I-5-4-32.LaBelle, et al. v. Sullivan
| Purpose | |
| Background | |
| Guiding Principles | |
| Definition of Individuals Eligible for LaBelle Relief | |
| Preadjudication Actions | |
| Processing and Adjudication | |
| Case Coding | |
| Inquiries | |
| - Teletype Instruction IT-67-91 Issued December 16, 1991 | |
| - LaBelle v. Sullivan Settlement Order Dated July 24, 1992 | |
| - Notice to Individuals Not Eligibile For LaBelle Relief | |
| - Notice of FO Determination That No Bona Fide Loan Exists |
ISSUED: June 29, 1993
I. Purpose
This Temporary Instruction (TI) sets forth procedures for implementing the July 24, 1992 Settlement Order approved by the United States District Court for the Middle District of Florida in the LaBelle, et al. v. Sullivan action involving the effect of loans of in-kind support and maintenance on Supplemental Security Income (SSI) eligibility and payment amounts.
Adjudicators throughout the country must be familiar with this TI because individuals eligible for relief under the LaBelle Settlement Order who now reside outside of the Eleventh Circuit must have their cases processed in accordance with the requirements of the court's Settlement Order.
II. Background
On December 5, 1991, plaintiffs filed an Eleventh circuit-wide class action challenging the Secretary's policy that restricted the definition of “loan” to transactions that involved an exchange of money, and resulted in treating advances of food and/or shelter as income for SSI purposes.
On December 16, 1991, the Social Security Administration (SSA) announced a policy reinterpretation, effective December 17, 1991, that permitted bona fide loans based on advances of food and/or shelter to be disregarded in the same manner as cash loans in computing SSI eligibility and benefits amounts. SSA issued teletype instruction IT-67-91 (Attachment 1) to provide operating components with instructions on implementing the policy change. IT-67-91 permitted one-year reopening of prior determinations or decisions based on this change of position.
On July 24, 1992, the district court approved the parties' jointly submitted Settlement Order setting forth the terms for applying the Secretary's change of policy retroactively to certain Eleventh Circuit (Alabama, Florida and Georgia) residents (Attachment 2).
On September 8, 1992, SSA published Social Security Ruling (SSR) 92-8p which provides a uniform national policy interpretation on the treatment of advances of in-kind support and maintenance and implements the December 1991 policy change that permits bona fide loans based on advances of food and/or shelter to be disregarded in computing SSI eligibility and benefit amounts.
III. Guiding Principles
Under LaBelle, the Secretary will make a new determination for persons who: 1) respond to notice informing them of the opportunity for review; and 2) are determined to be eligible for relief under the Settlement Order after screening (see Part V. below). The Southeastern Program Service Center (SEPSC) or the SSA field office (FO) (i.e., district office or branch office) servicing the claimant's residence, as appropriate, will screen cases to determine who is eligible for relief under the LaBelle Settlement Order.
The FO will make a new determination at the reconsideration level regardless of the final level at which the case was previously decided. Individuals eligible for relief under the LaBelle Settlement Order who receive adverse determinations will have appeal rights (i.e., Administrative Law Judge (ALJ) hearing, Appeals Council and judicial review).
Generally, the LaBelle Settlement Order does not require any change in OHA's adjudicatory policies because, since December 16, 1991, OHA adjudicators have been excluding bona fide loans based on advances of food and/or shelter in computing SSI eligibility and benefits amounts. However, under the LaBelle Settlement Order, the Secretary will recognize and accept as determinative and final any prior decision of the Secretary at any administrative level that there did exist a bona fide loan based on the advance of food and/or shelter and honor that determination without further inquiry.
IV. Definition of Individuals Eligible for LaBelle Relief
Except as noted below, for purposes of implementing the July 24, 1992 Settlement Order, individuals eligible for relief under the LaBelle Settlement Order include all past or present residents of Alabama, Florida and Georgia who, between January 1, 1990, and December 31, 1991, inclusive, received a determination or decision at any administrative level (initial, reconsideration, ALJ hearing or Appeals Council review) that reduced, suspended or denied SSI benefits because SSA counted as income food and/or shelter that an individual received as a bona fide loan.
EXCEPTION:
A person is not eligible for relief under the LaBelle Settlement Order if
(1) the individual is a former resident of Alabama, Florida and Georgia and received a determination or decision between January 1, 1990, and December 31, 1991, inclusive, but the individual was not a resident of Alabama, Florida or Georgia at the time of the determination or decision; or
(2) the individual's income (after excluding bona fide loans of food and/or shelter) or resources preclude SSI eligibility or additional payment.
NOTE:
Current residents of Alabama, Florida or Georgia are potential class members if they received a determination or decision between January 1, 1990, and December 31, 1991, inclusive, even if they were not residents of Alabama, Florida or Georgia at the time they received the determination or decision.
V. Preadjudication Actions
A. Notification
On January 19, 1993, SSA began sending notices to all individuals potentially eligible for relief under the LaBelle Settlement Order as identified by computer run. The notice included a reply form and a postage-paid return envelope addressed to the SEPSC. Individuals have 180 days from the date of receipt of the notice to request that SSA readjudicate their claims under the terms of the LaBelle Settlement Order. Receipt will be presumed to have occurred within 5 days of the notice.
The SEPSC will send all untimely responses to the servicing FO to develop good cause for the untimely response. Good cause determinations will be based on the standards in 20 CFR § 416.1411.
