TN 76 (12-97)

Citations:

Social Security Act as amended, section 1612(a)(2)(B);

20 CFR 416.1121(a) and 416.1123(e)

A. When to Use

The following instructions are used only for determining the dependent's portion of augmented benefits paid from July 1, 1990 through November 16, 1994 by the Department of Veterans Affairs (VA) in the Ninth Federal Judicial Circuit in the Western United States. See SI 00830.314 for general instructions regarding the treatment of augmented VA benefits.

B. Background

In the 1988 case of Paxton v. Secretary, the U.S. Court of Appeals for the Ninth Circuit held that the SSI regulations did not support one aspect of the SSI policy on augmented VA benefits. The issue in question was the SSI policy of considering the dependent's portion of an augmented VA benefit paid directly to a designated beneficiary as unearned income to the dependent.

On November 17, 1994, SSA amended the SSI regulations to state clearly the SSI policy on the dependent's portion and to restore the national policy to the Ninth Circuit.

C. Policy

1. Area of Applicability

The policies and procedures in this section apply only to SSI claimants and recipients residing in the Ninth Circuit. The Ninth Circuit includes:

• Alaska

• Arizona

• California

• Hawaii

• Idaho

• Montana

• Nevada

• Northern Mariana Islands

• Oregon

• Washington

2. VA Benefits Received Before 7/90 and After 11/16/94

The dependent's portion of an augmented VA benefit paid to a designated beneficiary is VA income to the dependent.

EXCEPTION: Effective November 17, 1994, an absent dependent's portion may not be VA income to the dependent. See SI 00830.314 C.4. - 6. for an explanation of the absent dependent policy.

3. VA Benefits Received Between 7/90 and 11/16/94 Inclusive

The dependent's portion of an augmented VA benefit paid to a designated beneficiary was income to the dependent only if:

• the dependent was a member of an SSI eligible couple, and

• no one member of the couple was subject to the $30 payment limit (see SI 02005.020D. and SI 02005.020).

Under no circumstances is the dependent's portion counted as income to the designated beneficiary.

4. Apportioned Benefit

A benefit paid by apportionment is VA income to the dependent to whom (or for whom) it is paid, per SI 00830.314 C.1. (This policy has always been in effect.)

D. Procedure

1. Identification of Affected Cases

Verify the amount of a VA dependent's portion for all SSI claims filed or pending on or after November 17, 1994, including denied claims under appeal.

Verify the amount of a VA dependent's portion for posteligibility cases at the first redetermination or other income review completed on or after November 17, 1994.

NOTE: Previous POMS instructions provided that, in the Ninth Circuit, FOs would input a VA dependent's portion to the SSR under the appropriate income code and in a continuing amount of zero (except when the dependent's portion was countable per B.3. or B.4. above). FOs also were to have entered a CG code of “9THX CIRC AUGM VAXX.” Develop cases with such entries if a VA dependent appears to be involved.

2. Effective Date of Input

a. Initial Claims and Denied Claims Under Appeal

Input the verified amount of the VA dependent's portion paid to a designated beneficiary as VA income to the dependent effective with the first month of SSI eligibility or the first month in which VA income was received, but not earlier than November 17, 1994.

b. Posteligibility Cases Requiring Reposting of VA Dependent's Amounts

For cases in which the VA dependent's portion had been reduced to a continuing amount of zero because of Paxton v.Secretary,input the verified amount of the VA dependent's portion paid to a designated beneficiary as VA income to the dependent effective with the month in which the verification is received. (This implementation method will usually eliminate the need to make an overpayment determination for months after the policy effective date). Do not charge a dependent's portion greater than zero for any months before the month in which verification was received, unless:

• the benefit was paid to the dependent by apportionment, or

• the dependent's portion is countable per C.3. above.

If verification of the dependent's portion is already in file when the redetermination or income review is initiated, input the verified amount as VA income to the dependent effective with the current calendar month at the time of the input.

Delete any CG code related to the prior Ninth Circuit policy.

3. Manual Notice When Restoring Dependent's Portions to PE Cases

In the same systems input used to restore VA income to the record, suppress the automated notice. Use the Field Office Notice Software (FONS) to generate an SSI Notice of Planned Action (SSA-L8155-U2).

Prepare a dictated paragraph to explain that:

• beginning (month/year), we consider part of (the designated beneficiary's) VA benefit to be (the dependent's) unearned income, and

• we now use that income to decide the amount of the SSI payment.

NOTE: A manual notice is required only when initially restoring the amounts of VA dependent's portions for cases in which the VA dependent's portion had been reduced to a continuing amount of zero because of Paxton v. Secretary.

E. References

• Augmented VA Benefits, SI 00830.314

• Notice Suppression Instructions, SI 02301.300 - SI 02301.307, SM 01305.530, SM 01305.540

• System Input of a VA Dependent Portion, SI 00830.314 E.2.-3., SM 01005.191, SM 01305.296

• Verification of VA Educational Benefits, SI 00830.306C.

• Verification of VA Pension and Compensation Payments, SI 00830.302C.