SSR 80-18: Title XVI: SSI Treatment of Veterans Administration Payments to SSI Eligibles/Fiduciaries
To clarify supplemental security income (SSI) policy with respect to (1) Veterans Administration (VA) payments made to SSI eligibles where VA augments the payments because the recipient has dependents, and (2) VA payments made to fiduciaries.
Section 1612(a)(2)(B) of the Social Security Act; Regulations No. 16, sections 416.1102(a), 416.1120, and 416.1130(d), 38 U.S.C. Veterans Benefits.
(1) The current Social Security Administration (SSA) policy provides that the total amount of VA disability compensation or pension benefits received by an eligible individual is unearned income to that individual (and is a resource if held to the next quarter). The income or resource is used in determining eligibility and amount of benefits under the SSI program. This policy applies to the designated beneficiary (person to whom the check is actually made payable and thus who may negotiate the check) even when the amount of the check has been augmented because of the beneficiary's dependents. Under VA law a veteran or a widow may receive an increased amount if there is a dependent.
There have been challenges in the courts on SSA's policy of counting the additional (augmented) payments to the VA beneficiary as income to him or her when they are paid to the designated beneficiary. However, the Veteran Administration's legal counsel interprets VA law to mean (in summary) that additional amounts of benefits which are payable by reason the designated beneficiary's having dependents do not vest entitlement in such dependents. Thus, under the VA law as interpreted by that agency, only the designated beneficiary has the right to the augmented portion of the VA compensation or pension payment. Moreover, the beneficiary may use the payment as he or she chooses. The dependent has no (vested) right to any portion of the augmented payment. Therefore, a change of policy on the part of SSA would be inconsistent with the law.
(2) Benefits which are paid to an individual as a fiduciary (a party who receives and manages the benefits for another) are not available for the fiduciary's own use and, therefore, are not counted as unearned income of the fiduciary in the quarter of receipt or as a resource thereafter for the purpose of determining the fiduciary's eligibility for or amount of SSI benefits.
There are situations where a person may be receiving VA benefits as a beneficiary and also as a fiduciary for another person(s). For example, A World War II disabled veteran in receipt of his own VA compensation may also be in receipt of VA benefits in a separate check as a fiduciary on behalf of his incompetent Vietnam veteran son; a widow in receipt of her own VA pension may also be in receipt of VA benefits in a separate check as a fiduciary on behalf of her grandchild; or that the child of a deceased veteran may be in receipt of dependents' educational assistance, and also in receipt of dependents' educational assistance, and also in receipt of dependents' indemnity compensation as a fiduciary on behalf of his or her brother or sister.
(1) VA payments, including those augmented portions which are payable because of dependents, are income to the designated beneficiary for the purposes of determining eligibility and payment amount under the SSI program.
(2) Payments made by the VA to an individual in his or her capacity as fiduciary for another are not income or resources to the fiduciary for the purposes of determining eligibility and payment amount under the SSI program. For SSI purposes, such VA payments are income or resources of the individual for whom the VA payments are made.
Appointment of a fiduciary and the amounts being paid must be documented. When a person is receiving payment as a fiduciary the check legend will show the name of the fiduciary followed by a phrase which indicates the fiduciary's relationship. The most common phrases are "wife of," "guardian of," and "custodian of the child(ren) of." Other documentation may include a VA award letter which shows the same name and phraseology cited above or a copy of VA Form 27-4703, Fiduciary Agreement. The Veterans Administration issues separate checks for any benefits to which a payee is eligible in his or her own right.
Claims Manual section 12304.A-12304.B; E12343.B.4.b.