RS 01301.190: Rules for Support Determinations

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~~Effective Dates: 10/21/2016 - Present~~
Effective Dates: 07/23/2018 - Present
TN 7 (01-12)
RS 01301.190 Rules for Support Determinations
A. General information on rules for support determinations
In order to determine whether the claimant meets one-half support requirement for a relevant period, we need to figure out how much support the claimant received and the sources of income used to make those payments.
Look at the facts of the claim and determine which of the following methods apply:
1. Pooled fund method
Apply the Pooled Fund Method when ALL household income is pooled into a single account and the account is used for paying all household expenses, including support payments. We generally assume that the Pooled Fund Method applies unless there are facts indicating otherwise. See RS 01301.190B (in this section).
2. Actual support method
Apply the Actual Support Method when any of the household income is NOT pooled into a common fund. See RS 01301.190D.
B. Policy on pooled fund method
1. General information on pooled fund method
Under this method, we assume that the household pools all income for its support and that each member shares equally in the funds used for support. When using the pooled fund method, we need to determine all income coming into the household.
NOTE: If using the pooled fund method results in the stepchild failing to meet one-half support by a narrow margin, compute the child's support using the method in RS 01301.190C (in this section).
NOTE: Use the KCNET one-half support pooled fund method calculator to compute one-half support.
2. Exceptions to using the pooled fund method
Do not use the pooled fund method when:
* the household members did not pool all income;
* there is evidence indicating all income for support was not shared equally (e.g., one member of the household had large medical expenses);
* separate family groups live in the same household;
* joint custody is involved (equal time between two households); and
* the stepchild and stepparent live in different households
C. Procedure for applying the pooled fund method
1. General procedure for using the pooled fund method
* Determine the support period (see RS 01301.020B).
* Compute the total gross income to the family from all sources during the support period.
* Compute the total gross income to the family from all sources during the support period (see RS 01301.030 - One-Half Support Income to Claimant).
* Determine the relevant Pooled Fund Method Procedures from the examples below, based on the facts of the case, and apply it to determine if the claimant meets the one-half support requirement.
NOTE: The principles used in the example in RS 01301.195A apply to one-half support for stepchildren as well as parents.
2. Stepchild has no outside Income; number holder (NH) is only person in household with income
The claimant meets the one-half support requirement if NH is the only household member with income.
EXAMPLE: Ron Williams became entitled to retirement insurance benefits (RIB) in July 2010. In August 2010, his stepchild Sean applied for benefits on his record. The support period is the 12-month period before Ron became entitled. During that period, NH, his wife and the applicant all lived in the same household. Ron's income during that period was $25,000 in earnings and $1,000 in investment income. Susan and Sean had no outside income. Using the pooled fund method, we assume that all family members shared equally in the family income.
Since Sean had no outside income, and Ron was the only contributor to his support, Sean meets the one-half support requirement.
3. Stepchild has outside income; NH is only other household member with income
* Determine the support period (see RS 01301.020B).
* Compute the total gross income to the family from all sources during the support period.
* Divide the total amount of income coming into the household by the number of members in the household. The resulting amount is the equal share of each household member's support. Divide the equal share by two to determine the amount for one-half support.
* Compare the stepchild's outside income to the one-half support figure. If the child's income exceeds one-half support, the NH did not provide at least one-half support. If the stepchild's income is equal to or less than the one-half support figure, the NH provided at least one-half support.
EXAMPLE: Bill Smith died in July 2010. In the year before his death, he lived with his wife Mary and her son Ryan. During that year, Bill's income consisted of $24,000 in earnings. Mary had no income. Ryan received $6,000 from his natural father during the year. Pool the total $30,000 family income.
Dividing $30,000 by the number of household members (three) produces an amount of $10,000 as the cost of each member's support. One-half of $10,000 is $5,000. Since Ryan's income of $6,000 was more than $5,000, Bill did not provide one-half support to Ryan during the support period.
4. NH and spouse both have income; stepchild may or may not have outside income
NOTE: Remember the NH's contributions to the stepchild must equal or exceed one-half support.
* Determine the support period (see RS 01301.020B).
* Compute the total gross income to the family from all sources during the support period.
* Divide the total amount of income by the number of members in the household. This amount constitutes the cost of support for each member. Dividing this amount by 2 equals one-half of each member's support.
* If the stepchild’s outside income exceeds one-half the cost of support, the NH could not have been providing at least one-half support. If the stepchild's income is equal to or less than one-half the cost of support, or if the stepchild has no outside income, proceed to the following steps.
* For each member of the household whose income exceeds the cost of support, (e.g., the NH and spouse), the cost of his/her own support is subtracted from their income. The balance is the amount that individual is contributing toward the support of other household members.
