TN 3 (05-14)

A. Introduction to pass-along provisions

Congress approved pass-along legislation because some States reduced their supplementary payment levels when Congress enacted cost-of-living adjustments (COLAs) in the Federal Benefit Rate (FBR). As a result, some Supplemental Security Income (SSI) recipients often did not receive the full amount of the COLA increase.

B. Definitions

1. March 1983 payment levels

These payment levels must be maintained in order for a State to comply with pass-along requirements. The passage of Section 402 of P.L. 98-21 (the Social Security Amendments of 1983) established this provision.

2. March 1983 payment levels as adjusted

States could adjust (reduce) their March 1983 payment levels by up to $10.30 for an individual and up to $15.40 for a couple effective July 1, 1983. This represents the difference between the increase to the FBR, $20 for an individual and $30 for a couple and the amount the FBR would have increased on July 1, 1983, had there been a COLA (3.5 percent). Congress changed the effective date of COLAs from July 1 to January 1 beginning in January 1984.

3. State supplementary payment level

This represents the total mandatory minimum or Optional State Supplementary payment, or both, that a State provides an individual (or couple) with no countable income in excess of the FBR. Each State payment variation represents a separate payment level. For information on elements of state supplementary payments, see SI 01415.000.

4. Mandatory Minimum State Supplementary (MMSS) payment level

This equals a recipient's December 1973 minimum income level (MIL) plus any State increases less any reductions made after December 1973 due to changes in special needs or circumstances less the Federal SSI benefit rate.

5. OSS payment level

This refers to a State payment made in supplementation of Federal SSI benefits. For more information on OSS payments, see SI 01401.001B.5. and SI 01415.000. There are three types of OSS payments.

a. Flat grant amount

The OSS payment level for March 1983 for flat grant amounts is the total that an individual (or couple) with no countable income received for March 1983 in excess of the Federal SSI benefit for March 1983.

b. Individual budget amount

The OSS payment level for individually budgeted grant amounts for March 1983 is the amount that the State budgeted for March 1983 in excess of the Federal SSI benefit for March 1983 for an eligible individual (or couple) having the same needs and no countable income.

c. Per diem grant amount

The OSS payment level for March 1983 for per diem grant amounts is the total dollar amount the State paid for a particular month to an eligible individual (or couple) with no countable income for that month, at rates in effect in March 1983 (e.g., number of days in the calendar month multiplied by the per diem rate for March 1983, plus any personal needs allowance for March 1983) in excess of the Federal SSI benefit for March 1983.

6. Total state expenditures

This equals the State's total payments for both MMSS and OSS payments in the appropriate 12-month period less the amounts of any recoveries and adjustments.

7. 12-month period

For States using the total expenditures method, this refers to a period of 12 calendar months beginning on the effective date of an FBR increase.

8. Shortfall

This refers to the amount by which total State expenditures in the relevant 12-month period are less than the total expenditures in the immediately preceding 12-month period.

9. Combined level

This represents an amount equal to the total of the FBR plus the State supplementary payment for each payment category that must be provided in any month after March 1983 in order for a State to be in compliance based on maintaining required levels.

C. Pass-along policy

1. State agreements with Commissioner

In order to be eligible to receive Medicaid reimbursement, any State that makes supplementary payments on or after June 30, 1977, must have in effect an agreement with the Commissioner by which the States agree to:

• continue to make such payments; and

• maintain such payments at the required levels.

2. State options for compliance

SSA will determine that States are in compliance with the pass-along requirements if they accomplish either of the following:

• maintain supplementary payments at March 1983 levels or March 1983 levels as adjusted; or

• maintain total State expenditures in a relevant 12-month period at least equal to expenditures in the prior 12-month period.

States may create a new state-administered state supplement category and limit the number of individuals who receive payments in that category or the total amount of funds spent on payments to those individuals.

3. State noncompliance

a. Noncompliance with pass-along procedures

There are two situations in which States may be found out of compliance:

• Lack of agreement

SSA will find a State to be out of compliance with the pass-along procedures if the State fails to have an agreement in effect or a State terminates the agreement. For information on monitoring and noncompliance with pass along, see SI 01403.005B.1.

• Failure to maintain required supplementary levels or meet total expenditures test

SSA will find a State to be out of compliance with the pass-along procedures if the State fails to maintain required supplementary levels or meet the total expenditures test. For information on monitoring and noncompliance with pass along, see SI 01403.005B.2.

NOTE: If SSA finds that a State is determined to be out of compliance with the pass-along requirements and the State does not take corrective action to achieve compliance, the State could lose Federal funding for its title XIX program.

b. Remedies for noncompliance with pass-along requirements

If States fail to meet either requirement in SI 01403.001C.2. in this section, they must do one of the following:

• restore retroactively any deficient level(s) and issue one-time payments to all affected recipients; or

• increase total expenditures in the current 12-month period to cover any existing shortfall in the prior 12-month period.

4. State responsibilities for providing information

a. Providing documentation of pass-along compliance

States must submit certain information to SSA:

• each of the State's supplementary payment levels including subsequent changes; and

• any changes in State eligibility requirements.

b. Submitting additional information – failure to meet pass-along compliance

States need to submit certain additional information if they fail to meet the requirements stated in SI 01403.001C.2. in this section:

• total expenditures for a 12-month period beginning on the date of an FBR increase; and

• advance estimate of State expenditures in future 12-month periods covered by the agreement.

5. Special provision of the law regarding FLA-D

Section 1618, as amended by Section 9119 of P.L. 100-203, requires States to pass along the $5 increase in the personal needs allowance payable to recipients in Federal Living Arrangement (FLA) “D” beginning July 1, 1988. This is accomplished by requiring States to maintain the combined Federal and State payment level to recipients in FLA “D” in effect in October 1987. If no Optional State Supplementary (OSS) payments were made in October 1987, then the State must maintain the combined payment level for the first subsequent month for which OSS payments were made, increased by the $5 in the case of individuals and by $10 in the case of couples.

D. Related policy – certificate of authority

Each State that has agreed to comply with the pass-along provision will furnish a certificate of authority stating the name and official title of the person(s) authorized to submit the required information to the Commissioner. The State may wish to designate one or more officials so that they may act as alternates to sign the form.

The certificate must be signed by the person occupying the position of head of the agency designated to act on behalf of the State, or by the head of an organization in the direct line of authority above the designated agency. The form for an acceptable certificate of authority is shown in SI 01403.001E in this section. It may be modified, however, to conform to State regulations or specific needs.

E. Exhibit of certificate of authority

CERTIFICATE OF AUTHORITY

“I hereby certify that the following officials are authorized to submit State supplementary payment level information, information as to total supplementary payments for pertinent 12-month periods and advance estimates of such expenditures, to certify documents, and to represent the designated State agency in fiscal matters in accordance with the SSI mandatory pass-along agreement between the State of            and the Commissioner of the Social Security Administration.”