On September 10, 1990, plaintiffs filed a statewide class action in
Missouri challenging the Secretary's loan policy that restricted the
definition of “loan” in
20 CFR §
416.1103(f) to transactions that involved an exchange of money and
resulted in treating advances of food or shelter as income for
Supplemental Security Income (SSI) purposes.
On December 16, 1991, following adverse decisions in the Fifth and Ninth
Circuits in Hickman v. Bowen, 803 F.2d 1377 (5th
Cir. 1986) and Ceguerra v. Secretary, 933 F.2d
735 (9th Cir. 1991), SSA announced a policy reinterpretation, through
teletype instruction IT-67-91, effective December 17, 1991, that
permitted bona fide loans of food or shelter to be treated in the same
manner as cash loans (i.e., disregarded) when computing SSI eligibility
and benefit amounts (Attachment 1). IT-67-91 noted the applicability of
the one-year timeframe for reopening prior determinations or decisions
based on this change of position.
On June 10, 1992, the district court certified a class in
Medellin consisting of: 1) all SSI applicants or
recipients who resided in Missouri at the time their SSI applications were
denied, or at the time their SSI benefits were reduced or terminated,
between July 12, 1990, and December 31, 1991, because the Secretary
counted as income in-kind support and maintenance (IKSM) that the
applicant or recipient was obligated to repay under a loan agreement; and,
2) all SSI applicants and recipients who resided in Missouri during the
period July 12, 1990, to September 10, 1990, and were either appealing or
could have appealed a determination or decision that resulted in or upheld
a denial, reduction or termination of SSI benefits that occurred because
the Secretary counted as income IKSM that the applicant or recipient was
obligated to repay under a loan agreement while a resident of Missouri.
On September 8, 1992, SSA published
Social
Security Ruling (SSR) 92-8p to provide a uniform national policy
interpretation on the treatment of advances of IKSM and to further
implement the December 1991 policy change.
On December 18, 1992, the district court issued an order granting
plaintiffs' motion for summary judgment and revising its class
certification order to address the effect of the Secretary's policy change
on the merits of potential class member claims. The court found that the
Secretary's former loan policy was invalid but that the Secretary's change
in position had rendered plaintiffs' action moot with respect to
inclusion of those individuals who had “pending or available
administrative claims” as of December 16, 1991. However, the court
also found that those individuals with “lapsed claims,” i.e.,
those individuals whose SSI benefits had been denied, reduced or
terminated and who failed to exhaust fully the available administrative
remedies and/or seek judicial review prior to December 16, 1991, were
improperly excluded from the class because they would be unable to
benefit from the Secretary's change in policy. Thus, the court modified
the class definition set forth in its order of June 10, 1992, concluding
that waiver of exhaustion of administrative remedies was appropriate
regardless of whether the individual had presented a timely § 405(g)
action. The court concluded that November 10, 1986, the date on which the
Fifth Circuit invalidated the Secretary's former loan policy in
Hickman, was a reasonable opening date for the
class because the Hickman decision should have
put the Secretary on notice that the validity of its former policy was in
question.
On February 11, 1993, the court denied the Secretary's motion to alter or
amend the order of December 18, 1992. The Secretary filed a timely notice
of appeal in the United States Court of Appeals for the Eighth Circuit
with respect to the inclusion of “lapsed claims” in the class
definition but did not appeal the inclusion of live claims. The merits of
plaintiffs' complaint was no longer at issue because of the Secretary's
December 1991 change of position. The parties signed a partial consent
judgment on December 1, 1993, for the purpose of proceeding with
implementation of relief for those individuals with live claims.
On December 16, 1993, the district court approved the parties' partial
consent judgment (Attachment 2). The partial consent judgment requires
that the Secretary apply the new loan policy to all individuals who meet
the class definition set forth in the district court's June 10, 1992
order; however, individuals with “lapsed claims,” i.e., those
individuals who failed to fully exhaust the available administrative
remedies and/or seek judicial review between November 11, 1986, and July
11, 1990, who were added to the class by the district court's order of
December 18, 1992, were excluded from relief under the partial consent
judgment.
