SSR 80-32: Section 1612 (42 U.S.C. 1382a) Supplemental Security Income—Unearned Income—Clothing Allowances Paid by the Veterans Administration
20 CFR 416.1102 and 416.1130
When the Social Security Administration (SSA) informed the claimant that some of the supplemental security income (SSI) benefits paid to him in the second quarter of 1979 constituted an overpayment because of his receipt in May, 1979 of a clothing allowance from the Veterans Administration (VA), the claimant filed an appeal questioning whether the allowance should be counted as income. Held, under 20 CFR 416.1130(d), the VA clothing allowance constitutes unearned income; therefore, it must be considered in determining the amount of the claimant's SSI benefits.
It has been determined that the claimant meets all factors of eligibility for SSI benefits. However, the claimant disputes the amount of benefits payable, which is dependent upon the amount of countable income deducted from his SSI benefits. Accordingly, the issue is the correctness of the deduction made and its effect upon the amount of SSI benefits payable.
The claimant has been entitled to SSI benefits since August, 1976 based on an application filed in that month. On August 21, 1979, the claimant received a notice of overpayment from SSA, informing him that some of the SSI benefits paid to him in the second quarter of 1979 constituted an overpayment because of his receipt in May, 1979 of a clothing allowance from the VA. On August 23, 1979, the claimant filed for a reconsideration, stating his belief that the clothing allowance should not be counted as income. A notice of reconsideration was sent to the claimant on October 12, 1979 affirming the initial determination, and he filed for a hearing on October 15, 1979.
At the hearing, the claimant explained that eligibility for the clothing allowance depends on the need for more than two "appliances," such as a wheelchair or walker. This allowance is paid yearly, the claimant reported, and he first received such a disbursement by a check dated May 24, 1979.
Section 1611(b)(1) of the Social Security Act (the Act) provides that the benefit for an individual who does not have an eligible spouse shall be payable at the rate of $2,272.80 per calendar year reduced by the amount of income, not excluded pursuant to section 1612(b), of such individual.
Section 1612(b)(2)(A) of the Act provides that in determining the income of an individual (and his eligible spouse) there shall be excluded 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.
20 CFR 416.1101(a), in part, provides: "Under Title XVI of the Act, an individual's income includes all of his own income in cash or in kind, both earned income and unearned income. It also includes all of the income of his or her eligible spouse (as defined in §416.120(c)(14))."
20 CFR 416.1102, in part, provides:
"(a) Meaning of income. The term "income" for purposes of title XVI means the receipt by an individual of any property or service which he can apply, either directly or by sale or conversation, to meeting is basic needs for food, clothing, and shelter."
20 CFR 416.1130, in part, provides:
"The following types of periodic payments are among those included in unearned income; however, this list is not all-inclusive:
* * * * *
(d) Veterans compensation and pension. Veterans payments are based on service in the armed forces; but this service is not limited to the U.S. armed forces. Such payments may be made by the U.S. Veterans Administration, another country, a State or local governmental entity, or any other organization or entity."
20 CFR 416.1115, in part, provides:
"Countable income defined. (a) The amount of a beneficiary's countable income for a calendar quarter (or shorter period, when applicable) is used to determine whether he is or not eligible for benefits under title XVI of the Act and, if he is eligible, the amount payable. Countable income is the amount of an individual's income which affects payments under title XVI. It is the sum of:
(1) His total earned income (as set forth in §416.1102(b) less his earned income exclusions (as set forth in §§416.1145-416.1175); and (2) His total unearned income (as set forth in §416.1102(c)) less his unearned income exclusions (as set forth in §§416.1145-4416.1175.)"
After a thorough consideration of all the evidence of record, SSA has concluded that the clothing allowance received by the claimant from the VA does count as unearned income. These funds clearly come within the definition of income in 20 CFR 416.1102(a) which specifically refers to cash or other property which can be used to meet the basic need for (among other things) clothing. Further, 20 CFR 416.1130(d) provides that payments from the VA are included within the meaning of unearned income. Accordingly, the VA clothing allowance must be considered as unearned income for purpose of determining the amount of the claimant's SSI benefits.