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Protection & Advocacy Inc.
Advancing the rights of Californians with disabilities |
LOS
ANGELES
Tel:
TTY: (800) 781-4546
Toll Free: (800)776-5746
Fax:
www.pai-ca.org |
MEMORANDUM |
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DATE: |
June 2007 |
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TO: |
Advocates and Parents of Children with
Disabilities |
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RE: |
Social Security Rules for Deeming Income from Parents to a
Disabled Child to Determine Whether a Child is Eligible for SSI and, if so,
the Amount |
Preliminary Notes: Income received by a parent for providing
In-Home Supportive Services (IHSS) to a disabled child is not counted as income
for purposes of deeming – it is SSI exempt income. 20 CFR § 416.1161(a)(16).
Through the Independence Plus Demonstration
Waiver (IPW) that went into effect in 2004, IHSS services provided by a parent
to a child are covered by Medi-Cal and the income received by the parent is
Medi-Cal exempt income. For more
information about IHSS, call and ask us to send you a copy of the IHSS Fair
Hearing and Self-Assessment packet.
Social Security does not count as a resource parents’ pension
or retirement funds (such as IRAs, KEOGH, or tax deferred annuities) for
purposes of determining a child’s SSI eligibility – even if the fund could be
cashed in. 20 CFR § 416.1202(b). Social Security does not count resources
used for self-support such as a small business’ inventory and operating bank
account or tools, equipment, a second vehicle used while at work. 42 USC
§1382b(a)(3).
The 1996 welfare reform legislation, Pub.L. 104-193, did two
things that affect children with disabilities: (1) The disability definition is
narrowed (ask us to send you information on SSI child disability). (2) SSI
benefits no longer start as of the date of application, but rather as of the
first of the month following the month of application. While the 1996 welfare
legislation said that legal residents will no longer be eligible for SSI
benefits after July or August of 1997 unless they meet one of the exemptions,
the 1997 Balanced Budget Amendments, §§ 5301-5308 of Pub.L. 105-33,
rescinded those provisions with respect to children and others receiving SSI on
For general information about the SSI program, ask us to send you the Social Security Service Rights Booklet.
Medi-Cal for Other Members of the Family: Income and resources counted for purposes of determining a client’s financial eligibility for SSI and the amount of the child’s SSI check cannot be counted again to determine the Medi-Cal eligibility of other members of the family[1].
Before getting to the actual procedures for calculating how
much of a parent’s income is attributed to the child and how you determine
whether the child is eligible for any SSI and, if so, how much, you need to
understand Social Security’s “retrospective monthly accounting” system and your
reporting obligations. Social Security counts only the income and resources of
the parent with whom the SSI child is living. Social Security does not count
the income or resources of a parent with whom the SSI child is not living. The
income of a stepparent with whom the SSI child lives is counted.[2]
Social Security uses retrospective monthly accounting during a
period of eligibility. 20 CFR § 416.420. That means the income received in
one month determines the amount of SSI two months later; the income received in
January affects the amount of the March SSI check. However, if income is too
high in one month to qualify for any SSI, SSI is suspended as of that month.
Thus, if income in January is so high that your child is ineligible for SSI,
SSI is suspended as of January. Your child is entitled to automatic
reinstatement without a new application if your income is low enough for your
child to qualify for SSI in any of the subsequent 11 months.[3]
20 CFR § 416.1323(b). If you go 12 months without your income
dropping low enough for your child to qualify for any SSI, the suspension turns
into a termination. 20 CFR § 416.1335. Once your child has been terminated,
you would have to file a new application for your child to get SSI again.
To make the “Retrospective Monthly Accounting” work, Social Security has a rule that says you must let Social Security know by the 10th of the month if there is any change in income the prior month. 20 CFR § 416.708(c), 416.714[4] If in January your income was more or less than your income in December, you must report the change so that Social Security knows about it by the 10th of February – better if by the 5th. You do not need to make any report if your income in January is the same as your income in December. When Social Security receives your income change report for January, Social Security is supposed to enter the change information into the computer so that your March SSI check will be adjusted up or down to reflect the change in your January income.
