A-80185, SEPTEMBER 26, 1936, 16 COMP. GEN. 314

A-80185, SEPTEMBER 26, 1936, 16 COMP. GEN. 314

SOCIAL SECURITY ACT OF 1935 - FEDERAL CONTRIBUTIONS TO THE STATES QUARTERLY PAYMENTS TO THE STATES AS OLD-AGE ASSISTANCE UNDER SECTION 3 OF THE SOCIAL SECURITY ACT OF 1935, 49 STAT. 621, ARE FOR DETERMINATION UPON THE BASIS OF ONE-HALF THE AMOUNTS EXPENDED BY THE STATE DURING THE QUARTER AS OLD-AGE ASSISTANCE, NOT IN EXCESS OF $30 PER MONTH WITH RESPECT TO ANY INDIVIDUAL, FOR THE PERIOD COVERED BY THE STATE PAYMENT, BUT STATE PAYMENTS FOR ANY PERIOD PRIOR TO THE MONTH IN WHICH THE FIRST PAYMENT WAS MADE BY THE STATE MAY NOT BE CONSIDERED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, SOCIAL SECURITY BOARD, SEPTEMBER 26, 1936:

I HAVE YOUR LETTER OF SEPTEMBER 18, 1936, AS FOLLOWS:

UPON RECEIPT OF YOUR LETTER OF SEPTEMBER 5, 1936, IN REPLY TO OUR LETTER OF AUGUST 25, 1936, WE FELT THAT OUR LETTER HAD NOT STATED COMPLETELY THE QUESTIONS CONFRONTING US, AND, THEREFORE, ASK YOUR PERMISSION TO RESUBMIT THESE QUESTIONS, WHICH ARE OF GREAT PRACTICAL IMPORTANCE TO US IN DEALING WITH THE STATES UNDER THE SOCIAL SECURITY ACT.

THE PERTINENT LANGUAGE OF THE SOCIAL SECURITY ACT (49 STAT. 626) OCCURS IN SECTION 3 THEREOF, PROVIDING THAT THE UNITED STATES SHALL PAY TO EACH STATE WHICH HAS AN APPROVED PLAN FOR OLD AGE ASSISTANCE AN AMOUNT "EQUAL TO ONE-HALF OF THE TOTAL OF THE SUMS EXPENDED DURING SUCH QUARTER AS OLD AGE ASSISTANCE UNDER THE STATE PLAN * * * NOT COUNTING SO MUCH OF SUCH EXPENDITURE WITH RESPECT TO ANY INDIVIDUAL FOR ANY MONTH AS EXCEED $30 * *

THE PROBLEMS WHICH HAVE ARISEN IN CONNECTION WITH MATCHING STATE EXPENDITURES MAY BE STATED SEPARATELY AS TWO QUESTIONS, THOUGH IN MANY RESPECTS THEY ARE VERY SIMILAR.

FIRST, A NUMBER OF STATE PLANS HAVE BEEN IN OPERATION FOR SOME MONTHS, WITH REGULAR MONTHLY PAYMENTS OF OLD AGE ASSISTANCE BEING MADE BY THE STATE TO QUALIFIED AGED PERSONS. IN A NUMBER OF THESE STATES, THE STATE OLD AGE ASSISTANCE PLANS THEMSELVES PROVIDE FOR PAYMENT BEING MADE IN AUGUST, FOR INSTANCE, WITH RESPECT TO THE APPLICANT'S NEED IN JULY. IT IS SOMETIMES THE PRACTICE, ON THE OTHER HAND, FOR AUGUST PAYMENTS TO BE MADE WITH RESPECT TO THE APPLICANT'S NEED IN AUGUST AND SOMETIMES WITH RESPECT TO HIS NEED IN SEPTEMBER. IN MANY INSTANCES, THESE VARIATIONS ARE REQUIRED BY STATE LAW AND ACCORD WITH CUSTOMARY ACCOUNTING PROCEDURE. ALSO IT SOMETIMES HAPPENS THAT THE STATE NECESSARILY FALLS A MONTH OR TWO BEHIND IN MAKING ITS PAYMENTS, TO THESE AGED PERSONS. FOR EXAMPLE, SOMETIMES REINVESTIGATION OF THE PERSON'S NEED CAUSES A DELAY OF A FEW WEEKS. SOMETIMES THERE IS A DELAY OCCASIONED BY SOME TECHNICAL DEFECT IN THE STATE'S QUARTERLY APPLICATION FOR A GRANT FROM THE UNITED STATES. UNDER THESE CIRCUMSTANCES, MAY THE BOARD MATCH THE DISBURSEMENTS MADE DURING A GIVEN MONTH TO INDIVIDUALS FOR THEIR SUPPORT IN A MONTH (OR MONTHS) IMMEDIATELY PRECEDING OR FOLLOWING THE MONTH DURING WHICH THE DISBURSEMENTS ARE MADE, ASSUMING OF COURSE THAT THE RATE OF PAYMENT HAS NOT BEEN IN EXCESS OF $30 PER MONTH.

