SSR 76-18: SECTIONS 1611(a)(1) and 1612(a) and (b) (42 U.S.C. 1382(a)(1), and 1382a(a)and (b)) -- SUPPLEMENTAL SECURITY INCOME -- UNEARNED INCOME -- SERVICE ALLOTMENTS

20 CFR 416.1102(a)

SSR 76-18

The Supplemental Security Income (SSI) recipient began receiving an allotment from daughter who was in the military service. The daughter claimed the entire allotment was not intended for the sole use of the claimant but rather to supplement her living expenses. The balance was to be deposited to a joint savings account. The claimant contended that only the amount she actually used for her support should count as her income in computing any SSI payment due her. Held, in accordance with sections 1612(a) and (b) of the Social Security Act, the entire allotment is income attributed directly to the claimant and chargeable to her as "unearned income" as defined in those sections. Therefore her SSI payment must be adjusted accordingly.

It has been determined that the claimant meets all factors eligibility for supplemental security income except with respect to the question of income. Accordingly, the issue before the Hearing Examiner is whether the claimant's income, other than income excluded pursuant to section 1612(b) of the Social Security Act, is at a rate of no more than $1,752 per calendar year as set forth in section 1611(a)(1)(A) of the Act.

At the hearing, the claimant readily testified that she had been receiving the sum of $180 monthly as an allotment from her daughter who entered the Army in June, 1974. These allotments were effective with the month of January, 1975, and the claimant testified that the allotment check was made to her solely. However, she testified that the intent of the allotment check was not for her sole use; rather, her daughter had instructed her to place the money in a joint savings account and the claimant was to use whatever was necessary to maintain a decent standard of living, particularly in the area of food acquisition. According to the claimant, when her daughter was discharged from the Army she planned to use the money left in the savings account for educational expenses. The claimant further testified that she never used all of the $180 monthly for her own expenses. In fact, she seldom used as much as one-half of the money sent for her own personal use. Claimant also testified that at the time that her daughter made the allotment payable to her, she was not receiving supplemental security income benefit checks but was subsequently restored to supplemental security income benefits.

The claimant did not present the savings account book which would have shown the deposits and withdrawals from the joint account which was maintained and supplemented with the allotment check.

A representative of the Social Security Office personally inspected the records of the Army Finance Center, Indianapolis, Indiana, to verify the allotment in question. He found that the allotment was in the amount of $180 monthly beginning January, 1975, through April, 1975, and $100 monthly beginning May, 1975. There was on record a request from the daughter that the allotment be terminated effective July, 1975.

Section 1611(a)(1)(A) of the Social Security Act provides, as pertinent herein, that a disabled individual who does not have an eligible spouse and whose income, other than income excluded pursuant to section 1612(b)(2) is at a rate of not more than $1,752 per calendar year shall be an eligible individual for purposes of the Act.

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))." "Unearned income" means all other income.

Section 1612(b) sets forth the types of income which may be excluded in determining an individual's income for the purpose of title XVI of the Social Security Act.

Section 1612(b)(2) of the Social Security Act provides, as pertinent herein, that in determining the income of an individual there shall be excluded the first $240 per year (or proportionately smaller amounts for shorter periods) of income (whether earned or unearned) other than income which is paid on the basis of the need of the eligible individual.

Section 416.1102(a) of Regulations No. 16 defines income. The term "income" for purposes of title XVI of the Social Security Act (the Supplemental Security Income Law) means the receipt by an individual of any property or service which he can apply, either directly or by sale or conversion, to meeting his basic needs for food, clothing, and shelter.

The law and regulations cited above provide that a disabled individual is entitled to supplemental security income benefits only if her income, after excludable deductions, does not exceed the sum of $1,752 yearly, or $438 quarter (or $146 monthly if claimant is potentially entitled to one or more payments during a calendar quarter). Regulations No. 16, section 416.1102(a) defines income for purposes of title XVI as the receipt by an individual of any property or service which he can apply (emphasis supplied), either directly or by sale or conversion to meeting his basic needs for food, clothing, and shelter. In view of this regulation, it becomes clear that the allotment to the claimant by her daughter could have been wholly applied by the claimant toward meeting her basic needs for food, clothing, and shelter. It does not matter that the proceeds of the allotment were not, in fact, so applied by the claimant so long as she could have applied the proceeds in the manner mentioned by the regulations. Certainly, this might seem inequitable if the claimant applied only a portion of the allotment toward her living expenses, as she testified. However, the regulations are clear that the entire amount of the allotment must be charged as income to the claimant.

The only exclusion that can be applied toward the allotment proceeds received by the claimant is the exclusion outlined in section 1612(b)(2) of the law which provides for an exclusion of $240 yearly or $60 quarterly or $20 monthly. In this case, section 1611(c)(1) of the law provides for quarterly computation of countable income.

In accordance with the above, it is concluded and found by the Hearing Examiner that the claimant is not entitled to supplemental security income benefits for the quarter ending in March, 1975, by reason of the fact that she was receiving income in excess of the amount allowed by law.

For the three months ending in June, 1975, it is found that the claimant received the sum of $380 as proceeds of the allotment. Deducting the sum of $60 in accordance with law, the countable income of the claimant for that quarter was $320. Deducting $320 from potential payments of $438 ($146 for three months) results in the amount of $118 in benefits owing to the claimant for the quarter ending June 30, 1975.

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