Parent-to-Child Deeming From Stepparents, 72641-72645 [E7-24787]

Agencies

• Social Security Administration

[Federal Register Volume 72, Number 245 (Friday, December 21, 2007)]
[Proposed Rules]
[Pages 72641-72645]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24787]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

[Docket No. SSA 2007-0070]
RIN 0960-AF96


Parent-to-Child Deeming From Stepparents

AGENCY: Social Security Administration (SSA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: We propose to change the Supplemental Security Income (SSI) 
parent-to-child deeming rules so that we would no longer consider the 
income and resources of a stepparent when an eligible child resides in 
the household with a stepparent, but that child's natural or adoptive 
parent has permanently left the household. These proposed rules would 
respond to a decision by the United States Court of Appeals for the 
Second Circuit. Social Security Acquiescence Ruling (AR) 99-1(2) 
currently applies the Court's decision to individuals who reside in 
Connecticut, New York, and Vermont. These rules propose to establish a 
uniform national policy with respect to this issue. Also, we propose to 
make uniform the age at which we consider someone to be a ``child'' in 
SSI program regulations and to make other minor clarifications to our 
rules.

DATES: To be sure that we consider your comments, we must receive them 
by February 19, 2008.

ADDRESSES: You may submit comments by any of the following methods. 
Regardless of which method you choose, to ensure that we can associate 
your comments with the correct regulation for consideration, you must 
state that your comments refer to Docket No. SSA-2007-0070:
     Federal eRulemaking Portal at https://www.regulations.gov. 
(This is the preferred method for submitting your comments.) In the 
Search Documents section, select ``Social Security Administration'' 
from the agency drop-down menu, then click ``submit''. In the Docket ID 
Column, locate SSA-2007-0070 and then click ``Add Comments'' in the 
``Comments Add/Due By'' column.
     Telefax to (410) 966-2830.
     Letter to the Commissioner of Social Security, P.O. Box 
17703, Baltimore, Maryland 21235-7703.
     Deliver your comments to the Office of Regulations, Social 
Security Administration, 922 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, Maryland 21235-6401, between 8 a.m. and 4:30 p.m. 
on regular business days.
    Comments are posted on the Federal eRulemaking portal, or you many 
inspect them on regular business days by making arrangements with the 
contact person shown in this preamble.

FOR FURTHER INFORMATION CONTACT: Eric Skidmore, Office of Income 
Security Programs, 252 Altmeyer Building, Social Security 
Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, 
(410) 597-1833, or TTY (410) 966-5609. For information on eligibility 
or filing for benefits, call our national toll-free number, 1-800-772-
1213 or TTY 1-800-325-0778, or visit our Internet site, 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/
index.html.

Background

    The basic purpose of the SSI program is to provide a minimum level 
of

[[Page 72642]]

