PURPOSE: To state policy on the treatment of cash or in-kind assistance to repair or replace an excluded resource which is lost, damaged, or stolen.
CITATIONS (AUTHORITY): Section 2, Public Law 94-331; Public Law 95-171; Sections 1102, 1611, 1612, 1613, and 1631 of the Social Security Act; Regulations No. 16, sections 416.1105(b), 416.1125, 416.1126, 416.1127, 416.1156, 416.1232, 416.1237.
PERTINENT HISTORY: Regulations in effect prior to March 15, 1979, excluded from countable resources any cash received from an insurance company to repair or replace an excluded resource that had been lost, damaged, or stolen. However, the exclusion applied only if the individual (or couple) used the total amount of the cash to repair or replace the excluded resource within 3 months for personal property and 6 months for real property. Any cash that the individual did not use within these time periods became a countable resource. In addition, certain laws enacted by the 94th and 95th Congresses provide for the exclusion from income and resources, for limited time spans, of any Federal assistance received as the result of an event which the President declares to be a major disaster. This exclusion applies only to disasters which occur during the periods specified in the pertinent laws.
Our review of the types of assistance excluded from income and resources under the regulations in effect prior to March 15, 1979, as well as our recent field experience with casualty losses of excluded resources, indicated that the policy should be expanded because it did not cover situations where there was reimbursement for a casualty loss by a source other than an insurance company. For example, a supplemental security income (SSI) beneficiary may suffer damage to his or her property (which qualifies as an excluded resource) through negligence on the part of another person. Rather than involve his or her insurance company, the individual causing the damage may provide the reimbursement out of pocket. In such a case, the regulations in effect prior to March 15, 1979, would not have afforded the beneficiary the same protection they would if an insurance company were providing the reimbursement. That is, the reimbursement would have been income and a countable resource.
In addition, the Federal statutes dealing with disasters only apply in the case of major calamities which the President declares to be major disasters. For example, an individual loses his mobile home in a tornado. The area is not declared a major disaster area and the individual receives cash from his church to repair his mobile home. There is no statutory exclusion for the assistance and, under regulations in effect prior to March 15, 1979, the cash was countable as income and as a resource if retained. Also, the 3 and 6-month periods to repair or replace the resource proved to be inadequate in situations where the repair or replacement was necessary because of damage, loss, or theft caused by a disaster. Many who suffered losses from the Grand Teton Dam collapse of June 5, 1976, were unable to obtain the necessary contractor services and, therefore, were unable to expend promptly the disaster assistance provided them. As a result, the disaster assistance funds became countable resources and caused a loss of eligibility due to excess resources.
Therefore, without an extension of the 3 and 6-month time periods, and a "good cause" provision for even further extension, the time limits for excluding the resources resulted in SSI ineligibility through no fault of the beneficiary. There were situations where, because of contracting or other uncontrollable factors, an individual was unable to use assistance furnished to repair or replace the damaged, lost, or stolen excluded resource. This was especially true where circumstances resulted in widespread damage, loss, or theft to personal and real property. In those cases, it was extremely difficult for anyone who had suffered property loss to make replacement or to engage the appropriate contractors within time limits provided by the prior regulations. Accordingly, some SSI beneficiaries retained eligibility while others lost it. Extension of the basic time period plus an additional extension for "good cause" will help alleviate such inequities.
Public Law 95-171, which excludes disaster assistance under Federal statutes, provides for an initial 9-month exclusion period. That rule, combined with our experience in the Grand Teton Dam disaster, indicated that a total of 18 months allowed enough time to repair or replace homes. Therefore, a good cause extension of up to an additional 9 months should be sufficient. The total 18-month period is also consistent with the maximum 18-month period provided by the Social Security Act during which support and maintenance received as the result of a presidentially declared major disaster is excluded from income.
POLICY STATEMENT: 1. Countable income and resources do not include cash (including any interest earned on the cash) or in-kind assistance received from any source for purposes of repairing or replacing an excluded resource that is lost, damaged, or stolen if the individual uses the assistance (including any interest earned on it) to repair or replace the excluded resource within certain time periods.
When an individual receives temporary housing because his or her excluded home has been damaged or destroyed, that temporary housing is intended to replace the individual's own home until it can be repaired or replaced. Therefore, we do not count the value of the support and maintenance as income.
2. The initial time period for repair or replacement of a lost, damaged, or stolen excluded resource is 9 months for both real and personal property. The initial period will be extended for a reasonable period up to an additional 9 months where we find the individual has "good cause" for not repairing or replacing the resource within the initial 9-month limit. "Good cause" exists when an individual shows that circumstances beyond his or her control prevented the repair or replacement (or contracting for the repair or replacement) of lost, damaged, or stolen excluded resource within the initial 9-month time period. For example, the individual may have been seriously ill, unable to obtain a contractor's services or the necessary materials, or prevented by bad weather conditions from starting or completing the repair or replacement. In no case can the total period be more than 18 months.
EFFECTIVE DATE: These policies are effective March 15, 1979, the date of publication of final regulations in the Federal Register (44 FR 15661).
DOCUMENTATION: We must obtain evidence which shows that cash or in-kind assistance is for repair or replacement of damaged, lost, or stolen excluded resources. Where an extension of the time period for repairing or replacing the resource is requested, we must obtain documentation which shows that the individual made a reasonable and diligent effort to repair or replace the lost, damaged, or stolen excluded resource within the prescribed time periods. Where it is alleged that circumstances beyond the individual's control prevent using the assistance and interest within the allotted time, evidence must be obtained to show that an attempt has been made.
CROSS-REFERENCES: Claims Manual section 12502(d); Program Policy Statement No. 53, Treatment of Assistance Received by SSI Applicants or Beneficiaries as A Result of Catastrophes Declared by the President to be Major Disasters.
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