TN 64 (03-10)

SI 00835.510 Breakpoints

A. Definition of breakpoints

A breakpoint is an event which signals a possible change in the value of inside or outside in-kind support and maintenance (ISM). It may signal a change in the way inside ISM is valued: value of the one-third reduction (VTR) vs. presumed maximum value (PMV) or it may mean that ISM has started or stopped. Further investigation is necessary to determine if the event actually affects the living arrangement (LA) or ISM.

B. Policy related to ISM breakpoints

1. Inside ISM breakpoints

The following are inside ISM breakpoints. A change in:

  • ownership interest or rental liability;

  • public assistance (PA) household status;

  • separate purchase or consumption;

  • contribution to household expenses (For significant changes in contribution which include the beginning or end of a loan of ISM see SI 00835.480D.2.);

  • household composition;

  • non-fluctuating household operating expense;

  • earmarking; and

  • residence.

2. Outside ISM breakpoints

The following events are outside ISM breakpoints. A change in:

  • household composition;

  • household payment towards the household cost;

  • the current market value (CMV) of the household cost — due to a change in the vendor charge or if there is no vendor charge, a change in the estimate of the CMV which results from an identifiable event (For additional instructions on LA and ISM see SI 00835.515 - SI 00835.520);

  • provision of household cost - the starting or stopping of someone outside the household providing household costs; and

    NOTE: The beginning or end of a loan of outside ISM is a change in the provision of household cost. For more information on developing loans of ISM see SI 00835.482.

  • residence.

3. Explanation of a change in residence

Always evaluate and develop the LA basis and ISM in a new residence. A change in residence differs from other breakpoints in that it is not the change itself which causes a change in ISM. A change in residence usually means one or more of the other factors which affect the computation of inside or outside ISM has changed. For example, a change in residence usually means the average household operating expenses have changed. It often means a change in household composition as well.

REMINDER: A change of residence occurs when an individual's temporary absence due to medical confinement or school attendance ceases for a reason other than return to the permanent living arrangement. For information on temporary absence see SI 00835.040 - SI 00835.043.

4. Effective month of breakpoints

The following chart shows the effective month of change for all breakpoints. The effective months are based on principles relating to the LA basis and contributions to household expenses. For information about the LA basis, see SI 00835.001.

EVENTS

EFFECTIVE
MONTH OF
CHANGE

Change in ownership interest or rental liability (from VTR)

Month it occurs

Loss of ownership interest or rental liability

Month after it occurs

PA household:

 

Member starts receiving PA

Month it occurs

Member stops receiving PA

Month after it occurs

Member without PA moves in or out

Month after it occurs

Change to separate purchase/
consumption

First full month it occurs

Change from separate purchase or consumption

Month it occurs

Change in contribution to household expenses

Month it occurs

Change in household composition

Month after it occurs

Change in non-fluctuating household operating expense

Month it occurs

Change to earmarking

First full month it occurs

Change from earmarking

Month it occurs

Change in household payment toward the household cost

Month it occurs

Change in CMV of household cost

Month it occurs

Change in provision of household costs by someone outside the household

Month it occurs

Residence change (For information on applying the First of the Month Rule (FOM) see
SI 00835.500)

Month after it occurs


References:

SI 00835.110, Home Ownership as LA Basis

SI 00835.170, Earmark Sharing

SI 00835.480, Contribution Toward Household Operating Expenses

SI 00835.482, Loans of In-Kind Support and Maintenance

SI 00835.485, Household Composition

SI 00835.500, First-of-the-Month (FOM) Residence and ISM Determinations

SI 00835.350, Computation of In-Kind Support and Maintenance from Outside a household (Including Vendor Payments by a Third Party Outside the Household)

SI 00835.380, Rental Subsidies

C. Policy for evaluating breakpoints

When a breakpoint is reported, determine if it affects the LA basis, inside ISM or outside ISM. Follow these guidelines:

1. Inside ISM breakpoints

a. Gain or loss of ownership interest or rental liability

This may mean a change from or to the VTR or require the investigation of cash contributions from others in the household, therefore, always fully evaluate these situations.

b. Gain or loss of PA household status

Consider the following when a PA household status change occurs:

  • If PA household status is gained, no ISM development needs to be done because of the presumption of sharing.

  • If PA household status is lost, full LA and ISM development must be done.

c. Starting or stopping separate purchase or separate consumption

This always requires an evaluation of the ISM in the new situation.

d. Change in contribution to household expenses

When a change in contribution occurs:

  • Presume there has been no change in ISM if the individual's contribution decreases and the individual is being charged some inside ISM; and

  • Reevaluate the ISM if the contribution significantly changes. For discussion of significant changes in contribution including the beginning or end of a loan of ISM see SI 00835.480D.2.

e. Change in household composition

A change in household composition is significant because both the relationship of the persons with whom the individual shares the household and the number of household members are material to the determination of ISM.