income to people aged 65 or older, or who are blind or disabled, and 
who have limited income and resources. Section 1611 of the Social 
Security Act (the Act) provides that SSI payments can only be made to 
people who have income and resources below specified amounts.
    When we determine SSI eligibility and benefit amounts, we always 
consider the individual's own income and resources. Through a process 
known as deeming, we also consider the income and resources of others 
who are responsible for the individual's welfare. Deeming is based on 
the concept that those with responsibility for others provide support 
to them.
    Section 1614(f)(2) of the Act requires the Commissioner of Social 
Security (the Commissioner) to deem the income and resources of 
eligible children to include the income and resources of a natural or 
adoptive parent and the spouse of a parent who are living in the same 
household as the eligible child. These income and resource amounts are 
deemed to the eligible child whether or not they are available to the 
child, except to the extent determined by the Commissioner to be 
inequitable under the circumstances.
    Existing regulations in 20 CFR part 416, subparts K, L and R, apply 
to parents and stepparents equally for purposes of deeming income and 
resources to an eligible child who lives in the same household as the 
parent or stepparent. However, a 1998 decision by the United States 
Court of Appeals for the Second Circuit held that our regulations 
require that a stepparent live in the same household as the natural or 
adoptive parent, in addition to living with the child, in order for the 
stepparent's income to be deemed to the child. (Florez on behalf of 
Wallace v. Callahan, 156 F. 3d 438 (2d Cir. 1998.)). In the case of a 
natural parent who abandoned the family home leaving her spouse, as 
stepparent, with sole physical custody of the eligible child, the Court 
found that deeming of a stepparent's income to the child was not 
supported by the regulations.
    The Court disagreed with us that the controlling regulation in such 
a case was Sec.  416.1806, which addresses who is a spouse for SSI 
purposes and, by extension, who is a spouse for purposes of deeming. 
Under this regulation, we deem the income and resources of a stepparent 
living in the same household as the eligible child when the stepparent 
is legally married under State law to that child's natural or adoptive 
parent, even if the natural or adoptive parent is not living in the 
household.
    Instead, the Court held that Sec.  416.1101, which defines a spouse 
as someone who lives with another person as that person's husband or 
wife, was the controlling regulation. The Court found that Sec. Sec.  
416.1101 and 416.1806 created a two-part test for determining whether a 
spouse of a natural parent, who lives with the eligible child, is an 
ineligible parent for deeming purposes under Sec.  416.1160. Under this 
test, (1) the spouse must live with the child's natural or adoptive 
parent pursuant to Sec.  416.1101; and (2) the relationship must be as 
husband or wife, as further defined at Sec.  416.1806.
    The Court concluded that the plain language of these regulations, 
supported by the legislative history of the Act, required us to exclude 
a stepparent's income from deeming when the eligible child's natural 
parent no longer resided in the family home. As a result of this 
decision, we issued AR 99-1(2) on February 1, 1999 to apply the Court's 
decision within the States in the Second Circuit. We apply the AR if an 
SSI beneficiary is an eligible child who resides in Connecticut, New 
York, and Vermont at the time of the determination (including all post-
eligibility determinations) or decision at any level of the 
administrative review process. We continue to use Sec.  416.1806 as the 
controlling regulation in similar cases for the rest of the nation.
    These rules propose to change our regulations so that we will now 
deem a child's income and resources to include the income and resources 
of the stepparent only if the stepparent lives in the same household as 
the child and the natural or adoptive parent. If we adopt these 
proposed rules as final rules, we anticipate that we would rescind AR 
99-1(2), consistent with our regulations at 20 CFR 416.1485(e)(4).
    The regulatory changes we propose would amend existing regulations 
so that we would exclude, as part of an eligible child's income and 
resources, the income and resources of a stepparent if the natural or 
adoptive parent is permanently absent from the household. If adopted as 
final rules, the proposed rules would restore national uniformity by 
extending the policy set out in AR 99-1(2) to the rest of the nation. 
We believe the policy in these proposed rules will encourage 
stepparents to voluntarily accept responsibility for SSI eligible 
children who have been abandoned by their natural or adoptive parents.
    Generally, we believe this regulatory change will prove beneficial 
to SSI children who are subject to the conditions described above 
because we will not deem income or resources from stepparents who 
assume sole responsibility for their well-being. There may be a small 
number of children who are affected by the proposed changes in the 
following manner. Under this proposed rule, the stepparent would no 
longer be considered a parent for deeming purposes and the child would 
be considered living in another person's household and, therefore, 
possibly in receipt of income in the form of in-kind support and 
maintenance (ISM). ISM is treated as income and represents the value of 
food and/or shelter that an individual receives while in the household 
of a person who is not the individual's spouse or parent. Although we 
would no longer deem the stepparent's income and resources when the 
natural or adoptive parent has left the home, under the SSI living 
arrangement rules, we are required to consider the ISM value the child 
may receive. While the individual is in the household of another, the 
value of ISM is determined by dividing the food and household expenses 
by the number of people in the household and then subtracting the 
individual's contribution, if any, toward those expenses. If the 
individual's contribution is less than the computed pro rata share of 
the expenses, the difference between the contribution and the pro rata 
share is then counted as income to the individual. The amount of income 
charged to an eligible individual in such a situation is capped at one-
third of the Federal Benefit Rate (FBR) for an individual. So, if the 
difference between the individual's contribution and the individual's 
pro rata share is greater than one-third of the individual FBR, we only 
count one-third of the FBR as income to the individual. The amount of 
ISM we would charge to the child would be reduced if the child 
contributed a portion of his or her income (such as the child's SSI 
check) toward the household expenses, and in no case can ISM alone 
cause a child to be ineligible for SSI benefits.
    We tracked cases in the States in the Second Circuit for a 1-year 
period following issuance of the AR and found no other cases where the 
stepparent was the only person who remained in the household with the 
eligible child after the natural or adoptive parent left. Since we 
found that there are generally other people in the household, we 
believe it is more likely that the child would be able to pay his or 
her share of the household expenses and, therefore, we expect that the 
child would be charged with little or no ISM. In addition, if the 
computation results in countable ISM, it may be less than the amount of 
deemed