* To compute the balance of the stepchild’s support (which comes from the contributions of the NH and spouse), subtract the stepchild's income from the cost of support.
* Compute the proportion of the NH's contributions to the stepchild as follows:
Using the amounts arrived at in 5 (the NH's and spouse's balance available for support of other household members), then add the two figures together. Determine what proportion of the total amount the NH's contribution represents. This fraction is the proportion of the NH’s support to the stepchild.
* Apply the fraction derived in 7 to the balance of the stepchild's support (the amount arrived at in 6) to determine how much of the balance of support the NH contributed. If the result is equal to or greater than one-half the cost of the stepchild's support, the one-half support requirement is met.
EXAMPLE: John Sanders became entitled to disability insurance benefits (DIB) in July 2010. The support period is the 12 months before he became disabled. In that year, he lived in the same household with his wife Marie and her son James. James is now applying for benefits as John's stepchild.
John's income during this period was $20,000. Marie's income was $15,000, and James received $4,000 during the period from his grandfather. Pooling all household income, the total family income was $39,000. The cost of each member's support was $13,000. One-half is $6,500. Since James' income did not exceed $6,500, SSA must determine whether John was providing at least one-half of his support.
Both John's income and Marie's income exceeded the cost of each one's support ($13,000). Subtract the cost of support from their share of income. The balance of John's income available for support of other household members is $7,000 ($20,000 minus $13,000); for Marie, the balance is $2000 (15,000 minus $13,000).
Subtract the amount of James' income from the cost of his support ($13,000 minus $4,000 = $9,000). The balance of his support came from the contributions of John and Marie.
In order to determine how much of the balance of James' support came from the NH, apply the following rule:
The proportion of one member's contributions to any other member is the same as the proportion of their contributions (minus their own support) to the total of the remaining amounts available for support by the contributing members.
Compute the proportions as follows:
John
Marie
Income
Cost of own support
Balance available for support of other
$20,000
-13,000
$ 7,000
$15,000
-13,000
$ 2,000
John's contribution to James' support equals 78% of $9,000 (the balance of James support). Compute the proportion of 78% by dividing $7,000 (the balance available from John) by $9000 (the total remaining support available from John and Marie).
Since 78% of the balance of James' support ($9,000) is $7,020, and this amount is greater than $6,500 (one-half the cost of James' support), John, the NH provided one-half support and the requirement for James' entitlement is met.
D. Pooled fund method does not apply
1. General procedure when the pooled fund method does not apply
If the pooled fund method does not apply, or if using the method results in the stepchild failing to meet one-half support by a narrow margin, compute the stepchild's support as shown below. The examples below illustrate the principles used in computing one-half support in cases where the family does not pool income. You may also refer to the example on NH living in parent’s home in RS 01301.195B.3.
* Compute the child's income from sources other than the NH.
* Compute the NH's net contribution to the stepchild (the amount he or she actually contributed to the stepchild).
* Add the figures from steps “a” and “b” to determine the cost of the stepchild's support. One-half of this amount equals one-half of the child's support.
* If the stepchild's income from sources other than the NH exceeds one-half the cost of the stepchild's support, the one-half support requirement is not met. If the NH's contributions to the stepchild equal or exceed one-half the cost of the child's support, the requirement is met.
2. Examples of when the pooled fund method does not apply
a. Example 1: NH, spouse, and stepchild have income; NH and spouse did not pool their income.
The NH, Anna Smith, died in August 2010. During the 12-month period before she died, she lived with her husband Philip and his son from a previous marriage, Mitchell. Mitchell is filing for benefits as a stepchild on Anna's record. During the support period, Anna's income was $20,000. Philip's income was $18,000, and Mitchell received $2,000 from his natural mother. The two other children in the household had no income.
During development, we determine the pooled fund method could not be used in this case because not all family income was pooled. We did not pool the household income because Anna's income was used to pay for household expenses such as mortgage, utilities, taxes, food, and insurance. Philip's uses his income to pay for all other expenses, such as clothing and medical expenses. They used support payments from Mitchell’s mother solely for his support.
We must determine Anna's net contribution to Mitchell's support. Development indicated the value of Mitchell's room and board was $2,400 for the period. (See room and board computation method in RS 01301.080C.) Since Anna paid for all household expenses, the $2,400 amount constitutes her contribution to Mitchell's room and board. The amount Philip contributed toward Mitchell's other expenses, such as clothing and medical expenses, equaled $2,000. Total family income was $40,000.
The total cost of Mitchell's support was determined by adding all his sources of income: $2,400 from Anna, $2,000 from Philip, and $2,000 from his natural mother. Thus, the total cost of his support equaled $6,400. One-half of the support amount is $3,200.
