Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York
State
DATE: August 3, 1993
Department of Social Services
Docket No. A-93-109 Decision
No. 1429
ANALYSIS AND RECOMMENDED DECISION
The New York State Department of Social Services (New York) appealed
an
initial determination by the Acting Commissioner of the Social
Security
Administration (SSA) concerning the methods by which SSA will
determine
reimbursement it owes New York for interim assistance paid by New
York
to individuals who have applied for Supplemental Security Income
(SSI)
payments under Title XVI of the Social Security Act (Act).
These
reimbursements are made according to a November 27, 1989
agreement
(Agreement) between New York and SSA, pursuant to section 1631(g)
of the
Act.
As discussed below, under the terms of the Agreement, determinations
of
the SSA Commissioner may be appealed by New York to the Secretary of
the
Department of Health and Human Services, who reviews and renders
a
decision affirming, modifying, or reversing the
Commissioner's
determination. The Agreement provides that in connection
with the
Secretary's review this Board will provide the parties "an
opportunity
to be heard and offer evidence in support of their
positions." While
the Board thus does not have the explicit authority
to issue a final
decision under the terms of the Agreement, the Board can
provide an
analysis of the dispute and a recommended decision to assist
the
Secretary in her evaluation of New York's appeal.
Accordingly, we are issuing this analysis and recommended decision to
the
Secretary. As explained below, our analysis indicates that:
(1) there is no statutory or regulatory basis for requiring New York
to
use month-to-month accounting as SSA required here in the
Interim
Assistance Program and that SSA's specific requirement is
inconsistent
with the statutory purpose of encouraging states to provide
interim
assistance. Thus we recommend that this issue be resolved in
favor of
New York. Nothing in our recommended analysis, however, would
preclude
SSA from seeking to change the definition of interim assistance
to
require month-to-month accounting, based on policy reasons,
not
articulated by SSA in the Commissioner's determinations or
these
proceedings, which would outweigh the negative impact of
month-to-month
accounting.
(2) applicable regulations support the SSA Commissioner's finding
that
reimbursement for interim assistance paid while an initial
application
is pending be limited to the first payment of SSI benefits.
We
therefore recommend that the Secretary uphold SSA's determination
on
this issue.
Background: the Interim Assistance Program
The SSI program, Title XVI of the Act, 42 U.S.C. .. 1381 et seq.,
was
established in 1972 as a federally administered assistance
program
designed to meet basic subsistence needs of aged, blind, and
disabled
individuals according to uniform eligibility standards and
payment
levels. In 1974, Congress enacted the Interim Assistance
Program, which
amended section 1631 of the Act to authorize the Secretary to
enter into
agreements with states under which the Secretary will reimburse
states
for assistance the states provide to individuals who have applied
for,
but have not yet received, SSI benefits. The purpose of this
provision
was to encourage states to provide individuals with financial
assistance
for meeting their basic needs from the time they first apply for
SSI
benefits to the time SSA makes the first payment of benefits to them.
State reimbursement occurs as follows. A state and SSA enter into
an
agreement whereby SSA withholds, based on written authorization by
an
individual receiving state interim assistance, the first SSI
benefit
payment due that individual for the period commencing on the date of
the
individual applies for SSI benefits and is eligible and ending on
the
date SSA pays SSI benefits retroactively due to the individual.
SSA
sends the amount of that SSI benefit to the state which has provided
the
individual with interim assistance. The state deducts an
amount
representing the interim assistance paid to the individual and
forwards
the remaining balance, if any, to the individual within 10 working
days.
Section 1631(g)(4)(A) of the Act.
Procedural Background
In October 1992 New York requested that the
SSA
Commissioner
make an initial determination on three issues pertaining to the
recovery
of interim assistance paid by New York to persons during the
pendency of
their SSI applications. On January 13, 1993, the
Commissioner of SSA
issued his determination that New York must:
1) use month-to-month accounting, thus precluding
reimbursement
of interim assistance for any month in the interim period
in
which the SSI recipient is ineligible for SSI benefits; and
2) limit reimbursement to the first payment of benefits,
thus
precluding reimbursement to New York of interim assistance
from
any subsequent SSI payments made by SSA to remedy an
erroneous
first SSI payment.
