SSR 87-22a: SECTION 1612(a)(2)(F) OF THE SOCIAL SECURITY ACT (42 U.S.C. 1382a(a)(2)(F)) SUPPLEMENTAL SECURITY INCOME -- UNEARNED INCOME -- FEES FOR RIGHT-OF-WAY OVER INDIAN LAND
20 CFR 416.1103(c), 416.1121(d), and 416.1234
SSR 87-22a
- R, a supplemental security income (SSI) recipient, was a member of an Indian tribe and had an interest in certain land that was owned by her tribe. Although she could not sell her interest in the property without her tribe's approval, she did receive a payment from a power company for having granted it a right-of-way over this land. An administrative law judge (ALJ) decided that R's right-of-way payment constituted the conversion of a resource from one form to another and as such, was not income under 20 CFR 416.1103(c). The Appeals Council (AC), however, found that the right-of-way payment did not constitute the conversion of a resource within the meaning of 20 CFR 416.1103(c). Instead, the AC held that, because it was paid for the use of real property, the right-of-way payment constituted rental income, as defined in 20 CFR 416.1121(d), and as such, was countable in the month of receipt as unearned income for SSI purposes. Accordingly, the ALJ's decision was reversed.
The issue before the Appeals Council (AC) was whether a payment received by R for granting a right-of-way over her land constituted income for supplemental security income (SSI) purposes.
R, an SSI recipient, was a member of an Indian tribe and had an interest in certain land that was owned by her tribe. The evidence of record showed that she could not sell her interest in the land without her tribe's approval. In February 1984, R received $877.36 from a power company for having granted it a right-of-way over this land.
An administrative law judge (ALJ) found that the $877.36 which the claimant had received was not countable as income for SSI purposes but represented the conversion of a resource from one form to another. The ALJ based this finding on his belief that the agreement creating the right-of-way conveyed a real property interest and that the $877.36 represented proceeds from the sale or transfer of a resource which were not considered income under § 416.1103(c) of Regulations No. 16.
Section 416.1102 of Regulations No. 16 provides, in pertinent part, that --
"Income is anything you receive in cash or in kind that you can use to meet your needs for food, clothing, or shelter. . . ."
Section 416.1103 of Regulations No. 16 provides, in pertinent part, that --
". . . what you receive from the sale or exchange of your own property is not income; it remains a resource . . . (c) . . . Receipts from the sale, exchange, or replacement of a resource are not income but are resources that have changed their form. . . ."
Section 416.1104 of Regulations No. 16 provides that "There are different types of income, earned and unearned." Earned income is defined in § 416.1110 of Regulations No. 16 while unearned income is defined in § 416.1120.
Section 416.1121 of Regulations No. 16 provides in pertinent part, that "rents" constitute unearned income. Paragraph (d) of that section of the regulations defines "rents" as "payments you receive for the use of real or personal property such as land, housing, or machinery."
Section 416.1201 of Regulations No. 16 provides, in pertinent part, that --
". . . resources mean cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his support and maintenance. If the individual has the right, authority or power to liquidate the property, or his share of the property, it is considered a resource. If a property right cannot be liquidated, the property will not be considered a resource of the individual (or spouse).
. . . Liquid resource are those assets that are in cash or are financial instruments which are convertible to cash.
. . . Nonliquid resources include all other properties. The term includes both real and personal property. . . ."
Section 416.1234 of Regulations No. 16 provides that --
"In determining the resources of an individual (and spouse, if any) who is of Indian descent from a federally recognized Indian tribe, there shall be excluded such restricted, allotted lands as such individual (and spouse, if any) may possess if such individual (and spouse, if any) cannot sell, transfer or otherwise dispose of such land without permission of other individuals, his tribe or an agency of the Federal Government."
The AC did not agree with the ALJ's decision. The AC concluded that the $877.36 right-of-way payment received by the claimant in February 1984 was unearned income as set forth in §§ 416.1120 and 416.1121(d) of Regulations No. 16. The AC noted that the claimant in SSR 82-27a (C.B. 1982, page 276) had similarly argued that fees she had received for allowing cattle to graze across tribal land constituted a conversion of a resource within the meaning of § 416.1103(c) of Regulations No. 16 and as such, were excludable from resources under § 416.1234. However, it was held that because the land had not changed form but had remained intact, the fees that had been received represented payment for the use of real property and therefore constituted rental income as defined in § 416.1121(d).
In this case, R granted use of tribal land in which she had an interest to a power company for a limited period of time, in return for which she was paid $877.36. The land did not change form or ownership. The payment received for the right-of-way was payment for the use of the land, comparable to a rental payment and as such, was countable in the month of receipt as unearned income for SSI purposes. Accordingly, the ALJ's decision was reversed.