[Title 20 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2002 Edition]
[From the U.S. Government Printing Office]



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                    20


          Parts 400 to 499

                         Revised as of April 1, 2002

Employees' Benefits





          Containing a codification of documents of general 
          applicability and future effect
          As of April 1, 2002
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

A Special Edition of the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2002



  For sale by the Superintendent of Documents, U.S. Government Printing 
                                  Office
  Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area 
                              (202) 512-1800
      Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001



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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 20:
          Chapter III--Social Security Administration                3
  Finding Aids:
      Table of CFR Titles and Chapters........................    1093
      Alphabetical List of Agencies Appearing in the CFR......    1111
      Redesignation Table.....................................    1121
      Chapter III Index.......................................    1123
      List of CFR Sections Affected...........................    1131



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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 20 CFR 401.5 refers 
                       to title 20, part 401, 
                       section 5.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2002), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

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Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
info@fedreg.nara.gov.

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call 202-512-1800, 
M-F 8 a.m. to 4 p.m. e.s.t. or fax your order to 202-512-2233, 24 hours 
a day. For payment by check, write to the Superintendent of Documents, 
Attn: New Orders, P.O. Box 371954, Pittsburgh, PA 15250-7954. For GPO 
Customer Service call 202-512-1803.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
format at www.access.gpo.gov/nara (``GPO Access''). For more 
information, contact Electronic Information Dissemination Services, U.S. 
Government Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-
free). E-mail, gpoaccess@gpo.gov.

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    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.nara.gov/fedreg. The NARA 
site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 2002.



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                               THIS TITLE

    Title 20--Employees' Benefits is composed of three volumes. The 
first volume, containing parts 1-399, includes all current regulations 
issued by the Office of Workers' Compensation Programs, Department of 
Labor and the Railroad Retirement Board. The second volume, containing 
parts 400-499, includes all current regulations issued by the Social 
Security Administration. The third volume, containing part 500 to End, 
includes all current regulations issued by the Employees' Compensation 
Appeals Board, the Employment and Training Administration, the 
Employment Standards Administration, the Benefits Review Board, the 
Office of the Assistant Secretary for Veterans' Employment and Training 
(all of the Department of Labor) and the Joint Board for the Enrollment 
of Actuaries. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of April 1, 2002.

    Redesignation tables appear in the Finding Aids section of the first 
and second volumes and an Index to chapter III appears in the second 
volume.

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                      TITLE 20--EMPLOYEES' BENEFITS




                  (This book contains parts 400 to 499)

  --------------------------------------------------------------------
                                                                    Part

chapter iii--Social Security Administration.................         401

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               CHAPTER III--SOCIAL SECURITY ADMINISTRATION




  --------------------------------------------------------------------
Part                                                                Page
400            [Reserved]

401             Privacy and disclosure of official records 
                    and information.........................           5
402             Availability of information and records to 
                    the public..............................          24
403             Testimony by employees and the production of 
                    reords and information in legal 
                    proceedings.............................          41
404             Federal old-age, survivors and disability 
                    insurance (1950-    )...................          45
410             Federal Coal Mine Health and Safety Act of 
                    1969, Title IV--Black lung benefits 
                    (1969-    ).............................         580
411             The Ticket to Work and Self-Sufficiency 
                    Program.................................         666
416             Supplemental security income for the aged, 
                    blind, and disabled.....................         704
422             Organization and procedures.................        1044
423             Service of process..........................        1072
424-428         [Reserved]

429             Administrative regulations..................        1073
430             Personnel...................................        1077
431-497         [Reserved]

498             Civil monetary penalties, assessments and 
                    recommended exclusions..................        1077
499             [Reserved]

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                           PART 400 [RESERVED]



PART 401--PRIVACY AND DISCLOSURE OF OFFICIAL RECORDS AND INFORMATION--Table of Contents




                           Subpart A--General

Sec.
401.5  Purpose of the regulations.
401.10  Applicability.
401.15  Limitations on scope.
401.20  Scope.
401.25  Terms defined.

                       Subpart B--The Privacy Act

401.30  Privacy Act responsibilities.
401.35  Your right to request records.
401.40  How to get your own records.
401.45  Verifying your identity.
401.50  Granting notification of or access to a record.
401.55  Special procedures for notification of or access to medical 
          records.
401.60  Access or notification of program records about two or more 
          individuals.
401.65  How to correct your record.
401.70  Appeals of refusals to correct or amend records.
401.75  Rights of parents or legal guardians.
401.80  Accounting for disclosures.
401.85  Exempt systems.
401.90  Contractors.
401.95  Fees.

        Subpart C--Disclosure of Official Records and Information

401.100  Disclosure of records with the consent of the subject of the 
          record.
401.105  Disclosure of personal information without the consent of the 
          subject of the record.
401.110  Disclosure of personal information in nonprogram records 
          without the consent of the subject of the record.
401.115  Disclosure of personal information in program records without 
          the consent of the subject of the record.
401.120  Disclosures required by law.
401.125  Disclosures prohibited by law.
401.130  Freedom of Information Act.
401.135  Other laws.
401.140  General principles.
401.145  Safeguards against unauthorized redisclosure or use.
401.150  Compatible purposes.
401.155  Law enforcement purposes.
401.160  Health or safety.
401.165  Statistical and research activities.
401.170  Congress.
401.175  General Accounting Office.
401.180  Courts.
401.185  Other specific recipients.
401.190  Deceased persons.
401.195  Situations not specified in this part.
401.200  Blood donor locator service.

Appendix A to Part 401--Employee Standards of Conduct

    Authority: Secs. 205, 702(a)(5), 1106, and 1141 of the Social 
Security Act (42 U.S.C. 405, 902(a)(5), 1306, and 1320b-11); 5 U.S.C. 
552 and 552a; 8 U.S.C. 1360; 26 U.S.C. 6103; 30 U.S.C. 923.

    Source: 62 FR 4143, Jan. 29, 1997, unless otherwise noted.



                           Subpart A--General



Sec. 401.5  Purpose of the regulations.

    (a) General. The purpose of this part is to describe the Social 
Security Administration (SSA) policies and procedures for implementing 
the requirements of the Privacy Act of 1974, 5 U.S.C. 552a and section 
1106 of the Social Security Act concerning disclosure of information 
about individuals, both with and without their consent. This part also 
complies with other applicable statutes.
    (b) Privacy. This part implements the Privacy Act by establishing 
agency policies and procedures for the maintenance of records. This part 
also establishes agency policies and procedures under which you can ask 
us whether we maintain records about you or obtain access to your 
records. Additionally, this part establishes policies and procedures 
under which you may seek to have your record corrected or amended if you 
believe that your record is not accurate, timely, complete, or relevant.
    (c) Disclosure. This part also sets out the general guidelines which 
we follow in deciding whether to make disclosures. However, we must 
examine the facts of each case separately to decide if we should 
disclose the information or keep it confidential.



Sec. 401.10  Applicability.

    (a) SSA. All SSA employees and components are governed by this part. 
SSA employees governed by this part include all regular and special 
government employees of SSA; experts and consultants whose temporary 
(not in

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excess of 1 year) or intermittent services have been procured by SSA by 
contract pursuant to 5 U.S.C. 3109; volunteers where acceptance of their 
services are authorized by law; those individuals performing gratuitous 
services as permitted under conditions prescribed by the Office of 
Personnel Management; and, participants in work-study or training 
programs.
    (b) Other entities. This part also applies to advisory committees 
and councils within the meaning of the Federal Advisory Committee Act 
which provide advice to: Any official or component of SSA; or the 
President and for which SSA has been delegated responsibility for 
providing services.



Sec. 401.15  Limitations on scope.