There was no indication of exactly what the financial consequences of
the
Commissioner's determination would be to New York. 1/
In February 1993, New York appealed the Commissioner's determination
to
both the Board and the Secretary of the Department of Health and
Human
Services. New York pointed out that under the terms of the
Agreement
the final decision authority over appeals under the Agreement rests
with
the Secretary. Article VI of the Agreement provides in pertinent
part
for an appeal "to the Secretary to reconsider the [SSA
Commissioner's]
initial determination" and for the issuance by the Secretary
of "a
decision affirming, modifying or reversing such determination . . .
."
Article VI further states that "[i]n connection with the
Secretary's
review, the parties shall be afforded an opportunity to be heard
and
offer evidence in support of their positions before the Grant
Appeals
Board [now the Departmental Appeals Board] . . . ."
The cover letter accompanying the Commissioner's determination,
while
noting that the Agreement provided for appeals to the
Secretary,
referred New York to this Board as the forum for hearing appeals
made to
the Secretary. SSA contended that an appeal to the Board under
the
provisions of 45 C.F.R. Part 16 was the proper procedure to resolve
this
dispute. SSA argued that the Board had authority to make the
final
decision because of a January 27, 1989 Memorandum of Understanding
(MOU)
executed by SSA and the Board Chair. 2/
On March 1, 1993, the Presiding Board Member held a telephone
conference
to hear the parties' arguments on what the Board's role in this
appeal
should be. On March 22, 1993, the Board issued a ruling in
support of
New York's position that the Board did not have the authority to
issue a
final decision in this appeal. We held that the MOU did not
override
the specific language of the Agreement leaving the ultimate
decision
over any dispute to the Secretary. We noted that SSA was free
to obtain
a delegation of authority to the Board of authority to issue a
"final"
decision as we do in most cases. No such delegation was
provided.
Accordingly, the Board's role in this dispute is limited to
compiling a
record, analyzing the issues, and issuing a recommended decision.
3/
Statutory Authority
The issues in this appeal arise under the following provisions of
section
1631(g) of the Act:
(1) . . . the Secretary may, upon written authorization by
an
individual, withhold benefits due with respect to
that
individual and may pay to a State (or a political
subdivision
thereof if agreed to by the Secretary and the State) from
the
benefits withheld an amount sufficient to reimburse the
State
(or political subdivision) for interim assistance furnished
on
behalf of the individual by the State (or
political
subdivision).
(2) For purposes of this subsection, the term "benefits"
with
respect to any individual means supplemental security
income
benefits under this title, and any State supplementary
payments[
4/] . . . which the Secretary makes on behalf of a State
(or
political subdivision thereof), that the Secretary
has
determined to be due with respect to the individual at the
time
the Secretary makes the first payment of benefits with
respect
to the period described in clause (A) or (B) of paragraph (3).
.
. (3) For purposes of this subsection, the term
"interim
assistance" with respect to any individual means
assistance
financed from State or local funds and furnished for
meeting
basic needs (A) during the period, beginning with the month
in
which the individual filed an application for benefits
(as
defined in paragraph (2)), for which he was eligible for
such
benefits, or (B) during the period beginning with the
first
month for which the individual's benefits (as defined
in
paragraph (2)) have been terminated or suspended if
the
individual was subsequently found to have been eligible for
such
benefits.
Analysis
I. There is no statutory or regulatory basis
for requiring New York
to use month-to-month accounting in the Interim
Assistance Program.
A. The dispute
The purpose of section 1631(g) of the Act is to encourage states
to
provide a mechanism whereby applicants for SSI benefits can
receive
assistance while SSA is determining their SSI eligibility. 5/
New York
provides assistance under its existing Home Relief program
beginning
with the month in which an individual applies for SSI benefits
and
ending when SSA determines the individual is eligible for SSI
benefits
and sends the first SSI benefit payment.