[[Page 72643]]

income we would have counted under our current rules in such a 
circumstance. As compared to our current rules where we deem a 
stepparent's income, if these proposed rules are adopted as final 
rules, we believe there would likely be no adverse impact on the child. 
We also considered the possibility of revising our regulations 
pertaining to ISM to not count ISM in the case of a stepparent and 
child living together when the natural or adoptive parent has departed 
the household. We determined that this option was undesirable because 
of the inequities it would create under the established ISM framework 
for other beneficiaries living in a non-deemor's household. That is, we 
could not justify not counting ISM in one situation (an eligible child 
living with a non-deemor stepparent), but continuing to count ISM in 
other similar situations (an eligible child living with a non-deemor 
such as a friend or other relative).
    We also propose to modify existing regulations to clarify our 
longstanding policy of not deeming the income and resources of a 
stepparent who lives with an eligible child to the child when the 
natural or adoptive parent dies or divorces the stepparent.
    We also propose one change and one clarification to our definition 
of ``ineligible child.'' First, we propose to eliminate the age 
difference in existing regulations between our definitions of ``child'' 
and ``ineligible child.'' For purposes of consistency and to make our 
rules more easily understood by the public, we propose revising the 
regulatory definition of ``ineligible child'' to mirror the regulatory 
definition of ``child'' with respect to the maximum age requirement. As 
proposed, the new rule would permit a child in the household to be 
considered an ineligible child for deeming purposes until attainment of 
age 22, assuming all other requirements are met.
    Second, we also propose to modify our definition of ``ineligible 
child'' to clarify who is considered a ``spouse'' for purposes of 
ineligible child determinations in deeming situations. Under current 
policy, in determining the amount of income to deem from a parent to an 
eligible child, we make an allocation for other children in the home, 
that is, we consider what other ineligible children reside in the home 
and deduct from the amount of income to be deemed accordingly. In the 
situation where a parent lives in a home with his or her eligible 
child, and also with the ineligible child of the parent's spouse, we 
provide an allocation for the ineligible child of the parent's spouse 
in determining how much income to deem from the parent to the eligible 
child. If the parent's spouse were to abandon the home, leaving the 
ineligible child of the parent's spouse behind, we still provide an 
allocation with respect to the ineligible child of the parent's spouse, 
when determining how much income to deem from the parent to the 
eligible child. The proposed rule would clarify, consistent with 
current policy, that when determining who meets the definition of 
``ineligible child'' for SSI purposes in the context of the child of a 
spouse, we use the definition of spouse at Sec.  416.1806, which does 
not necessarily require that the spouse of a parent live with the 
parent to be considered the parent's spouse.
    Finally, we propose to update the name of a government entity in 
our regulations due to the creation of the United States Department of 
Homeland Security. This change is clerical in nature and has no 
substantive effect on our policies or procedures.