On April 28, 1994, the Eighth Circuit reversed the district court's order
of December 18, 1992, with respect to inclusion of individuals with lapsed
claims in the Medellin class. By this action,
the partial consent judgment became descriptive of the full scope of
relief available in the Medellin class
action.
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF
MISSOURIWESTERN DIVISION
UPON agreement and stipulation of the
parties, it is hereby ORDERED, ADJUDGED and DECREED as follows:
A plaintiff class was certified on June 10,
1992, and subsequently modified on December 18, 1992. Under the Court's
modified order, the class definition includes all SSI applicants or
recipients residing in the State of Missouri who have made or will make a
claim for SSI benefits and received or will receive a decision from the
defendant denying his or her claim at any administrative level in whole or
part since November 10, 1986, on the basis that the applicant/recipient
received in-kind support which defendant considered income, although the
individual was obligated to repay the amount under a loan agreement.
On December 18, 1992, the court granted
plaintiffs' motion for summary judgment. The final judgment of the
district court was entered on March 3, 1993. Defendant filed a timely
notice of appeal on April 30, 1993, challenging the district court's
inclusion of claims lapsing prior to July 12, 1990, in the class.
Defendant did not appeal the judgment on the merits or the inclusion of
persons in the class who had live claims1 on or after July 12,
1990. The purpose of this Partial Consent Judgement is to provide the
following relief for the class members not subject to the pending
appeal:
-
Effective December 17, 1991, defendant began treating in-kind advances of
food and/or shelter in the same manner that cash loans and credit
purchases are treated under
20 C.F.R. §
416.1103(f), with the result that bona fide in-kind loans are no
longer charged as income to SSI applicants and recipients. On December 16,
1991, the Secretary issued teletype instructions IT-67-91 (Exhibit 1) to
provide the appropriate operating components of the Social Security
Administration (SSA) with guidance on implementing the change of position
regarding treatment of in-kind loans. In July 1992, the Secretary issued
POMS instructions to implement the change of policy (Exhibit 2), and
subsequently published
Social
Security Ruling (SSR) 92-8p in 57 Fed. Reg. 40918 (September 8, 1992)
which further explains the new policy. (Exhibit 3) Defendant agrees to
apply this change of policy, as explained in IT-67-91,
SSR
92-8p and the applicable POMS, to all individuals who meet the class
definition set forth in the court's June 10, 1992 order. Under the
court's order, class members must meet the following requirements:
(1) The member shall be a SSI applicant or recipient residing in the State
of Missouri who has made or will make a claim for SSI benefits; and
(2) The member received or will receive a decision from defendant denying
his or her claim at any administrative level in whole or part; and
(3) The basis for this denial must be that the applicant/recipient
received in-kind support which defendant considered income, although he or
she was obligated to repay the amount under a loan agreement or business
arrangement; and
(4) The putative member must have had a § 405(g) claim, based upon
facts satisfying the above three factors, that arose no more than sixty
(60) days prior to September 10, 1990 (the filing date of plaintiffs'
complaint).
-
By this agreement, all class members with claims lapsing between November
10, 1986, and July 12, 1990, are excluded from relief pending final
resolution of all appeals of the court's December 18, 1992, certification
order. This judgment applies to the class certified by the court order of
June 10, 1992, and specifically includes: (1) SSI applicants and
recipients who resided in Missouri at the time their SSI applications were
denied, or at the time their SSI benefits were reduced or terminated
between July 12, 1990, and December 31, 1991, because the Secretary
counted as income in-kind support and maintenance that the applicant or
recipient was obligated to repay under a loan agreement; and (2) SSI
applicants and recipients who resided in Missouri during the period July
12, 1990, to September 10, 1990, and were either appealing or could have
appealed a determination or decision that resulted in or upheld a denial,
reduction or termination of SSI benefits that occurred because the
Secretary counted as income in-kind support and maintenance that the
applicant or recipient was obligated to repay under a loan agreement while
a resident of Missouri.
-
Within 120 days of the date this agreement is signed by both parties, SSA
(Social Security Administration) will identify potential class members
entitled to redeterminations pursuant to this agreement from its computer
records. Within 150 days of the date this agreement is signed by both
parties, SSA will send by first class mail a copy of the attached notice
(Exhibit 4) to individuals whom SSA identifies from its computer records
as potential class members. SSA will bear the costs of such notification.