New York explained that its long-standing practice under the program
has
been to subtract the aggregate amount of interim assistance
provided
from the aggregate amount of SSI benefits provided for the period
from
the beginning of the month in which the individual first applied
and
became eligible for SSI benefits until the first payment of
SSI
benefits. In other words, New York's position is that section
1631(g)
and the implementing regulation establish one continuous period of
time
from the month of application for SSI benefits to the first payment
of
benefits, as the reimbursable period of interim assistance. 6/
Section 1631(g)(3) of the Act defines interim assistance as--
assistance financed from State or local funds and furnished
for
meeting basic needs (A) during the period, beginning with
the
month in which the individual filed an application for
benefits
. . . for which he was eligible for such benefits, or (B)
during
the period beginning with the first month for which
the
individual's benefits . . . have been terminated or suspended
if
the individual was subsequently found to have been eligible
for
such benefits.
SSA pointed out that the language of clause (A) refers to assistance
paid
"during the period" in which an individual was "eligible for
such
benefits." Conversely, SSA argued, if a state made payments to
an
individual in months (following the filing of an SSI application)
in
which the individual was not eligible for SSI, it would be reasonable
to
conclude that such months were not part of a period of eligibility
and
that any payments made during that time were not interim
assistance.
SSA said that states are therefore required to compute
amounts
reimbursable as interim assistance using a method called
month-to-month
accounting, explained in the Program Operations Manual System
(POMS) at
section SI 02003.045. This computation method permits a state
to
recover interim assistance it paid an individual only for months
for
which both SSI benefits and interim assistance were paid.
SSA argued that the legislative history of the Interim Assistance
Program
indicated that Congress intended for states participating in the
program to
be reimbursed only for assistance paid for periods that
overlap the periods
for which SSI benefits are subsequently paid.
Specifically, SSA relied on the
following remarks on the Senate floor by
Senator Long:
The amendment would authorize the Social
Security
Administration, upon authorization by the individual,
to
withhold from his first SSI check an amount sufficient
to
reimburse the State for any interim payments it may have made
to
him in lieu of SSI benefits for which he was eligible but
which
had not yet been processed.
120 Cong. Rec. 20967-68 (emphasis added). SSA viewed this comment as
a
clear expression of congressional intent that properly
reimbursable
interim assistance may not include amounts paid by a state for
months in
the interim period in which no SSI benefit was payable.
New York argued that the legislative history as a whole showed
that
Congress intended to prevent recipients receiving duplicative
assistance
from both a state and SSA by allowing states to recover all
interim
assistance. According to New York, month-to-month accounting
would
deprive New York of such recovery because the interplay between
SSA's
retrospective monthly accounting system and New York's
prospective
accounting system frequently prevents a month of SSI
ineligibility from
coinciding with a month of ineligibility for state
benefits. For
example, New York maintained that it was unfairly
penalized by this
system because it could not account prospectively for
income received by
a recipient during a month in the same month determined by
SSA with the
advantage of hindsight.
SSA took the position that states must use month-to-month
accounting,
"notwithstanding the fact that the regulations and IAR Agreement
do not
specifically address this or any other computational
method."
Commissioner's determination at 6. While sympathizing with
any
difficulty New York might have in the interplay between New
York's
budgeting system and SSA's retrospective monthly accounting, SSA
argued
that "the use of retrospective accounting is required by statute"
and
SSA had no latitude to change retrospective monthly accounting to
a
system more compatible with the one used by New York. Id.
The Commissioner's determination summarily rejected New York's
contentions
and adopted SSA's position as "sufficiently supported by
statute, and
regulation." Id. at 8.
B. Our analysis
For the reasons explained below, we conclude that SSA's
proposed
computation method is not compelled by the statutory language or
its
legislative history, is inconsistent with the purpose of the
interim
assistance provision, and is inconsistent with the
longstanding
regulatory definition of "interim assistance." SSA's
computation method
could arbitrarily reduce states' recovery of assistance
paid to an SSI
recipient pending an SSI eligibility determination and
therefore may act
as a disincentive to states to pay assistance during this
period.
Moreover, SSA's accounting method would be more costly to
administer
because it would require a more complex computation process.
SSA
pointed to no reason why this computation method is needed in order
to
protect either the recipients' or SSA's interests; in fact,
the
increased complexity could conceivably lead to an increase
in
computational errors.