    The regulations in this part do not--
    (a) Make available to an individual records which are not retrieved 
by that individual's name or other personal identifier.
    (b) Make available to the general public records which are retrieved 
by an individual's name or other personal identifier or make available 
to the general public records which would otherwise not be available to 
the general public under the Freedom of Information Act, 5 U.S.C. 552, 
and part 402 of this title.
    (c) Govern the maintenance or disclosure of, notification about or 
access to, records in the possession of SSA which are subject to the 
regulations of another agency, such as personnel records which are part 
of a system of records administered by the Office of Personnel 
Management.
    (d) Apply to grantees, including State and local governments or 
subdivisions thereof, administering federally funded programs.
    (e) Make available records compiled by SSA in reasonable 
anticipation of court litigation or formal administrative proceedings. 
The availability of such records to the general public or to any subject 
individual or party to such litigation or proceedings shall be governed 
by applicable constitutional principles, rules of discovery, and 
applicable regulations of the agency.



Sec. 401.20  Scope.

    (a) Privacy. Sections 401.30 through 401.95, which set out SSA's 
rules for implementing the Privacy Act, apply to all agency records 
accessed by an individual's name or personal identifier subject to the 
Privacy Act.
    (b) Disclosure--(1) Program records. Regulations that apply to the 
disclosure of information about an individual contained in SSA's program 
records are set out in Secs. 401.100 through 401.200 of this part. These 
regulations also apply to the disclosure of other Federal program 
information which SSA maintains. That information includes:
    (i) Health insurance records which SSA maintains for the Health Care 
Financing Administration's (HCFA) programs under title XVIII of the 
Social Security Act. We will disclose these records to HCFA. HCFA may 
redisclose these records under the regulations applying to records in 
HCFA's custody;
    (ii) Black lung benefit records which SSA maintains for the 
administration of the Federal Coal Mine Health and Safety Act; (However, 
this information is not covered by section 1106 of the Social Security 
Act.) and
    (iii) Records kept by consultants. Information retained by a 
medical, psychological or vocational professional concerning an 
examination performed under contract in the social security program 
shall not be disclosed except as permitted by this part.
    (2) Nonprogram records. Section 401.110 sets out rules applicable to 
the disclosure of nonprogram records, e.g., SSA's administrative and 
personnel records.

[62 FR 4143, Jan. 29, 1997, as amended at 65 FR 16812, Mar. 30, 2000]



Sec. 401.25  Terms defined.

    Access means making a record available to a subject individual.
    Act means the Social Security Act.
    Agency means the Social Security Administration.
    Commissioner means the Commissioner of Social Security.
    Disclosure means making a record about an individual available to or 
releasing it to another party.
    FOIA means the Freedom of Information Act.

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    Individual when used in connection with the Privacy Act or for 
disclosure of nonprogram records, means a living person who is a citizen 
of the United States or an alien lawfully admitted for permanent 
residence. It does not include persons such as sole proprietorships, 
partnerships, or corporations. A business firm which is identified by 
the name of one or more persons is not an individual. When used in 
connection with the rules governing program information, individual 
means a living natural person; this does not include corporations, 
partnerships, and unincorporated business or professional groups of two 
or more persons.
    Information means information about an individual, and includes, but 
is not limited to, vital statistics; race, sex, or other physical 
characteristics; earnings information; professional fees paid to an 
individual and other financial information; benefit data or other claims 
information; the social security number, employer identification number, 
or other individual identifier; address; phone number; medical 
information, including psychological or psychiatric information or lay 
information used in a medical determination; and information about 
marital and family relationships and other personal relationships.
    Maintain means to establish, collect, use, or disseminate when used 
in connection with the term record; and, to have control over or 
responsibility for a system of records when used in connection with the 
term system of records.
    Notification means communication to an individual whether he is a 
subject individual. (Subject individual is defined further on in this 
section.)
    Program Information means personal information and records collected 
and compiled by SSA in order to discharge its responsibilities under 
titles I, II, IV part A, X, XI, XIV, XVI and XVIII of the Act and parts 
B and C of the Federal Coal Mine Health and Safety Act.
    Record means any item, collection, or grouping of information about 
an individual that is maintained by SSA including, but not limited to, 
information such as an individual's education, financial transactions, 
medical history, and criminal or employment history that contains the 
individual's name, or an identifying number, symbol, or any other means 
by which an individual can be identified. When used in this part, record 
means only a record which is in a system of records.
    Routine use means the disclosure of a record outside SSA, without 
the consent of the subject individual, for a purpose which is compatible 
with the purpose for which the record was collected. It includes 
disclosures required to be made by statutes other than the Freedom of 
Information Act, 5 U.S.C. 552. It does not include disclosures which the 
Privacy Act otherwise permits without the consent of the subject 
individual and without regard to whether they are compatible with the 
purpose for which the information is collected, such as disclosures to 
the Bureau of the Census, the General Accounting Office, or to Congress.
    Social Security Administration (SSA) means (1) that Federal agency 
which has administrative responsibilities under titles, I, II, X, XI, 
XIV, XVI, and XVIII of the Act; and (2) units of State governments which 
make determinations under agreements made under sections 221 and 1633 of 
the Act.
    Social Security program means any program or provision of law which 
SSA is responsible for administering, including the Freedom of 
Information Act and Privacy Act. This includes our responsibilities 
under parts B and C of the Federal Coal Mine Health and Safety Act.
    Statistical record means a record maintained for statistical 
research or reporting purposes only and not maintained to make 
determinations about a particular subject individual.
    Subject individual means the person to whom a record pertains.
    System of records means a group of records under our control from 
which information about an individual is retrieved by the name of the 
individual or by an identifying number, symbol, or other identifying 
particular. Single records or groups of records which are not retrieved 
by a personal identifier are not part of a system of records. Papers 
maintained by individual Agency employees which are prepared, 
maintained, or discarded at the discretion of the employee and which are 
not subject to the Federal Records Act, 44 U.S.C. 2901, are not part of 
a system of

[[Page 8]]

records; provided, that such personal papers are not used by the 
employee or the Agency to determine any rights, benefits, or privileges 
of individuals.
    We and our mean the Social Security Administration.



                       Subpart B--The Privacy Act



Sec. 401.30  Privacy Act responsibilities.

    (a) Policy. Our policy is to protect the privacy of individuals to 
the fullest extent possible while nonetheless permitting the exchange of 
records required to fulfill our administrative and program 
responsibilities, and responsibilities for disclosing records which the 
general public is entitled to have under the Freedom of Information Act, 
5 U.S.C. 552, and 20 CFR part 402.
    (b) Maintenance of Records. We will maintain no record unless:
    (1) It is relevant and necessary to accomplish an SSA function which 
is required to be accomplished by statute or Executive Order;
    (2) We obtain the information in the record, as much as it is 
practicable, from the subject individual if we may use the record to 
determine an individual's rights, benefits or privileges under Federal 
programs;
    (3) We inform the individual providing the record to us of the 
authority for our asking him or her to provide the record (including 
whether providing the record is mandatory or voluntary, the principal 
purpose for maintaining the record, the routine uses for the record, and 
what effect his or her refusal to provide the record may have on him or 
her). Further, the individual agrees to provide the record, if the 
individual is not required by statute or Executive Order to do so.
    (c) First Amendment rights. We will keep no record which describes 
how an individual exercises rights guaranteed by the First Amendment 
unless we are expressly authorized:
    (1) By statute,
    (2) By the subject individual, or
    (3) Unless pertinent to and within the scope of an authorized law 
enforcement activity.



Sec. 401.35  Your right to request records.

    The Privacy Act gives you the right to direct access to most records 
about yourself that are in our systems of records. Exceptions to this 
Privacy Act right include--
    (a) Special procedures for access to certain medical records (see 5 
U.S.C. 552a(f)(3) and Sec. 401.55);
    (b) Unavailability of certain criminal law enforcement records (see 
5 U.S.C. 552a(k), and Sec. 401.85); and
    (c) Unavailability of records compiled in reasonable anticipation of 
a court action or formal administrative proceeding.