The notices will include a self-addressed postage-paid return envelope for
mailing the reply form to SSA.
-
To qualify for consideration for relief, an individual must contact SSA
within 60 days of the date he or she receives the notice unless he or she
can establish good cause for not contacting SSA within the 60 day period.
Defendant will assume that an individual receives a notice five days after
the date on the notice, unless he or she can show that it was not
received within the five day period.
20 C.F.R. §
416.1401. Individuals receiving notice under this paragraph may
request class membership by mailing the reply form to the address
provided, by telephone, in writing, or in person at any Social Security
office. To decide whether an individual has established good cause for
missing the deadline to request review under this agreement, defendant
will apply the criteria in
20 C.F.R. §
416.1411 and
Social
Security Ruling 91-5p.
-
With respect to notices that are returned as undeliverable, SSA will
attempt to obtain updated addresses from the Missouri Department of Social
Services (DSS). Any attempt by SSA to obtain updated addresses is subject
to the requirements of the Privacy Act, as amended by the Computer
Matching and Privacy Protection Act, 5 U.S.C. § 552a. SSA will not be
obligated to bring legal proceedings to gain access to such data system
records. SSA will mail notices to potential class members for whom new
addresses are provided by the DSS.
-
SSA will instruct those persons making class membership findings that
class membership is not precluded by a prior decision reducing an
individual's SSI benefits based on the receipt of in-kind support and
maintenance even though the individual alleged that the support was made
pursuant to a loan of food and/or shelter.
-
(a) SSA will screen the claim of each individual who timely responds to
the notice discussed in paragraph three to ascertain whether the
individual could become eligible or re-eligible for SSI and/or receive
additional SSI if he or she were to meet the criteria under paragraph one.
SSA will inform the individual in writing of the outcome of the screening
and a copy of this notice will be sent to counsel for plaintiffs.
(b) For each requester who is found to have met the criteria in (a), SSA
will determine whether the individual meets the criteria in paragraph one
and properly requested review under paragraph four. If SSA finds that a
requester does not meet the criteria of paragraph one, SSA will notify the
individual and explain why the requester is not a class member. A copy of
this notice will be sent to counsel for plaintiffs. If SSA determines
that the requester did not properly request review under paragraph four,
SSA will notify the individual and explain that the request for review
was not timely. A copy of this notice will be sent to counsel for
plaintiffs.
-
If SSA determines that an individual is not a class member based on a
procedural defect in requesting review or because the individual does not
meet prongs one or four of the class definition contained in paragraph
one, and the individual disputes that determination plaintiffs' counsel
shall contact a designated person within the Office of the General
Counsel, Department of Health and Human Services, and the parties will
attempt to informally resolve the dispute. The Secretary will make
available to plaintiffs' counsel the files of any persons denied class
membership at a mutually acceptable location in Kansas City, Missouri.
Plaintiffs' counsel shall review the files within 60 days of the date the
files are made available to them. The court shall retain jurisdiction to
resolve class membership disputes of this nature which the parties are
unable to resolve.
-
Defendant further agrees to:
-
Recognize and accept as determinative and final any prior determination of
the Secretary at any administrative level for those members of the group
as defined in paragraph one, that a bona fide loan of food and/or shelter
existed, and to honor that determination without further inquiry; and
-
Provide the right to a determination on the issue of the existence of a
bona fide in-kind loan for individuals (1) who timely request review under
paragraph four, and (2) who could become eligible or re-eligible for SSI
and/or receive additional SSI if the individual were to meet the criteria
under paragraph one. Determinations made under this paragraph will be
afforded the appeal rights set forth in 20 C.F.R. Part 416, Subpart N.
-
Individuals described in paragraph 9(b) will be contacted by SSA and
informed of their right to submit evidence in support of their claims. An
appointment will be made to interview an individual, if SSA finds that an
interview is necessary, or if an individual requests an interview.
Individuals can request an interview by telephone, in writing, or in
person at any Social Security office. SSA will make determinations on
individuals' claims that they received loans of food and/or shelter. A
copy of the determination will be sent to class counsel.
