SSR 81-21: SECTIONS 1611(a)(1)(A) and 1614(f)(2) (42 U.S.C. 1382(a)(1)(A) and 1382c(f)(2)) SUPPLEMENTAL SECURITY INCOME -- ELIGIBILITY -- EXCESS INCOME -- DEEMING OF INCOME FROM A PARENT

20 CFR 416.1165

SSR 81-21

When the Social Security Administration (SSA) determined that the claimant, a disabled minor, was ineligible for SSI benefits because his income exceeded the statutory limit, his mother filed an appeal. Held under section 1614(f)(2) of the Social Security Act, the claimant's income is deemed to include the income of his mother subject to reduction by an allocation for the mother under 20 CFR 416.1165(c)(1); therefore, he is ineligible for SSI benefits because his countable income, after the $60 exclusion provided by 20 CFR 416.1124(c)(10) exceeds the statutory limit.

The general issue is whether the claimant has income that makes him ineligible for Supplemental Security Income (SSI) benefits under section 1611(a)(1)(A) of the Social Security Act (the Act). The specific issue is whether the claimant's mother's income should be counted in determining the claimant's eligibility for SSI benefits.

M, the claimant's mother, applied for SSI benefits on the claimant's behalf in October 1979. The claimant, who is disabled was born on November 4, 1972. When the Social Security Administration (SSA) determined both initially and upon reconsideration that the claimant did not meet the eligibility requirements for SSI benefits because the portion of his mother's income deemed to him exceeded the statutory limit, M filed a request for a hearing.

The facts developed at the hearing through testimony and documentary evidence are that M is divorced from the claimant's father and that the father's whereabouts are unknown. There is no court order for child support from the claimant's father.

M pays $78.93 per month toward purchase of a trailer home in which she and the claimant live. The trailer is located on land owned by M's father. M owns a 1974 Oldsmobile which is used to take the claimant to the doctors and to school. M owns no other property and has no checking or savings account. She has incurred approximately $1400 in unpaid hospital and doctor bills on the claimant's behalf. Ordinary living expenses for M and the claimant exhaust M's entire monthly income.

M works 40 hours per week for a piano company earning $4.36 per hour. A statement from M's employer, dated November 26, 1979, shows that M earned $656.88 in the month of October 1979, and was expected to earn $732.48 in November of 1979 and $837.12 in December of 1979.

Section 1611(a)(1)(A) of the Act provides, in part, that each aged, blind, or disabled individual who does not have an eligible spouse and whose income, other than income excluded pursuant to Section 1612(b), is at a rate of not more than $2498.40 (the amount in effect for the period July 1979 through June 1980) shall be an eligible individual for the purposes of this title.

Section 1611(c)(1) of the Act provides, in part, that an individual's eligibility for benefits under this title and the amount of such benefits shall be determined for each quarter of a calendar year except that, if the initial application for benefits is filed in the second or third month of a calendar quarter, such determinations shall be made for each month in such quarter.

Section 1612(a) of the Act provides, in part, that "income" means both, earned and unearned income. "Earned income" means only the claimant's wages and net earnings from self-employment. "Unearned income" means all other income.

Section 1614(f)(2) of the Act provide that for purposes of determining eligibility for and the amount of benefits for any individual who is a child under age 21[1], the individual's income and resources shall be deemed to include any income and resources of his or her parent who is living in the same household as the individual, whether or not the parent's income is available to the individual, except to the extent determined by the Secretary to be inequitable under the circumstances.

Section 416.1124(c)(10) of Regulations No. 16 provides that in determining an individual's countable income, there shall be excluded the first $60 per quarter of income, earned or unearned, other than income based on need.

Section 416.1165 of Regulations No. 16 provides that the quarterly income to be deemed to an eligible child from the child's parent(s) living in the same household is reduced by an allocation for each ineligible child in the household and then reduced by an allocation for such parent(s), the amount of which depends on whether the income involved is earned or unearned. If the parent has only earned income and is the only parent residing in the household, the earned income is reduced by an amount equal to $255 plus twice the quarterly Federal benefit rate for an individual. The remainder, which is deemed to the eligible child as unearned income, is combined with any other unearned income he or she has for that quarter; and the appropriate exclusions in § 416.1124 are applied to determine the child's quarterly countable unearned income. The child's countable unearned income is added to the child's countable earned income, if any, to determine the child's quarterly countable income. The eligible child's quarterly benefit rate is determined by subtracting the child's quarterly countable income from the quarterly standard payment amount for an eligible individual.

The facts in this case are that M had earned income in the amount of $2226.48 for the quarter commencing October 1979 and ending December 1979. After allocating to M, as provided in § 416.1165(c)(1)(ii), $255 plus $1249.20, which is twice the quarterly standard payment amount, or a total of $1504.20, the remainder, $722.28, constituted deemed income to the claimant for the quarter. Under § 416.115(d), the $722.28 deemed income must be treated as unearned income; therefore after subtracting the $60-per-quarter exclusion provided in § 416.1124(c)(10), the claimant's quarterly countable income amounted to $662.28. This amount exceeded the $624.60 quarterly standard payment amount in effect for the fourth quarter of 1979. Accordingly, the claimant was ineligible for SSI benefits because his income exceeded the statutory limit.

[1] Section 1614(f)(2) of the Act has been amended by section 203 of Public Law 96-265 (Social Security Amendments of 1980). The section now limits, effective October 1, 1980, the deeming of a parent's income and resources to a child under age 18, with an exception for a child who in September 1980 was at least age 18 but under age 21, received an SSI benefit for that month, and would receive a higher benefit without the application of the new amendment.

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