Rules for the Issuance of Work Report Receipts, Payment of Benefits for Trial Work Period Service Months After a Fraud Conviction, Changes to the Student Earned Income Exclusion, and Expansion of the Reentitlement Period for Childhood Disability Benefits, 66860-66867 [E6-19232]

Agencies

• Social Security Administration

[Federal Register Volume 71, Number 222 (Friday, November 17, 2006)]
[Rules and Regulations]
[Pages 66860-66867]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19232]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Docket No. SSA-2006-0099]
RIN 0960-AG10


Rules for the Issuance of Work Report Receipts, Payment of 
Benefits for Trial Work Period Service Months After a Fraud Conviction, 
Changes to the Student Earned Income Exclusion, and Expansion of the 
Reentitlement Period for Childhood Disability Benefits

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are revising our rules to reflect and implement sections 
202, 208, 420A, and 432 of the Social Security Protection Act of 2004 
(the SSPA). Section 202 of the SSPA requires us to issue a receipt each 
time you or your representative report a change in your work activity 
or give us documentation of a change in your earnings if you receive 
benefits based on disability under title II or title XVI of the Social 
Security Act (the Act). Section 208 changes the way we pay benefits 
during the trial work period if you are convicted by a Federal court of 
fraudulently concealing your work activity. Section 420A changed the 
law to allow you to become reentitled to childhood disability benefits 
under title II at any time if your previous entitlement to childhood 
disability benefits was terminated because of the performance of 
substantial gainful activity. Section 432 changes the way we decide if 
you are eligible for the student earned income exclusion. We will also 
apply the student earned income exclusion when determining the 
countable income of an ineligible spouse or ineligible parent. We are 
also changing the SSI student policy to include home schooling as a 
form of regular school attendance.

DATES: These final rules are effective December 18, 2006.

FOR FURTHER INFORMATION CONTACT: Cindy Duzan, Policy Analyst, Social 
Security Administration, 6401 Security Boulevard, Baltimore, Maryland 
21235-6401, (410) 965-4203, or TTY (410) 966-5609 for information about 
these final rules. For information on eligibility or filing for 
benefits, call our national toll-free number 1 (800) 772-1213 or TTY 1 
(800) 325-0778. You may also contact Social Security Online, at https://
www.socialsecurity.gov/.

SUPPLEMENTARY INFORMATION: Electronic Version: The electronic file of 
this document is available on the date of publication in the Federal 
Register at https://www.gpoaccess.gov/fr/.
    We are amending our rules to reflect and implement sections 202, 
208, 420A, and 432 of the SSPA. These changes apply to you if you 
engage in work activity while entitled to or eligible for benefits 
based on disability under title II or title XVI of the Act.
    We are also changing the SSI student policy to include home 
schooling as a form of regular school attendance. This may allow more 
individuals to benefit from the student earned income exclusion. This 
change, which is separate from the changes being made to reflect and 
implement the SSPA, will make the title II and title XVI programs 
uniform with respect to home schooling. The title II program recognizes 
home schooling as a form of school attendance. We will also apply the 
student earned income exclusion when determining the countable income 
of an ineligible spouse or ineligible parent.

When Will We Start To Use These Rules?

    The effective date of the provisions of the SSPA that are the 
subject of these final rules are set forth below and take effect on the 
dates mandated by statute. The changes regarding home schooling and the 
extension of the student earned income exclusion to ineligible 
individuals will take effect 30 days after publication of these rules 
in the Federal Register.

What Is the Purpose of Section 202?

    Section 202 of the SSPA requires us to issue a receipt to you or 
your representative each time you or your representative report a 
change in your work activity or give us evidence of a change in your 
earnings, such as your pay stubs, if you receive benefits based on 
disability under title II or title XVI of the Act. The law provides 
that we are to issue a receipt each time you or your representative 
report to us until we establish a centralized computer file that will 
electronically record the information about the change in your work 
activity and the date that you make your report. After the centralized 
computer file is implemented, we will continue to issue receipts to you 
or your representative automatically for a trial period of at least 6 
months during which we will assess the effectiveness of our centralized 
computer file.
    Once we determine that the automatic issuance of work receipts is 
no longer necessary, we will continue to issue receipts to you or your 
representative upon request. Adequate notice will be provided when this 
procedural change is put in place.
    In the past, the reports you gave to us about your work activity 
may not have been processed timely, resulting in processing delays. 
This might have caused us to pay benefits to you incorrectly, without 
considering the effect your work and earnings may have had on your 
benefits, causing you to become overpaid. We are implementing a new 
centralized computer system which will create an electronic record of 
the work information that you report to us. This will help us ensure 
that we fulfill our responsibility to process your earnings reports and 
pay benefits to you correctly. We currently expect this centralized 
computer system to be operational in the summer of 2006. Issuing a 
receipt to you when you report your work or earnings will provide you 
with proof that you properly fulfilled your responsibility to report 
your earnings to us.

Why Must You Report Your Work Activity?

    If you receive benefits based on disability under title II of the 
Act or are eligible for benefits under title XVI, you are required to 
report changes in your work activity and earnings to us. (See 
Sec. Sec.  404.1588 and 416.708.)
    Your earnings can affect your eligibility for benefits or the 
amount of your benefits.
    You can report your work to us:
     By phone to our toll free number;
     In person or by phone to your local office; or
     By mailing your pay stubs to your local office.
    We are also making efforts to expand the ways you can report 
information to us.

