AR 88-7(5)

AR 88-7(5): Hickman v. Bowen, 803 F.2d 1377 (5th Cir. 1986) Evaluation of Loans of In-kind Support and Maintenance For Supplemental Security Income (SSI) Benefit Calculation Purposes


Whether in-kind support and maintenance, the value of which is to be repaid, may be considered a loan and therefore not income for the purpose of calculating SSI benefits.


Section 1612(a)(2)(A) of the Social Security Act (42 U.S.C. Section 1382a(a)(2)(A));

20 C.F.R. Section 416.1103(f);

20 C.F.R. Sections 416.1130-416.1148;

SSR 78-26



Hickman v. Bowen, 803 F.2d 1377 (5th Cir. 1986)


THIS Ruling applies to decisions or determinations at all administrative levels (i.e., initial, reconsideration, administrative law judge hearing and Appeals Council).

To the extent inconsistent therewith, this Ruling supersedes SSR 78-26 in the Fifth Circuit only.


Ms. Hickman was found disabled by an administrative law judge (ALJ) based on her January 1983 SSI application. Ms. Hickman, in January 1984, completed a Social Security form for determining her financial eligibility for SSI. She reported that she had lived with her mother all her life. When asked whether she paid rent, Ms. Hickman reported that she did not but would have to start paying rent when her SSI check started. In response to a question as to whether she received any support such as cash, free room or free food she replied, “free food and shelter, I make no contributions to [household] expenses yet.” Based on this information, it was determined that Ms. Hickman was receiving in-kind support and maintenance and her monthly SSI payment was accordingly reduced by one-third.

On reconsideration, Ms. Hickman completed a supplemental statement outlining her financial arrangement with her mother. She explained that she had started contributing her share of the rent, utilities and food when she received her first SSI check in February 1984. Prior to that date she stated that her mother had given her a loan of food and shelter. She went on to explain that her mother “divided all the bills in half and I am to pay her back all money due her when I receive my back SSI money . . . . My mother loaned me an average of $25 a month in cash. She expects this to be paid back.” Ms. Hickman also submitted a letter from her mother stating that “[t]he living expenses for Theresa M. Hickman was a loan paid by me. Everything I provided for her was a loan to her which I expect to be paid back to me by her.” She also stated that she treated Ms. Hickman as any other boarder and would expect her to move out if she failed to pay for room and board.

Based on the above facts it was decided on reconsideration that full SSI benefits should be paid from February 1984 forward but that Ms. Hickman's benefits were properly reduced for the 11-month period between the time she first applied for SSI and the time she began receiving SSI. This determination was based on the finding that the receipt of in-kind support and maintenance was not a loan for SSI purposes and, therefore, not excludable from income.

Ms. Hickman appealed this decision to an ALJ who observed that 20 C.F.R. Section 416.1103(f) describes a loan as money borrowed or received. The ALJ found that the food and shelter provided Ms. Hickman by her mother did not constitute a loan because it was not “money.” The ALJ also found that since no loan had taken place, the reduction of the SSI benefits due to months prior to February 1984 was correct.

The Appeals Council denied claimant's request for review of the hearing decision. The District Court for the Western District of Texas upheld the decision of the ALJ. Ms. Hickman appealed this decision to the United States Court of Appeals for the Fifth Circuit. The court of appeals remanded the case to the Secretary for consideration in accordance with its opinion.


The U.S. Court of Appeals for the Fifth Circuit held that 20 C.F.R. Section 416.1103(f) permits forms of loans other than money loans to be excluded from income. The court found that “the express language of the regulation sweeps beyond simply cash loans. Certainly, if someone purchases food or shelter on credit, and it is excluded from income, borrowing or being advanced such necessities should be treated similarly. In either case, as with a loan, the borrower is liable and must repay the lender.” The court stated that it did not believe that its decision would allow every recipient of SSI who received in-kind support while awaiting processing of their application to collect full benefits for the waiting period. The court further stated that SSI recipients would still need to show that any in-kind support received was, in fact, loaned to them in realistic anticipation of repayment and that they indeed intended to repay that debt. The court then remanded the case to the Secretary to determine whether the in-kind support and maintenance Ms. Hickman received for the 11 months in question was, in fact, a loan.


The Social Security Administration (SSA) does not view a receipt of in-kind support and maintenance as a loan, meeting the definition of what is not income, under 20 C.F.R. Section 416.1103(f). The regulation provides that money an individual borrows is not income. It does not contemplate a loan of food or shelter.

The Fifth Circuit's decision in Hickman holds that in-kind support and maintenance may constitute a loan and thereby may be excluded from income.


This Ruling applies to cases in which the individual resides in Louisiana, Mississippi or Texas at the time of the decision or determination at any administrative level, i.e., initial, reconsideration, administrative law judge hearing or Appeals Council.

When an SSI applicant or recipient alleges receiving in- kind support and maintenance, that in-kind support and maintenance will be considered a loan and its value will not be considered for the purpose of calculating SSI benefits only if the applicant or recipient can demonstrate that the in-kind support and maintenance received was, in fact, loaned to him to her in realistic anticipation of repayment, that he or she intends to repay the debt, and that under the terms of SSR 78-26 a bona fide loan agreement has been made.


Date of Publication 11/14/88

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