Essentially, SSA reads the phrase "for which he was eligible" as
requiring
that the individual be eligible for an actual payment of SSI
benefits for any
month for which reimbursable interim assistance is
paid. We agree with
SSA that the phrase "for which he was eligible"
most likely was intended to
modify the word "period" even though there
is an intervening phrase
explaining when the period begins. The
intervening phrase "beginning
with the month in which the individual
filed an application . . ." is set off
by commas. The limitation of
reimbursement to a period for which an
individual was eligible, however,
does not necessarily require month-to-month
accounting.
New York pointed out several aspects of section 1631(g)(3) which
call
SSA's reading into question. First, SSA ignores the fact that the
word
"period" is in the singular, which is arguably inconsistent
with
computing reimbursement for more than one discrete period within
the
period pending an SSI eligibility determination. Moreover, clause
(B)
of section 1631(g)(3) allows reimbursement during the period
a
termination or suspension of benefits is being reconsidered "if
the
individual was subsequently found to have been eligible for
such
benefits." This clause ties reimbursement to eligibility of
the
individual for some benefits, not to eligibility in each month of
the
period.
SSA argued, however, that section 1631(g) must be considered in
context
with section 1611(c)(1) of the Act. The latter section
provides:
An individual's eligibility for a benefit under this title for
a
month shall be determined on the basis of the individual's
(and
eligible spouse's, if any) income, resources and other
relevant
characteristics in such month, and . . . the amount of
such
benefit shall be determined for such month on the basis
of
income and other characteristics in the first or . . .
second
month preceding such month. (Emphasis added.)
SSA contended that, since this section mandates that SSA
determine
eligibility and benefit amount on a month-to-month basis, it
is
therefore reasonable to conclude that interim assistance should also
be
determined on a monthly basis. This contention ignores the fact
that
section 1611(a) of the Act defines an "Eligible Individual" according
to
status (aged, blind, or disabled) and rate of income for a calendar
year
(as well as resources). Thus, eligibility is not used in the
statute
solely to mean eligibility to be paid a benefit in any particular
month.
More important, New York argued persuasively that it cannot
reasonably
be expected on an ongoing basis to conform its pattern of
disbursing
interim assistance exactly to the monthly pattern determined by
SSA with
hindsight.
Moreover, Congress did not amend section 1631(g)(3) in 1981, when
it
amended section 1611(c) to change from a quarterly determination
of
eligibility for benefits to a monthly determination. In our view,
this
indicates that Congress had no clear intention that
requiring
month-to-month accounting for SSI benefits would have a
corresponding
effect of requiring the states to adopt month-to-month
accounting for
interim assistance. Similarly, when Congress in 1987
added clause (B)
to section 1631(g)(3) to include post-eligibility cases, it
chose
language for clause (B) which parallels clause (A) by referring to
a
"period," rather than defining interim assistance in terms of months
for
which an SSI benefit is actually paid.
SSA's reliance on Senator Long's remarks on the Interim Assistance
Program
is also misplaced. Such remarks should not be considered
controlling,
especially since, when the program was enacted, section
1611(c) required
quarterly, not monthly, determinations of benefit
amount. The
legislative history does not explicitly address the
computation method to be
used in the program. Instead, the legislative
history stresses the
purpose of the program as encouraging states to
provide interim assistance
"in lieu of SSI benefits" (Senator Long's
remarks) or as "assured
reimbursement for advances to persons eligible
for SSI" (Senator Taft's
remarks). 120 Cong. Rec. 20968. The
assistance a state pays an
individual pending an SSI eligibility
determination may reasonably be
considered to be "in lieu of SSI
benefits" even if the state's determination
of benefit amounts for
particular months does not correspond precisely to
SSA's ultimate
determination, so long as the aggregate amount the state paid
does not
exceed the aggregate benefits retroactively due from SSI.
Similarly,
assistance could reasonably be considered an "advance" of SSI
benefits
even if a state does not disburse the funds in precisely the
same
monthly pattern that they would have been disbursed by SSA.
New York supplied an example of how SSA's computation method
of
month-to-month accounting harms New York and confers a windfall
on
assistance recipients. New York explained that if a recipient
has
unreported income which is discovered months after receipt, SSA,
because
its application process gives it the benefit of hindsight,
will
attribute the income to the month following receipt (or the
month
following that month) and determine the recipient to have
been
ineligible for SSI benefits in the month to which the income has
been
attributed. New York, on the other hand, will have paid the
recipient
full assistance in that month and will then reduce its assistance
in
future months to effect recovery. According to New York, the
aggregate
amount of interim assistance it will have paid under this scenario
is
the same as if New York had paid nothing in the month of
ineligibility
and full assistance in the succeeding months, but SSA's
position will
deny New York any reimbursement for the month of
ineligibility.