What Is the Effective Date of Section 202?

    The statutory change that requires us to issue receipts every time 
you or your representative report a change in your work activity or 
give us documentation of a change in your earnings is effective as soon 
as possible, but no later than March 2, 2005. We are currently issuing 
receipts to you or your representative and will continue to do so at 
least until

[[Page 66861]]

we establish a centralized computer file to record the information that 
you give us and the date that you make your report. Once the 
centralized computer file is in place, we will continue to issue 
receipts to you or your representative if you request us to do so.

What Is the Purpose of Section 208?

    Section 208 of the SSPA provides that if you are convicted by a 
Federal court of fraudulently concealing your work activity during the 
trial work period, no benefits are payable for any trial work period 
service month (generally a month of work activity, see Sec.  404.1592) 
that occurred in or after March 2004 and before the date of your 
conviction. Section 208 of the SSPA will help to deter fraud within the 
Social Security program by prohibiting payment for trial work period 
service months to disabled individuals who are convicted of 
fraudulently concealing work activity.

What Is the Trial Work Period?

    The trial work period allows a title II beneficiary to test his or 
her ability to work for at least 9 months and still be considered 
disabled. During your trial work period, you continue to be entitled to 
receive your Social Security disability insurance benefits regardless 
of how high your earnings might be so long as you continue to have a 
disabling impairment. The trial work period continues until you 
accumulate 9 months (not necessarily consecutive) in which you 
performed ``services'' (i.e., work activity) within a rolling 60-
consecutive-month period. We use this ``services'' rule to count trial 
work period months. Under section 222(c)(2) of the Act and Sec.  
404.1592(b) of the regulations, services means any activity (whether 
legal or illegal), which is done in employment or self-employment for 
pay or profit, or is the kind normally done for pay or profit. We 
generally use earnings guidelines to evaluate whether the work activity 
you are performing as an employee or self-employed person is services 
for the trial work period. We consider your work in a particular month 
to be services if you earn more than $620 in that month for the year 
2006, or work more than 80 self-employed hours in that month. The 
dollar amount is adjusted each year based on the national average wage.

What Is the Effective Date of Section 208?

    The statutory change provides that an individual is not entitled to 
receive title II disability benefits for trial work period service 
months that occur in or after March 2004 and before the date of 
conviction by a Federal court of fraudulently concealing work activity 
during that trial work period.

What Is the Purpose of Section 420A?

    Section 420A of the SSPA applies to you if you are a disabled 
adult, your disability began before the age of 22, and you became 
eligible for ``childhood disability benefits'' (i.e., benefits for 
disabled adult children) under title II of the Act once you reached 
your 18th birthday. Section 420A of the SSPA provides that if your 
previous entitlement to childhood disability benefits under title II of 
the Act ended due to the performance of substantial gainful activity, 
you may become reentitled to childhood disability benefits at any time 
if you become disabled again and you meet other requirements for 
reentitlement as described in Sec.  404.351. Prior to the effective 
date of section 420A, if childhood disability benefits were terminated 
because disability ceased, you could become reentitled to benefits only 
if you became disabled again within 7 years of the most recent 
termination.
    Section 420A removed a significant disincentive to work for 
childhood disability beneficiaries by removing the 7-year restriction 
on reentitlement for individuals whose entitlement to childhood 
disability benefits was terminated due to the performance of 
substantial gainful activity. The 7-year restriction continues to apply 
to beneficiaries whose previous entitlement to childhood disability 
benefits terminated because of medical improvement.

What Is the Effective Date of Section 420A?

    The statutory change that removed the 7-year restriction on 
reentitlement to childhood disability benefits under title II of the 
Act, if the previous entitlement terminated due to the performance of 
substantial gainful activity, became effective with respect to benefits 
payable for months beginning October 2004.

What Is the Purpose of Section 432?

    Section 432 of the SSPA changes who is eligible for the student 
earned income exclusion under title XVI of the Act. The law increases 
the number of persons eligible for the exclusion by eliminating the 
requirement that you must meet the definition of a child under our SSI 
rules to be eligible for this exclusion. Specifically, section 432 of 
the SSPA removes the restriction that you must be unmarried and not 
head of your own household to qualify. You no longer need to be 
considered a ``child'' to get the student earned income exclusion, you 
only must be under the age of 22, and, as before, regularly attending a 
school, college, or university, or a course of vocational or technical 
training to prepare for gainful employment.

What Is the Student Earned Income Exclusion?

    The student earned income exclusion is a provision that allows us 
to exclude a greater amount of your earned income if you are a student 
than we do under our usual income counting rules. If you meet the 
definition of child for SSI and you are regularly attending school, we 
exclude a greater amount of your earned income when determining your 
eligibility for, and the amount of, benefits. For the year 2006, we do 
not count up to $1,460 of earned income per month, up to a maximum 
yearly exclusion of $5,910. These dollar amounts are adjusted each year 
by the cost-of-living adjustment (COLA) that is used to adjust the SSI 
Federal Benefit Rate. Section 432 eliminated the requirement that you 
meet the definition of a child to be eligible for the student earned 
income exclusion.