    Note to Sec. 401.35: The Freedom of Information Act (see 20 CFR part 
402) allows you to request information from SSA whether or not it is in 
a system of records.



Sec. 401.40  How to get your own records.

    (a) Your right to notification and access. Subject to the provisions 
governing medical records in Sec. 401.55, you may ask for notification 
of or access to any record about yourself that is in an SSA system of 
records. If you are a minor, you may get information about yourself 
under the same rules as for an adult. Under the Privacy Act, if you are 
the parent or guardian of a minor, or the legal guardian of someone who 
has been declared legally incompetent, and you are acting on his or her 
behalf, you may ask for information about that individual. You may be 
accompanied by another individual of your choice when you request access 
to a record in person, provided that you affirmatively authorize the 
presence of such other individual during any discussion of a record to 
which you are requesting access.
    (b) Identifying the records. At the time of your request, you must 
specify which systems of records you wish to have searched and the 
records to which you wish to have access. You may also request copies of 
all or any such records. Also, we may ask you to provide sufficient 
particulars to enable us to distinguish between records on individuals 
with the same name. The necessary particulars are set forth in the 
notices of systems of records which are published in the Federal 
Register.
    (c) Requesting notification or access. To request notification of or 
access to a record, you may visit your local social security office or 
write to the manager of the SSA system of records. The

[[Page 9]]

name and address of the manager of the system is part of the notice of 
systems of records. Every local social security office keeps a copy of 
the Federal Register containing that notice. That office can also help 
you get access to your record. You do not need to use any special form 
to ask for a record about you in our files, but your request must give 
enough identifying information about the record you want to enable us to 
find your particular record. This identifying information should include 
the system of records in which the record is located and the name and 
social security number (or other identifier) under which the record is 
filed. We do not honor requests for all records, all information, or 
similar blanket requests. Before granting notification of or access to a 
record, we may, if you are making your request in person, require you to 
put your request in writing if you have not already done so.



Sec. 401.45  Verifying your identity.

    (a) When required. Unless you are making a request for notification 
of or access to a record in person, and you are personally known to the 
SSA representative, you must verify your identity in accordance with 
paragraph (b) of this section if:
    (1) You make a request for notification of a record and we determine 
that the mere notice of the existence of the record would be a clearly 
unwarranted invasion of privacy if disclosed to someone other than the 
subject individual; or,
    (2) You make a request for access to a record which is not required 
to be disclosed to the general public under the Freedom of Information 
Act, 5 U.S.C. 552, and part 402 of this chapter.
    (b) Manner of verifying identity--(1) Request in person. If you make 
a request to us in person, you must provide at least one piece of 
tangible identification such as a driver's license, passport, alien or 
voter registration card, or union card to verify your identity. If you 
do not have identification papers to verify your identity, you must 
certify in writing that you are the individual who you claim to be and 
that you understand that the knowing and willful request for or 
acquisition of a record pertaining to an individual under false 
pretenses is a criminal offense.
    (2) Request by telephone. If you make a request by telephone, you 
must verify your identity by providing identifying particulars which 
parallel the record to which notification or access is being sought. If 
we determine that the particulars provided by telephone are 
insufficient, you will be required to submit your request in writing or 
in person. We will not accept telephone requests where an individual is 
requesting notification of or access to sensitive records such as 
medical records.
    (3) Requests not in person. Except as provided in paragraph (b)(2) 
of this section, if you do not make a request in person, you must submit 
a notarized request to SSA to verify your identity or you must certify 
in your request that you are the individual you claim to be and that you 
understand that the knowing and willful request for or acquisition of a 
record pertaining to an individual under false pretenses is a criminal 
offense.
    (4) Requests on behalf of another. If you make a request on behalf 
of a minor or legal incompetent as authorized under Sec. 401.40, you 
must verify your relationship to the minor or legal incompetent, in 
addition to verifying your own identity, by providing a copy of the 
minor's birth certificate, a court order, or other competent evidence of 
guardianship to SSA; except that you are not required to verify your 
relationship to the minor or legal incompetent when you are not required 
to verify your own identity or when evidence of your relationship to the 
minor or legal incompetent has been previously given to SSA.
    (5) Medical records--additional verification. You need to further 
verify your identity if you are requesting notification of or access to 
sensitive records such as medical records. Any information for further 
verification must parallel the information in the record to which 
notification or access is being sought. Such further verification may 
include such particulars as the date or place of birth, names of 
parents, name of employer or the specific times the individual received 
medical treatment.

[[Page 10]]



Sec. 401.50  Granting notification of or access to a record.

    (a) General. Subject to the provisions governing medical records in 
Sec. 401.55 and the provisions governing exempt systems in Sec. 401.85, 
upon receipt of your request for notification of or access to a record 
and verification of your identity, we will review your request and grant 
notification or access to a record, if you are the subject of the 
record.
    (b) Our delay in responding. If we determine that we will have to 
delay responding to your request because of the number of requests we 
are processing, a breakdown of equipment, shortage of personnel, storage 
of records in other locations, etc., we will so inform you and tell you 
when notification or access will be granted.



Sec. 401.55  Special procedures for notification of or access to medical records.

    (a) General. In general, you have a right to notification of or 
access to your medical records, including psychological records, as well 
as to other records pertaining to you that we maintain. In this section, 
we set forth special procedures as permitted by the Privacy Act for 
notification of or access to medical records, including a special 
procedure for notification of or access to medical records of minors.
    (b) Medical records procedures--(1) Notification of or access to 
medical records. (i) You may request notification of or access to a 
medical record pertaining to you. Unless you are a parent or guardian 
requesting notification of or access to a minor's medical record, you 
must make a request for a medical record in accordance with this section 
and the procedures in Secs. 401.45 through 401.50 of this part.
    (ii) When you request medical information about yourself, you must 
also name a representative in writing. The representative may be a 
physician, other health professional, or other responsible individual 
who would be willing to review the record and inform you of its contents 
at your representative's discretion. If you do not designate a 
representative, we may decline to release the requested information. In 
some cases, it may be possible to release medical information directly 
to you rather than to your representative.
    (2) Utilization of the designated representative. You will be 
granted direct access to your medical record if we can determine that 
direct access is not likely to have an adverse effect on you. If we 
believe that we are not qualified to determine, or if we do determine, 
that direct access to you is likely to have an adverse effect, the 
record will be sent to the designated representative. We will inform you 
in writing that the record has been sent.
    (c) Medical records of minors--(1) Requests by minors; notification 
of or access to medical records to minors. A minor may request 
notification of or access to a medical record pertaining to him or her 
in accordance with paragraph (b) of this section.
    (2) Requests on a minor's behalf; notification of or access to 
medical records to an individual on a minor's behalf. (i) To protect the 
privacy of a minor, we will not give to a parent or guardian direct 
notification of or access to a minor's record, even though the parent or 
guardian who requests such notification or access is authorized to act 
on a minor's behalf as provided in Sec. 401.75 of this part.
    (ii) A parent or guardian must make all requests for notification of 
or access to a minor's medical record in accordance with this paragraph 
and the procedures in Secs. 401.45 through 401.50 of this part. A parent 
or guardian must at the time he or she makes a request designate a 
family physician or other health professional (other than a family 
member) to whom the record, if any, will be sent. If the parent or 
guardian will not designate a representative, we will decline to release 
the requested information.
    (iii) Where a medical record on the minor exists, we will in all 
cases send it to the physician or health professional designated by the 
parent or guardian. If disclosure of the record would constitute an 
invasion of the minor's privacy, we will bring that fact to the 
attention of the physician or health professional to whom we send the 
record. We will ask the physician or health professional to consider the 
effect that disclosure of the record to

[[Page 11]]

the parent or guardian would have on the minor when the physician or 
health professional determines whether the minor's medical record should 
be made available to the parent or guardian. We will respond in 
substantially the following form to the parent or guardian making the 
request:

We have completed processing your request for notification of or access 
to --------'s (Name of minor) medical records. Please be informed that 
if any medical record was found pertaining to that individual, it has 
been sent to your designated physician or health professional.

