DSL MEMO SERIES 01-16

August 22, 2001

STATE OF WISCONSIN
Department of Health and Family Services
Division of Supportive Living 

To:
Area Administrators/Assistant Area Administrators
Bureau Directors
County Departments of Community Programs Directors
County Departments of Developmental Disabilities
Services Directors
County Departments of Human Services Directors
County Departments of Social Services Directors
Licensing Chiefs/Section Chiefs
Tribal Chairpersons/Human Services Facilitators

From:
Sinikka McCabe, Administrator
Division of Supportive Living

Re: SSI Policy Change Affecting Grandfathered "State-Only" Recipients

In Wisconsin there are currently approximately 13,000 Supplemental Security Income (SSI) recipients receiving cash SSI benefits from the Wisconsin Department of Health and Family Services (DHS ) who do not receive federal SSI These individuals were receiving only state SSI benefits when DHS assumed administration of its own state SSI supplements on January 1, 1996, rather than continue to contract with the federal SSI program to administer payments for us. In January 1996, these state only SSI recipients had total countable income that was higher than the federal SSI payment amount, but less than the combined federal and state SSI supplemental payment amounts, and thus were recognized by the federal Social Security Administration as "optional state supplementation recipients". These recipients are also referred to as "grandfathered state only recipients."

Using July 2001 SSI payment figures, eligible state only cash SSI recipients in Wisconsin will have countable income in the shaded area of the following illustration:

State-only SSI recipients in Wisconsin are required to undergo annual review of their continued eligibility. As part of this review, the Department has looked only at the earned income (wages) of these state only SSI recipients. However, the statutory language authorizing state-only SSI benefits requires that the Department count both earned and unearned (i.e., Social Security) sources of income in determining continued eligibility for these benefits.

Therefore, the unearned income of all state-only SSI recipients will be considered when the Department processes the annual eligibility reviews in the fall of 2001. Beginning January 2002, the Department will begin to review the unearned income of all state-only SSI recipients on a monthly basis and will terminate recipients due to excess unearned income on a monthly basis. However, because the Department must rely on quarterly wage reporting by employers to obtain accurate earnings reports, it will continue to review earned income of state only recipients annually.

All state-only SSI recipients will be notified in August 2001 of the potential for this change to impact them. A copy of this notification is attached to this memo. Each individual who is terminated because of this mass change will have his or her SSI cash benefits terminated effective December 31, 2001. SSI Medicaid, which is authorized for these individuals by the DHS , will be terminated effective January 31, 2002. All individuals whose benefits are terminated, including those who are currently participating in Home and Community Based Services waivers, will receive materials by mail from DHS that will facilitate their application for Medicaid at county human/social services agencies. Each county economic support unit will receive a listing of individuals living in that county who are affected by this change by November 1, 2001.

Example 1: Jim was grandfathered as a state-only SSI recipient in 1995 when his income from Social Security was $525 per month. He had no income from wages at that time. Federal law allows a disregard of $20 of unearned income, leaving him with $505 in countable unearned income. Since Jim’s countable income was higher than the 1995 federal SSI payment amount ($458), but lower than the 1995 combined federal and state SSI payment amount ($458+$83.78+$95.99 E Supplement = $637.77), he was grandfathered as a state only SSI recipient.

However, in 2001 Jim’s Social Security income increases to $810 per month. This exceeds the 2001 combined federal and state SSI payment amounts ($531+$83.78+$95.99=$711.00, rounded). Therefore, Jim is no longer eligible for state SSI or SSI Medicaid.

Example 2: Henry is a grandfathered state-only SSI recipient. He receives $578 per month social security benefits and earns $212 per month as a bagger at GroceryMart.

We will disregard $20 of his unearned income and the first $65 and ½ of the remainder of his earned income. This leaves him with $631.50 in countable income, a figure that is well below the eligibility threshold. DHS will recertify his SSI cash and SSI Medicaid benefits for 2002.

Participants in Home and Community Based Services waivers who are eligible for SSI are not subject to cost sharing for their waiver services. However, if an individual’s SSI eligibility ends s/he must be found eligible for Medicaid under the special Medicaid Waiver category in order to continue to participate in the waiver. To facilitate transition from SSI Medicaid for these consumers, the Department will provide a listing of affected individuals to each county’s waiver contact by November 1, 2001.

As allowed under federal law, the DHS will continue to authorize Medicaid only for certain former state-only SSI cash recipients who work. This provision, referred to as Section 1619 (b) under Title XVI of the Social Security Act, was established for all SSI recipients as an incentive to employment. This provision applies only to recipients whose countable unearned income is below the annual eligibility threshold ($711 in 2001) but whose countable earnings from work make them ineligible for cash SSI benefits.

Attached to this memo is the informational letter about this policy change that the Department will send to each state only SSI recipient in August 2001. A revision to the Department publication State SSI Administration Policy (PSL-3129) reflecting these changes and clarifying the eligibility for Medicaid under Title XVI, Section 1619 (b) will be available on the Internet at www.DHS .state.wi.us/ssi after September 1, 2001.

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