Who Can Use the Student Earned Income Exclusion for the Period Before 
April 1, 2005?

    Before April 1, 2005, (that is, before the changes made by section 
432 of the SSPA), you could qualify for the student earned income 
exclusion if you were:
     Under age 22;
     Unmarried;
     Not the head of your own household; and
     Regularly attending school, college or university, or a 
course of vocational or technical training designed to prepare you for 
gainful employment.
    Section 416.1861 provides that you are a student if you are 
regularly attending school or college, or training that is designed to 
prepare you for a paying job, if you are enrolled for one or more 
courses of study and attend class (1) in a college or university for at 
least 8 hours a week under a semester or quarter system, (2) in grades 
7-12 for at least 12 hours a week, or (3) in a course of training to 
prepare for a paying job, and attending that training for at least 15 
hours a week if the training involves shop practice or 12 hours a week 
if it does not involve shop practice. Prior to this final rulemaking, 
Sec.  416.1861 did not specifically address home schooling as a form of 
regular school attendance. However, Sec.  404.367 recognizes, as full-
time school attendance students, those who are instructed at home in 
accordance with

[[Page 66862]]

a home school law of the State or other jurisdiction in which they 
reside.

How Do Section 432 and the Revision Regarding Home Schooling Change the 
Student Earned Income Exclusion?

    Section 432 of the SSPA eliminates the requirement that you must be 
a child to qualify for the student earned income exclusion. 
Specifically, it removes the requirement that you must be unmarried and 
not the head of your own household.
    These final rules regarding home schooling allow you to be 
considered a student regularly attending school if you are instructed 
at home in grades 7-12 in accordance with a home school law of the 
State or other jurisdiction in which you live and for at least 12 hours 
a week. Allowing home schooling as a form of regular school attendance 
will make the title II and title XVI programs uniform with respect to 
home schooling. We hope that our rule change to consider home 
schooling, and the statute's removal of the child requirement, will 
increase the number of persons who can benefit from the student earned 
income exclusion.

Will the Student Earned Income Exclusion Apply to Deemors?

    Yes. Section 1614(f) of the Act requires that when we determine an 
individual's eligibility for SSI benefits, we must consider the income 
and resources of an ineligible spouse living in the same household, or, 
in the case of a child under the age of 18, the income and resources of 
an ineligible parent living in the same household. We use the term 
``deeming'' to describe this process of considering part of an 
ineligible spouse's or parent's income and resources to be the 
individual's own income and resources. Deeming an ineligible parent's 
income and resources to a child eligible for SSI benefits is only done 
if the child is under age 18 and is subject to parental control. 
Section 1614(f) also grants the Commissioner the discretion to not deem 
the income and resources of an ineligible spouse or parent to an 
eligible individual when the Commissioner determines that deeming would 
be inequitable under the circumstances.
    In addition to adding to our regulations the change in how we 
determine an eligible individual's income required by section 432 of 
the SSPA, we will apply this earned income exclusion when determining 
the countable income of an ineligible spouse or ineligible parent who 
is a student, that is, someone who is under age 22 and who regularly 
attends school or college or training designed to prepare them for a 
paying job. When more than one individual in a household qualifies for 
the student earned income exclusion--for example, in instances where a 
deemor and a deemor's disabled child are both eligible for the student 
earned income exclusion--our operating procedures contain instructions 
to apply the entire student earned income exclusion amount to the 
single household.
    Extending this student earned income exclusion to the deeming 
process, as authorized by section 1614(f) of the Act, is consistent 
with the SSI program's longstanding treatment of income and resources 
of spouses and parents comparably to the way that income and resources 
of an eligible individual would be treated. It also provides incentives 
to encourage work and education to ineligible individuals living with 
beneficiaries.

What Is the Effective Date of Section 432 and the Revision Regarding 
Home Schooling?

    The statutory changes that allow those who are married and the head 
of a household to also qualify for the student earned income exclusion 
are effective with benefits payable April 1, 2005. The changes to allow 
home schooling as a form of regular school attendance and the extension 
of the student earned income exclusion to ineligible individuals will 
be effective 30 days after publication of these final rules.

Explanation of Changes

    We are revising several of our rules in subparts D, E, J, and P of 
part 404 and subparts G, K, N, and R of part 416 to:
     Reflect the statutory change that requires us to issue 
receipts to you or your representative when you or your representative 
report changes in your work activity or earnings or give us 
documentation of those changes until we establish a centralized 
computer file to record the information you report to us and the date 
you report it;
     Explain that disability benefits are not payable for trial 
work period service months if you are convicted by a Federal court of 
fraudulently concealing your work activity during that trial work 
period;
     Reflect the statutory change that expands the number of 
persons who can use the student earned income exclusion by removing the 
requirement that you must be a child, unmarried, and not the head of 
your own household;
     Expand the number of persons who can use the student 
earned income exclusion by allowing home schooling as a form of regular 
school attendance;
     Extend application of the student earned income exclusion 
to the income of an ineligible spouse and ineligible parent for deeming 
purposes; and
     Reflect the statutory change that eliminates the 7-year 
time limit on reentitlement to childhood disability benefits when the 
prior entitlement terminated due to the performance of substantial 
gainful activity.
    The following is an explanation of the specific changes we are 
making and the reasons for these changes.