-
When an individual described in paragraph 9(b) does not have an active
claim pending at any administrative level at the time of the interview,
SSA will review the loan allegation as though it were a request for
reconsideration.
-
With respect to individuals who are class members, for all months for
which it is determined that such individuals received food and/or shelter
pursuant to a bona fide loan, SSA will determine the class members' SSI
benefit amounts and/or eligibility without counting such food and/or
shelter as income and inform the individual in writing of that
determination. If the determination results in a reinstatement of
benefits, the first month to which the determination applies is the first
month for which benefits are reinstated.
-
Within 150 days of the date this agreement is signed by both parties, and
every 90 days thereafter, defendant shall submit a written report to the
court and to plaintiffs' counsel, which includes the following
information:
-
The number of individuals to whom the notification under paragraph three
was sent.
-
The number of individuals who responded to the notices described in
paragraph three.
-
The number of individuals determined to be class members.
-
The number of individuals determined not to be class members.
-
SSA will distribute POMS instructions reasonably necessary to carry out
the terms of this partial consent judgment. A draft of proposed
Medellin POMS will be provided to class counsel
for comment prior to finalization. The Secretary will consider but is not
bound by class counsel's comments. At the same time as such instructions
are sent to all appropriate offices, divisions, levels, departments, etc.,
of the Social Security Administration, SSA will also send plaintiffs'
counsel the final instructional materials.
-
SSA agrees to recompute Donald Langley's SSI benefits for December 1988
through July 1989, and for October 1989, and December 1989 without
counting as income in-kind support and maintenance that he received as a
loan.
-
Plaintiffs agree that if the Secretary should lose her appeal of the
lapsed claims issue before the Eighth Circuit Court of Appeals, they will
not pursue implementation of relief for lapsed claims until the time for
seeking certiorari to the Supreme Court has run, and if certiorari is
sought by the Secretary, until much time as all final appeals in the case
have been resolved.
-
The court shall retain jurisdiction over this matter for the enforcement
of the provisions of this Partial Consent Judgment.
LET JUDGMENT BE ENTERED ACCORDINGLY
Dated this 16th day of
December, 1993.
Exhibit 1 - [See IT-67-91 at Attachment 1]
Explanation of Acronyms Designating Addresses of Teletype IT-67-91—
Medellin, et al.
Exhibit 2
As a result of several challenges in the courts to our policy of not
recognizing loans of in-kind support and maintenance (ISM) from within a
household, the Commissioner decided to change the policy. On December 16,
1991, a teletype (IT-67-91) was released to all field offices to implement
the policy change nationwide.
This transmittal manualizes and expands on the instructions in that
teletype. It also includes additional instructions for implementing the
policy change for residents of the Fifth and Ninth Circuit Courts. This
transmittal also provides instructions for effectuating the U.S. District
Court's decision in the case of Gale R. Johnson, et
al. v. Sullivan regarding loans of ISM from within a household for
residents of Idaho.
This transmittal obsoletes teletype IT-67-91. It contains new material and
section E00835.481 should be read in its entirety by all field offices
serving Idaho residents.
E00835.431 Loans of Food and/or Shelter from Within a Household
This new section supplements the instructions in POMS
SI
00835.481 on contributions for residents of the Fifth Circuit
(Louisiana, Mississippi, and Texas). Those instructions were required as
a result of SSA's acquiescence in the court case
Hickman v. Bowen. As a result of the change in
policy on loans of ISM from within a household, national policy is now
the same as the policy ordered by the Circuit Court of Appeals in the
Fifth Circuit.
This new section provides that when food and/or shelter that an individual
receives from the household in which he/she lives must be paid for at a
future date, we will no longer determine that the individual receives ISM
from the household, provided that the advance of food and shelter is a
bona fide loan. This policy is effective beginning with December 17,
1990.