Since the $2,400 Anna contributed to Mitchell was less than one-half of his support ($3,200), she does not meet the one-half support requirement.
b. Example 2: NH, spouse, and stepchild have income; child's income not pooled with rest of family income
The NH, Sarah Johnson, died in August 2010. During the 12-month period before she died, she lived with her husband Frank and his daughter from a prior marriage, Judith, along with Frank's two sons. Judith has filed for benefits on Sarah's record as a stepchild.
During the 12-month support period, Sarah had $30,000 in income. Frank's income was $24,000. Judith received $4,000 in child support payments from her natural mother. Although Frank and Sarah pooled their incomes, they used Judith's child support payments exclusively for her own needs such as clothing and medical care. Therefore, we cannot use the pooled fund method.
Development per RS 01301.070 through RS 01301.080 determined that the value of Judith's room and board for the period was $4,000. Since Sarah and Frank pooled their incomes, we must compute the proportion of their contributions to Judith that may be attributed to Sarah. . In order to determine this proportion, compute the proportion that Sarah's income ($30,000) represents with respect to the total of her income and Frank's income ($54,000). Since Sarah's income represents 56% of the total of her income and Frank's income, assume that she paid that percent of Judith's room and board. (This rule applies unless the facts indicate otherwise.) Thus, Sarah contributed $2,240 ($4,000 x 56%) to Judith's room and board.
In computing Sarah's contributions to Judith's other needs such as clothing and medical expenses (which totaled $5,000), deduct Judith's $4,000 income from her total expenses, since this money was used only for her expenses. The remainder is $1,000. Apply the 56 percent calculated above to this $1,000 to determine the amount Sarah contributed to Judith for these expenses ($560).
The total of all contributions to Judith (from Frank, Sarah, and Judith's mother) equaled $9,000. The breakdown is as follows:
Judith's income from her mother:
$4,000
Frank's and Sarah's contributions to Judith's room and board
$4,000
Frank's and Sarah's contributions to Judith's other expenses
$1,000
Total cost of Judith's support
$9,000
One-half of the cost of Judith's support is $4,500. Sarah's contributions to Judith ($2,240 plus $560) equaled $2,800, which is less than $4,500. Therefore, Judith does not meet the one-half support requirement.
c. Example 3: NH and spouse have income; NH has extraordinary medical expenses
Adam Moore, the NH, became disabled in August 2010. For the 12-month period before his onset, he, his wife Amanda, and her daughter Monica, lived in the same household. Monica is now filing for benefits as a stepchild on Adam's record.
For the 12-month period, Adam had $28,000 in income. Amanda's income was $20,000. Monica had no income. We cannot use the pooled fund method because they did not pool all family income Adam spent $4,000 of his income on medical expenses for himself during the period. The household pooled the remaining amount of his income with Amanda's to pay for family expenses.
To determine the amount of Adam's income available for support of the household, we deduct the $4,000 in medical expenses from his total income, leaving a balance of $24,000. The proportion represented by this $24,000 in relation to the $44,000 total of this amount and Amanda's income must be determined; it equals 55%. We determined the value of each household member's room and board to be $5,000. We assume that Adam contributed 55% of this amount, or $2,750. The total of Adam's and Amanda's contributions to Monica for her other expenses, such as clothing and medical care, amount to $3,000. We assume Adam's share of these expenses to be 55%, or $1,650.
The total cost of Monica's support was $8,000 (the amount Adam and Amanda contributed for her room and board --$5,000-- and to her other expenses ($3,000). One-half support was $4,000. Adam contributed a total of $4,400 to her ($2,750 in household expenses plus $1,650 in other expenses). Since $4,400 is greater than $4,000, Adam contributed at least one-half of Monica's support.
E. Deemed support rule
“Where the NH provides the claimant with room and board and the claimant did not receive other income amounting to more than $170.10 a month, the claimant is deemed to have received at least one-half support.
NOTE: The Deemed Support Rule does not apply in cases involving one-half support of a child. See RS 01301.070B.
F. Procedure for cases other than pooled fund or deemed rule
If neither the pooled fund nor the deemed rule apply, follow these steps:
Step
Action
1
Compare the claimant's income and the NH's net contribution.
2
Determine the amount of the claimant's support.
3
Determine what the claimant's contribution is toward his/her own support.
4
Determine the amount of the NH's contribution toward the claimant's support.
5
Compare the amount in step 4 with the amount in step 3.
G. References
* See SSR 61-2 , Contributions of Food, Clothing, Lodging, etc. to Claimant by Worker
* See SSR 66-15C ; section 202(h) – Parents Insurance Benefits – Support Requirement

POMS Reference

RS 01301.190: Rules for Support Determinations