Section 404.351 Who May Be Reentitled to Child's Benefits

    We are adding a new paragraph (d) to explain that, effective with 
respect to benefits payable for months beginning October 2004, you can 
be reentitled to childhood disability benefits at any time if your 
prior entitlement terminated because you ceased to be under a 
disability due to the performance of substantial gainful activity. The 
regulatory language in this final rule has been changed from the 
language that appeared in the notice of proposed rulemaking. This was 
done in response to a public comment that the regulatory language in 
the proposed rules was difficult to decipher and should be rewritten 
for clarity.

Section 404.401a When We Do Not Pay Benefits Because of a Disability 
Beneficiary's Work Activity

    We are revising the last sentence in Sec.  404.401a to clarify that 
earnings from work activity during a trial work period will not stop 
benefits except as provided in Sec.  404.471.

Section 404.471 Nonpayment of Disability Benefits for Trial Work Period 
Service Months Upon a Conviction of Fraudulently Concealing Work 
Activity

    We are adding a new Sec.  404.471 to explain that disability 
benefits will not be payable for trial work period service months if 
you are convicted by a Federal court of fraudulently concealing your 
work activity during the trial work period. As explained in Sec.  
404.1592, the trial work period is a period during which you may test 
your ability to work and still continue to receive disability benefits 
if you still have a disabling impairment, no matter how much you are 
earning. Under this change, which reflects section 208 of the SSPA of 
2004, if you are convicted in Federal court of fraudulently concealing 
your work activity during your trial work period, disability benefits 
are not payable for any trial work period service months beginning 
March 2004 that occur prior to that conviction. Benefits already 
received that are determined not

[[Page 66863]]

payable because of the Federal court decision are considered an 
overpayment on the record. Consistent with section 208, we explain in 
Sec.  404.471(b) what is meant by fraudulently concealing work 
activity. You can be found to be fraudulently concealing work activity 
if you provide false information concerning the amount of your 
earnings, engage in work activity under another identity while 
receiving disability benefits, or take actions to conceal your work 
activity with the intent of obtaining benefits in excess of amounts 
due.

Section 404.903 Administrative Actions That Are Not Initial 
Determinations

    We are adding a new paragraph (x) to Sec.  404.903 to explain that 
the receipt we give you or your representative as a result of a report 
of a change in your work activity or earnings is not an initial 
determination. As explained in existing Sec.  404.903, administrative 
actions that are not initial determinations may be reviewed by us, but 
they are not subject to the administrative review process provided by 
subpart J of part 404, and they are not subject to judicial review. The 
receipt will summarize the information that you give us, and we will 
ask you to review the information contained in the receipt for accuracy 
and to tell us if the information is wrong. If our information is 
wrong, we will correct our records based on the new information that 
you give us.
    In addition, we will give you advance notice if we determine that 
you are not now disabled based on what you told us about your work 
activity, as explained in Sec.  404.1595.

Section 404.1588 Your Responsibility to Tell Us of Events That May 
Change Your Disability Status

    We are designating the undesignated current paragraph as paragraph 
(a) and adding a title: Your responsibility to report changes to us, 
and redesignating paragraphs (a), (b), (c), and (d) as (1), (2), (3), 
and (4). We are also adding a new paragraph (b), Our responsibility 
when you report your work to us, that clarifies how we will respond 
when you or your representative report a change in your work activity 
to us. Section 404.1588(a) explains that if you receive benefits based 
on disability, you must report to us when there is a change in your 
work activity; for example, you return to work, or there is an increase 
in your earnings or the amount of work you are doing. New paragraph (b) 
explains that we will issue a receipt to you or your representative 
when you or your representative report a change in your work activity 
or earnings, at least until a centralized computer file that records 
the information that you give us and the date that you make your report 
is in place. Once the centralized computer file is in place, we will 
continue to issue receipts to you or your representative if you request 
us to do so.

Section 404.1592 The Trial Work Period

    In Sec.  404.1592 we are adding a new paragraph (f), Nonpayment of 
benefits for trial work period service months, to clarify that benefits 
will not be payable for trial work period service months if you have 
been convicted by a Federal court of fraudulently concealing your work 
activity. We are also adding a cross-reference to the new Sec.  
404.471.

Section 416.708 What You Must Report

    We are amending the last paragraph of paragraph (c) by adding two 
new sentences to explain how we will respond when you report a change 
in your earned income. Section 416.708(c) explains that if you receive 
SSI benefits, you must report to us when there is a change in your 
income. The new sentences added to paragraph (c) explain that if you 
receive SSI benefits based on disability, we will issue a receipt to 
you or your representative when you or your representative report a 
change in your work activity or your earned income until we establish a 
centralized computer file to record the information that you give us 
and the date that you make your report. Once the centralized computer 
file is in place, we will continue to issue receipts to you or your 
representative if you request us to do so.

Section 416.1112 Earned Income We Do Not Count

    We are amending paragraph (c)(3) to reflect the statutory change 
eliminating the requirement that you must be a child to qualify for the 
student earned income exclusion.

Section 416.1161 Income of an Ineligible Spouse, Ineligible Parent, and 
Essential Person for Deeming Purposes

    We are amending Sec.  416.1161 by adding a new paragraph (a)(27) to 
exclude certain earned income of a student as provided by section 432 
from the income of an ineligible spouse and ineligible parent for 
deeming purposes.

