1110 of Social Security Regulations No. 16 defines earned income as "what you receive as wages or as net earnings from self-employment.
Section 416.1120 of Social Security Regulations No. 16 defines unearned incomes as "all income that is not earned income."
Section 1612(a)(2)(E) of the Act provides that a gift is unearned income.
Section 416.1121(g) of Social Security Regulations No. 16 defines a gift as "something you receive which is not repayment to you for goods or services you provided and which is not given to you because of a legal obligation on the giver's part."
Section 416.1104 of Social Security Regulations No. 16 provides that the amount of an individual's countable income is "the amount that is left after we subtract what is not income or is not counted."
Section 416.1124(c)(6) of Social Security Regulations No. 16 provides for the exclusion of infrequent or irregular income from countable income. Unearned income which is received only once during a quarter or which cannot be reasonably expected is excluded in determining countable income if the total does not exceed $60 per quarter.
Section 416.1124(c)(10) of Regulations No. 16 provides, in part, for the exclusion from income of the first $60 of any unearned income in a calendar quarter other than income based on need.
If the claimant's daughter had paid the claimant's tax bill directly to the city, the daughter's payment would still have been counted as income to the claimant. Under § 416.1103(g) of Regulations No. 16, the daughter's payment would have been treated as in-kind rather than cash income, and therefore subject to the presumed value rule under § 416.1140 of Regulations No. 16. In this case, however, the daughter made the check for the claimant's taxes payable to the claimant rather than to the city. Therefore, under § 416.1121(g) of Regulations No. 16, the check was a cash gift to the claimant and not in-kind income. Because the check did not meet any of the exclusions in § 416.1124 of Regulations No. 16, it was countable as unearned income, under section 1612(a)(2)(E) of the Act, in determining the claimant's eligibility for SSI benefits. Accordingly, the claimant was ineligible for SSI benefits because her income exceeded the limited provided by statute.