SSR 79-10: TITLE XVI: EXCLUSION FROM INCOME OF ASSISTANCE BASED ON NEED FURNISHED BY ANY STATE OR POLITICAL SUBDIVISION
PURPOSE: To revise existing policy with respect to exclusion from countable income, under the supplemental security income (SSI) program, of certain assistance based on need as mandated by Section 505(b) of Public Law 94-566.
CITATIONS (AUTHORITY): Section 401 of Public Law 92-603 and Section 212 of Public Law 93-66; Sections 1612(a)(2), 1612(b)(6) as amended by Section 505(b) of Public Law 94-566, 1614(e) and (f), and 1616(a) of the Social Security Act; Regulations No. 16, Sections 416.120(c), 416.1102, 416.1109, 416.1125, 416.1145(b)(2), 416.1151, 416.1185, and 416.2001.
PERTINENT HISTORY: As originally enacted, Section 1612(b)(6) of the Social Security Act, in determining the income of an individual (and eligible spouse), authorized the exclusion from countable income of assistance, as described in Section 1616(a), which was based on need and furnished by any State or political subdivision of a State. In order to meet the requirements of Section 1616(a), excludable assistance payments had to be made to an eligible individual in cash, on a regular basis, and in supplementation of SSI benefits. A payment was considered to be "based on need" if the program under which the payment was made required use of the individual's or family's income (or income and resources) as a criterion for determining eligibility for and amount of payment. A payment was considered to be "in cash" only if a cash payment were made directly to an eligible individual (and eligible spouse, if any) or to such a person's representative or protective payee. Thus, vendor payments which resulted in an individual's receipt of in-kind support and maintenance, even though made by a State agency or a political subdivision of a State under a needs-based program, were not excluded under this provision because the payments were not made in cash directly to an eligible individual. Therefore, a State administered and State/local funded payment made for foster care resulted in countable income in the form of in-kind support and maintenance. Similarly, adoption subsidies to enable low-income parents to adopt a child were considered income to the parents; if the parents applied for SSI, the adoption subsidies could effect their eligibility. If the adopted child were eligible for SSI and the parents were not, the subsidy was included in parental income to be deemed to the child under the provisions of Section 1614(f).
Because of the statutory requirements for State supplementation related to Section 1616(a) assistance "furnished by a State or political subdivision of a State" has been interpreted to mean only those payments funded wholly by a State of the United States (as defined in Section 1614(e)), a political subdivision thereof, or a combination of the two. (For this purpose, an Indian tribe was considered to be a political subdivision of a State). Excludable assistance payments do not involve any Federal or private agency funding. Consequently, payments under a needs-based program such as Aid to Families with Dependent Children (AFDC), though made directly to an eligible individual and administered by a State agency, are not excluded under Section 1612(b)(6) because of the Federal funding involved. On October 20, 1976, Public Law 94-566 was signed. Section 505(b) of that law amended Section 1612(b)(6) of the Social Security Act effective October 1, 1976. As amended, that section now provides for the exclusion from income of assistance, furnished to or on behalf of an eligible individual, which is based on need and furnished by any State or political subdivision thereof. In addition, the reference to Section 1616(a), with its requirement that payments be made in cash to an eligible individual, has been deleted. Therefore, the requirement that an assistance payment must be made in cash to an eligible individual in order to be excluded as assistance based no need has been abolished; payments made to a vendor on behalf of an eligible individual can also qualify for this exclusion.
Once it is established that certain payments qualify as assistance based on need under 1612(b)(6), existing regulations automatically exclude them from consideration in the deeming process under Section 416.1185 of Regulations No. 16. The result is the total exclusion from countable income of such payments, as well as of State supplementary payments which have always before been excluded under this provision.
POLICY DIRECTIVE STATEMENT: 1. Effective October 1, 1976, assistance, furnished to or on behalf of an eligible individual (and eligible spouse, if any) is excluded from counting as income under the SSI program if it meets both of the following criteria:
- (a) The assistance is provided under a public (governmental) program which uses income, or income and resources, as criteria for determining eligibility for and amount of payment; and
- (b) The paying program is funded wholly by a State of the United States (as defined in Section 1614(e)) or by a political subdivision of a State, including an Indian tribe, or any combination of such jurisdictions.
2. Assistance provided under programs described in 1. above is excluded from income regardless of whether the program provides it in cash directly to an eligible individual (and eligible spouse, if any) or whether it purchases in-kind (noncash) benefits for an individual from a third party. Thus, certain vendor payments which prior to October 1, 1976, resulted in countable income are now excluded; e.g., State foster care payments, adoption subsidies, and other payments to providers of food, clothing, and shelter are excluded if they are based on need. (Vendor payments made by a public or private agency or by a private individual for social services or for medical care or services, including room and board furnished during medical confinement, have never been treated as income for SSI purposes. Such items are not defined as "income" under Sections 416.1102 and 416.1109 of Regulations No. 16, and this Program Policy Directive makes no change in that definition.)
3. Any payments which are excluded from income on the basis of being assistance based on need under Section 1612(b)(6) are also excluded from income to be deemed under Section 416.1185 of Regulations No. 16.
DOCUMENTATION: Evidence must be obtained from the agency administering potentially excludable assistance that an individual is receiving assistance as alleged, that the program uses income (or income and resources) to determine eligibility and payment amounts, and that there is no Federal or private agency funding involved. Federal funding is involved when Federal monies are provided for benefit payments under a specific Federal/State program of project grants or formula grants, (such as grants-in-aid under title IV-A of the Social Security Act).
FURTHER INFORMATION: Final regulations covering this policy were published in the Federal Register on October 20, 1978, at 43 FR 48994.
This Program Policy Directive does not make any change in existing policy with respect to what constitutes a payment which is based on need. Neither does it change the existing interpretation of what constitutes assistance "furnished by" a State or a political subdivision thereof. Payments made under needs-based programs which are funded in whole or in part by the Federal Government (e.g. Bureau of Indian Affairs general assistance, Veterans Administration pensions, AFDC, etc.) or by any private nonprofit agency (Goodwill Industries, Red Cross, etc.) are not excluded under this rule. Similarly, this exclusion does not apply to programs, such as unemployment compensation, which are State/local administered but do not use income to determine eligibility and payment amount.
CROSS-REFERENCE: Claims Manual Section 12362