TN 14 (02-98)

GN 02250.120 Income and Ordinary and Necessary Living Expenses

A. Policy - Income

1. Income to the Household

Consider income to a spouse and dependents as being available to the person requesting waiver. If an individual living in the same household is not dependent, include any contributions or room and board payments that person makes as income to the household; do not include that person's income.

2. Types of Income

Income includes but is not limited to:

  1. Government benefits - Social Security, railroad, workers' compensation, unemployment compensation;

  2. Wages and/or net income from self-employment;

  3. regular monthly payments, such as room and board and pensions;

  4. investment income such as interest, dividends, royalties, and rent;

  5. regular contributions from friends or relatives.

B. Policy - Expenses

1. Person's Particular Circumstances Important

A persons particular circumstances and lifestyle determine whether expenses are ordinary and necessary. Patterns of living are established over time and these patterns must be considered when evaluating the facts. This policy, however, does not imply acceptance of unreasonable expenses which are neither ordinary nor necessary.

2. Types of Expenses

Expenses include:

  1. fixed living expenses such as food and clothing, rent, mortgage payments, maintenance, utilities, transportation, necessary household help, insurance, taxes, etc.;

  2. medical, hospitalization and other similar expenses not covered by insurance;

  3. expenses for the support of others for whom the person is responsible;

  4. miscellaneous expenses consistent with the individual's life style, such as newspaper, hairdresser, pet maintenance, entertainment, charitable donations, etc.

C. Procedure

1. Determining Acceptable Expenses

  1. Do not impose rigid restrictions on acceptable expenses.

  2. Do not allow unlimited amounts for necessities such as food and shelter or exclude nonessential expenses such as entertainment.

  3. Allow such expenses as are consistent with the person's standard of living.

  4. Do not allow extraordinary and unnecessary expenses (e.g., expenses related to a travel trailer used for vacationing) regardless of the person's standard of living.

  5. Do not allow expenses that help a person maintain a luxurious standard of living that developed as the result of the incorrect payments.

  6. Fully document and explain any unusual individual circumstances.

2. Evaluation of Large Expenses

If the person has an unusually large expense, determine if the expense should be prorated over the entire year or if it is a recurring expense. Prorate an expense over the entire year if it is for a onetime expense (e.g., a large medical bill) or for items which would be used in the entire year.

3. Expenses of the Household

Include the expenses of a person who is a dependent member of the household. Do not include expenses of a boarder or anyone else in the household who is not a dependent.

4. Expenses Not Always Fixed Amounts

Be alert for regular payments, such as charge account payments where the person is paying more than the minimum payment. Reduce to the minimum amount shown on the charge statements, where appropriate, to permit some payment on the overpayment. Also, be alert to the possibility that some installment payments may duplicate itemized expenses (e.g., the $50 monthly clothing expense was charged and is included in the $75 department store payment).


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202250120
GN 02250.120 - Income and Ordinary and Necessary Living Expenses - 10/03/2005
Batch run: 01/27/2009
Rev:10/03/2005