Parent-to-Child Deeming From Stepparents, 28033-28036 [E8-10800]

Agencies

• Social Security Administration

[Federal Register Volume 73, Number 95 (Thursday, May 15, 2008)]
[Rules and Regulations]
[Pages 28033-28036]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-10800]


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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: Final rule.

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SUMMARY: We are changing the Supplemental Security Income (SSI) parent-
to-child deeming rules so that we no longer will 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 rules respond to a 
decision by the United States Court of Appeals for the Second Circuit, 
codified in Social Security Acquiescence Ruling (AR) 99-1(2), and 
establish a uniform national policy. Also, we are making uniform the 
age at which we consider someone to be a ``child'' in SSI program 
regulations and are making other minor clarifications to our rules.

DATES: This final rule is effective on June 16, 2008.

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. 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 income to people aged 65 or older, or who are blind or disabled, and 
who

[[Page 28034]]

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). 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 Second Circuit found that 
deeming of a stepparent's income to the child was not supported by the 
regulations.
    The Second Circuit also disagreed with our position that the 
controlling regulation in the 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 that 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 stepparent who lives 
with the eligible child is an eligible parent for deeming purposes 
under Sec.  416.1160. Under this test, the spouse must live with the 
child's natural or adoptive parent pursuant to Sec.  416.1101, and the 
relationship must be as husband or wife, as defined at Sec.  416.1806. 
The court concluded that both the plain language of these regulations 
and 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 in the States in the Second Circuit. We apply the AR 
if an SSI beneficiary is an eligible child who resides in Connecticut, 
New York, or 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.
    The new regulation will restore national uniformity by extending 
the policy set out in AR 99-1(2) to the rest of the nation. The 
regulation deems 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. We will 
not deem the income and resources of a stepparent to an eligible child 
if the natural or adoptive parent is permanently absent from the 
household. We are publishing a notice in the Federal Register effective 
on the same day as this final rule to rescind AR 99-1(2).
    Generally, we believe this regulation will prove beneficial to SSI 
children because we will not deem income or resources from stepparents 
who assume sole responsibility for their well-being. We also believe 
the policy change embodied in the regulation will encourage stepparents 
to voluntarily accept responsibility for SSI eligible children who have 
been abandoned by their natural or adoptive parents. This regulatory 
change may affect a small number of children in the following 
circumstance: the stepparent no longer will be considered a parent for 
deeming purposes. However, the child will 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 
includes the value of food and shelter that an individual receives 
while in the household of someone who is not the individual's spouse or 
parent. Although we no longer will deem the stepparent's income and 
resources when the natural or adoptive parent has left the home, under 
the SSI living arrangement rules, we will consider the value of the ISM 
the child may receive. When the individual is living in the household 
of another, we determine the value of ISM 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 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. We reduce the amount of ISM charged to the child if the 
child contributed a portion of his or her income (such as the child's 
SSI check) toward the household expenses. In no case can ISM alone 
cause a child to be ineligible for SSI benefits.
    In order to determine the effect of this change on eligible 
children, we tracked cases in the States in the Second Circuit for a 1-
year period following issuance of AR 99-1(2). We 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 there are generally other people in the household, we believe it 
is likely that the eligible child could pay his or her pro rata share 
of the household expenses and, therefore, 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 income we would 
have counted under our prior rules in such a circumstance. As compared 
to our prior rules where we deem a stepparent's income, we believe 
these final rules likely will cause no adverse impact on the child.
    We considered the possibility of revising our regulations 
pertaining to ISM to not count ISM in this situation. However, we 
determined that this option was undesirable because of the inequities 
it would create. We could not justify not counting ISM where an 
eligible child lives with a non-deemor stepparent, but continuing to 
count ISM in similar situations, such as where an eligible child lives 
with a non-deemor such as a friend or other relative. In addition, we 
modified our regulations to clarify our longstanding policy of not 
deeming the income and resources of a

[[Page 28035]]

stepparent who lives with an eligible child to the child when the 
natural or adoptive parent dies or divorces the stepparent.
    We also made one change and one clarification to our definition of 
``ineligible child.'' First, we eliminated the age difference in our 
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 revised the regulatory definition of 
``ineligible child'' to mirror the regulatory definition of ``child'' 
with respect to the maximum age requirement. The new rule permits 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.
    We modified our definition of ``ineligible child'' to make clear 
that we will provide an allocation even if that ineligible child's 
parent were to leave the household. In determining the amount of income 
to deem from a parent to an eligible child, we make an allocation for 
other ineligible children in the home: We consider what other 
ineligible children reside in the home and reduce the amount of income 
to be deemed accordingly. And, consistent with our current policy, the 
final rule clarifies that we use the definition of ``spouse'' at Sec.  
416.1806 when determining who meets the definition of ``ineligible 
child'' for SSI purposes.
    Finally, we updated our regulations to properly identify 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 amended the regulations in 20 CFR, part 416, subparts K, L, and 
R, to implement policy changes and clarify existing policy as discussed 
above. In summary, we are:
     Revising 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.
     Updating 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.
     Revising 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 
eliminates the distinction between an ``ineligible child'' for deeming 
purposes and a ``child'' for all other purposes.
     Revising 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'' will cross-reference Sec.  416.1806 defining how 
we determine if an individual is married and who is a spouse. The 
change clarifies our regulations, consistent with our policy, to 
provide 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.
     Revising Sec.  416.1165(g)(3) to clarify how we deem 
income to an eligible child when the ineligible parent dies. The 
changes to Sec.  416.1165(g)(3) clarify our longstanding policy, 
consistent with Sec.  416.1881(b), to not deem the income of the 
stepparent to the eligible child when the natural or adoptive parent 
dies or divorces the stepparent.
     Updating Sec.  416.1204 to replace ``Immigration and 
Naturalization Service'' with ``U.S. Citizenship and Immigration 
Services'' due to a change in the name of the government entity. This 
is a result of the creation of the Department of Homeland Security.

Public Comments

    In the notice of proposed rulemaking we published at 72 FR 72641 
(December 21, 2007), we provided the public with a 60-day period in 
which to comment on the proposed changes. That comment period ended on 
February 19, 2008. We received comments from one individual who 
supported the proposed changes.

Regulatory Procedures

Executive Order 12866, as Amended

    The Office of Management and Budget (OMB) determined that the 
proposed rules met the requirements for a significant regulatory action 
under Executive Order 12866, as amended, and it reviewed those proposed 
rules. Because we are making no changes in the final rules from what we 
proposed, OMB agreed that it did not need to review the final rules.

Regulatory Flexibility Act

    We certify that these rules will not have a significant economic 
impact on 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 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: May 8, 2008.
Michael J. Astrue,
Commissioner of Social Security.

0
For the reasons set out in the preamble, we are amending 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]

0
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).


0
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

[[Page 28036]]

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.
* * * * *

0
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]

0
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).


0
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.
* * * * *

0
6. Amend Sec.  416.1204 by revising the first two sentences of the 
introductory text to read as follows:


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]

0
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)).


0
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. E8-10800 Filed 5-14-08; 8:45 am]
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