Section 416.1403 Administrative Actions That Are Not Initial 
Determinations

    We are adding a new paragraph (a)(22) to Sec.  416.1403 to explain 
that the receipt we give you or your representative as a result of your 
report of work activity or earnings is not an initial determination. As 
explained in Sec.  416.1403(a), administrative actions that are not 
initial determinations may be reviewed by us, but they are not subject 
to the administrative review process provided by subpart N, and they 
are not subject to judicial review. The receipt will summarize the 
information that you or your representative give us and we will ask you 
to review the information contained in the receipt for accuracy and 
tell us if the information is wrong. If our information is wrong, we 
will correct our records based on the new information that you give us.
    In addition, we will give you advance notice if we suspend or 
reduce your benefit amount based on what you told us about your 
earnings as explained in Sec.  416.1336.

Section 416.1861 Deciding Whether You Are a Child: Are You a Student?

    We are adding a new paragraph (b) to Sec.  416.1861 to add home 
schooling conducted in accordance with a home school law of the State 
or other jurisdiction in which you live as a form of regular school 
attendance for purposes of title XVI. We are redesignating paragraphs 
(b), (c), (d), (e), and (f) as paragraphs (c), (d), (e), (f), and (g). 
We are also amending current paragraph (e) to remove references to 
earnings because we discuss student earnings in a new section.
    We are adding a new undesignated centered heading after Sec.  
416.1866 to read, Who is Considered a Student for Purposes of the 
Student Earned Income Exclusion.

Section 416.1870 Effect of Being Considered a Student

    We are adding a new Sec.  416.1870 to explain that if we consider 
you to be a student, we will not count all of your earned income when 
we determine your SSI eligibility and benefit amount.

Section 416.1872 Who Is Considered a Student

    We are adding a new Sec.  416.1872 to explain that we consider you 
to be a student if you are under 22 years old and you are regularly 
attending school or college or training that is designed to prepare you 
for a paying job.

[[Page 66864]]

Section 416.1874 When We Need Evidence That You Are a Student

    We are adding a new Sec.  416.1874 to explain what evidence we need 
if you are a student and you expect to earn over $65 in any month.

Public Comments

    On October 18, 2005, we published a Notice of Proposed Rulemaking 
(NPRM) in the Federal Register at 70 FR 60463 and provided a 60-day 
comment period. We received comments from two organizations and one 
individual. We carefully considered the comments received on the 
proposed rules in publishing these final rules. The comments we 
received and our responses to the comments are set forth below. 
Although we condensed, summarized, or paraphrased the comments, we 
believe we have expressed the views accurately and have responded to 
all the relevant issues raised.
    Comment: One commenter suggested that the requirement to issue 
receipts should stay intact even after the establishment of a 
centralized computer file which records the date of submission of the 
work information. The receipt provides proof to the beneficiary that he 
or she has met their reporting requirements.
    Response: We considered this comment but decided not to include 
this requirement in the final rules. The regulatory language as written 
accurately reflects the requirements of the legislation. The statute 
provides that we must issue a receipt to you until we implement a 
centralized computer file which records the date you (or your 
representative) reported to us regarding a change in your work 
activity, and we are in the process of implementing such a centralized 
computer file. The final regulations provide that we will give you a 
paper receipt if you ask us to, but the statute does not require us to 
issue such receipts after the centralized computer file is in place.
    Comment: One commenter suggested that the language in section 
404.1588(b) is unclear about whether beneficiaries must request a 
receipt each time a report of a change in work activity is made, or if 
one blanket request will be logged into the centralized computer file 
to generate a receipt each time a report is made. The commenter 
recommends SSA should adopt the latter policy.
    Response: We considered this comment but decided not to include 
language within the rules detailing how a request for a receipt is to 
be made after the centralized computer file is implemented. 
Instructions for how to request receipts will be provided prior to the 
implementation of a centralized computer file and will be made readily 
available to those beneficiaries and their representatives who are 
interested in receiving receipts when they report work activity 
changes.
    Comment: One commenter urged SSA to include language from the 
preamble in the text of the regulations regarding the content of the 
receipt. The preamble states that the receipt will include details 
about the work activity or earnings information reported by the 
beneficiary, that we will ask the beneficiary to review the information 
and tell us if we are wrong, and correct our records based on the new 
information. The commenter further recommended that we specifically 
state in the regulations that SSA will tell beneficiaries that they may 
request a receipt, as the inclusion of this information will help 
beneficiaries know exactly what to expect and what is expected of them.
    Response: We considered this comment but decided not to include 
language within the rules which prescribes in detail what will be 
contained within the receipt. Such information will be available to 
beneficiaries and their representatives elsewhere. The receipts 
currently contain a summary of the work activity or earnings 
information reported as well as contact information for the local 
Social Security office. Also, we do not believe it is necessary to 
include language within the regulation requiring SSA to tell 
beneficiaries of the option to request a receipt. We are currently 
issuing a receipt each time work activity is reported whether or not 
one is requested. After the centralized computer file is in place, we 
will inform beneficiaries and their representatives through our 
disability publications that they may, upon request, receive a receipt 
whenever they report work activity to us.
    Comment: One commenter stated that overpayments resulting from 
SSA's failure to take timely action on work reports remain a major 
barrier to beneficiaries' ability to utilize work incentive programs. 
The commenter urged SSA to establish a reliable, efficient method of 
collecting and recording, in a timely manner, information about 
earnings, and take timely action to adjust benefits when necessary. The 
commenter also recommended that Congress require SSA to forgive 
overpayments if the beneficiary is not notified of the overpayment 
within a reasonable period of time.
    Response: We completed the implementation of an electronic system 
which issues receipts in response to work reports if you receive 
benefits based on disability under title II or title XVI. In addition, 
this system records work report information and automates the control 
of title II work issue continuing disability reviews. A similar system 
for automation of title XVI earned income inputs is currently in 
development. We expect that these systems will help us to better 
control work reports and help us to ensure that we take timely action 
on those work reports. The recommendation that SSA forgive overpayments 
is beyond the scope of these rules.
    Comment: One commenter suggested that the provisions of section 208 
of the SSPA are flawed because beneficiaries do not know they are in a 
trial work period. Reporting requirements are not clear and more needs 
to be done to train SSA personnel on ensuring beneficiaries know about 
their responsibility to report work activity.
    Response: We considered this comment but decided that changes to 
the language of section 404.471 are not necessary or appropriate. The 
nonpayment for trial work period service months is applicable only if a 
beneficiary is convicted by a Federal court of fraudulently concealing 
work activity. Section 404.471 further specifies that a beneficiary may 
be found to be fraudulently concealing work activity if he or she 
provides false information to SSA, works under another identity, or 
takes action to conceal work activity with the intent of fraudulently 
receiving benefits. The provisions for nonpayment of trial work period 
service months do not apply simply because a beneficiary fails to 
understand his or her reporting responsibilities. The language in 
section 404.471 makes that sufficiently clear without further addition.
    Comment: One commenter suggested that the language of section 
404.351(d) is unclear and should be rewritten for clarity to include 
the explanatory language of the preamble. The commenter further 
suggested that it would be helpful if all of section 404.351 was 
rewritten in clear language, as section 404.351(c) is also difficult to 
decipher. Such a rewrite would give beneficiaries concrete information 
as to what will happen to their childhood disability benefits under 
different circumstances.
    Response: We agree that the language of Section 404.351(d) is 
unclear and we have rewritten the paragraph to include the explanatory 
language contained in the preamble. However, we have not