We have attached a sample income change report form to help you meet your reporting obligations. We suggest that you partially fill in the report form by writing in the address of your Social Security office and all the information after “re.” Then photocopy many copies of the partially filled in form. Each month where there has been a change in income, write in the date you are signing the form, the month you are reporting about, and the income information at the bottom. Then sign the form. Only one parent need sign the report form. Either photocopy the filled-in form or fill-in a second form as a copy for you to keep. Attach photocopies of any pay or check stubs to the report form you are sending to Social Security. Attach the originals to the copy you keep for your files. Do not send Social Security your pay stub originals, only photocopies.[5] Social Security often loses things sent to it in the mail. Keep the original pay and check stubs attached to your copy of the report form so that Social Security may review the originals at the time of your annual review. On the income change report copy you keep, write down the date you put the letter in the mailbox.[6] Keep a copy of everything you send to Social Security. Keep a record of any time you talk to Social Security. Write down the date you talked, to whom you talked, and what was said. We recommend you three-hole punch what you receive from Social Security and copies of what you send to Social Security and put everything in a notebook.
The parent-to-child deeming regulations are found at 20 CFR §§ 416.1160, 416.1161, and 416.1165. “Earned income” includes wages and salary or income from self-employment.[7] Everything else is “unearned income:” Gifts, unemployment benefits, state disability benefits, Social Security benefits and interest payments on a savings account are all examples of unearned income. You combine the parents’ unearned income. You also combine the parents’ earned income. For earned income you count the gross income, not what you take home. Gross income is the amount you earned before any deductions.[8]
Social Security starts by deducting an allocation for each
nondisabled child in the family other than the SSI child or children with
disabilities. You deduct the allocation first from any unearned income and
then, to the extent the allocation has not been used up, from the earned
income. “Child” for purposes of the deduction includes children below the age
of 21 living in the same household, and
21 year-olds who are full-time students under the standards in 20 CFR
§ 416.1861. The allocation for each nondisabled child is the
difference between the individual Federal Benefit Rate (FBR) and the couple
FBR. (The Federal Benefit Rate is that part of the SSI check that comes from
the federal government; the rest of the SSI check represents state money.)[9]
The ineligible child’s own income will
reduce the allocation. However if the
ineligible child is a full-time student, earnings will be exempt to the same
extent they are exempt for an SSI child or young adult under the age of
22. 20 CFR §§ 416.1112(c)(3),
416.1160(d), 416.1161(c), 416.1163(b), 416.1165, 416.1861.
After deductions for nondisabled children in the home, you next deduct the $20.00 any-income disregard first from unearned income (if any or if any remaining) and then, to the extent the deduction is not used up by the unearned income, from earned income. Next come special deductions for earned income – first $65.00 and then 50% of the balance. The remaining unearned and earned income amounts are added together. From the total you deduct either the individual FBR (if a single parent) or the couple FBR (if both parents or parent and stepparent are in the home). The balance is deemed to the disabled child as the child’s unearned income. If there is more than one disabled child in the family, the amount deemed is divided among them.
The child’s SSI grant is determined the same way as that of
any SSI recipient with two exceptions. First, only two-thirds of any child
support is counted. 20
Attached to this memo is a blank worksheet. You may wish to make several copies of the worksheet to use in calculating the amount of your child’s SSI. In addition, we have attached two worksheets which have been filled out in accord with examples “A” and “B”. The calculations are based on 2007 benefit amounts. The numbers and letters below correspond to the numbers and letters on the deeming worksheet.
Example A: Mr. and Mrs. Apple have three children including Adam
who has a disability. Mr. Apple’s gross earned income is $2,000.00 a month.
Mrs. Apple works part-time and her gross income is $1000.00 a month. They also
have a savings account that pays monthly interest of $6.00.
1.
Enter $6.00 which is the unearned income from the
savings account.
2.
There are two children in the family in addition to
Adam. They have no income of their own in the example. The 2007 allowance for
nondisabled children in the family is $311 each. The total allowance for the
nondisabled children is $622 which is entered.
3.
There is no unearned income from which to take the
any-income deduction.
4. The total countable unearned income is of course zero.
5. The combined total gross earned income for both Mr. and Mrs. Apple is $3,000.00 ($2,000.00 plus $1,000.00).
6. The unused balance of the allowance (#1 minus #2) for the nondisabled children in the family is $616.00.
7.
Since you did not reach the $20.00 any-income disregard
in number 3 above, the full $20.00 deduction is entered here.
8.
You next deduct the $65.00 earned income deduction.
9.
