An attorney asked us, "How does the Social Security Administration treat Worker’s Compensation benefits for SSI eligibility purposes?"  

WC weekly wage replacement payments.  The SSI financial eligiblity rules require that a claimant have low income and few assets, which they call "resources."  Weekly worker’s comp wage payments are treated as "unearned income" for SSI monthly income eligibility purposes, and except for a $20 general income disregard, the full amount of the worker’s comp payments are subtracted from the potential full SSI benefit of $637.  Thus, an injured worker who receives worker’s comp payments of $657 or more in a month, would not be eligible for SSI for that month.  See the SSI federal income regulations on unearned income.  Whether the income stream from WC payments can be irrevocably assigned to a Special Needs Trust, is a matter of state law that varies from state to state.  The SSI POMS at SI 01120.201.J. do NOT list WC payments as income items that cannot be assigned to a trust.

WC Wash-out Settlements.  Sometimes workers "wash out" the settlement, taking a lump sum and foregoing any additional payments from the worker’s compensation insurance company.  These settlements can range from a few thousand dollars, to hundreds of thousands, depending on the seriousness of the injury.  The SSI rules would treat the lump sum settlement as "income" in the month received, probably knocking out SSI and SSI-related Medicaid eligibility for the month of receipt of the settlement check.  However, what happens next?  Teh retained funds become a resource (asset) that is usually over the $2,000 limit.  If the worker keeps the settlement money, and the amount is over $2,000, SSI eligibility is lost, and SSI-related Medicaid is lost, UNLESS the worker places the funds in a Special Needs Trust.  A trust will solve the problem.

The first week of July, we will be presenting a "webinar" (an Internet Seminar) for members of the Academy of Special Needs Planners on the POMS and how to use them.  "POMS" is an acronym for the "Program Operations Manual System," the Social Security Administration’s staff manual for its 61,000 employees.  In preparation for the seminar, I expanded the presentation outline of official SSA websites into word document, and organized them by general legal citations (statutes, regulations, rulings, POMS) and secondary sources, such as the Social Security Handbook and other materials published by the agency for public use.   I hope you find it useful. 

If you are an attorney and want to join a terrific organization that focuses on helping severely disabled children and adults, and helping their families plan for the future, shelter personal injury or medical malpractice awards, join ASNP– the Academy of Special Needs Planners.

Until recently, if you wanted to see what SSA was up to in terms of proposing new regulations, you would go to policy information page on the Social Security Administration’s main website.

Under a new policy, all federal agencies’ proposed regulations, and other announcements, will appear on a new website called Regulations.gov.  One of the neat things about the website, is that we can sign up for notification of any new proposed regulations by whatever agency we’re interested in.  We will be sent an email.

This is an important development because it makes it easier to alert the public so that timely comments can be made to proposed regulations before they are adopted.  These NPRM items, "Notice of Proposed Rule Making" are published in the Federal Register pursuant to the Administrative Procedures Act.  But wading through the Federal Register every day or each week is tedious.  Now the Internet will do it for us!

It won’t come up often, but will certainly help in certain situations.  The general rule is that eligibility for SSI disability payments, and SSI-related Medicaid, for minor children depends on the income and assets of the parents, which are "deemed" to be available to the child.  "Parents" include "step-parents."  But only the income and assets of a parent or step-parent who resides with the child are deemed against that child’s eligibility for disability benefits and Medicaid.

An unusual situation arises when the natural parent of a child terminates the relationship with the step-parent, moves out of the family home, but leaves the child living with the step-parent.  For years, SSA’s position was that even where the parent-step-parent relationship ended, the child lost eligibility for SSI disability benefits through deeming of the (former) step-parent.

The courts did not agree.  In Florez v. Callahan, the Second Circuit reversed SSA’s position:

"The plaintiff stepfather took on the care and support of his emotionally disabled stepson after his wife, the child’s mother, abandoned her family. When the stepfather applied for SSI disability benefits on behalf of his stepson, the Social Security Administration….

"Plaintiff, in assuming the sole responsibility of caring for his wife’s child after she left home, shows himself to be a person who plainly believes that in passing through life, any kindness he can show to another must be shown now, and not put off until another day. One would suppose that a social services agency would encourage such a generous attitude. But, the Social Security Administration adopted quite the opposite position and penalized the stepfather by ruling that his income, prior to the child’s entering the psychiatric center, was attributable to the child and thereby reduced the amount of monthly SSI benefits. The stepfather appeals this first ruling, and also appeals a second ruling that interpreted the regulations to authorize a reduced flat-rate payment of SSI benefits once his stepson was admitted to the medical care facility. "

The court reversed SSA’s rule in 1998, at least for residents of the Second Circuit.  On May 15, 2008, the Social Security Administration finally nationalized the rule adopted by the court and issued a new regulation, modifying 20 CFR 416.1160.