The following chart illustrates New York's argument.
Month 1 2 3 4 Total
State pays $100 $100 $50
$50 $300 SSI benefit
$100
X $100 $100 $300
Under a month-to-month accounting, although a state may have reduced
its
payments in months 3 and 4 to offset the amount it paid in month 2,
the
state will end up being reimbursed only $200 for the $300 in
assistance
it provided, because it cannot receive any reimbursement for month
2.
SSA's outlay would be the same, but the recipient would receive a
total
of $400 (the $300 paid by the state pending the
eligibility
determination and the $100 the state would be required to forward
to the
recipient after deducting the $200 interim assistance from the
SSI
retroactive benefits).
This result could provide a disincentive to a state to pay
interim
assistance since it is unlikely that the state will be able to
recover
the $100 from the recipient, even though it is an amount in excess
of
what SSI determined the recipient needed to meet basic needs during
the
eligibility determination period.
Thus, we conclude that neither the statute nor its legislative
history
mandate the result SSA advocated here, and that result is
inconsistent
with the purpose of encouraging states to provide interim
assistance.
The main reason for our recommending a result different from that
reached
by the Commissioner, however, is that we do not agree with SSA
that the
regulations are silent on this issue. While the regulations do
not
explicitly address the computation method to be used in the
Interim
Assistance Program, the month-to-month computation method advocated
by
SSA effectively excludes from reimbursement assistance that would
be
reimbursable under the definition of interim assistance in
the
regulations.
Interim assistance is defined in the regulations as:
[A]ssistance the State gives you, including payments made
on
your behalf to providers of goods or services, to meet
basic
needs, beginning with the day of the month you apply for
SSI
benefits and are eligible for them, and ending with,
and
including, the month your SSI benefit payments begin,
or
assistance the State gives you beginning with the day for
which
your eligibility for SSI benefits is reinstated after a
period
of suspension or termination and ending with, and including,
the
month the Secretary makes the first payment of
benefits
following the suspension or termination if it is
determined
subsequently that you were eligible for benefits during
that
period. . . .
20 C.F.R. . 416.1902 (1991).
This definition uses the period in which the assistance is paid as
the
touchstone for determining whether the assistance is
"interim
assistance" and refers to eligibility only with respect to the
beginning
of the period. In this respect, the definition has remained
unchanged
since at least 1981. 46 Fed. Reg. 47,449 (September 27,
1981). In
1991, a change was made to begin the period with the day of
the month on
which an individual applies and is eligible (rather than the
month in
which the individual applies and is eligible). The rationale
for this
change was the amendment to section 1611(c) made in 1981, yet no
change
was made to limit interim assistance only to payment amounts
actually
disbursed for months for which SSI benefits were paid. 7/
Similar statements defining interim assistance according to the period
in
which it is paid are made in the Agreement between SSA and New York,
and in
the regulatory provisions and Agreement terms regarding
authorization by
recipients for states to receive reimbursement for
interim assistance.
See Agreement, Article II, . F, and Appendix C (SSA
Exhibit A); 20 C.F.R. .
416.1906.
We question SSA's reliance on the POMS for its position. The
sections
of the POMS supplied to us by SSA and referred to by the
Commissioner in
his determination are apparently dated 1990. This is
over eight years
after Congress in section 1611(c) required monthly SSI
benefit
determinations, but it appears from the record before us that this
was
the first articulation by SSA of its method of month-to-month
accounting
for interim assistance. The POMS gives no rationale for the
need of
month-to-month accounting and even appears to be somewhat
inconsistent
with the rationale given by SSA here. 8/
While we recognize that Congress did not guarantee that a state would
be
reimbursed for every dollar of interim assistance it provided,
SSA's
policy of month-to-month accounting might increase the risk of
monetary
loss to a state to such a degree that it might act as a disincentive
to
the state to participate in the Interim Assistance Program.