    (iv) In each case where we send a minor's medical record to a 
physician or health professional, we will make reasonable efforts to 
inform the minor that we have given the record to the representative.
    (d) Requests on behalf of an incapacitated adult. If you are the 
legal guardian of an adult who has been declared legally incompetent, 
you may receive his or her records directly.



Sec. 401.60  Access or notification of program records about two or more individuals.

    When information about two or more individuals is in one record 
filed under your social security number, you may receive the information 
about you and the fact of entitlement and the amount of benefits payable 
to other persons based on your record. You may receive information about 
yourself or others, which is filed under someone else's social security 
number, if that information affects your entitlement to social security 
benefits or the amount of those benefits.



Sec. 401.65  How to correct your record.

    (a) How to request a correction. This section applies to all records 
kept by SSA (as described in Sec. 401.5) except for records of earnings. 
(20 CFR 422.125 describes how to request correction of your earnings 
record.) You may request that your record be corrected or amended if you 
believe that the record is not accurate, timely, complete, relevant, or 
necessary to the administration of a social security program. To amend 
or correct your record, you should write to the manager identified in 
the notice of systems of records which is published in the Federal 
Register (see Sec. 401.40(c) on how to locate this information). The 
staff at any social security office can help you prepare the request. 
You should submit any available evidence to support your request. Your 
request should indicate--
    (1) The system of records from which the record is retrieved;
    (2) The particular record which you want to correct or amend;
    (3) Whether you want to add, delete or substitute information in the 
record; and
    (4) Your reasons for believing that your record should be corrected 
or amended.
    (b) What we will not change. You cannot use the correction process 
to alter, delete, or amend information which is part of a determination 
of fact or which is evidence received in the record of a claim in the 
administrative appeal process. Disagreements with these determinations 
are to be resolved through the SSA appeal process. (See subparts I and J 
of part 404, and subpart N of part 416, of this chapter.) For example, 
you cannot use the correction process to alter or delete a document 
showing a birth date used in deciding your social security claim. 
However, you may submit a statement on why you think certain information 
should be altered, deleted, or amended, and we will make this statement 
part of your file.
    (c) Acknowledgment of correction request. We will acknowledge 
receipt of a correction request within 10 working days, unless we can 
review and process the request and give an initial determination of 
denial or compliance before that time.
    (d) Notice of error. If the record is wrong, we will correct it 
promptly. If wrong information was disclosed from the record, we will 
tell all those of whom we are aware received that information that it 
was wrong and will give them the correct information. This will not be 
necessary if the change is not due to an error, e.g., a change of name 
or address.
    (e) Record found to be correct. If the record is correct, we will 
inform you in writing of the reason why we refuse to amend your record 
and we will also inform you of your right to seek a review

[[Page 12]]

of the refusal and the name and address of the official to whom you 
should send your request for review.
    (f) Record of another government agency. If you request us to 
correct or amend a record governed by the regulation of another 
government agency, e.g., Office of Personnel Management, Federal Bureau 
of Investigation, we will forward your request to such government agency 
for processing and we will inform you in writing of the referral.



Sec. 401.70  Appeals of refusals to correct or amend records.

    (a) Which decisions are covered. This section describes how to 
appeal a decision made under the Privacy Act concerning your request for 
correction of a record or for access to your records, those of your 
minor child, or those of a person for whom you are the legal guardian. 
We generally handle a denial of your request for information about 
another person under the provisions of the FOIA (see part 402 of this 
chapter). This section applies only to written requests.
    (b) Appeal of refusal to amend or correct a record. (1) If we deny 
your request to correct a record, you may request a review of that 
decision. As discussed in Sec. 401.65(e), our letter denying your 
request will tell you to whom to write.
    (2) We will review your request within 30 working days from the date 
of receipt. However, for a good reason and with the approval of the 
Commissioner, or designee, this time limit may be extended up to an 
additional 30 days. In that case, we will notify you about the delay, 
the reason for it, and the date when the review is expected to be 
completed. If, after review, we determine that the record should be 
corrected, the record will be corrected. If, after review, we also 
refuse to amend the record exactly as you requested, we will inform you-
-
    (i) That your request has been refused and the reason;
    (ii) That this refusal is SSA's final decision;
    (iii) That you have a right to seek court review of this request to 
amend the record; and
    (iv) That you have a right to file a statement of disagreement with 
the decision. Your statement should include the reason you disagree. We 
will make your statement available to anyone to whom the record is 
subsequently disclosed, together with a statement of our reasons for 
refusing to amend the record. Also, we will provide a copy of your 
statement to individuals whom we are aware received the record 
previously.
    (c) Appeals after denial of access. If, under the Privacy Act, we 
deny your request for access to your own record, those of your minor 
child, or those of a person for whom you are the legal guardian, we will 
advise you in writing of the reason for that denial, the name and title 
or position of the person responsible for the decision, and your right 
to appeal that decision. You may appeal the denial decision to the 
Commissioner of Social Security, 6401 Security Boulevard, Baltimore, MD 
21235, within 30 days after you receive the notice denying all or part 
of your request, or, if later, within 30 days after you receive 
materials sent to you in partial compliance with your request. If we 
refuse to release a medical record because you did not designate a 
representative (Sec. 401.55) to receive the material, that refusal is 
not a formal denial of access and, therefore, may not be appealed to the 
Commissioner. If you file an appeal, either the Commissioner or a 
designee will review your request and any supporting information 
submitted and then send you a notice explaining the decision on your 
appeal. We must make our decision within 20 working days after we 
receive your appeal. The Commissioner or a designee may extend this time 
limit up to 10 additional working days if one of the circumstances in 20 
CFR 402.140 is met. We will notify you in writing of any extension, the 
reason for the extension, and the date by which we will decide your 
appeal. The notice of the decision on your appeal will explain your 
right to have the matter reviewed in a Federal district court if you 
disagree with all or part of our decision.



Sec. 401.75  Rights of parents or legal guardians.

    For purposes of this part, a parent or guardian of any minor or the 
legal guardian of any individual who has

[[Page 13]]

been declared incompetent due to physical or mental incapacity or age by 
a court of competent jurisdiction is authorized to act on behalf of a 
minor or incompetent individual. Except as provided in Sec. 401.45, 
governing procedures for verifying an individual's identity, and 
Sec. 401.55(c) governing special procedures for notification of or 
access to a minor's medical records, if you are authorized to act on 
behalf of a minor or legal incompetent, you will be viewed as if you 
were the individual or subject individual.



Sec. 401.80  Accounting for disclosures.

    (a) We will maintain an accounting of all disclosures of a record 
for five years or for the life of the record, whichever is longer; 
except that, we will not make accounting for:
    (1) Disclosures under paragraphs (a) and (b) of Sec. 401.110; and,
    (2) Disclosures of your record made with your written consent.
    (b) The accounting will include:
    (1) The date, nature, and purpose of each disclosure; and
    (2) The name and address of the person or entity to whom the 
disclosure is made.
    (c) You may request access to an accounting of disclosures of your 
record. You must request access to an accounting in accordance with the 
procedures in Sec. 401.40. You will be granted access to an accounting 
of the disclosures of your record in accordance with the procedures of 
this part which govern access to the related record. We may, at our 
discretion, grant access to an accounting of a disclosure of a record 
made under paragraph (g) of Sec. 401.110.



Sec. 401.85  Exempt systems.

