TN 46 (03-99)

SI 00835.210 The One-Third Reduction Provision and Deeming

A. Policy — general

The VTR and deeming may both apply to an individual who lives with someone other than a child or someone whose income may be deemed to him when neither the individual nor his deemor is the householder.

In these situations, follow the sequence of LA development to determine the applicability of the VTR.

B. Policy — determining the individual's contribution

To determine the individual's contribution when the individual lives with one or more deemors, use the individual's own contribution to household operating expenses plus any excess contribution from the individual's deemors.

The excess contribution is determined as follows. Apply any contribution the deemor makes towards the expenses to his own pro rata share. (If the contribution is earmarked, the contribution is applied to his pro rata share of the earmarked expense.) Next, apply any excess equally to the pro rata shares of the eligible individual(s) and any children involved in the deeming computation.

For purposes of determining inside ISM valued under the PMV rule, use the same method to determine the individual's contribution. However, if the deemor's contribution is earmarked, deduct the deemor's pro rata share for food and shelter first. See SI 00835.340C.

  • Example 1: Tony Smith, an eligible child lives with his 2 younger sisters and his parents in a home they are buying. Tony's aunt also lives with the family. The claims representative (CR) establishes that the household expenses are $1,200 per month and that the pro rata share is $200. Tony's mother contributes $500 per month from her wages and his aunt contributes $700 per month toward household expenses. Tony makes no contribution from his own funds. The CR establishes that Tony is not living in a public assistance household. Tony and his parents do not earmark contributions toward food or shelter, and they do not separately purchase or consume food. Tony's contribution is computed like this:

 $500Mother's contribution
  -200 Mother's pro rata share
 $300Mother's excess contribution
  $300 Mother's excess contribution divided by
 3(The eligible child plus the other two children in the deeming unit)
=$100Tony's contribution
  • Determination: Because Tony lives with his parents who have ownership interest in the home, the CR determines that Tony is in FLA C. The inside ISM, if any, is determined using the Presumed Maximum Value (PMV) rule. Tony's contribution is determined to be $100. He is charged with $100 of ISM (the difference between his pro rata share and his contribution).

    Example 2: In this example, the facts are the same as Example 1 except that both Tony and his father are SSI recipients. The contributions of Tony and his father are computed as follows:

 $500Mother's contribution
  -200 Mother's pro rata share
 $300Mother's excess contribution
  $300 Mother's excess contribution divided by
 4(Tony, his eligible father, plus the other two children in the deeming unit)
=$75each contributed by Tony and his father.

C. Policy — situations in which both the one-third reduction and deeming provisions apply

The following is a list of situations in which both the one-third reduction provision (i.e., the VTR) and deeming provisions apply, see SI 01320.400, for more information on deeming of income from an ineligible spouse:

  1. An eligible individual lives with an ineligible spouse in a household that is not their own and receives food and shelter from person(s) in the same household (other than the ineligible spouse).

    EXAMPLE:

    Sam Fero, an eligible individual, lives with his ineligible spouse and their ineligible adult son in a home owned by the son. Mr. Fero and his wife make a general contribution to the household of $100 for both. A pro rata share of household operating expenses is $110. Mr. Fero does not have ownership interest or rental liability, is not separately consuming or separately purchasing food, does not meet his pro rata share and is not earmarking. Therefore, he is considered to be receiving food and shelter from inside the household. As Mr. Fero is living in a household that is not his own, throughout a month, with at least one person other than any child as defined in SI 00501.010, his spouse, or other person whose income may be deemed to him, the VTR applies. His FBR is reduced by the VTR and his spouse's income can be deemed to him.

  2. An eligible individual lives with an essential person in the household of another and receives food and shelter from person(s) in the same household (other than the essential person, any child as defined in SI 00501.010, and/ or the individual's spouse).

    EXAMPLE:

    Mrs. Jones is the essential person (EP) of Mrs. Williams, an SSI eligible individual (EI), and both live in the apartment rented by Mrs. Williams' two ineligible brothers, and all four individuals are members of the same household. Mrs. Williams, the EI, receives a monthly title II benefit of $152.80, but does not contribute anything to the household. Mrs. Jones, the EP, contributes $40/month, but this is less than a pro rata share of household operating expenses. Mrs. Williams, the EI, is living in the household of another and is receiving food and shelter from inside the household. Her FBR is reduced by the VTR. Mrs. Jones' income is deemable as long as Mrs. Williams wants Mrs. Jones to be considered as an essential person (SI 00501.110).

  3. An eligible child lives with at least one ineligible parent in a household which the parent does not own or rent and receives food and shelter from person(s) living in the same household (other than the ineligible parent(s) or any child as defined in SI 00501.010).

    EXAMPLE a:

    James Duggan, an eligible child, lives with his ineligible father and his ineligible uncle in a home owned by the uncle. James has no income, but his father does and the father contributes $200 toward the household operating expenses. A pro rata share of those expenses is $140. The father's contribution of $200 is first applied to meeting the father's pro rata share.

    The father's contribution of $200 less the pro rata share of $140 leaves an excess contribution of $60. The father's excess contribution (i.e., $60) is then applied toward James' pro rata share: $140 less $60 excess contribution yields $80 as the actual value of ISM (i.e., food and shelter) that James is receiving from inside the household. However, because James is an eligible child living in a household throughout a month with an ineligible parent and the house is not owned or rented by the parent, and at least one person other than any child as defined in
    SI 00501.010 or an ineligible parent lives in the same household throughout a month, the value of the ISM received is the VTR.

    EXAMPLE b:

    Same facts as Example a above, except that when James begins to receive his SSI payments, he contributes $80/month toward the household's operating expenses. The $60 excess contribution from his father, when combined with James' own contribution of $80, equals a pro rata share. James has established that he is living in his own household by virtue of sharing (SI 00835.200) and the VTR provision no longer applies, effective with the first month James started contributing the additional $80 (SI 00835.510). His father's income, however, is still subject to deeming.


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SI 00835.210 - The One-Third Reduction Provision and Deeming - 02/03/2014
Batch run: 02/03/2014
Rev:02/03/2014