The relationship of the persons with whom the individual shares the household is significant since inside ISM is only an issue when the individual lives with someone other than a spouse, children, or someone whose income may be deemed to the individual. For an exception to this rule see
SI 00835.340.

EXAMPLE:  The individual lives with her child and another adult who is not the individual's spouse or deemor. ISM must be developed. When the other adult moves out of the household, inside ISM is no longer an issue.

A change in the number of persons in the household is significant because it may result in an increase or decrease in the household operating expenses. This change does not necessarily change the pro rata share of household operating expenses because those expenses, especially for food, may change proportionately. However, in order to determine the effect that the change in the number of persons living in the household has upon inside ISM, always develop the issue when the number of persons in the household changes and inside ISM remains an issue that must be developed.

f. Change in non-fluctuating household operating expense

Presume no change in ISM occurred if a non-fluctuating expense:

  • increases and the individual is already charged with the VTR or PMV; or

  • decreases and there is no ISM identified as inside ISM on the Supplemental Security Record (SSR).

For an explanation of non-fluctuating expenses see SI 00835.475C.

g. Change in earmarking

Consider the following when a change in earmarked contributions occurs. If earmarking:

  • begins, ISM must be reevaluated; or

  • stops, the VTR is charged unless there are other changes involved.

h. Change in residence

Always reevaluate the ISM.

2. Outside ISM breakpoints

a. Change in household composition

No material change occurs if the household composition decreases and the individual is being charged the PMV.

b. Change in household payment towards the household cost

No material change occurs if the household payment decreases and the individual is already being charged the PMV.

c. Change in CMV of the household cost

No material change occurs if the CMV increases and the individual is already being charged the PMV.

d. Change in provision of household cost by someone outside the household

The beginning or stopping of provision of household cost by someone outside the household always requires further development. The beginning or end of a loan of ISM from outside the household is an example of a change in provision of household cost. For more information on developing and computing loans of ISM outside the household see SI 00835.482.

e. Change in residence

Evaluate the effect of a change in residence on items SI 00835.510C.2.a. - SI 00835.510C.2.d.

D. Procedure for documenting breakpoints

Breakpoints are usually discovered as part of a redetermination or as a timely report unconnected with a redetermination. If the breakpoint has no effect on ISM no documentation is required. For information on evaluating breakpoints see SI 00835.510C (in this section).

EXCEPTION: If the last living arrangement was based on a continuing loan of ISM, the living arrangement and ISM must be fully developed and documented regardless of the effect on ISM.

1. Inside ISM

a. Breakpoint is material

If the breakpoint is material, document a description of the change and the date the change occurred:

  • on a DROC screen within MSSICS; or

  • on a paper SSA-5002 for non-MSSICS cases.

Document the file by faxing the SSA-5002 form directly into the appropriate electronic folder. Do not retain the paper SSA-5002 after you document the issue electronically.

b. Date of change unknown or uncertain

If the individual does not know or is unsure about the month and year, contact a knowledgeable party and record his or her response:

  • within MSSICS on a DROC screen; or

  • on a paper SSA-5002 for non-MSSICS cases.

  • Document the file by faxing the SSA-5002 form directly into the appropriate electronic folder. Do not retain the paper SSA-5002 after you document the issue electronically.

c. Breakpoint affects LA basis or inside ISM

If the breakpoint could affect the LA basis or inside ISM determination:

  • Complete the MSSICS living arrangement screens to document the situation as of the breakpoint effective month; or

  • For non-MSSICS cases it may be necessary to complete Part I and Part II of the SSA-8006 (Statement of Living Arrangements, In-Kind Support and Maintenance) in order to document the situation as of the effective month of the breakpoint. For information on completing the household expense portion of the SSA-8006 see SI 00835.475 and SI 00835.600.

d. Documentation and computation of ISM

For documenting the living arrangement and computing the ISM follow the requirements in SI 00835.110 - SI 00835.170, SI 00835.320, and SI 00835.340.

2. Outside ISM

a. Breakpoint affects ISM

If the breakpoint affects ISM:

  • document it on DROC screen within MSSICS with a description of the change and the CMV of the item received and the month(s) it was received; or

  • on a paper SSA-5002 for non-MSSICS cases with a description of the change and the CMV of the item received and the month(s) it was received. Document the file by faxing the SSA-5002 form directly into the appropriate electronic folder. Do not retain the paper SSA-5002 after you document the issue electronically.

b. Date of change unknown or uncertain

If the individual does not know the month(s) the outside ISM was received, contact a knowledgeable party and record his or her response:

  • on a DROC screen within MSSICS; or

  • on a SSA-5002 for non-MSSICS cases.

Document the file by faxing the SSA-5002 form directly into the appropriate electronic folder. Do not retain the paper SSA-5002 after you document the issue electronically.

c. Documentation and computation of ISM

For documenting and computing the new value of ISM follow the requirements in SI 00835.350.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0500835510
SI 00835.510 - Breakpoints - 03/18/2010
Batch run: 03/18/2010
Rev:03/18/2010