Explanation of Proposed Changes

    We propose to amend the regulations in 20 CFR, part 416, subparts 
K, L and R, to implement the policy changes discussed above. In 
summary, we propose to:
     Revise Sec. Sec.  416.1160(a)(2) and (d), 416.1165(g)(4), 
416.1202(b)(1), and 416.1851(c) to not deem income and resources from a 
stepparent when an eligible child lives with a stepparent but not with 
his or her natural or adoptive parent. This will make our national 
policy uniform with respect to the deeming of income and resources from 
stepparents to eligible children when the natural or adoptive parent 
has permanently left the household, as defined in Sec.  416.1167.
     Update Sec.  416.1160(d) to replace ``Immigration and 
Naturalization Service'' with ``U.S. Citizenship and Immigration 
Services'' due to a change in the name of a government entity. This is 
a result of the creation of the Department of Homeland Security.
     Revise the definition of ineligible child in Sec.  
416.1160(d) to remove the under 21 age standard so that the definition 
of ``ineligible child'' will cross-reference the definition of 
``child'' in Sec.  416.1101, which uses an age limit of 22. This change 
would eliminate a layer of complexity that currently exists in the SSI 
program; that is, the distinction between an ``ineligible child'' for 
deeming purposes and a ``child'' for all other purposes.
     Revise the definition of ineligible child in Sec.  
416.1160(d) to clarify how we decide who is a ``spouse'' when 
determining who is an ``ineligible child.'' The definition of 
``ineligible child'' would cross-reference Sec.  416.1806 defining how 
we determine if an individual is married and who is a spouse. The 
proposed change would clarify our regulations, consistent with current 
policy, to continue providing an ineligible child allocation when the 
spouse of a parent leaves the household, but the spouse's children 
remain in the household with the eligible child and the parent of the 
eligible child.
     Revise Sec.  416.1165(g)(3) to clarify how we deem income 
to an eligible child when the ineligible parent dies. The proposed 
changes to Sec.  416.1165(g)(3) would clarify our longstanding policy, 
consistent with Sec.  416.1881(b), to no longer deem the income of the 
stepparent to the eligible child when the natural or adoptive parent 
dies or divorces the stepparent.
     Update Sec.  416.1204 to replace ``Immigration and 
Naturalization Service'' with ``U.S. Citizenship and Immigration 
Services'' due to a change in the name of a government entity. This is 
a result of the creation of the Department of Homeland Security.

Clarity of These Rules

    Executive Order 12866, as amended, requires each agency to write 
all rules in plain language. In addition to your substantive comments 
on these proposed rules, we invite your comments on how to make them 
easier to understand. For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that is 
not clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists or 
diagrams?
     What else could we do to make the rules easier to 
understand?

Regulatory Procedures

Executive Order 12866, as Amended

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

Regulatory Flexibility Act

    We certify that these proposed rules, when published in final, 
would not have a significant economic impact on

[[Page 72644]]

a substantial number of small entities because they affect only 
individuals. Accordingly, a regulatory flexibility analysis as provided 
in the Regulatory Flexibility Act, as amended, is not required.

Paperwork Reduction Act

    These proposed regulations will impose no additional reporting or 
recordkeeping requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Programs No. 96.006, 
Supplemental Security Income)

List of Subjects in 20 CFR Part 416

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

    Dated: September 25, 2007.
Michael J. Astrue,
Commissioner of Social Security.

    For the reasons set out in the preamble, we propose to amend 
subparts K, L and R of part 416 of chapter III of title 20 Code of 
Federal Regulations as set forth below:

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

Subpart K--[Amended]

    1. The authority citation for subpart K of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
1621, 1631, and 1633 of the Social Security Act (42 U.S.C. 
902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 
1383b); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    2. Amend Sec.  416.1160 by revising the section heading, paragraph 
(a)(2) and the definitions of ``Date of admission to or date of entry 
into the United States'' and ``Ineligible child'' in paragraph (d) to 
read as follows:


Sec.  416.1160  What is deeming of income?

    (a) * * *
    (2) Ineligible parent. If you are a child to whom deeming rules 
apply (see Sec.  416.1165), we look at your ineligible parent's income 
to decide whether we must deem some of it to be yours. If you live with 
both your parent and your parent's spouse (i.e., your stepparent), we 
also look at your stepparent's income to decide whether we must deem 
some of it to be yours. We do this because we expect your parent (and 
your stepparent, if living with you and your parent) to use some of his 
or her income to take care of your needs.
* * * * *
    (d) * * *
    Date of admission to or date of entry into the United States means 
the date established by the U.S. Citizenship and Immigration Services 
as the date the alien is admitted for permanent residence.
* * * * *
    Ineligible child means your natural child or adopted child, or the 
natural or adopted child of your spouse, or the natural or adopted 
child of your parent or of your parent's spouse (as the term child is 
defined in Sec.  416.1101 and the term spouse is defined in Sec.  
416.1806), who lives in the same household with you, and is not 
eligible for SSI benefits.
* * * * *
    3. Amend Sec.  416.1165 by revising paragraphs (g)(3) and (g)(4) to 
read as follows:


Sec.  416.1165  How we deem income to you from your ineligible 
parent(s).

