This is the description given for proposed new regulations that the Social Security Administration has sent to the Office of Management and Budget for approval:
We propose expanding the rental subsidy exception beyond the 7 states to which it already applies so that it applies nationwide. Accordingly, our nationwide policy would be that a business arrangement exists when the amount of monthly rent required to be paid equals or exceeds the presumed maximum value or the current market value, whichever is less. We expect that the proposed change would improve service delivery by making our policy uniform throughout the country and reducing administrative burdens for individuals seeking access to the Supplemental Security Income (SSI) program.
I'm not familiar with this. Could someone explain it? Why is it only in seven states now? How has it worked in those seven states?
The only thing available to the public now is this brief description.
At the rate that proposed regulations have been advancing, it will be two years or more before this could become a final rule and that's assuming there's no change in the party controlling the White House after next year's election
6 comments:
The seven states are Texas and in the Second and Seventh Circuits. The Second Circuit is bound by AR 90-2(2) and Texas by POMS SI DAL00835.380, but I don't know about the rest.
I found this 1998 District Court case that seems to give a good overview discussion of the issue. The case may not be precedent but the discussion is informative:
https://casetext.com/case/ragsdale-v-apfel
In NY this is also known as Rupert developed when " someone in the household is related as a parent or child to the landlord or landlord's spouse." Most commonly in room rental situatons.
SI 00835.380 Rental Subsidies
As best as I can tell, if an SSI recipient is getting help with his rent (outside of the home of the person helping with the rent), then if the recipient is paying less than the full market value of the rent property, his SSI will be reduced by 1/3 of the federal benefit rate (or the amount of the rent subsidy - whichever is less) even if he is paying more than 1/3 of federal benefit rate for rent.
However, in the 7 States doing it differently, a claimant paying 1/3 of the Federal Benefit rate for rent, is automatically, presumed to be paying the market value of rent and won't be reduced for any subsidy.
The proposed regulation is thus proposing to expand this rule to all 50 States. This would be a MAJOR benefit for claimants having most of their rent paid by a family member. Right now if a claimant is pay $500 towards renting a $1000 apartment, with family paying or subsidizing the rent, the claimant will have his check reduced by $304 dollars, leaving him with only $110 after paying rent. Under the proposed rule the claimant would get his full check leaving him with $414 after paying the rent. A great improvement that will vastly improve the quality of life for claimants.
Let's be realistic. Rents are so high that no SSI claimant can possibly rent a place today without getting assistance (or a subsidy) from a friend or relative. Under the general rule, as rents go up, claimant's need more help from family, and when they get that help their SSI checks get reduced. Or in other words they have to choose between being homeless of having their SSI checks reduced by having someone help them pay for their home. Ridiculous! This new proposed regulation will hopefully get fast tracked as rents are sky high now meaning more claimant's everyday will have be getting more rent assistance exceeding the presumed value to keep from being homeless and consequently having their checks reduced giving them less money to pay for inflated goods. A double edged sword - rent inflation requires they get more subsidy from family, which then reduces their checks which are anyway worth less now because of inflation for everything else.
Lastly, there needs to be a similar rule to help out people subject to the 1/3 reduction rule (different from the presumed value rule), for when the claimants are living IN THE HOME of someone helping them with their living expenses. (Presumed value rule is only for people getting assistance OUTSIDE of the home of the person providing the assistance.) Under the 1/3 reduction rule, if a person is paying $500 in a $4,000 apartment shared by 4 people, the claimant will still have his check reduced by 1/3 of the federal benefit rate, despite his paying $500 for rent, because he's not considered to be paying his "full pro-rata share" of the household expenses. There also needs to be a rule giving these people some relief, so they don't get their checks reduced by 1/3.
Hope this explanation helps everyone.
This will help some folks, and it's nice that SSA is doing what it can. But Congress could just get rid of ISM. OACT estimates that would cost $3.1 billion per year, which is admittedly a lot, but it would all go to people with low income and assets (very roughly, 860k people would get an extra $300ish a month). Maybe some of them would get less in food stamps and other benefits to help offset the costs, and there would be savings to SSA in terms of staff time and fewer overpayments.
People on SSI aren't on easy street even if they get free housing...the FBR is below the poverty line. And it's weird now that if your free housing is a homeless shelter it doesn't hurt your SSI, but if your mom pays your rent or your friend lets you sleep on his couch you lose 1/3 of your benefits. The law shouldn't discourage people helping each other.
Probably still cheaper than raising the SSI amount to actually cover housing ($914 won't get you anywhere in most of the country), or funding the section 8/public housing programs enough that wait lists are open at all and aren't years long. I hope this goes through soon, though, for the people it *will* help.
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