Also,
month-to-month accounting would also arguably increase
the
administrative costs of participation in the program for a state
by
requiring more complicated calculations. Thus, there are policy
reasons
supporting New York's position, and SSA did not articulate
any
convincing countervailing rationale supporting the need for such
a
computation method. While SSA alluded to a policy against reduction
of
SSI benefits to needy recipients (response br. at 30-31), SSA did
not
explain -- and we cannot see --- how New York's interpretation
would
result in such a reduction. SSA gave no rationale here
why
month-to-month accounting is needed to protect the recipient. 9/
Nor
did SSA explain how permitting states to calculate reimbursable
interim
assistance on an aggregate basis would somehow interfere with
SSA's
administration of the requirement in section 1611(c) that SSI
benefits
be determined monthly.
Accordingly, we recommend that the Secretary resolve this dispute in
favor
of New York. Nothing in our recommended analysis here, however,
would
preclude SSA from seeking to change the definition of interim
assistance to
require such a computation, based on policy reasons, not
articulated by SSA
in the Commissioner's determination or these
proceedings, which would
outweigh the negative impact of month-to-month
accounting discussed
above.
II. Reimbursement to New York for interim assistancepaid while
an
initial application is pending is
limited to the first payment of
SSI benefits.
As discussed above, under the terms of the Agreement, SSA sends the
first
payment of SSI benefits to New York. The question posed here
arises
when there has been an underpayment or overpayment in the amount
of that
first payment of SSI benefits sent by SSA to New York. SSA's
practice
is to send any corrective payments, i.e., a payment remedying
the mistake in
the first payment, to the SSI recipient, and not to New
York. The
effect of that policy, according to New York, is that in the
case of an
underpayment New York fails to be totally reimbursed for the
amount of
interim assistance it has provided to the SSI recipient.
New York contended that SSA's practice, if SSA does make such an
erroneous
underpayment in the first payment of SSI benefits and sends
the corrective
payment to the SSI recipient, violates the explicit
directive of section
1631(g) that amounts determined to be due at the
time of the first payment of
benefits are benefits to be sent to the
state. While agreeing with SSA
that amounts of SSI benefits coming due
the SSI recipient after the first
payment are not subject to recovery by
the state, New York argued that
corrective payments are, as stated in
section 1631(g)(2), benefits that "the
Secretary has determined to be
due . . . at the time the Secretary makes the
first payment of benefits"
and should therefore properly be sent to New
York. New York pointed to
20 C.F.R. . 416.1902 defining "SSI benefit
payment" as focusing on the
amount due the recipient at the time of the first
payment, and not on
the amount initially and perhaps erroneously determined
to be due.
SSA responded that section 1631(g)(2) supports its policy that
any
corrective payments go to the recipient rather than to the state.
SSA
contended that New York's interpretation of section 1631(g)(2)
focused
exclusively on the word "due" and ignored the fact that the phrase
"at
the time the Secretary makes the first payment of benefits" modifies
the
phrase "that the Secretary has determined to be due with respect to
the
individual," with the result that only those benefits determined to
be
due at the time of the first payment are to be reimbursed to the
state.
SSA argued that any revisions to the first payment are thus payable
to
the recipient and not the state.
While the language of section 1631(g)(2) arguably might support
SSA's
position, it is not definitive, especially in light of the fact that
20
C.F.R. . 416.1902 only refers to payments which are "due" and
not
"determined to be due." However, other regulations promulgated
to
explain the Interim Assistance Program to SSI recipients clearly
support
SSA's position by limiting the authorization to the "first" or
"initial"
payment.
Section 416.1906 of 20 C.F.R. explains when an authorization to
withhold
SSI benefits is in effect:
Your authorization for us to withhold your SSI benefit
payment,
to repay the State for interim assistance the State gives
you,
is effective when we receive it, or (if our agreement with
the
State allows) when we receive notice from the State that it
has
received your authorization. It remains in effect until --
(a)
We make the first SSI benefit payment on your
initial
application for benefits or, in the case of
an
authorization effective for a period of suspense
or
termination, until the initial payment following
the
termination or suspension of your benefits.
(Emphasis
added.)
Thus, once a state receives a payment, the recipient's authorization
for
the state to receive any further payments of SSI benefits from SSA
is
terminated.