This section also provides instructions for applying the policy to
residents of the Fifth Circuit as a result of the
Hickman Acquiescence Ruling, and to residents of
the Ninth Circuit as a result of the Circuit Court of Appeals decision in
Ceguerra v. Secretary. (The Ninth Circuit
includes Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana,
Nevada, the Northern Mariana Islands, Oregon, and Washington.) In lieu of
an acquiescence ruling that would otherwise be required under SSA
acquiescence policy, the Commissioner decided to issue a Social Security
Ruling (SSR) to change national policy on loans of ISM. (That ruling had
not yet been published in the Federal Register when this
transmittal was printed. Field offices will be notified in a future NEWS
item when the ruling is published. The date of publication and ruling
number may be filled in at that time.) Special rules apply to requests for
application of the new policy to a determination or decision that was
made on or after the court of appeals' decision applicable to the
claimant's State of residence.
E00835.432 Loans of Food and/or Shelter from Within a
Household—Idaho Residents
This new section provides special instructions for processing cases of
class members under the Johnson, et. al. v.
Sullivan court case. These instructions are limited to residents of
Idaho.
E00835.483 Developmental Procedures for Johnson
Cases
This new section provides instructions for developing the nonmedical
factors or eligibility and payment amount in
Johnson cases. These instructions allow use of
streamlined verification and documentation, similar to those used to
process Zebley cases.
TM 29
7-92 Table
of Contents
__________________________________________________________________________
Section
Rental Subsidies for Residents of New York,
Connecticut, and
Vermont .................................................E00835.381
Loans of Food and/or Shelter from Within a Household
.......................E00835.481
Loans of Food and/or Shelter from
Within a Household
Idaho Residents
..........................................................E00835.482
Developmental Procedures for Johnson Cases
.................................E00835.483
E00835.481 LOANS OF FOOD AND/OR SHELTER FROM WITHIN A HOUSEHOLD
Exhibit 3
Social Security
Ruling
__________________________________________________________________________
SSR
92-8p EFFECTIVE/PUBLICATION DATE: 09/08/92
__________________________________________________________________________
General Information
Social Security Rulings (SSRs) are published under the authority of the
Commissioner of Social Security and make available to the public a series
of precedential decisions relating to Federal old-age, survivors,
disability, supplemental security income, and black lung benefits
programs. SSRs may be based on case decisions made at all administrative
levels of adjudication, Federal court decisions, Commissioner's decisions,
opinions of the Office of the General Counsel, and other policy
interpretations of the law and regulations. SSRs are first published in
the Federal Register. SSRs are effective upon
publication, and the effective date is shown on the first page of each
Ruling. Although SSRs do not have the force and effect of the law or
regulations, they are binding on all components of the Social Security
Administration, in accordance with section
402.35(b)(2)
of Social Security Regulations and are to be relied upon as precedents in
adjudicating other cases. An SSR may be superseded, modified, or revoked
by later legislation, regulations, court decisions, or Rulings.
SSRs are published on a flow basis and may be purchased by annual
subscription or by individual copy from the Superintendent of Documents,
U.S Government Printing Office, Washington, D.C. 20402. A
Cumulative Edition, reproducing all of the SSRs
published in 1990 and 1991 that have not been superseded or rescinded, may
also be purchased from the Superintendent of Documents. Since the cost of
these publications and subscription changes periodically, the current
price will be supplied upon request to the Superintendent of Documents. A
check or money order covering the price of the publication should
accompany the order. SSRs from 1960 through 1989 are available to the
public, free of charge, upon request to the Social Security
Administration, Office of Regulations, 3-8-5 Operations Building, 6401
Security Boulevard, Baltimore, MD 21235. Requests for free copies of the
SSRs must include the requester's street address rather than a post office
box.
__________________________________________________________________________
Social Security
Ruling
__________________________________________________________________________
SSR
92-8p EFFECTIVE/PUBLICATION DATE: 09/08/92
__________________________________________________________________________
POLICY INTERPRETATION RULING
TITLE XVI: SSI LOAN POLICY, INCLUDING ITS
APPLICABILITY TO ADVANCES
OF FOOD AND/OR SHELTER
Purpose: This Ruling defines a loan for SSI purposes. It also explains
when the proceeds of a loan count as resources under the SSl program, when
they do not count as income, and how SSA treats a loan agreement when the
lender is an SSI applicant or recipient. Social Security Ruling (SSR)
78-26 previously addressed these issues.
