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Statement of Need: These changes will simplify our rules, making them less cumbersome to administer and easier for the public to understand and follow, and thereby reducing the potential for payment errors. These changes also will make SSI financial eligibility rules more consistent with those of other means-tested Federal programs. The changes also will eliminate the need to ask claimants, beneficiaries, and other members of their household certain questions that have been viewed as intrusive. By no longer counting gifts of clothing as income, we will remove a disincentive for family members to help needy relatives.

Summary of the Legal Basis: None.

Alternatives: Clothing None. Automobile - We considered revising the regulations to provide that SSA will assume that the recipient's automobile meets the use requirements for total exclusion of one automobile, absent evidence to the contrary. We did not select this option because it would not change the rule but only how we apply it. It does not go far enough in simplifying the SSI program. By revising the use requirements to exclude a car if it is used for transportation, thus replacing the four present specific transportation exclusion criteria, we will simplify the process. We considered excluding the value of one automobile, regardless of use. We did not select this option because it would allow for the routine exclusion of an automobile even if it were not used for transportation. Such an approach would exclude an inoperable vehicle, a vehicle not being used at all, or a vehicle only used for recreation (such as a dune buggy). We maintain that it is unreasonable to exclude from resources the value of a vehicle that is not used for transportation. We also considered increasing the excludable value of an automobile not meeting the use test to $11,000. We did not select this option because it would not simplify the SSI program. Household Goods and Personal Effects - Instead of excluding the entire value of household goods and personal effects, we considered raising the excludable limit to $10,000 from the current level of $2,000. We decided not to pursue this option because it would not provide any policy simplification. It would increase the amount excluded but it would not eliminate the need for the current time-consuming and complex procedures for determining the market value of an individual's household goods and personal effects.

Anticipated Costs and Benefits: We estimate that the program costs and administrative costs for these regulatory changes would be negligible. The proposed rules will simplify the administrative process of valuing noncash items. The change to the household goods and personal effects exclusion would simplify our rules and improve work efficiency by eliminating the need to inventory an individual's household goods and personal effects and determine their current market value. The proposed changes would also serve to make our rules less intrusive and more protective of the dignity of individuals seeking SSI benefits.

Risks: These proposed changes would simplify complex SSI rules without disadvantaging SSI applicants or recipients or significantly increasing program or administrative costs. Clothing - There are no significant concerns. Automobile - Our experience shows that most SSI beneficiaries do not own expensive cars. Still, it is possible that a beneficiary may, under our proposal, own an automobile that is used for transportation (and therefore excluded) and that is worth a considerable amount of money. Household Goods and Personal Effects - Under the proposed change to the household goods and personal effects exclusion, we would continue to recognize that individuals applying for SSI may own items that have investment value and which may be quite valuable. Such items as gems, jewelry, and collectibles would still be considered countable resources and subject to the SSI resource limit. Thus, the proposed exclusion for household goods and personal effects would not create an unintended exclusion for items that have investment value.