Your subtotal is $2,299.00 ($3,000.00 less $616.00,
less $20.00, and less $65.00).
10.
You enter $1,149.50, which is one half of number 9.
11.
Your total countable earned income is $1,149.50.
12.
Since there is no countable unearned income from number
4 above, the total countable income is also $1,149.50.
13.
The Federal Benefit Rate for a couple in 2007 is $934.
14.
The amount deemed to the disabled child is the total
countable income less the couple
a.
In 2007 the grant level for a disabled SSI child
is $742.
b.
The amount deemed is $215.50 and there is no
other unearned income (such as Title II Social Security dependent benefits).
c.
There is no child support in this example.
d.
You deduct the $20.00 any-income disregard from
the child’s income.
e.
The child has no earned income in this example.
f.
The child’s total countable income is $195.50
($215.50 less the child’s allowable $20.00 any-income deduction).
g.
The child’s SSI check would be $546.50.
Example B: Betty Barton is a single parent with a disabled child,
Bill. Bill receives $225.00 a month in child support from his father. Ms.
Barton earns $2,000.00 a month before any deductions.
1-4. In the example there is no unearned income.
5. The gross earned income is $2,000.00 a month.
6. In the example there are no other children in the family.
7. Since there was no unearned income, deduct the full $20.00
any-income disregard here.
8. You next deduct the $65.00 earned income deduction.
9. The subtotal is $1,915.00 -- $2,000.00 less the $20.00 (number
7) and $65.00 (number 8) disregards.
10. Less one half of $1,915.00 or $957.50.
11. The total countable earned income is also $957.50.
12. The total countable income is $957.50 since there is no unearned
income in the example.
13. The Federal Benefit Rate for a single parent in 2007 is $623.
14. The amount deemed to Bill is $334.50, the difference between
$957.50 and $623.
a. The Child’s 2007 grant level is $742.00.
b.
The amount deemed is $334.50. There is no other
unearned income such as Title II Social Security dependent benefits.
c.
In the example Bill receives $225.00 a month in
child support from an absent parent. Social Security only counts two-thirds of
the child support, one-third of $225 or $75 is deducted from $225 and the
balance or $150 is counted as the child’s income.
d.
You deduct the $20.00 any-income disregard from
the child’s income.
e.
In the example the Child has no earned income.
f.
The Child’s countable unearned income is $464.50
($334.50 plus $150.00 less $20.00).
g. The Child’s SSI grant is $277.50 ($742.00 less $464.50)
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2004 |
2005 |
2006 |
2007 |
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Individual FBR |
564.00 |
$579.00 |
$603.00 |
$623.00 |
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Couple FBR |
846.00 |
$869.00 |
$904.00 |
$934.00 |
|
Income Deduction Nondisabled Child |
282.00 |
$290.00 |
$301.00 |
$311.00 |
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SSI Disabled Child Rate |
679.00 |
**$694/698 |
**$698/722 |
$742.00 |
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SSI Blind Child |
854.00 |
**$869/877 |
**$877/901 |
$921.00 |
* The first amount represents the
benefit amount for January through March of 2005 with the pass through to the
SSI/SSP recipient of the federal $27 COLA on the federal part (SSI) of the
SSI/SSP check. The second amount for
April through December of 2005 includes a cost of living allowance for the
state funded (SSP) part of the SSI/SSP check.
** The first amount represents the benefit
amount for April through December of 2005 with the state funded (
EXAMPLE A
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Parents’ Income: |
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1. Unearned income |
$6.00 |
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2. * Less allowance for other children |
$(622.00) |
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3. Less $20 any-income disregard |
$(20.00) |
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4. Total Countable Unearned Income |
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$0.00 |
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5. Gross earned income |
$3,000.00 |
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6. * Less balance for other children (2 minus 1) |
$(616.00) |
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7. Less balance of any-income disregard |
$(20.00) |
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8. Less $65.00 earned income disregard |
$(65.00) |
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9. Subtotal |
$2,299.00 |
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10. Less one half (50%) of #9 subtotal |
$1,149.50 |
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11. Total countable earned income |
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$1,149.50 |
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12. Subtotal - countable income |
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$1,149.50 |
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13. ** Less individual or couple FBR |
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$(934.00) |
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14. # Amount deemed to disabled child |
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$215.50 |
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Calculating Child’s Grant |
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a. ## Child’s SSI Grant Level |
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