    (a) General policy. The Privacy Act permits certain types of 
specific systems of records to be exempt from some of its requirements. 
Our policy is to exercise authority to exempt systems of records only in 
compelling cases.
    (b) Specific systems of records exempted. (1) Those systems of 
records listed in paragraph (b)(2) of this section are exempt from the 
following provisions of the Act and this part:
    (i) 5 U.S.C. 552a(c)(3) and paragraph (c) of Sec. 401.80 of this 
part which require that you be granted access to an accounting of 
disclosures of your record.
    (ii) 5 U.S.C. 552a (d) (1) through (4) and (f) and Secs. 401.35 
through 401.75 relating to notification of or access to records and 
correction or amendment of records.
    (iii) 5 U.S.C. 552a(e)(4) (G) and (H) which require that we include 
information about SSA procedures for notification, access, and 
correction or amendment of records in the notice for the systems of 
records.
    (iv) 5 U.S.C. 552a(e)(3) and Sec. 401.30 which require that if we 
ask you to provide a record to us, we must inform you of the authority 
for our asking you to provide the record (including whether providing 
the record is mandatory or voluntary, the principal purposes for 
maintaining the record, the routine uses for the record, and what effect 
your refusal to provide the record may have on you), and if you are not 
required by statute or Executive Order to provide the record, that you 
agree to provide the record. This exemption applies only to an 
investigatory record compiled by SSA for criminal law enforcement 
purposes in a system of records exempt under subsection (j)(2) of the 
Privacy Act to the extent that these requirements would prejudice the 
conduct of the investigation.
    (2) The following systems of records are exempt from those 
provisions of the Privacy Act and this part listed in paragraph (b)(1) 
of this section:
    (i) Pursuant to subsection (j)(2) of the Privacy Act, the 
Investigatory Material Compiled for Law Enforcement Purposes System, 
SSA.
    (ii) Pursuant to subsection (k)(2) of the Privacy Act:
    (A) The General Criminal Investigation Files, SSA;
    (B) The Criminal Investigations File, SSA; and,
    (C) The Program Integrity Case Files, SSA.
    (D) Civil and Administrative Investigative Files of the Inspector 
General, SSA/OIG.
    (E) Complaint Files and Log. SSA/OGC.
    (iii) Pursuant to subsection (k)(5) of the Privacy Act:

[[Page 14]]

    (A) The Investigatory Material Compiled for Security and Suitability 
Purposes System, SSA; and,
    (B) The Suitability for Employment Records, SSA.
    (iv) Pursuant to subsection (k)(6) of the Privacy Act, the Personnel 
Research and Merit Promotion Test Records, SSA/DCHR/OPE.
    (c) Notification of or access to records in exempt systems of 
records. (1) Where a system of records is exempt as provided in 
paragraph (b) of this section, you may nonetheless request notification 
of or access to a record in that system. You should make requests for 
notification of or access to a record in an exempt system of records in 
accordance with the procedures of Secs. 401.35 through 401.55.
    (2) We will grant you notification of or access to a record in an 
exempt system but only to the extent such notification or access would 
not reveal the identity of a source who furnished the record to us under 
an express promise, and prior to September 27, 1975, an implied promise, 
that his or her identity would be held in confidence, if:
    (i) The record is in a system of records which is exempt under 
subsection (k)(2) of the Privacy Act and you have been, as a result of 
the maintenance of the record, denied a right, privilege, or benefit to 
which you would otherwise be eligible; or,
    (ii) The record is in a system of records which is exempt under 
subsection (k)(5) of the Privacy Act.
    (3) If we do not grant you notification of or access to a record in 
a system of records exempt under subsections (k) (2) and (5) of the 
Privacy Act in accordance with this paragraph, we will inform you that 
the identity of a confidential source would be revealed if we granted 
you notification of or access to the record.
    (d) Discretionary actions by SSA. Unless disclosure of a record to 
the general public is otherwise prohibited by law, we may at our 
discretion grant notification of or access to a record in a system of 
records which is exempt under paragraph (b) of this section. 
Discretionary notification of or access to a record in accordance with 
this paragraph will not be a precedent for discretionary notification of 
or access to a similar or related record and will not obligate us to 
exercise discretion to grant notification of or access to any other 
record in a system of records which is exempt under paragraph (b) of 
this section.



Sec. 401.90  Contractors.

    (a) All contracts which require a contractor to maintain, or on 
behalf of SSA to maintain, a system of records to accomplish an SSA 
function must contain a provision requiring the contractor to comply 
with the Privacy Act and this part.
    (b) A contractor and any employee of such contractor will be 
considered employees of SSA only for the purposes of the criminal 
penalties of the Privacy Act, 5 U.S.C. 552a(i), and the employee 
standards of conduct (see appendix A of this part) where the contract 
contains a provision requiring the contractor to comply with the Privacy 
Act and this part.
    (c) This section does not apply to systems of records maintained by 
a contractor as a result of his management discretion, e.g., the 
contractor's personnel records.



Sec. 401.95  Fees.

    (a) Policy. Where applicable, we will charge fees for copying 
records in accordance with the schedule set forth in this section. We 
may only charge fees where you request that a copy be made of the record 
to which you are granted access. We will not charge a fee for searching 
a system of records, whether the search is manual, mechanical, or 
electronic. Where we must copy the record in order to provide access to 
the record (e.g., computer printout where no screen reading is 
available), we will provide the copy to you without cost. Where we make 
a medical record available to a representative designated by you or to a 
physician or health professional designated by a parent or guardian 
under Sec. 401.55 of this part, we will not charge a fee.
    (b) Fee schedule. Our Privacy Act fee schedule is as follows:
    (1) Copying of records susceptible to photocopying--$.10 per page.
    (2) Copying records not susceptible to photocopying (e.g., punch 
cards or

[[Page 15]]

magnetic tapes)--at actual cost to be determined on a case-by-case 
basis.
    (3) We will not charge if the total amount of copying does not 
exceed $25.
    (c) Other Fees. We also follow Secs. 402.155 through 402.165 of this 
chapter to determine the amount of fees, if any, we will charge for 
providing information under the FOIA and Privacy Act.



        Subpart C--Disclosure of Official Records and Information



Sec. 401.100  Disclosure of records with the consent of the subject of the record.

    (a) Except as permitted by the Privacy Act and the regulations in 
this chapter, or if required by the FOIA, we will not disclose your 
record without your written consent. The consent must specify the 
individual, organizational unit or class of individuals or 
organizational units to whom the record may be disclosed, which record 
may be disclosed and, where applicable, during which time frame the 
record may be disclosed (e.g., during the school year, while the subject 
individual is out of the country, whenever the subject individual is 
receiving specific services). We will not honor a blanket consent to 
disclose all your records to unspecified individuals or organizational 
units. We will verify your identity and, where applicable (e.g., where 
you consent to disclosure of a record to a specific individual), the 
identity of the individual to whom the record is to be disclosed.
    (b) A parent or guardian of a minor is not authorized to give 
consent to a disclosure of the minor's medical record. See 
Sec. 401.55(c) for the procedures for disclosures of or access to the 
medical records of minors.



Sec. 401.105  Disclosure of personal information without the consent of the subject of the record.

    (a) SSA maintains two categories of records which contain personal 
information:
    (1) Nonprogram records, primarily administrative and personnel 
records which contain information about SSA's activities as a government 
agency and employer, and
    (2) Program records which contain information about SSA's clients 
that it keeps to administer benefit programs under Federal law.
    (b) We apply different levels of confidentiality to disclosures of 
information in the categories in paragraphs (a) (1) and (2) of this 
section. For administrative and personnel records, we apply the Privacy 
Act restrictions on disclosure. For program records, we apply somewhat 
more strict confidentiality standards than those found in the Privacy 
Act. The reason for this difference in treatment is that our program 
records include information about a much greater number of persons than 
our administrative records, the information we must collect for program 
purposes is often very sensitive, and claimants are required by statute 
and regulation to provide us with the information in order to establish 
entitlement for benefits.



