TN 140 (06-20)

SI 00830.100 Expenses of Obtaining Income


A. Definition of expense

An expense as used in this section is one that is an essential factor in obtaining a particular payment(s).

B. Policy

1. Treatment of expenses

Unearned income does not include that part of a payment which is for an essential expense incurred in getting the payment.

  • From a payment received for damages in connection with an accident, we subtract legal, medical, and other expensesconnected with the accident.

  • From a retroactive check from a benefit program other than SSI, we subtract legal fees connected with that claim, which may also include out-of-pocket expenses that are not part of the fee, but are paid by, or billed to, the claimant.

2. How to deduct expenses — General

Except as noted in 3. below, expenses are deducted from the first and any subsequent amounts of related income until you have completely eliminated all expenses.

3. Deducting certain expenses incurred before June 1, 1991

For months prior to June 1991, the following expenses can be deducted from unearned income for SSI purposes if they were not deductible self-employment expenses for title II purposes: expenses of obtaining an interest-generating contract, a patent, a copyright, or securities. These expenses can be deducted from income only for the month in which they are incurred; if they exceed income for that month, the excess cannot be deducted from income in subsequent months.

4. Expense money — Assumption

You may assume that the following payments for expenses do not exceed the expenses and thus do not result in income:

  • payments by a government agency for expenses related to obtaining a service or participating in a program (e.g., $10 expense money provided to jurors); and

  • lump sum advances or reimbursements by employers to cover expenses of employment paid by the employee (e.g., employee receives a per diem allowance, school bus driver is paid $100 per month allowance to pay for gas and maintenance).

NOTE : See SI 00830C.2. below for verification requirements when this assumption is applied.

5. Repayment of legal fees when equal access to justice act payments are involved

An attorney who receives duplicate fees under the Equal Access to Justice Act (EAJA) and section 206(b) of the Social Security Act is obligated to return the smaller fee to the SSI recipient. Any such payment to the recipient is income, provided that the amount of the fee previously had been deducted from income.

C. Procedure

1. Verifying expenses — General

Use bills, receipts, contact with the provider, etc., to verify all essential expenses.

If an expense has been incurred but not paid, assume that the individual will pay the expense unless you have reason to question the situation.

NOTE : You do not need to follow up if this assumption applies.

2. Verifying expenses — Assumption in SI 00830.100B.4. applies

If the assumption in B.4. above applies, be aware that you do not need to verify expenses or follow up on how the money was spent.

3. Deducting allowable expenses

Deduct any expenses which have been verified as essential from the first and any subsequent amount(s) of related income. Deduct even those verified expenses which the recipient has previously paid (e.g., a partial payment to an attorney made from the individual's savings account) as long as the expenses are essential.

NOTE : The remainder is unearned income subject to the general rules pertaining to income and income exclusions.

D. Examples — Essential expenses

1. Document fees

A fee to acquire documentation to establish that an individual has a right to certain income (e.g., a fee for a birth certificate or medical examination) is an essential expense.

2. Guardianship fees

A guardianship fee is an essential expense only if the presence of a guardian is a requirement for receiving the income.

NOTE : Guardianship fees are never an essential expense for obtaining title II or title XVI benefits because the appointment of a legal guardian is never an SSA requirement.

E. References

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SI 00830.100 - Expenses of Obtaining Income - 06/23/2020
Batch run: 06/23/2020