In addition, this Ruling reinterprets SSI regulations to permit treating,
as the basis for a loan, food or shelter that an SSI applicant or
recipient receives from someone in whose household he or she lives and has
an obligation to pay for at a future date.
This Ruling supersedes SSR 78-26.
Citations (authority): Sections
1611 and
1631(e)(1)(B)
of the Social Security Act, as amended, Regulations No. 16. Subpart K,
sections 416.1103(f) and 416.1133(a).
Background: The Social Security Act, at section 1612(a)(21(A), provides
that unearned income includes in-kind support and maintenance.
Regulations, at 20
CFR 416.1121(h), define in-kind support and maintenance as food,
clothing, and shelter furnished to an SSI applicant or recipient.
Regulations, at 20
CFR 416.1103(f), provide that the proceeds of a loan are not
income.
In 1978, the Social Security Administration (SSA) published SSR 78-26,
setting forth its policy regarding the treatment of loans under the SSI
program. SSR 78-26 gave the following information:
When an individual borrows and receives money through a lending process,
as a borrower, or receives money as repayment on an outstanding loan
(lender), a determination must be made whether such money is considered a
resource or income for SSI eligibility and payment purposes. Since
inception of the SSI program, proceeds of a loan have not been considered
income to the borrower because of the obligation to repay. Existing
regulations do not spell this out. Similarly, since inception of the SSI
program, outstanding loans made by an SSI applicant or recipient from
money available to him/her have been considered a countable resource to
the extent there has been a negotiable instrument showing existence of a
loan agreement. This is because a negotiable instrument is convertible to
cash and, therefore, meets the definition of a resource for SSI purposes.
In such a case, the negotiable instrument would be a countable resource to
the lender.
Existence of a negotiable instrument, however, is not the sole criterion
of a bona fide loan. The interpretation of a bona fide loan for SSI
purposes is that where a borrower receives money (from relatives, friends
or others) a loan is created if there is an understanding between the
parties that the money borrowed is to be repaid and it is recognized as an
enforceable contract under State law. The transaction which creates a
loan can be in the form of a written or oral agreement if enforceable
under State law. Absent a negotiable instrument, a bona fide loan must
still be convertible to cash in order to be considered a resource for SSI
purposes.
Under this policy interpretation, a householder's advance of food or
shelter to a household member could not be treated as a loan because it
did not involve an actual advance of cash.
In 1986, in Hickman v. Bowen (803 F.2d 1377), the
Fifth Circuit Court of Appeals ruled that there was no jurisdiction for
treating cash and in-kind income differently under
20 CFR
416.1103(f). Since both are income, both could be the subject of a
loan. The court concluded that food or shelter provided by a householder
to a household member is a loan if the household member is obligated to
repay the debt.
In 1988, SSA issued Acquiescence Ruling (AR) 88-7(5) to implement the
Hickman decision for individuals residing in the
States in the Fifth Circuit (Louisiana. Mississippi, and Texas). AR
88-7(5) instructed that when an SSI claimant or recipient alleges
receiving in-kind support and maintenance, that in-kind support and
maintenance will be considered a loan and its value will not be
considered for the purpose of calculating SSI benefits, but only if the
applicant or recipient can demonstrate that the in-kind support and
maintenance received was, in fact, loaned to him or her in realistic
anticipation of repayment, that he or she intends to repay the debt, and
that under the terms of SSR 78-26 a bona fide loan agreement has been
made.
In 1991, in Cequerra v. Secretary of Health and Human
Services (933 F.2d 735), the Ninth Circuit Court of Appeals issued
an opinion which adopted the rationale of the Fifth Circuit Court of
Appeals in Hickman. Absent a change in national
policy, SSA acquiescence policy would thus require the issuance of another
acquiescence ruling similar to AR 88-7(5) for individuals residing in
the Ninth Circuit (Alaska. Arizona, California. Guam, Hawaii, Idaho,
Montana, Nevada, Northern Mariana Islands, Oregon, and Washington).
In view of these recent court decisions, SSA has decided to reinterpret
its regulations on the treatment in the SSI program of advances of food
and shelter to an SSI applicant or recipient by an individual in whose
household he or she is residing.