Sec. 401.110  Disclosure of personal information in nonprogram records without the consent of the subject of the record.

    The disclosures listed in this section may be made from our 
nonprogram records, e.g., administrative and personnel records, without 
your consent. Such disclosures are those:
    (a) To officers and employees of SSA who have a need for the record 
in the performance of their duties. The SSA official who is responsible 
for the record may upon request of any officer or employee, or on his 
own initiative, determine what constitutes legitimate need.
    (b) Required to be disclosed under the Freedom of Information Act, 5 
U.S.C. 552, and 20 CFR part 402.
    (c) For a routine use as defined in Sec. 401.25 of this part. 
Routine uses will be listed in any notice of a system of records. SSA 
publishes notices of systems of records, including all pertinent routine 
uses, in the Federal Register.
    (d) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to the provisions of 
Title 13 U.S.C.
    (e) To a recipient who has provided us with advance written 
assurance that

[[Page 16]]

the record will be used solely as a statistical research or reporting 
record; Provided, that, the record is transferred in a form that does 
not identify the subject individual.
    (f) To the National Archives of the United States as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the United States Government, or for evaluation by the 
Administrator of General Services or his designee to determine whether 
the record has such value.
    (g) To another government agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States for a civil or criminal law enforcement activity if the activity 
is authorized by law, and if the head of such government agency or 
instrumentality has submitted a written request to us, specifying the 
record desired and the law enforcement activity for which the record is 
sought.
    (h) To an individual pursuant to a showing of compelling 
circumstances affecting the health or safety of any individual if a 
notice of the disclosure is transmitted to the last known address of the 
subject individual.
    (i) To either House of Congress, or to the extent of matter within 
its jurisdiction, any committee or subcommittee thereof, any joint 
committee of Congress or subcommittee of any such joint committee.
    (j) To the Comptroller General, or any of his authorized 
representatives, in the course of the performance of the duties of the 
General Accounting Office.
    (k) Pursuant to the order of a court of competent jurisdiction.



Sec. 401.115  Disclosure of personal information in program records without the consent of the subject of the record.

    This section describes how various laws control the disclosure or 
confidentiality of personal information which we keep. We must consider 
these laws in the following order:
    (a) Some laws require us to disclose information (Sec. 401.120); 
some laws require us to withhold information (Sec. 401.125). These laws 
control whenever they apply.
    (b) If no law of this type applies in a given case, then we must 
look to FOIA principles. See Sec. 401.130.
    (c) When FOIA principles do not require disclosure, we may disclose 
information if both the Privacy Act and section 1106 of the Social 
Security Act permit the disclosure.



Sec. 401.120  Disclosures required by law.

    We disclose information when a law specifically requires it. The 
Social Security Act requires us to disclose information for certain 
program purposes. These include disclosures to the SSA Office of 
Inspector General, the Federal Parent Locator Service, and to States 
pursuant to an arrangement regarding use of the Blood Donor Locator 
Service. Also, there are other laws which require that we furnish other 
agencies information which they need for their programs. These agencies 
include the Department of Veterans Affairs for its benefit programs, the 
Immigration and Naturalization Service to carry out its duties regarding 
aliens, the Railroad Retirement Board for its benefit programs, and to 
Federal, State, and local agencies administering Aid to Families with 
Dependent Children, Medicaid, unemployment compensation, food stamps, 
and other programs.



Sec. 401.125  Disclosures prohibited by law.

    We do not disclose information when a law specifically prohibits it. 
The Internal Revenue Code generally prohibits us from disclosing tax 
return information which we receive to maintain individual earnings 
records. This includes, for example, amounts of wages and contributions 
from employers. Other laws restrict our disclosure of certain 
information about drug and alcohol abuse which we collect to determine 
eligibility for social security benefits.



Sec. 401.130  Freedom of Information Act.

    The FOIA requires us to disclose any information in our records upon 
request from the public, unless one of several exemptions in the FOIA 
applies. When the FOIA requires disclosure (see part 402 of this 
chapter), the Privacy Act permits it. The public does not include 
Federal agencies, courts, or

[[Page 17]]

the Congress, but does include State agencies, individuals, 
corporations, and most other parties. The FOIA does not apply to 
requests that are not from the public (e.g., from a Federal agency). 
However, we apply FOIA principles to requests from these other sources 
for disclosure of program information.



Sec. 401.135  Other laws.

    When the FOIA does not apply, we may not disclose any personal 
information unless both the Privacy Act and section 1106 of the Social 
Security Act permit the disclosure. Section 1106 of the Social Security 
Act requires that disclosures which may be made must be set out in 
statute or regulations; therefore, any disclosure permitted by this part 
is permitted by section 1106.



Sec. 401.140  General principles.

    When no law specifically requiring or prohibiting disclosure applies 
to a question of whether to disclose information, we follow FOIA 
principles to resolve that question. We do this to insure uniform 
treatment in all situations. The FOIA principle which most often applies 
to SSA disclosure questions is whether the disclosure would result in a 
``clearly unwarranted invasion of personal privacy.'' To decide whether 
a disclosure would be a clearly unwarranted invasion of personal privacy 
we consider--
    (a) The sensitivity of the information (e.g., whether individuals 
would suffer harm or embarrassment as a result of the disclosure);
    (b) The public interest in the disclosure;
    (c) The rights and expectations of individuals to have their 
personal information kept confidential;
    (d) The public's interest in maintaining general standards of 
confidentiality of personal information; and
    (e) The existence of safeguards against unauthorized redisclosure or 
use.



Sec. 401.145  Safeguards against unauthorized redisclosure or use.

    (a) The FOIA does not authorize us to impose any restrictions on how 
information is used after we disclose it under that law. In applying 
FOIA principles, we consider whether the information will be adequately 
safeguarded against improper use or redisclosure. We must consider all 
the ways in which the recipient might use the information and how likely 
the recipient is to redisclose the information to other parties. Thus, 
before we disclose personal information we may consider such factors as-
-
    (1) Whether only those individuals who have a need to know the 
information will obtain it;
    (2) Whether appropriate measures to safeguard the information to 
avoid unwarranted use or misuse will be taken; and
    (3) Whether we would be permitted to conduct on-site inspections to 
see whether the safeguards are being met.
    (b) We feel that there is a strong public interest in sharing 
information with other agencies with programs having the same or similar 
purposes, so we generally share information with those agencies. 
However, since there is usually little or no public interest in 
disclosing information for disputes between two private parties or for 
other private or commercial purposes, we generally do not share 
information for these purposes.



Sec. 401.150  Compatible purposes.

    (a) General. The Privacy Act allows us to disclose information, 
without the consent of the individual, to any other party for routine 
uses.
    (b) Routine use. We publish notices of systems of records in the 
Federal Register which contain a list of all routine use disclosures.
    (c) Determining compatibility. We disclose information for routine 
uses where necessary to carry out SSA's programs. It is also our policy 
to disclose information for use in other programs which have the same 
purposes as SSA programs if the information concerns eligibility, 
benefit amounts, or other matters of benefit status in a social security 
program and is relevant to determining the same matters in the other 
program. For example, we disclose information to the Railroad Retirement 
Board for pension and unemployment compensation programs, to the 
Veterans Administration for its benefit program, to worker's 
compensation programs, to State general

[[Page 18]]

assistance programs, and to other income maintenance programs at all 
levels of government; we also disclose for health-maintenance programs 
like Medicare and Medicaid, and in appropriate cases, for 
epidemiological and similar research.



Sec. 401.155  Law enforcement purposes.