SECOND, THERE ARE SOME INSTANCES WHERE PAYMENT WITH RESPECT TO AN EARLIER MONTH MIGHT BE MADE IN A STATE WHICH WAS JUST GETTING ITS OLD AGE ASSISTANCE PLAN INTO EFFECT. FOR INSTANCE, THE STATE OLD AGE ASSISTANCE LAW MIGHT, BY ITS OWN TERMS, COME INTO OPERATION JANUARY 1, WITH RIGHTS TO ASSISTANCE ACCRUING THEREFROM. THE STATE MIGHT FIND IT IMPOSSIBLE TO COMPLETE THE ENORMOUS TASK OF EXAMINING EVERY APPLICATION FOR ASSISTANCE IN LESS THAN SEVERAL MONTHS. IT MIGHT NOT BE UNTIL JUNE OR EVEN LATER THAT THE STATE FELT ITSELF TO BE IN A POSITION TO BEGIN MAKING PAYMENTS. UNDER THESE CIRCUMSTANCES, WOULD THE SOCIAL SECURITY BOARD BE JUSTIFIED IN AUTHORIZING A GRANT TO THE STATE TO MATCH THE DISBURSEMENTS MADE DURING A GIVEN MONTH TO INDIVIDUALS FOR THEIR SUPPORT IN THE MONTHS PRECEDING THE MONTH DURING WHICH THE DISBURSEMENTS ARE MADE, ASSUMING OF COURSE THAT THE RATE OF PAYMENT HAS NOT BEEN IN EXCESS OF $30 PER MONTH.

WHILE IF A STATE MADE A PAYMENT TO AN AGED PERSON IN ONE MONTH AND SAID THAT THE PAYMENT WAS ,FOR" A MONTH LONG PAST, IT WOULD SEEM TO BE QUESTIONABLE WHETHER THE INTENT OF THE SOCIAL SECURITY ACT, FOR REGULAR MONTHLY ASSISTANCE, WAS BEING CARRIED OUT; STILL THE PRACTICAL SITUATION IS THAT IN A NUMBER OF STATES IT HAS BEEN FOUND IMPOSSIBLE THUS FAR TO MAKE THE PAYMENT DURING THE MONTH FOR WHICH ASSISTANCE IS BEING GRANTED. IN OTHER STATES THE STATE PLANS THEMSELVES CALL FOR PAYMENT IN ONE MONTH "FOR" THE MONTH JUST PASSED OR THE MONTH TO COME. IN THESE STATES EVERY EFFORT IS BEING MADE TO CARRY OUT THE FULL INTENT OF THE SOCIAL SECURITY ACT AND IT IS IN OUR RELATION WITH THESE STATES THAT THE PROBLEMS PRESENTED ABOVE ASSUME SIGNIFICANCE WHICH WARRANTS, WE BELIEVE, OUR RESUBMISSION OF THESE QUESTIONS.

WE WOULD GREATLY APPRECIATE YOUR EARLY ATTENTION TO THIS MATTER.

SECTION 3, TITLE 1, OF THE SOCIAL SECURITY ACT, APPROVED AUGUST 14, 1935, 49 STAT. 621, PROVIDES:

SEC. 3 (A). FROM THE SUMS APPROPRIATED THEREFOR, THE SECRETARY OF THE TREASURY SHALL PAY TO EACH STATE WHICH HAS AN APPROVED PLAN FOR OLD-AGE ASSISTANCE, FOR EACH QUARTER, BEGINNING WITH THE QUARTER COMMENCING JULY 1, 1935, (1) AN AMOUNT, WHICH SHALL BE USED EXCLUSIVELY AS OLD-AGE ASSISTANCE, EQUAL TO ONE-HALF OF THE TOTAL OF THE SUMS EXPENDED DURING SUCH QUARTER AS OLD-AGE ASSISTANCE UNDER THE STATE PLAN WITH RESPECT TO EACH INDIVIDUAL WHO AT THE TIME OF SUCH EXPENDITURE IS SIXTY-FIVE YEARS OF AGE OR OLDER AND IS NOT AN INMATE OF A PUBLIC INSTITUTION, NOT COUNTING SO MUCH OF SUCH EXPENDITURE WITH RESPECT TO ANY INDIVIDUAL FOR ANY MONTH AS EXCEEDS $30 AND (2) 5 PERCENTUM OF SUCH AMOUNT, WHICH SHALL BE USED FOR PAYING THE COSTS OF ADMINISTERING THE STATE PLAN OR FOR OLD-AGE ASSISTANCE, OR BOTH, AND FOR NO OTHER PURPOSE: PROVIDED, THAT THE STATE PLAN IN ORDER TO BE APPROVED BY THE BOARD, NEED NOT PROVIDE FOR FINANCIAL PARTICIPATION BEFORE JULY 1, 1937, BY THE STATE, IN THE CASE OF ANY STATE WHICH THE BOARD, UPON APPLICATION BY THE STATE AND AFTER REASONABLE NOTICE AND OPPORTUNITY FOR HEARING TO THE STATE, FINDS IS PREVENTED BY ITS CONSTITUTION FROM PROVIDING SUCH FINANCIAL PARTICIPATION.