[[Page 66865]]

rewritten the entire section. We believe that the new paragraph (d) 
provides a clear explanation of the effect of the Social Security 
Protection Act legislation.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these final rules meet the criteria for a 
significant regulatory action under Executive Order 12866, as amended 
by Executive Order 13258. Thus, they were reviewed by OMB.

Regulatory Flexibility Act

    We certify that these final rules will not have a significant 
economic impact on a substantial number of small entities because they 
affect only individuals. Thus, a regulatory flexibility analysis as 
provided in the Regulatory Flexibility Act, as amended, is not 
required.

Paperwork Reduction Act

    This final rule contains information collection requirements that 
require Office of Management and Budget clearance under the Paperwork 
Reduction Act of 1995 (PRA). As required by the PRA, SSA has submitted 
a clearance request to OMB for approval. SSA will publish the OMB 
number and expiration date upon approval.
    SSA published a notice of proposed rulemaking on October 18 at 70 
FR 60463 and solicited comments under the PRA on the burden estimate; 
the need for the information; its practical utility; ways to enhance 
its quality, utility and clarity; and on ways to minimize the burden on 
respondents, including the use of automated collection techniques or 
other forms of information technology. We did not receive comments on 
the issues described above.

    Note: Please note that a new section containing public reporting 
requirements, Sec.  416.1874, has been added since the publication 
of the Notice of Proposed Rulemaking (burden information for this 
section follows). Therefore, we are soliciting public comments about 
this section only on the need for the information; its practical 
utility; ways to enhance its quality, utility and clarity; and on 
ways to minimize the burden on respondents, including the use of 
automated collection techniques or other forms of information 
technology.

    Burden information for section 1874:

----------------------------------------------------------------------------------------------------------------
                                                                              Average burden
               Annual number of responses                   Frequency of       per response    Estimated  annual
                                                              response          (minutes)       burden  (hours)
----------------------------------------------------------------------------------------------------------------
15,000.................................................                 1                 10              2,500
----------------------------------------------------------------------------------------------------------------

    Comments: on this section should be submitted/and or faxed to the 
Office of Management and Budget and the Social Security Administration 
at the following addresses/numbers:

Office of Management and Budget, Attn: Desk Officer for SSA, New 
Executive Office Building, Room 10230, 725 17th St., NW., Washington, 
DC 20530, Fax Number: 202-395-6974.
Social Security Administration, Attn: SSA Reports Clearance Officer, 
Rm. 1338 Annex building, 6401 Security Blvd., Baltimore, MD 21235-6401, 
Fax Number: 410-965-6400.

    Comments can be received between 30 and 60 days after publication 
of this notice and will be most useful if received by SSA within 30 
days of publication. To receive a copy of the OMB clearance package, 
you may call the SSA Reports Clearance Officer on 410-965-0454.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security--Disability Insurance; 96.002, Social Security--Retirement 
Insurance; 96.004, Social Security--Survivors Insurance; 96.006, 
Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Blind, Disability benefits, 
Old-Age, Survivors and Disability Insurance, Reporting and 
recordkeeping requirements, Social Security.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI).