    (a) General. The Privacy Act allows us to disclose information for 
law enforcement purposes under certain conditions. Much of the 
information in our files is especially sensitive or very personal. 
Furthermore, participation in social security programs is mandatory, so 
people cannot limit what information is given to us. Therefore, we 
generally disclose information for law enforcement purposes only in 
limited situations. Paragraphs (b) and (c) of this section discuss the 
disclosures we generally make for these purposes.
    (b) Serious crimes. SSA may disclose information for criminal law 
enforcement purposes where a violent crime such as murder or kidnapping 
has been committed and the individual about whom the information is 
being sought has been indicted or convicted of that crime. The Privacy 
Act allows us to disclose if the head of the law enforcement agency 
makes a written request giving enough information to show that these 
conditions are met, what information is needed, and why it is needed.
    (c) Criminal activity involving the social security program or 
another program with the same purposes. We disclose information when 
necessary to investigate or prosecute fraud or other criminal activity 
involving the social security program. We may also disclose information 
for investigation or prosecution of criminal activity in other income-
maintenance or health-maintenance programs (e.g., other governmental 
pension programs, unemployment compensation, general assistance, 
Medicare or Medicaid) if the information concerns eligibility, benefit 
amounts, or other matters of benefit status in a social security program 
and is relevant to determining the same matters in the other program.



Sec. 401.160  Health or safety.

    The Privacy Act allows us to disclose information in compelling 
circumstances where an individual's health or safety is affected. For 
example, if we learn that someone has been exposed to an excessive 
amount of radiation, we may notify that person and appropriate health 
officials. If we learn that someone has made a threat against someone 
else, we may notify that other person and law enforcement officials. 
When we make these disclosures, the Privacy Act requires us to send a 
notice of the disclosure to the last known address of the person whose 
record was disclosed.



Sec. 401.165  Statistical and research activities.

    (a) General. Statistical and research activities often do not 
require information in a format that identifies specific individuals. 
Therefore, whenever possible, we release information for statistical or 
research purposes only in the form of aggregates or individual data that 
cannot be associated with a particular individual. The Privacy Act 
allows us to release records if there are safeguards that the record 
will be used solely as a statistical or research record and the 
individual cannot be identified from any information in the record.
    (b) Safeguards for disclosure with identifiers. The Privacy Act also 
allows us to disclose data for statistical and research purposes in a 
form allowing individual identification, pursuant to published routine 
use, when the purpose is compatible with the purpose for which the 
record was collected. We will disclose personally identifiable 
information for statistical and research purposes if--
    (1) We determine that the requestor needs the information in an 
identifiable form for a statistical or research activity, will use the 
information only for that purpose, and will protect individuals from 
unreasonable and unwanted contacts;
    (2) The activity is designed to increase knowledge about present or 
alternative social security programs or

[[Page 19]]

other Federal or State income-maintenance or health-maintenance 
programs, or consists of epidemiological or similar research; and
    (3) The recipient will keep the information as a system of 
statistical records, will follow appropriate safeguards, and agrees to 
our on-site inspection of those safeguards so we can be sure the 
information is used or redisclosed only for statistical or research 
purposes. No redisclosure of the information may be made without SSA's 
approval.
    (c) Statistical record. A statistical record is a record in a system 
of records which is maintained only for statistical and research 
purposes, and which is not used to make any determination about an 
individual. We maintain and use statistical records only for statistical 
and research purposes. We may disclose a statistical record if the 
conditions in paragraph (b) of this section are met.
    (d) Compiling of records. Where a request for information for 
statistical and research purposes would require us to compile records, 
and doing that would be administratively burdensome to ongoing SSA 
operations, we may decline to furnish the information.



Sec. 401.170  Congress.

    (a) We disclose information to either House of Congress. We also 
disclose information to any committee or subcommittee of either House, 
or to any joint committee of Congress or subcommittee of that committee, 
if the information is on a matter within the committee's or 
subcommittee's jurisdiction.
    (b) We disclose to any member of Congress the information needed to 
respond to constituents' requests for information about themselves 
(including requests from parents of minors, or legal guardians). 
However, these disclosures are subject to the restrictions in 
Secs. 401.35 through 401.60.



Sec. 401.175  General Accounting Office.

    We disclose information to the General Accounting Office when that 
agency needs the information to carry out its duties.



Sec. 401.180  Courts.

    (a) General. The Privacy Act allows us to disclose information when 
we receive an order from a court of competent jurisdiction. However, 
much of our information is especially sensitive. Participation in social 
security programs is mandatory, and so people cannot limit what 
information is given to SSA. When information is used in a court 
proceeding, it usually becomes part of a public record, and its 
confidentiality cannot be protected. Therefore, we treat subpoenas or 
other court orders for information under the rules in paragraph (b) of 
this section.
    (b) Subpoena. We generally disclose information in response to a 
subpoena or other court order if--
    (1) Another section of this part would specifically allow the 
release; or
    (2) The Commissioner of SSA is a party to the proceeding; or
    (3) The information is necessary for due process in a criminal 
proceeding. In other cases, we try to satisfy the needs of courts while 
preserving the confidentiality of information.
    (c) Other regulations on testimony and production of records in 
legal proceedings. See Part 403 of this chapter for additional rules 
covering disclosure of information and records governed by this part and 
requested in connection with legal proceedings.

[62 FR 4143, Jan. 29, 1997, as amended at 66 FR 2809, Jan. 12, 2001]



Sec. 401.185  Other specific recipients.

    In addition to disclosures we make under the routine use provision, 
we also release information to--
    (a) The Bureau of the Census for purposes of planning or carrying 
out a census, survey, or related activity; and
    (b) The National Archives of the United States if the record has 
sufficient historical or other value to warrant its continued 
preservation by the United States Government. We also disclose a record 
to the Administrator of General Services for a determination of whether 
the record has such a value.



Sec. 401.190  Deceased persons.

    We do not consider the disclosure of information about a deceased 
person to be a clearly unwarranted invasion of

[[Page 20]]

that person's privacy. However, in disclosing information about a 
deceased person, we follow the principles in Sec. 401.115 to insure that 
the privacy rights of a living person are not violated.



Sec. 401.195  Situations not specified in this part.

    If no other provision in this part specifically allows SSA to 
disclose information, the Commissioner or designee may disclose this 
information if not prohibited by Federal law. For example, the 
Commissioner or designee may disclose information necessary to respond 
to life threatening situations.



Sec. 401.200  Blood donor locator service.

    (a) General. We will enter into arrangements with State agencies 
under which we will furnish to them at their request the last known 
personal mailing addresses (residence or post office box) of blood 
donors whose blood donations show that they are or may be infected with 
the human immunodeficiency virus which causes acquired immune deficiency 
syndrome. The State agency or other authorized person, as defined in 
paragraph (b) of this section, will then inform the donors that they may 
need medical care and treatment. The safeguards that must be used by 
authorized persons as a condition to receiving address information from 
the Blood Donor Locator Service are in paragraph (g) of this section, 
and the requirements for a request for address information are in 
paragraph (d) of this section.
    (b) Definitions. State means the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the 
Commonwealth of Northern Marianas, and the Trust Territory of the 
Pacific Islands.
    Authorized person means--
    (1) Any agency of a State (or of a political subdivision of a State) 
which has duties or authority under State law relating to the public 
health or otherwise has the duty or authority under State law to 
regulate blood donations; and
    (2) Any entity engaged in the acceptance of blood donations which is 
licensed or registered by the Food and Drug Administration in connection 
with the acceptance of such blood donations, and which provides for--
    (i) The confidentiality of any address information received pursuant 
to the rules in this part and section 1141 of the Social Security Act 
and related blood donor records;
    (ii) Blood donor notification procedures for individuals with 
respect to whom such information is requested and a finding has been 
made that they are or may be infected with the human immunodeficiency 
virus; and
    (iii) Counseling services for such individuals who have been found 
to have such virus. New counseling programs are not required, and an 
entity may use existing counseling programs or referrals to provide 
these services.
    Related blood donor records means any record, list, or compilation 
established in connection with a request for address information which 
indicates, directly or indirectly, the identity of any individual with 
respect to whom a request for address information has been made pursuant 
to the rules in this part.
    (c) Use of social security number for identification. A State or an 
authorized person in the State may require a blood donor to furnish his 
or her social security number when donating blood. The number may then 
be used by an authorized person to identify and locate a donor whose 
blood donation indicates that he or she is or may be infected with the 
human immunodeficiency virus.
    (d) Request for address of blood donor. An authorized person who has 
been unable to locate a blood donor at the address he or she may have 
given at the time of the blood donation may request assistance from the 
State agency which has arranged with us to participate in the Blood 
Donor Locator Service. The request to the Blood Donor Locator Service 
must--
    (1) Be in writing;
    (2) Be from a participating State agency either on its own behalf as 
an authorized person or on behalf of another authorized person;
    (3) Indicate that the authorized person meets the confidentiality 
safeguards of paragraph (g) of this section; and
    (4) Include the donor's name and social security number, the 
addresses at

