TN 45 (02-99)

SI 00835.515 Gradual Changes in ISM

A. Definition of Gradual Change in ISM

A gradual change in ISM is one that takes place over time, that is, it is not linked to a breakpoint.

B. Background

1. Inside ISM

A gradual change in inside ISM may result from changes in the household operating expenses due to inflation, deflation and/or usage. Since the average expenses affect the computation of the pro rata share, they also affect the determination of sharing, earmarked sharing and the AV of ISM.

A gradual change in inside ISM may also result from gradual changes in the individual's contribution.

2. Outside ISM

A gradual change in outside ISM is the result of changes in market conditions which result in a changed estimate of the CMV of an item of ISM. This affects only ISM which is based on CMV or CMRV estimates rather than vendor charges. Examples of outside ISM based on an estimate of the CMV or CMRV are wood for fuel from someone's wood lot, food from someone's garden, rent-free shelter and rental subsidies.

C. Procedure

1. Inside ISM

a. Development and Documentation

Do not require or encourage individuals to report month-by-month changes in their normally fluctuating household operating expenses and contributions to these expenses.

NOTE: The fluctuations in expenses and contributions are accounted for by averaging them. In general, gradual changes are uncovered when reaveraging household operating expenses and contributions during a redetermination (see SI 00835.520), or a PERC interview (see SI 00603.030) or upon an individual's request for a reevaluation.

In order to reevaluate the ISM where inside ISM is currently an issue (i.e., when the recipient lives with someone other than a spouse, child or a person whose income is deemed to him/her and it is not a PA household), complete Part II of the SSA-8006. (This form elicits information regarding average household operating expenses, see SI 00835.475 and SI 00835.600).

b. Effective Month of Change

If the new average yields a pro rata share which leads to a new ISM determination (e.g., a change from the VTR to sharing or vice-versa or the establishment of a new AV), the ISM change is effective with the month the redetermination is initiated, the month the individual's request for reevaluation is received or the month the PERC interview is conducted (see SI 00603.030).

EXAMPLE: Change in LA

On May 28, 1995, Andy Perry completed an SSA-8203 and SSA-8006 in connection with a scheduled redetermination. He was shown on the SSR in Federal LA A with no ISM. He alleged no changes in LA or ISM since his last redetermination in July 1993. The redetermination forms showed that he continued to reside with his mother in her home. She was not on public assistance. He alleged contributing $150 a month to household expenses. He did not know the average household expenses. Since he may be subject to the VTR, he was asked to submit evidence of sharing. Five days later, he brought in a statement from his mother showing the average household expenses for the period May 1994 through April 1995 and confirming his alleged contribution. The statement showed that Mr. Perry's pro rata share was now $165. He no longer met his pro rata share and he was charged with the VTR effective with May 1995, the month the redetermination was initiated.

NOTE: In the above example, the determination to charge the VTR is not retroactive to any month prior to the redetermination. There would also be no retroactivity if the opposite happened; i.e., if the individual were being charged the VTR but upon redetermination it is discovered that the pro rata share has decreased because expenses have gradually decreased and he now pays a pro rata share and is therefore not subject to the VTR. This is because the effective date for a change in LA or ISM which is due to gradual changes is the month the redetermination is initiated.

2. Outside ISM

a. Development and Documentation

Recipients are not expected to report gradual changes. Normally these changes will be discovered only on a redetermination (see SI 00835.520) or a PERC interview when questioning receipt of outside ISM.

Redevelop the CMV or CMRV as of the month the redetermination is initiated or the PERC interview is conducted.

Redevelop the CMV or CMRV for months of the review period only if an