Policy Interpretation: For purposes of determining when a loan is
not considered income and when a loan is considered a countable resource
under the SSI program, the following policies apply:
-
A loan means an advance from lender to borrower that the borrower must
repay, with or without interest. A loan can be cash or an in-kind advance
in lieu of cash. For example, an advance of food or shelter can represent
a loan of the pro rata share of household operating expenses. This applies
to any commercial or noncommercial loan (between reIatives, friends, or
others) that is recognized as enforceable under State law. The loan
agreement may be oral or written, as long as it is enforceable under State
law.
-
Any advance an SSI applicant or recipient receives that meets the above
definition of a loan is not income for SSI purposes since it is subject to
repayment. Any portion of borrowed funds that the borrower does not spend
is a countable resource to the borrower if retained into the month
following the month of receipt.
-
When money or an in-kind advance in lieu of cash is given and accepted
based on any understanding other than that it is to be repaid by the
receiver, there is no loan involved for SSI purposes. It could be a gift,
support payments, in-kind support and maintenance, etc., and must be
treated as provided for in the rules applicable to such items.
-
If there is a bona fide loan as defined in (1) above, there is a
rebuttable presumption that the loan agreement is a resource of the lender
for SSI purposes.
For example, an SSI applicant or recipient reports making a loan to a
relative. The loan agreement is oral. The oral agreement is found to be
binding under State law. Accordingly, the loan is presumed to be a
resource of the lender because it can be converted to cash if the lender
calls for repayment from the borrower. The lender can rebut this
presumption by showing that the loan cannot be converted to cash—for
example, because the borrower died without leaving an estate.
-
Money a lender receives as repayment of a loan (which meets the definition
of a resource) reduces the outstanding loan balance and is considered a
countable resource to the lender inasmuch as the repayment amount
represents a return of part of the loan principal; i.e., the total value
of the resource, which is the repayment amount plus the outstanding loan
balance, remains unchanged.
-
Interest on a loan is counted as unearned income to the lender in the
month of receipt and, if retained, is a resource as in (2) above.
Documentation: Evidence must be obtained with respect to the
existence of a bona fide loan agreement. The burden of proof with respect
to the bona fide nature of the loan is with the applicant or
recipient.
Effective Date: The effective date of this Ruling is the date of
its publication in the FederaI Register.
Determinations made before that date regarding advances of food or
shelter may be reopened and revised subject to the rules of
administrative finality of
20 CFR
416.1488(a).
The AR for the Hickman decision (AR 88-7(5)), is
being rescinded through a separate publication in the
FederaI Register. However, anyone to whom the
Hickman AR would have applied, had it remained in
effect, may request application of the policy contained in this Ruling to
determinations made by SSA between the date of the Fifth Circuit Court of
Appeals decision (November 10, 1986) and the date this Ruling is
published in the FederaI Register if he or she
first demonstrates that application of this Ruling could change the prior
determination or decision. In addition, anyone to whom a
Cequerra AR would have applied, had one been
issued, may request application of this Ruling to determinations made by
SSA between the date of the Ninth Circuit Court of Appeals decision (May
15, 1991) and the date this Ruling is published in the
FederaI Register if he or she first demonstrates
that application of this Ruling could change the prior determination or
decision.
Exhibit 4
Please read this letter carefully. If you think we owe you money,
please let us know right away.
We are writing to tell you that we may owe you money because of a recent
court case about Supplemental Security Income (SSI). The name of the case
is Medellin v. Sullivan. This case is about the
way we figure SSI for some people. As a result, you may be able to get
SSI or more SSI. We may owe you money even if you are no longer an
SSI recipient.
WE COUNT FOOD AND SHELTER FROM OTHERS AS INCOME
If you live in your own home and someone else who lives with you gives you
food or pays for your food or shelter, we count that help as income. If
you live in someone else's home or apartment, we count the food and
shelter you receive from the person you live with if you do not pay for
it. We used to count this help as income even if you had to pay back the
people who helped you with your food and shelter.
HOW THE MEDELLIN CASE MAY AFFECT YOU
The Medellin case says that we should not count
the help you received for your food and shelter if the help you
received was intended to be a loan. It could be a loan even if you
did not put the loan in writing. If you are not sure if you had a loan,
you should contact us anyway.