Jo Anne B. Barnhart,
Commissioner of Social Security.

0
For the reasons set out in the preamble, we are amending subparts D, E, 
J, and P of part 404 and subparts G, K, N, and R of part 416 of chapter 
III of title 20 of the Code of Federal Regulations as set forth below:

PART 404--FEDERAL OLD-AGE SURVIVORS AND DISABILITY INSURANCE (1950- 
)

Subpart D--[Amended]

0
1. The authority citation for subpart D continues to read as follows:

    Authority: Secs. 202, 203(a) and (b), 205(a), 216, 223, 225, 
228(a)-(e), and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 
403 (a) and (b), 405(a), 416, 423, 425, 428(a)-(e), and 902(a)(5)).


0
2. Section 404.351 is amended by removing ``; or'' at the end of 
paragraph (b) and replacing it with a period; removing the period at 
the end of paragraph (c) and replacing it with ``; or'', and adding a 
new paragraph (d) to read as follows:


Sec.  404.351  Who may be reentitled to child's benefits.

* * * * *
    (d) With respect to benefits payable for months beginning October 
2004, you can be reentitled to childhood disability benefits at anytime 
if your prior entitlement terminated because you ceased to be under a 
disability due to the performance of substantial gainful activity and 
you meet the other requirements for reentitlement. The 84-month time 
limit in paragraph (c) in this section continues to apply if your 
previous entitlement to childhood disability benefits terminated 
because of medical improvement.

Subpart E--[Amended]

0
3. The authority citation for subpart E is revised to read as follows:

    Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c), 
216(l), 222(c), 223(e), 224, 225, 702(a)(5), and 1129A of the Social 
Security Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c), 
416(l), 422(c), 423(e), 424a, 425, 902(a)(5), and 1320a-8a and 48 
U.S.C. 1801.


0
4. Section 404.401a is amended by revising the last sentence to read as 
follows:


Sec.  404.401a  When we do not pay benefits because of a disability 
beneficiary's work activity.

    * * * Except as provided in Sec.  404.471, earnings from work 
activity during a trial work period will not stop your benefits.

[[Page 66866]]


0
5. Add a new Sec.  404.471 to read as follows:


Sec.  404.471  Nonpayment of disability benefits for trial work period 
service months upon a conviction of fraudulently concealing work 
activity.

    (a) Nonpayment of benefits during the trial work period. Beginning 
with work activity performed in March 2004 and thereafter, if you are 
convicted by a Federal court of fraudulently concealing your work 
activity and the concealment of the work activity occurred while you 
were in a trial work period, monthly disability benefits under title II 
of the Social Security Act are not payable for months in which you 
performed services during that trial work period prior to the 
conviction (see Sec.  404.1592 for a definition of a trial work period 
and services). Benefits already received for months of work activity in 
the trial work period prior to the conviction and in the same period of 
disability during which the fraudulently concealed work activity 
occurred, will be considered an overpayment on the record.
    (b) Concealment of work activity. You can be found to be 
fraudulently concealing work activity if--
    (1) You provide false information to us concerning the amount of 
earnings you received or are receiving for a particular period;
    (2) You received or are receiving disability benefits while 
engaging in work activity under another identity (this would include 
working under another social security number or a forged social 
security number); or
    (3) You take other actions to conceal work activity with the intent 
of fraudulently obtaining benefits in excess of amounts that are due.

Subpart J--[Amended]

0
6. The authority citation for subpart J is revised to read as follows:

    Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 
221, 223(i), 225, and 702(a)(5) of the Social Security Act (42 
U.S.C. 401(j), 404(f), 405(a), (b), (d)-(h), and (j), 421, 423(i), 
425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 
U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98 
Stat. 1802 (42 U.S.C. 421 note); sec. 202, Pub. L. 108-203, 118 
Stat. 509 (42 U.S.C. 902 note).


0
7. Section 404.903 is amended by adding a new paragraph (aa) to read as 
follows:


Sec.  404.903  Administrative actions that are not initial 
determinations.

* * * * *
    (aa) Issuing a receipt in response to your report of a change in 
your work activity.

Subpart P--[Amended]

0
8. The authority citation for subpart P is revised to read as follows:

    Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a) 
and (i), 222(c), 223, 225, and 702(a)(5) of the Social Security Act 
(42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a) and (i), 
422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 
Stat. 2105, 2189; sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 
U.S.C. 902 note).


0
9. Section 404.1588 is revised to read as follows:


Sec.  404.1588  Your responsibility to tell us of events that may 
change your disability status.

    (a) Your responsibility to report changes to us. If you are 
entitled to cash benefits or to a period of disability because you are 
disabled, you should promptly tell us if--
    (1) Your condition improves;
    (2) You return to work;
    (3) You increase the amount of your work; or
    (4) Your earnings increase.
    (b) Our responsibility when you report your work to us. When you or 
your representative report changes in your work activity to us under 
paragraphs (a)(2), (a)(3), and (a)(4) of this section, we will issue a 
receipt to you or your representative at least until a centralized 
computer file that records the information that you give us and the 
date that you make your report is in place. Once the centralized 
computer file is in place, we will continue to issue receipts to you or 
your representative if you request us to do so.