The preamble to the original version of this regulation, in response to
a
comment which suggested that the authorization remain in effect until
a final
determination is made on an individual's claim, explained: 10/
The law and these regulations stipulate that reimbursement
is
made out of the first payment of benefits. Only a first
payment
of benefits, not a final determination, is required
for
reimbursement. There can be only one first payment and
the
effective life of the authorization ends with that payment.
46 Fed. Reg. 47,445, 47,447 (September 28, 1981) (emphasis added).
More important, SSA's policy is consistent with congressional intent.
SSA
has pointed to several instances where legislators referred to
reimbursement
to the state from the initial or first SSI check. See 120
Cong. Rec.
26091 (Congressman Schneebeli) and 20967 (Senator Long).
Moreover, it is
evident from the stringent conditions imposed by
Congress when it authorized
the Interim Assistance Program that Congress
was concerned about sending
recipients' SSI benefits to the states
rather to the individuals
themselves. Congress required that the SSI
recipient specifically
authorize the withholding of the first payment to
a state and that the state
forward any amount received in the first
payment in excess of the interim
assistance to the recipient within 10
working days. It can thus be
reasonably inferred that Congress did not
anticipate a recipient's SSI
benefits being sent to a state beyond the
reimbursement from the first
payment.
Furthermore, New York's position would place a significant
administrative
burden on SSA. Under New York's view SSA would be
required to send a
second check to a state if an underpayment were later
found in the initial
payment. Rather than including any such
underpayment in the next
monthly SSI benefits payment to the SSI
recipient, SSA would be forced to
expedite two separate checks, one to
the recipient, the other to the
state. New York's position also ignores
the possibility that the
initial payment could just as likely involve an
overpayment which New York is
also not required to adjust. In these
circumstance we do not see that
SSA's policy places an undue burden upon
a state.
In addition to making the specific statutory arguments discussed
above,
New York made the general argument that SSA's interpretation of
section
1631(g) would defeat the fundamental purpose of the Interim
Assistance
Program of inducing states to provide assistance to SSI applicants
on an
interim basis during the pendency of their applications by assuring
the
states that their outlays of funds would be reimbursed out of future
SSI
payments. New York maintained that SSA's policy of placing states
at
risk of loss by reason of SSA errors in the initial payment of
SSI
benefits thwarts the purpose of the Interim Assistance Program.
New
York argued that SSA's position allows recipients to reap windfalls
at
state expense and makes the state absorb all the risks of
deficiencies
in SSA's abilities to make determinations of eligibility quickly
and to
make accurate initial payments.
SSA provided documents disputing New York's arguments about the speed
with
which SSA processed SSI claims (SSA Ex. G) and the accuracy of
initial
payments (SSA Ex. F). These documents show that the average
processing
time for initial claims was 123.3 days for the SSA office
serving New York in
the quarter ending June 30, 1991, and that 96.3% of
all SSI payments for
fiscal year 1991 were accurate. These documents
support a finding that
SSA's regulation does not create an unreasonable
burden upon a state.
It is also important to realize that the possibility that an
individual
who receives interim assistance from a state may later be
determined by
SSA to be ineligible for SSI benefits has been present in the
Interim
Assistance Program since its creation. In such a case there
will be no
forthcoming first payment from SSA to the state. Thus, there
is no
guarantee that every dollar expended by a state participating in
the
program will be reimbursed to the state directly by SSA.
We conclude that the public policy considerations advanced by New York
are
not present and could not, in any event, override the express
requirement of
the regulation.
Conclusion
For reasons set forth above, we find that:
(1) there is no statutory or regulatory basis for requiring New York
to
use month-to-month accounting in the Interim Assistance Program
as
required here and that SSA's specific requirement is inconsistent
with
the statutory purpose of encouraging states to provide
interim
assistance. Thus we recommend that this issue be resolved in
favor of
New York. Nothing in our recommended analysis, however, would
preclude
SSA from seeking to change the definition of interim assistance
to
require month-to-month accounting, based on policy reasons,
not
articulated by SSA in the Commissioner's determinations or
these
proceedings, which would outweigh the disincentive effect.
(2) applicable regulations support the SSA Commissioner's finding
that
reimbursement for interim assistance paid while an initial
application
is pending is limited to the first payment of SSI benefits.