YOU MAY BE DUE SSI OR MORE SSI
Under the Medellin case, Missouri residents may
be able to get SSI or more SSI if:
-
You received help with your food or shelter (or both); and
-
we counted this help that you received with your food or shelter when we
decided if you could get SSI or when we figured the amount of your SSI
payment; and
-
you and the person who helped you agreed that you had to pay them back for
all the help you received; and
-
sometime after July 7, 1990 you received a letter from us telling you that
we were counting the help you received with your food or shelter (or
both), or
-
sometime after July 11, 1990 you were appealing our decision to count this
help as income, or
-
sometime after July 11, 1990 you could have appealed our decision to count
this help as income.
WHAT YOU SHOULD DO IF YOU THINK MEDELLIN APPLIES
TO YOU
If you think we owe you money because of the
Medellin case, you must contact us within 65 days
of the date of this notice. You can do this by sending the enclosed
"Medellin v. Sullivan Reply Form" to us in the
return envelope provided, or by calling or visiting your local Social
Security office.
WHAT WE WILL DO
When we hear from you, we will:
If we decide that the help you received was a loan, then we may owe you
SSI money. We will figure the amount we owe you, and will send you a
letter explaining the amount and when to expect your payment.
If we decide that you are not eligible for any more SSI, we will send you
a letter explaining the reason(s), and what to do if you disagree.
IF YOU HAVE ANY QUESTIONS
If you have any questions, you may call your local Social Security office.
The address and telephone number of your local office is printed at the
top of the first page of this letter.
Be sure to tell us that you got a Medellin
letter. It will help us answer your questions.
Also, you may write or visit any Social Security office. If you visit a
local Social Security office, bring this letter with you. You may call
ahead to make an appointment. This will help us serve you more quickly
when you arrive at the office.
IF YOU NEED MORE INFORMATION OR HELP
If you need help reading this letter or deciding what you should do, you
can ask a friend, a relative, or a lawyer. You may be eligible for free
legal advice from Legal Aid of Western Missouri, Inc. Their telephone
number is (816) 474-6750. REMEMBER, if you think we owe you money, please
fill out the enclosed “Medellin v. Sullivan Reply Form” and
send it to us right away, or call or visit your local Social Security
office.
If we do not hear from you within 65 days of the date of this notice, we
might not be able to help you.
Enclosure:
Medellin v. Sullivan Reply Form
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Social Security Administration
__________________________________________________________________________
MEDELLIN
v. SULLIVAN REPLY
FORM
__________________________________________________________________________
IMPORTANT
YOUR CASE WILL BE DROPPED UNLESS WE HEAR FROM
YOU
__________________________________________________________________________
IF YOU WANT THIS CLAIM REVIEWED, PLEASE SIGN AND DATE THIS FORM AND RETURN
IT IN THE SELF-ADDRESSED, PRE-PAID ENVELOPE.
SIGNATURE______________________ DATE___________________
Enter the area code and the telephone number where we can call you.
(AREA CODE) __________________ TELEPHONE NO. ____________
If your address is different than shown above, or if your Social Security
Number is different, please write in below your correct address and/or
your correct Social Security Number
__________________________________________________________________________
ADDRESS (NUMBER AND STREET, APT.NO., P.O. BOX or RURAL ROUTE)
______________________________________________
_______________________
CITY and STATE ZIP CODE
____________________________________________
SOCIAL SECURITY
NUMBER
Privacy Act Notice
The Social Security Act (Section 205(a) of title II, 702 of title VII,
1631(e)(1)(A) and (B) of title XVI, and 1869(b)(1) and (c) of title XVIII
allows us to collect the information on this form. We will use this
information to process your claim. You do not have to give us this
information, but without it we may not be able to process your claim.
Information may be disclosed to another person or to another government
agency for the Administration of the Social Security program or for the
administration of programs requiring coordination with the Social Security
Administration. These and other reasons why information about you may be
used or given out are explained in the Federal Register. If you want to
learn more about this, contact ant Social Security office.
1 A live claim for purposes of this class, is one which was
pending at any administrative level or in federal court on or after July
12, 1990, or one for which the period to appeal an administrative or
judicial decision had not run on July 12, 1990.