TN 39 (09-96)

SI 00835.475 Averaging

Citations:

Regulations, 20 CFR 416.1133(c)

A. Introduction

An average of household operating expenses is used in determining some LA bases and the receipt of ISM from inside the household. Using an average avoids giving undue weight to temporary or seasonal changes. This section provides instructions for determining the average household operating expenses.

B. Policy — general

The regulations provide for “generally” averaging the household expenses for the past 12 months to determine a pro rata share of those expenses.

For purposes of averaging, a household has been “in existence” during the period that the individual has lived at the same residence and the household composition has not changed.

C. Policy — which expenses to average

Fluctuating household expenses are averaged to avoid giving undue weight to temporary or seasonal changes. Examples of fluctuating expenses are food, electricity, or gas, i.e., expenses that vary from one billing period to the next depending on usage.

Non-fluctuating expenses are not averaged. A non-fluctuating expense is one which does not vary from one billing period to the next or is not dependent on usage. Examples of non-fluctuating expenses are rent, mortgage, and budgeted utility bills.

Household operating expenses are determined by adding the average of the fluctuating household expenses for the applicable period to the amount paid for any non-fluctuating expenses in the month for which a determination is made.

D. Policy — averaging period

The averaging period is established based on the month for which an ISM determination is needed.

1. Household Exists at Least 12 Months

The averaging period is the 12 full calendar months prior to the month for which the LA/ISM determination is needed. (See the example in SI 00835.475F.1.a.).

2. Household Exists Less Than 12 Months

The averaging period is the full months (up to 12) that the household has been in existence. The period may include months later than the determination month if they have elapsed at the point the determination is being made. (See the example in
SI 00835.475F.1.d.).

If the household has been in existence less than 1 full month, the averaging period begins in the month the household came into existence and extends to the month in which the determination is being made. (The beginning and ending month may be the same month. See the example in SI 00835.475F.1.c.).

Although the actual duration of the averaging period may be less than 12 months, the pro rata share should be based on a responsible household member's best estimate of what the expenses would be if the household maintains its existence for at least 12 months. Accordingly, it is appropriate to consider seasonal fluctuations of expenses when averaging expenses for any household that has been in existence less than 12 months.

E. Procedure-determining averaging period

Determine how long the household has been in existence prior to the month for which the determination is being made.

Follow D. above to determine the type of averaging period that pertains (e.g., at least 12 full months, less than 12 months).

Use the following rules to identify the determination month for the averaging period.

1. Initial Claims

The determination month is the month of effective filing.(See SI 00835.475E.4. if a Preefectuation Review Contact (PERC) is being conducted.

2. Breakpoints

The determination month is the effective month of the breakpoint (whether the breakpoint is developed on an initial claim, a redetermination, or a timely report). (SI 00835.510)

3. Redeterminations

The determination month for averaging is the month the redetermination is initiated. The redetermination period of review does not determine the averaging period.

If, during the redetermination, an average is determined in developing a breakpoint, do not average for the 12 months prior to the initiation date. Assume the average from the most recent breakpoint remains the same.

4. Other Averaging Situations

In the following situations, the determination month is:

  • the month the individual requests a reevaluation of his/her living arrangement basis and/or ISM;

  • the month for which a determination is needed of the actual value of ISM when the individual moves from a household where he was subject to the one-third reduction (VTR) to a new residence;

  • the month in which a Preeffectuation Review Contact (PERC) interview is conducted for a medical allowance (e.g., by DDS, ALJ, etc.), if more than one year has elapsed between the date the application is received and the date that the PERC interview is conducted.

    EXCEPTION: If during a PERC interview an average is obtained in developing a breakpoint, an average of the expenses for the 12 months prior to the month the PERC interview is conducted is not necessary. Assume the average from the most recent breakpoint remains the same.

F. Charts of averaging periods

*Indicates month for which a determination is needed.

1. Initial Claim

a. One Averaging Period

Disability claim filed 9/94.

Development deferred. Disability allowed 1/95.

ISM determination needed for 9/94.

No change in residence or composition in 12 months prior to 9/94.

No breakpoints since 9/94.

 

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b. Month Of Filing is not Month of First ISM Determination

Disability claim filed 9/95.

Simultaneously developed. Disability allowance input 1/96.

ISM determination involving averaging first needed for 10/95 - (was PA household in 9/95, not PA household starting 10/95).

No change in residence or composition in 12 months prior to 10/95.

No breakpoints since 10/95.

 

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c. With a Breakpoint

Disability Claim filed 9/95.

Simultaneously developed. Disability allowance input 1/96.

ISM determinations first needed for 9/95 and 12/95.

No changes in residence or composition in 12 months previous to 9/95.

Household composition changes from 6 persons to 5 in 11/95.

PERC conducted in 1/96.

 

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d. Change of Residence in Previous 12 months

Disability claim filed 9/95.

ISM determination first needed for 9/95.

Development deferred. Disability allowed 12/95 and LA/ISM development undertaken.

Claimant moved into residence in 4/95 (breakpoint effective 5/95).

No breakpoints since 5/95.

 

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2. Redetermination

a. No Breakpoints

Redetermination initiated 10/95.

Period of review begins 6/94.

No breakpoints over period of review.

 

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b. One Breakpoint

Redetermination initiated 10/95.

Period of review begins 6/94.

Household ceased to be a PA household as of 7/95.

ISM determination needed for 7/95.

 

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NOTE: It is not necessary to obtain an average for the 12 months prior to the month redetermination is initiated because one was already obtained for a breakpoint determination. See SI 00835.475E.3.

c. Two Breakpoints Including a Composition Change

Redetermination initiated 10/95. LA/ISM development undertaken in 10/95.

Period of review begins 6/94.

Household composition changed from 3 persons to 2 in 11/94.

Recipient increased his/her contribution significantly in 4/95.

ISM determinations needed for 12/94 and 4/95.

 

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NOTE: Since the first breakpoint was a composition change, the elapsed months after the first breakpoint are used to compute the average for both breakpoints. Although another ISM determination is needed for the second breakpoint, the averaging period also begins in 12/94 because the household composition has been the same since 12/94 (less than 12 months).


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http://policy.ssa.gov/poms.nsf/lnx/0500835475
SI 00835.475 - Averaging - 09/19/2014
Batch run: 09/19/2014
Rev:09/19/2014