20 CFR 416.1102, 416.1120, and 416.1130

SSR 80-21

The claimant is a seaman who filed an application for supplemental security income (SSI) benefits on January 24, 1979. He is entitled to a maintenance allowance of $8.00 a day from his employer under general maritime law for injury. This allowance is paid every other week to the claimant's attorney, who deposits it in his firm's trust account. Checks are then drawn on the account to remit one-third of the allowance to the firm for attorney fees and two-thirds to the claimant. Held, the claimant's maintenance allowance is countable as unearned income for SSI purposes, except for that portion which is paid to his attorney as an ordinary and necessary legal expense incurred in receiving the maintenance allowance.

The issue is whether the claimant's income from "maintenance" received under general maritime law should be included, in whole or in part, as unearned income under the provisions of section 1621(a)(2) of the Social Security Act (the Act), as amended, in determining his eligibility for SSI benefits under section 1602 of that Act.

The claimant filed an application for SSI benefits as a disabled person on January 24, 1979. He indicated income of $56 every week in benefits under another program. On April 4, 1979, the Social Security Administration advised him that he was not eligible to receive SSI benefits by reason of his "substantial income." He was advised that a person who was receiving unearned income of $628.20 or more during a calendar quarter exceeded the income limitation and, therefore, did not qualify under the SSI program. The claimant stated that the $8.00 daily maintenance payment which he is entitled to under general maritime law is not countable as income within the meaning of the pertinent provisions of the Act and that his countable income, in any event, does not exceed $628.20 per quarter when consideration is given to statutory exclusions, including legal expenses he pays out of his maintenance payments.

The attorney for the claimant furnished a copy of a legal treatise on Maintenance and Cure benefits under maritime law. There is no question but that there is a distinction to be made between those benefits and those payable under the Workmen's Compensation Act and similar statutes. Maintenance and Cure is a product of case law whereby a "seaman" is compensated by his employer for illness or injury. The Cure part of the concept refers to the employer's obligation to provide medical treatment until such time when the maximum cure possible has been effected, whereas, Maintenance payments provide the incapacitated seaman with a living allowance.

It was ascertained at a hearing that the claimant had not yet received anything for Cure. The claimant, however, is entitled to a Maintenance allowance of $8.00 a day from his employer. The benefit is paid every other week to his attorney, who deposits the payments to his firm's trust account. Checks are then drawn on the account to remit one-third of the payments to the firm for attorney fees and two-thirds to the claimant. What this amounts to is that, every two weeks, the attorney receives $37.33 with a balance of $74.67 being sent to the claimant.

Section 1602 of the Act provides for the payment of SSI to every aged, blind, or disabled individual who is determined to be eligible on the basis of his income and resources.

Section 1612(a) of the Act defines "Income" as meaning both unearned income and earned income.

Section 1512(a)(2) of the Act defines "Unearned income" as including, with certain exceptions not pertinent in this case, support and maintenance furnished in cash or kind, and any payments received as annuity, pension, retirement, or disability benefit, including veterans' compensation and pensions, workmen's compensation payments, old-age, survivors, and disability insurance benefits, railroad retirement annuities and pensions, and unemployment insurance benefits.

Section 1612(b) of the act provides certain "exclusions from income," none of which are pertinent in this case.

Section 416.1102, Subpart K, Regulations No. 16, defines "Income" as meaning 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 need for food, clothing, and shelter.

Section 416.1120 of the Regulations provides that, in determining the amount of unearned income, the amount actually available to the individual is considered. The gross amount is reduced by an ordinary and necessary expenses incurred in getting or receiving the unearned income. For example, where an individual receives compensation for damages incurred in an automobile accident, the amount of unearned income under title XVI is the final settlement amount less ordinary and necessary legal, medical, and other expenses.

Section 416.1130 of the Regulations states that disability benefits, veterans' compensation and pension, and workmen's compensation payments, including payments under Federal and State workmen's compensation statutes, Longshoremen and Harbor Worker's Act, etc., are types of periodic payments to be included as unearned income; however, this list is not all inclusive. Amounts included in workmen's compensation and such other awards for medical, legal, or related expenses, paid or actually incurred by an individual in connection with such claim, are deducted in determining the amount that is counted as unearned income.

There is no authority for excluding the entire amount of the Maintenance payments from the claimant's unearned income. Income is generally defined in Federal laws as meaning payments in money or kind from whatever sources derived unless specifically excluded by statute. There is no reason to differentiate insofar as the Maintenance payments to which the claimant is entitled are concerned. The Maintenance payments are a disability benefit, not unlike workmen's compensation and veteran's benefits. The purposes of those benefits are the same in providing the incapacitated person with funds to help meet his ordinary living expenses. If Congress had intended to exclude such payments from unearned income, it is reasonable to assume that such would have been specifically listed as a exclusion.

The attorney fee, however, is an "ordinary and necessary" legal expense in the recovery of the unearned income. It is obvious that this amount is specifically excluded from the claimant's unearned income under § 416.1120 of the Regulations. It is equally apparent that the remainder actually received by the claimant does not total $628.20 or more per calendar quarter and that the claimant cannot be denied SSI payments solely on the basis of income from that source.

Consequently, it is the decision of the Social Security Administration that the Maintenance payments to which the claimant is entitled under general maritime law are countable as unearned income for SSI purposes except for that portion which is paid to his attorney as an ordinary and necessary legal expense.

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