* * * * *
    (g) * * *
    (3) Ineligible parent dies. If your ineligible parent dies, we do 
not deem that parent's income to you to determine your eligibility for 
SSI benefits beginning with the month following the month of death. In 
determining your benefit amount beginning with the month following the 
month of death, we use only your own countable income in a prior month, 
excluding any income deemed to you in that month from your deceased 
ineligible parent (see Sec.  416.1160(b)(2)(iii)). If you live with two 
ineligible parents and one dies, we continue to deem income from the 
surviving ineligible parent who is also your natural or adoptive 
parent. If you live with a stepparent following the death of your 
natural or adoptive parent, we do not deem income from the stepparent.
    (4) Ineligible parent and you no longer live in the same household. 
If your ineligible parent and you no longer live in the same household, 
we do not deem that parent's income to you to determine your 
eligibility for SSI benefits beginning with the first month following 
the month in which one of you leaves the household. We also will not 
deem income to you from your parent's spouse (i.e., your stepparent) 
who remains in the household with you if your natural or adoptive 
parent has permanently left the household. To determine your benefit 
amount if you continue to be eligible, we follow the rule in Sec.  
416.420 of counting your income including deemed income from your 
parent and your parent's spouse (i.e., your stepparent) (if the 
stepparent and parent lived in the household with you) in the second 
month prior to the current month.
* * * * *

Subpart L--[Amended]

    4. The authority citation for subpart L of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
1621, 1631, and 1633 of the Social Security Act (42 U.S.C. 
902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 
1383b); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    5. Amend Sec.  416.1202 by revising paragraph (b)(1) to read as 
follows:


Sec.  416.1202  Deeming of resources.

* * * * *
    (b) Child--(1) General. In the case of a child (as defined in Sec.  
416.1856) who is under age 18, such child's resources shall be deemed 
to include any resources, not otherwise excluded under this subpart, of 
an ineligible parent of such child who is living in the same household 
with such child (as described in Sec.  416.1851). Such child's 
resources also shall be deemed to include the resources of an 
ineligible spouse of a parent (stepparent), provided the stepparent 
lives in the same household as the child and the parent. The child's 
resources shall be deemed to include the resources of the parent and 
stepparent whether or not the resources of the parent and stepparent 
are available to the child, to the extent that the resources of such 
parent (or parent and stepparent), exceed the resource limits described 
in Sec.  416.1205 except as provided in paragraph (b)(2) of this 
section. (If the child is living with only one parent, the resource 
limit for an individual applies. If the child is living with both 
parents, or the child is living with one parent and the stepparent, the 
resource limit for an individual and spouse applies.) In addition to 
the exclusions listed in Sec.  416.1210, pension funds which the parent 
or spouse of a parent may have are also excluded. The term ``pension 
funds'' is defined in paragraph (a) of this section. As used in this 
section, the term ``parent'' means the natural or adoptive parent of a 
child and the terms ``spouse of a parent'' and ``stepparent'' means the 
spouse (as defined in Sec.  416.1806) of such natural or adoptive 
parent who is living in the same household with the child and parent.
* * * * *
    6. Amend Sec.  416.1204 by revising the first two sentences of the 
introductory text to read as follows:

[[Page 72645]]

Sec.  416.1204  Deeming of resources of the sponsor of an alien.

    The resources of an alien who first applies for SSI benefits after 
September 30, 1980, are deemed to include the resources of the alien's 
sponsor for 3 years after the alien's date of admission into the United 
States. The date of admission is the date established by the U.S. 
Citizenship and Immigration Services as the date the alien is admitted 
for permanent residence.
* * * * *

Subpart R--[Amended]

    7. The authority citation for subpart R of part 416 continues 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)).

    8. Amend Sec.  416.1851 by revising the first sentence of paragraph 
(c) and adding a new second sentence to read as follows:


Sec.  416.1851  Effects of being considered a child.

* * * * *
    (c) If you are under age 18 and live with your parent(s) who is not 
eligible for SSI benefits, we consider (deem) part of his or her income 
and resources to be your own. If you are under age 18 and live with 
both your parent and your parent's spouse (stepparent) and neither is 
eligible for SSI benefits, we consider (deem) part of their income and 
resources to be your own.
* * * * *
[FR Doc. E7-24787 Filed 12-20-07; 8:45 am]
BILLING CODE 4191-02-P