(Supersedes PPS-46 (SSR 80-18))
This supersedes Program Policy Statement No. 46 (SSR No. 80-18), Title XVI: SSI Treatment of Veterans Administration Payments to SSI Eligibles/Fiduciaries
PURPOSE: To state supplemental security income (SSI) policy with respect to (1) Veterans Administration (VA) payments made to SSI eligibles where VA augments the payments because the recipient has dependents, and (2) VA payments made to fiduciaries.
CITATIONS (AUTHORITY): Section 1612(a)(2)(B) of the Social Security Act; Regulations No. 16, sections 416.1102 and 416.1121, 38 U.S.C. Veterans Benefits, Commissioner's Decision dated October 29, 1981.
PERTINENT HISTORY: 1. Social Security Administration (SSA) policy provides that VA disability compensation or pension benefits received by an eligible individual is unearned income to that individual (and is a resource if held to the next quarter). The income or resource is used in determining eligibility and amount of benefits under the SSI program. Under VA law, a veteran or widow may receive an increased amount if there is a dependent. Before November 1981, SSA policy provided that the additional (augmented) portion of a VA benefit when included in the VA payment to the designated beneficiary (person to whom the check is actually made payable and thus, who may negotiate the check) was unearned income to that individual. There were continuing challenges in the courts on SSA's policy of counting the additional (augmented) payments as income to the designated beneficiary. In three such cases, the courts held (1) that the portion of the VA benefit computed on the basis of the existence and number of dependents could not be counted as income to the veteran as payee of the benefits and (2) to consider it as such would obviate Congressional intent which was to increase the basic VA benefit to cover additional expenses incurred for the care and maintenance of dependents. A reevaluation of the VA benefit structure by SSA's Office of General Counsel together with VA's legal counsel found support for excluding the additional (augmented) portion of the VA benefit as income to the designated beneficiary. A change in policy was approved by the Commissioner on October 29, 1981. Effective November 1981, SSA policy provides that the additional (augmented) portion of a VA benefit when included in the VA payment to the designated beneficiary is not income to that individual. The additional (augmented) portion is income to the dependent.
2. Benefits which are paid to an individual as a fiduciary (a party who receives and manages the benefits for another) are not available for the fiduciary's own use and, therefore, are not counted as unearned income of the fiduciary in the quarter of receipt or as a resource thereafter for the purpose of determining the fiduciary's eligibility for or amount of SSI benefits.
There are situations where a person may be receiving VA benefits as a beneficiary and also as a fiduciary for another person(s). For example: A World War II disabled veteran in receipt of his own VA compensation may also be in receipt of VA benefits in a separate check as a fiduciary on behalf of his incompetent Vietnam veteran son; a widow in receipt of her own VA pension may also be in receipt of VA benefits in a separate check as a fiduciary on behalf of her grandchild; or the child of a deceased veteran may be in receipt of dependent's indemnity compensation as a fiduciary on behalf of his or her brother or sister.
POLICY STATEMENT: 1. VA payments, excluding those augmented portions which are payable because of dependents, are income to the designated beneficiary for the purposes of determining eligibility and payment amount under the SSI program. The augmented portion is unearned income to the dependent.
2. Payments made by the VA to an individual in his or her capacity as fiduciary for another are not income or resources to the fiduciary for the purpose of determining his or her eligibility for or amount of benefits under the SSI program. For SSI purposes, such VA payments are income or resources of the individual for whom the VA payments are made.
EFFECTIVE DATE: The new policy in 1. is effective November 1981. The policy in 2. has been in effect for a number of years.
DOCUMENTATION: Appointment of a fiduciary and the amounts being paid must be documented. When a person is receiving payment as a fiduciary the check legend will show the name of the fiduciary followed by a phrase which indicates the fiduciary's relationship. The most common phrases are "wife of," "guardian of," and "custodian of the child(ren) of." Other documentation may include a VA award letter which shows the same name and phraseology cited above or a copy of VA Form 27-4703, Fiduciary Agreement. The Veterans Administration issues separate checks for any benefits to which a payee is eligible in his or her own right.
CROSS REFERENCES: Program Operations Manual System SI 00810.120.A-00810.120.B.
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