(B) THE METHOD OF COMPUTING AND PAYING SUCH AMOUNTS SHALL BE AS FOLLOWS:

(1) THE BOARD SHALL, PRIOR TO THE BEGINNING OF EACH QUARTER, ESTIMATE THE AMOUNT TO BE PAID TO THE STATE FOR SUCH QUARTER UNDER THE PROVISIONS OF CLAUSE (1) OF SUBSECTION (A) SUCH ESTIMATE TO BE BASED ON (A) A REPORT FILED BY THE STATE CONTAINING ITS ESTIMATE OF THE TOTAL SUM TO BE EXPENDED IN SUCH QUARTER IN ACCORDANCE WITH THE PROVISIONS OF SUCH CLAUSE, AND STATING THE AMOUNT APPROPRIATED OR MADE AVAILABLE BY THE STATE AND ITS POLITICAL SUBDIVISIONS FOR SUCH EXPENDITURES IN SUCH QUARTER, AND IF SUCH AMOUNT IS LESS THAN ONE-HALF OF THE TOTAL SUM OF SUCH ESTIMATED EXPENDITURES, THE SOURCE OR SOURCES FROM WHICH THE DIFFERENCE IS EXPECTED TO BE DERIVED, (B) RECORDS SHOWING THE NUMBER OF AGED INDIVIDUALS IN THE STATE, AND (C) SUCH OTHER INVESTIGATION AS THE BOARD MAY FIND NECESSARY.

YOUR SUBMISSION OF AUGUST 20, 1936, SUBMITTED THE CASE OF AN AGED PERSON WHO FILED APPLICATION ON THE 1ST OF APRIL BUT ADMINISTRATIVE ACTION DELAYED THE APPROVAL UNTIL AUGUST, WHEN IT WAS APPROVED AND PAYMENT MADE IN AUGUST FOR $150, REPORTED TO COVER THE MONTHS OF APRIL, MAY, JUNE, JULY, AND AUGUST, AT THE RATE OF $30 PER MONTH. IN THE DECISION TO YOU OF SEPTEMBER 5, 1936, IT WAS STATED:

* * * OF THE $150 EXPENDED BY THE STATE IN AUGUST THERE MAY NOT BE CONSIDERED FOR MATCHING BY FEDERAL CONTRIBUTION MORE THAN $30, THE FEDERAL CONTRIBUTION BEING ONE-HALF OF THAT SUM, AND NO PORTION OF THE $150, COULD BE CONSIDERED AS APPLICABLE--- INSOFAR AS THE FEDERAL CONTRIBUTION IS CONCERNED--- TO THE MONTHS PRECEDING THE MONTH IN WHICH THE PAYMENT WAS ACTUALLY MADE--- THE AMOUNT "EXPENDED" BY THE STATE.

SAID STATEMENT MUST BE CONSIDERED AS MADE IN THE LIGHT OF THE FACTS IN THE PARTICULAR CASE THERE INVOLVED.

WHILE THE LAW PROVIDES FOR PAYMENTS TO THE STATES "FOR EACH QUARTER" ON THE BASIS OF EXPENDITURES TO BE MADE BY THE STATE "DURING SUCH QUARTER," THE LIMITATION WITH RESPECT TO THE COMPUTATION OF THE MAXIMUM AMOUNT PAYABLE "FOR" OR "DURING" THE QUARTER IS UPON THE RATE OF THE EXPENDITURE WITH RESPECT TO ANY INDIVIDUAL "FOR ANY MONTH.' THAT IS TO SAY, THE $30 LIMITATION RELATES NOT TO THE AMOUNT EXPENDED IN A PARTICULAR MONTH BUT TO THE AMOUNT EXPENDED FOR ANY PARTICULAR MONTH.

ACCORDINGLY, THE QUARTERLY PAYMENTS TO THE STATES BY THE FEDERAL GOVERNMENT ARE FOR ADJUSTMENT UPON THE BASIS OF ONE-HALF OF THE AMOUNTS EXPENDED BY THE STATE DURING SAID QUARTER AS OLD-AGE ASSISTANCE, NOT IN EXCESS OF $30 PER MONTH WITH RESPECT TO ANY INDIVIDUAL, FOR THE PERIOD COVERED BY THE STATE PAYMENT, PROVIDED THAT IN NO CASE SHALL PAYMENTS BY THE STATE FOR ANY PERIOD PRIOR TO THE MONTH IN WHICH THE FIRST PAYMENT WAS MADE BY THE STATE TO THE INDIVIDUAL BE CONSIDERED. THE DECISION OF SEPTEMBER 5, 1936, IS MODIFIED ACCORDINGLY.