B. Identifying Individuals Eligible for LaBelle Relief
SEPSC Responsibilities
Upon receipt of a reply form, SEPSC will obtain an SSID query for the respondent. SEPSC will not routinely obtain the claim folder. SEPSC will attempt to telephone each respondent, briefly explain the LaBelle Settlement Order, and ask each respondent if he or she considers the food and/or shelter received to be the basis for a loan. If a respondent does not allege a loan, SEPSC will document the allegation on a report of contact and issue a notice (see Part V. B. 3. below) advising the respondent that he or she is not eligible for relief under the LaBelle Settlement Order. SEPSC will forward the case information and a copy of the notice to the servicing FO.
If a respondent alleges a loan based on an advance of food and/or shelter, or a questionable situation arises, SEPSC will advise the respondent that the local FO will contact him or her for further information. SEPSC will document the discussion on a report of contact and forward the case information to the servicing FO for further development.
If SEPSC is unable to contact a respondent by telephone, it will forward the case information to the servicing FO for further action.
FO Responsibilities
The FO will initiate contact with a respondent to explain the LaBelle Settlement Order, and ask each respondent if he or she considers the food and/or shelter received to be the basis for a loan, when:
SEPSC is unable to contact a respondent by telephone;
a reply form is returned to the FO rather than to SEPSC;
an individual not previously sent a LaBelle notice contacts the FO inquiring about potential relief.
The FO will contact a respondent to develop for good cause when a reply is made more than 185 days after the date of the LaBelle notice.
Notice to Individuals Not Eligible for LaBelle Relief
SEPSC or the FO will send the notice in Attachment 3, modified to fit the circumstances of the case, to any individual who is not eligible for relief under the LaBelle Settlement Order because the individual:
does not allege an advance of food and/or shelter as the basis for a loan;
has income (after excluding bona fide loans based on advances of food and/or shelter) or resources that preclude SSI eligibility or additional payment;
was not a past or present resident of the Eleventh Circuit who received a determination or decision at any administrative level between January 1, 1990, and December 31, 1991, inclusive;
is deceased and there is no survivor who is eligible to receive an SSI underpayment.
An individual who wishes to challenge a finding that he or she is not eligible for LaBelle relief for any of the above reasons may do so only through class counsel, as explained in the notice (Attachment 3).
VI. Processing and Adjudication
A. FO Adjudication of LaBelle Claims
The FO will conduct the first LaBelle review. The FO determination will be at the reconsideration level, regardless of the administrative level at which the LaBelle claim(s) was previously decided, with full appeal rights (i.e., ALJ hearing, Appeals Council and judicial review). Prior determinations or decisions which had counted as income advances of food and/or shelter received under a bona fide loan will be reopened and revised, as appropriate.
If the FO determines that a claimant received food and/or shelter under a bona fide loan agreement, the FO will recompute the claimant's SSI benefits for any month(s) in the retroactive period in which the claimant was charged in-kind support and maintenance, calculate any underpayment, make appropriate systems input, and issue a notice advising the claimant regarding the change in payment.
If the FO determines that the food and/or shelter a claimant received was not received under a bona fide loan agreement, the FO will issue a notice advising the claimant of this determination and of his or her further appeal rights (Attachment 4).
B. OHA Adjudication of LaBelle Claims
The following instruction applies to LaBelle readjudication cases in which the claimant requests a hearing or Appeals Council review. OHA should not receive any unadjudicated LaBelle claims for possible consolidation with a current claim pending in OHA because the claims generally will not have common issues. Except as otherwise noted in this instruction, hearing offices and Headquarters will process LaBelle cases according to all other current practices and procedures including coding, scheduling, developing evidence, routing, etc.
Type of Review and Period to be Considered
Pursuant to the LaBelle Settlement Order, the type of review to be conducted is a reopening. For initial SSI claims and appeals of determinations on initial claims, adjudicators will apply the December 1991 policy change represented by IT-67-91 beginning with the month of the effective date of filing, even if it precedes January 1, 1990.
For posteligibility situations, adjudicators will apply the December 1991 policy change represented by IT-67-91 beginning with the date of the notice of the initial determination (as a result of an SSI redetermination) that reduced or suspended benefits because SSA counted as income food and/or shelter that the claimant received under a bona fide loan agreement.
NOTE:
Because LaBelle reopenings are being made pursuant to a court-approved settlement order, the ordinary rules of administrative finality (20 CFR § 416.1487ff) do not apply. However, any reopenings and revisions made subsequently on these same cases will be subject to administrative finality, unless the subsequent reopenings are also made pursuant to the LaBelle Settlement Order.
Loans of In-kind Support and Maintenance
LaBelle does not require any change in OHA's adjudicatory policies because, since December 16, 1991, OHA adjudicators have been excluding bona fide loans of food and/or shelter in computing SSI eligibility and benefits amounts. However, under the LaBelle Settlement Order, the Secretary will recognize and accept as determinative and final any prior decision of the Secretary at any administrative level that there did exist a bona fide loan and honor that determination without further inquiry.
Class Member is Deceased
If a class member is deceased, the usual survivor and substitute party provisions and existing procedures for determining distribution of any potential underpayment apply.
VII. Case Coding
HO personnel will code prior claims into the Hearing Office Tracking System (HOTS) and the OHA Case Control System (OHACCS) as “reopenings.”
To identify class member cases in HOTS, HO personnel will code “LB” in the “Class Action” field. No special identification codes will be used in the OHACCS.
VIII. Inquiries
HO personnel should direct any questions to their Regional Office. Regional Office personnel should contact the Division of Field Practices and Procedures in the Office of the Chief Administrative Law Judge at (703) 305-0022.