0
10. Section 404.1592 is amended by adding a new paragraph (f) to read 
as follows:


Sec.  404.1592  The trial work period.

* * * * *
    (f) Nonpayment of benefits for trial work period service months. 
See Sec.  404.471 for an explanation of when benefits for trial work 
period service months are not payable if you are convicted by a Federal 
court of fraudulently concealing your work activity.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

Subpart G--[Amended]

0
11. The authority citation for subpart G is revised to read as follows:

    Authority: Secs. 702(a)(5), 1611, 1612, 1613, 1614, and 1631 of 
the Social Security Act (42 U.S.C. 902(a)(5), 1382, 1382a, 1382b, 
1382c, and 1383); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 
1382 note); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 
note).


0
12. Section 416.708 is amended by revising the undesignated paragraph 
following paragraph (c)(4)to read as follows:


Sec.  416.708  What you must report.

* * * * *
    (c) * * *
    (4) * * *
    However, you need not report an increase in your Social Security 
benefits if the increase is only a cost-of-living adjustment. (For a 
complete discussion of what we consider income, see subpart K. See 
subpart M, Sec.  416.1323 regarding suspension because of excess 
income.) If you receive benefits based on disability, when you or your 
representative report changes in your earned income, we will issue a 
receipt to you or your representative until we establish a centralized 
computer file to record the information that you give us and the date 
that you make your report. Once the centralized computer file is in 
place, we will continue to issue receipts to you or your representative 
if you request us to do so.
* * * * *

Subpart K--[Amended]

0
13. The authority citation for subpart K continues to read as follows:

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
1621, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 
1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, and 1383); sec. 211, 
Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).


0
14. Section 416.1112 is amended by revising paragraph (c)(3) 
introductory text to read as follows:


Sec.  416.1112  Earned income we do not count.

* * * * *
    (c) * * *
    (3) If you are under age 22 and a student who is regularly 
attending school as described in Sec.  416.1861:
* * * * *

0
15. Section 416.1161 is amended by adding a new paragraph (a)(27) to 
read as follows:


Sec.  416.1161  Income of an ineligible spouse, ineligible parent, and 
essential person for deeming purposes.

* * * * *
    (a) * * *
    (27) Earned income of a student as described in Sec.  
416.1112(c)(3).
* * * * *

[[Page 66867]]

Subpart N--[Amended]

0
16. The authority citation for subpart N is revised to read as follows:

    Authority: Secs. 702(a)(5), 1631, and 1633 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b); sec. 202, Pub. 
L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).


0
17. Section 416.1403 is amended by adding new paragraph (a)(25) to read 
as follows:


Sec.  416.1403  Administrative actions that are not initial 
determinations.

    (a) * * *
    (25) Issuing a receipt in response to your report of a change in 
your earned income.

Subpart R--[Amended]

0
18. The authority citation for subpart R is revised to read as follows:

    Authority: Secs. 702(a)(5), 1612(b), 1614(b), (c), and (d), and 
1631(d)(1) and (e) of the Social Security Act (42 U.S.C. 902(a)(5), 
1382a(b), 1382c(b), (c), and (d) and 1383(d)(1) and (e)).


0
19. Section 416.1861 is amended by redesignating paragraphs (b), (c), 
(d), (e) and (f) as (c), (d), (e), (f) and (g), adding new paragraph 
(b), and revising newly redesignated paragraph (f) to read as follows:


Sec.  416.1861  Deciding whether you are a child: Are you a student?

* * * * *
    (b) If you are instructed at home. You may be a student regularly 
attending school if you are instructed at home in grades 7-12 in 
accordance with a home school law of the State or other jurisdiction in 
which you reside and for at least 12 hours a week.
* * * * *
    (f) When we need evidence that you are a student. We need evidence 
that you are a student if you are 18 years old or older but under age 
22, because we will not consider you to be a child unless we consider 
you to be a student.
* * * * *

0
20-21. Add a new Sec.  416.1870 and undesignated center heading to read 
as follows:

Who Is Considered a Student for Purposes of the Student Earned Income 
Exclusion


Sec.  416.1870  Effect of being considered a student.

    If we consider you to be a student, we will not count all of your 
earned income when we determine your SSI eligibility and benefit 
amount. If you are an ineligible spouse or ineligible parent for 
deeming purposes and we consider you to be a student, we will not count 
all of your income when we determine how much of your income to deem. 
Section 416.1110 explains what we mean by earned income. Section 
416.1112(c)(3) explains how much of your earned income we will not 
count. Section 416.1161(a)(27) explains how the student earned income 
exclusion applies to deemors.

0
22. Add a new Sec.  416.1872 to read as follows:


Sec.  416.1872  Who is considered a student.

    We consider you to be a student if you are under 22 years old and 
you regularly attend school or college or training that is designed to 
prepare you for a paying job as described in Sec.  416.1861(a) through 
(e).

0
23. Add a new Sec.  416.1874 to read as follows:


Sec.  416.1874  When we need evidence that you are a student.

    We need evidence that you are a student if you are under age 22 and 
you expect to earn over $65 in any month. Section 416.1861(g) explains 
what evidence we need.

 [FR Doc. E6-19232 Filed 11-16-06; 8:45 am]
BILLING CODE 4191-02-P