We
therefore recommend that the Secretary uphold SSA's determination
on
this issue.
_________________________ Judith
A.
Ballard
_________________________ Cecilia
Sparks
Ford
_________________________ M.
Terry
Johnson Presiding Board Member
1. The Commissioner also upheld SSA's initial
determination that
interim assistance reimbursement payments in the initial
month of SSI
eligibility or re-eligibility must be prorated, thus precluding
routine
reimbursement of interim assistance from the beginning of the month
to
the date of eligibility. The parties agreed after New York filed
its
appeal that this issue was expressly covered by the regulations
and
therefore beyond the specified scope of the dispute resolution
process
of the Agreement. Accordingly, neither the Board or the
Secretary is
required to address this issue as part of this proceeding.
2. The MOU states that its purpose is to confer on the Board:
the authority to review disputes that may arise between the
SSA
and the various States during the performance of the
obligations
set out in agreements entered into by SSA and the States
for
interim assistance reimbursement (IAR) under section 1631(g)
of
the Social Security Act . . . .
The MOU further states that the Board's responsibilities will
include
reviewing each dispute in accordance with the Board's procedures
set
forth at 45 C.F.R. Part 16 and making "a final decision with respect
to
the dispute."
3. Under Article VI of the Agreement, the Secretary
shall issue a
decision on the appeal within 120 days, unless the Secretary
determines
that the decision will take longer. The appeal in this case
will have
taken longer than 120 days by the time a final decision has
been
reached. This delay will have been due to: (a) a delay at
the
beginning of the case during which the parties briefed, and the
Board
ruled on, the threshold procedural issue of whether the Board
was
authorized to provide a final decision; (b) extensions of time
granted
both parties; and (c) the necessity to fully develop and fairly
consider
the record.
4. The Agreement between New York and SSA includes in
its definition
of "benefits" both SSI payments and any state supplementary
payments
under section 1616 of the Act or mandatory minimum
supplementary
payments under section 212 of Public Law 93-66, which the
Secretary
makes on behalf of New York. Since the parties used the term
"SSI
benefits" in their briefs to refer to all benefits at issue here,
we
adopt that term in our analysis.
5. While the statute also provides for interim
assistance for
individuals during a period of termination or suspension of
benefits
while an application for redetermination is pending (referred to by
the
parties as "post-eligibility cases"), the parties' arguments focused
on
interim assistance provided while an initial application was pending.
6. New York took the position before the Commissioner
that the
interim period begins with the first day of the month in which
an
individual applies for SSI and is eligible, even if the individual
was
determined eligible for only part of that month, and, therefore,
New
York does not need to prorate assistance provided for that month.
As
noted previously (note 2), the proration issue is not before us
since
the parties agreed that the regulations require proration.
7. Section 1611(c)(2)(B) requires that SSI benefits
for the first
month be prorated. The preamble to the 1991 regulatory
amendments
specifically discusses why this also requires proration of
interim
assistance for the first month. The preamble, however, does not
address
the month-to-month accounting method at issue here.
8. The POMS computation method would limit
reimbursement to months
in which both an SSI benefit and state assistance was
paid, but would
not limit the amount of reimbursement for any particular
month to the
amount of the SSI benefit. Thus, the POMS method is not
consistent with
SSA's apparent position that interim assistance is
reimbursable only to
the extent it parallels what would have been paid in any
month by SSI
had the eligibility determination been made sooner.
Moreover, the POMS
method would appear arbitrarily to permit a recovery of
total aggregate
assistance by a state that paid assistance higher than the
SSI benefit
in circumstances where a state that paid equal to or less than
the SSI
benefit could only recover part of its aggregate assistance because
the
recipient was ineligible for one or more months in the
eligibility
determination period in which state assistance was paid.
9. Section 1631(g) provides an exception to the usual
policies
prohibiting assignment of SSI benefits and limiting recovery
of
overpayments of SSI benefits. SSA did not argue, however, that
the
reasons underlying those policies, which are meant to ensure
that
recipients can meet their basic needs, supported the result
SSA
advocated here.
10. Section 416.1906 was amended effective April 26,
1991. 56 Fed.
Reg. 19,260. The amendment made no significant
change in the regulation
that would affect the result