SSR 78-4: SECTIONS 1611(a) and 1612(a) and (b) (42 U.S.C. 1382(a) and 1382a(a) and (b)) SUPPLEMENTAL SECURITY INCOME -- UNEARNED INCOME -- INCOME BASED ON NEED -- VETERAN'S PENSION

20 CFR 416.1130(d), 416.1145(b)(9), and 416.1165

SSR 78-4

Where claimant's entire non-service connected disability pension from the Veterans Administration (VA) was considered in determining the amount of his Supplemental Security Income benefit and claimant contended that the income exclusion of the first $20 per month should be applied to the pension, held, a VA pension which takes into consideration the annual income of a veteran is unearned income based on need and, thus is not subject to the exclusion under section 1621(b)(2)(A) and implementing Regulations No. 16, section 416.1165, which is applicable only to income other than income paid on the basis of need.

The claimant, a disabled individual, meets all factors of eligibility for Supplemental Security Income. In addition, claimant also receives a non-service connected disability pension from the Veterans' Administration (VA) which is based on meeting certain medical criteria and income limitations. The issue is whether the amount of VA pension constitutes income subject to the exclusion provided under section 1612(b)(2)(A) of the Social Security Act and implementing Regulations No. 16, section 416.1165.

Section 1611(a)(1) of the Social Security Act provides that:

"Each aged, blind, or disabled individual who does not have an eligible spouse and --

(A) whose income, other than income excluded pursuant to section 1612(b), is at a rate of not more than $1,752 (or, if greater, the amount determined under section 1617) . . . for the calendar year 1974 or any calendar year thereafter, . . . shall be an eligible individual for purposes of this title."

Section 1612 of the Social Security Act provides:

"For purposes of this title, income means both earned income and unearned income; and --

(1) earned income means only --

(A) wages as determined under section 203(f)(5)(C); and (B) net earnings from self-employment, as defined in section 211 (without the application of the second and third sentences following subsection (a)(10), and the last paragraph of subsection (a)), including earnings for services described in paragraphs (4), (5), and (6) of subsection (c); and

(2) unearned income means all other income, including --

* * * * * * *

(B) any payments received as an annuity, pension, retirement, or disability benefit, including veterans compensation and pensions, workmen's compensation payments, old-age survivors, and disability insurance benefits, railroad retirement annuities and pensions, and unemployment insurance benefits; . . ." (Emphasis added.)

Section 1612(b) provides:

"Exclusions From Income

"(b) In determining the income of an individual (and his eligible spouse) there shall be excluded --

* * * * * * *

(2)(A) The first $240 per year (or proportionately smaller amounts for shorter periods) of income (whether earned or unearned) other than income which is paid on the basis of the need of the eligible individual; . . ."

Section 416.1165 of Regulations No. 16 provides:

"First $60 of unearned income or earned income --

"The first $60 of unearned income or earned income received in a quarter, not otherwise excluded by § 416.1149 through § 416.1163 shall not be considered in determining countable income under § 416.1115; except income which is paid on the basis of need shall not be excluded under this section."

Claimant's eligibility for Veterans Administration pension was based on meeting not only medical criteria but also certain annual income limitations. Accordingly, the VA pension under section 1612(2)(B) of the Social Security Act is not subject to the exclusion provided under section 1612(b)(2)(A) and section 416.1165 of Regulations No. 16. These provisions are applicable only to earned or unearned income other than income based on need. Since claimant's income was considered in determining his eligibility for the pension it is based on need.

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