SSI Issues: Cars, Bikes and Overpayments

March 1, 2008

Author: Catherine M. Callery (Kate)| Louise M. Tarantino

Nobody said it would be easy for our clients once we got them Supplemental Security Income (SSI) benefits.  Seemingly arcane income and resources rules abound in SSA’s world, enough to keep recipients and advocates scratching their heads!  So when is a car a gift, or a Harley Davidson a resource, or how is an overpayment valued?  These are a few questions that were addressed on the DAP list serve and are  reproduced here for your reading pleasure.

Recently a question arose as to how the gift of a car from an SSI recipient’s father would affect SSI benefits.  The answer to this question can be found at 20 C.F.R. §416.1218 and POMS Section SI 00830.520 - Gifts.  A gift is defined as something a person receives that is not repayment for goods or services the person provided and is not being given as a legal obligation on the giver’s part.  Also, it must be given irrevocably. 

A gift is considered unearned income and is subject to the general rules pertaining to income and income exclusions.  The value of any noncash item, other than food or shelter, is not income if the item would become a partially or totally excluded nonliquid resource if it was retained in the month after the month of receipt.  The value of one car of any value is totally excluded from resources as long as the car is used for transportation by the individual or member of the individual’s household.  Other vehicles are considered to be non-liquid resources.  The individual’s equity in the other automobiles is counted as a resource.  The father may also pay for insurance on the automobile as long as he pays for the policy directly to the insurer.

A representative payee may use a large retroactive benefit payment for the purchase of or down payment on an automobile as long as it is used for the SSI recipient and is owned by the SSI recipient.  And the representative payee may use some of the retroactive money for monthly payments on the automobile.  A gift received as the result of a death is a death benefit and is addressed in POMS Section SI 00830.545. Thanks to Penny Vulcan of Nassau Suffolk Law Services for answering this question.

Now about that Harley Davidson…as noted above, the value of one car is totally excluded from resources if it’s used for work transportation by someone in the SSI recipient’s family.  Now what if the mode of transportation is a motorcycle?  According to the regulations, the term automobile includes, in addition to passenger cars, other vehicles used to provide    necessary transportation. 20 C.F.R. §416.1218(a).  So far, so good.  But for some reason, the good folks at the Corning District Office cannot believe that someone would drive a motorcycle year round in the Southern Tier, so they are counting the hog as a resource.  This one has not yet been resolved, but Ellen Heidrick of LAW-NY in Bath is gearing up for a fight.  We’ll keep you posted.

And lastly, isn’t there a rule that says if the resources that cause an SSI overpayment are of lesser value than the overpaid amount, SSI is supposed to use the lesser amount, i.e., the value of the resource, as the overpayment?  Yes, there is such a rule and our good friend Cathy Roberts, now an Empire Justice Center paralegal specializing in health care, gave us chapter and verse.  POMS SI 02260.025C.3 Policy - SSI Overpayment Waiver - Against Equity and Good Conscience , Excess resource Rules:

Waiver policy for SSI overpayments created because of excess resources involves the standard waiver rules and two unique waiver rules that are only applicable to overpayments which are the result of excess.  If an overpayment is caused solely by excess resources, find “at fault” only if the individual “willfully and knowingly” failed to report excess resources. All or part of an SSI overpayment due to excess resources can be waived if one or more of the following waiver rules apply.

Rule 3

The individual is without fault and it is against equity and good conscience to recover the full amount of the overpayment because the total overpayment is greater than the amount by which the resources exceeded the resource limit. This is explained in SI 02260.025D.

Who knew that SSI income and resources rules could be so fascinating!