[[Page 21]]

which the authorized person attempted without success to contact the 
donor, the date of the blood donation if available, a statement that the 
donor has tested positive for the human immunodeficiency virus according 
to the latest Food and Drug Administration standards or that the history 
of the subsequent use of the donated blood or blood products indicates 
that the donor has or may have the human immunodeficiency virus, and the 
name and address of the requesting blood donation facility.
    (e) SSA response to request for address. After receiving a request 
that meets the requirements of paragraph (d) of this section, we will 
search our records for the donor's latest personal mailing address. If 
we do not find a current address, we will request that the Internal 
Revenue Service search its tax records and furnish us any personal 
mailing address information from its files, as required under section 
6103(m)(6) of the Internal Revenue Code. After completing these 
searches, we will provide to the requesting State agency either the 
latest mailing address available for the donor or a response stating 
that we do not have this information. We will then destroy the records 
or delete all identifying donor information related to the request and 
maintain only the information that we will need to monitor the 
compliance of authorized persons with the confidentiality safeguards 
contained in paragraph (g) of this section.
    (f) SSA refusal to furnish address. If we determine that an 
authorized person has not met the requirements of paragraphs (d) and (g) 
of this section, we will not furnish address information to the State 
agency. In that case, we will notify the State agency of our 
determination, explain the reasons for our determination, and explain 
that the State agency may request administrative review of our 
determination. The Commissioner of Social Security or a delegate of the 
Commissioner will conduct this review. The review will be based on the 
information of record and there will not be an opportunity for an oral 
hearing. A request for administrative review, which may be submitted 
only by a State agency, must be in writing. The State agency must send 
its request for administrative review to the Commissioner of Social 
Security, 6401 Security Boulevard, Baltimore, MD 21235, within 60 days 
after receiving our notice refusing to give the donor's address. The 
request for review must include supporting information or evidence that 
the requirements of the rules in this part have been met. If we do not 
furnish address information because an authorized person failed to 
comply with the confidentiality safeguards of paragraph (g) of this 
section, the State agency will have an opportunity to submit evidence 
that the authorized person is now in compliance. If we then determine, 
based on our review of the request for administrative review and the 
supporting evidence, that the authorized person meets the requirements 
of the rules in this part, we will respond to the address request as 
provided in paragraph (e) of this section. If we determine on 
administrative review that the requirements have not been met, we will 
notify the State agency in writing of our decision. We will make our 
determination within 30 days after receiving the request for 
administrative review, unless we notify the State agency within this 30-
day time period that we will need additional time. Our determination on 
the request for administrative review will give the findings of fact, 
the reasons for the decision, and what actions the State agency should 
take to ensure that it or the blood donation facility is in compliance 
with the rules in this part.
    (g) Safeguards to ensure confidentiality of blood donor records. We 
will require assurance that authorized persons have established and 
continue to maintain adequate safeguards to protect the confidentiality 
of both address information received from the Blood Donor Locator 
Service and related blood donor records. The authorized person must, to 
the satisfaction of the Secretary--
    (1) Establish and maintain a system for standardizing records which 
includes the reasons for requesting the addresses of blood donors, dates 
of the requests, and any disclosures of address information;
    (2) Store blood donors' addresses received from the Blood Donor 
Locator Service and all related blood donor

[[Page 22]]

records in a secure area or place that is physically safe from access by 
persons other than those whose duties and responsibilities require 
access;
    (3) Restrict access to these records to authorized employees and 
officials who need them to perform their official duties related to 
notifying blood donors who are or may be infected with the human 
immunodeficiency virus that they may need medical care and treatment;
    (4) Advise all personnel who will have access to the records of the 
confidential nature of the information, the safeguards required to 
protect the information, and the civil and criminal sanctions for 
unauthorized use or disclosure of the information;
    (5) Destroy the address information received from the Blood Donor 
Locator Service, as well as any records established in connection with 
the request which indicate directly or indirectly the identity of the 
individual, after notifying or attempting to notify the donor at the 
address obtained from the Blood Donor Locator Service; and
    (6) Upon request, report to us the procedures established and 
utilized to ensure the confidentiality of address information and 
related blood donor records. We reserve the right to make onsite 
inspections to ensure that these procedures are adequate and are being 
followed and to request such information as we may need to ensure that 
the safeguards required in this section are being met.
    (h) Unauthorized disclosure. Any official or employee of the Federal 
Government, a State, or a blood donation facility who discloses blood 
donor information, except as provided for in this section or under a 
provision of law, will be subject to the same criminal penalty as 
provided in section 7213(a) of the Internal Revenue Code of 1986 for the 
unauthorized disclosure of tax information.

          Appendix A to Part 401--Employee Standards of Conduct

    (a) General. All SSA employees are required to be aware of their 
responsibilities under the Privacy Act of 1974, 5 U.S.C. 552a. 
Regulations implementing the Privacy Act are set forth in this part. 
Instruction on the requirements of the Act and regulation shall be 
provided to all new employees of SSA. In addition, supervisors shall be 
responsible for assuring that employees who are working with systems of 
records or who undertake new duties which require the use of systems of 
records are informed of their responsibilities. Supervisors shall also 
be responsible for assuring that all employees who work with such 
systems of records are periodically reminded of the requirements of the 
Privacy Act and are advised of any new provisions or interpretations of 
the Act.
    (b) Penalties. (1) All employees must guard against improper 
disclosure of records which are governed by the Privacy Act. Because of 
the serious consequences of improper invasions of personal privacy, 
employees may be subject to disciplinary action and criminal prosecution 
for knowing and willful violations of the Privacy Act and regulation. In 
addition, employees may also be subject to disciplinary action for 
unknowing or unwillful violations, where the employee had notice of the 
provisions of the Privacy Act and regulations and failed to inform 
himself or herself sufficiently or to conduct himself or herself in 
accordance with the requirements to avoid violations.
    (2) SSA may be subjected to civil liability for the following 
actions undertaken by its employees:
    (a) Making a determination under the Privacy Act and Secs. 401.65 
and 401.70 not to amend an individual's record in accordance with his or 
her request, or failing to make such review in conformity with those 
provisions;
    (b) Refusing to comply with an individual's request for notification 
of or access to a record pertaining to him or her;
    (c) Failing to maintain any record pertaining to any individual with 
such accuracy, relevance, timeliness, and completeness as is necessary 
to assure fairness in any determination relating to the qualifications, 
character, rights, or opportunities of, or benefits to the individual 
that may be made on the basis of such a record, and consequently makes a 
determination which is adverse to the individual; or
    (d) Failing to comply with any other provision of the Act or any 
rule promulgated thereunder, in such a way as to have an adverse effect 
on an individual.
    (3) An employee may be personally subject to criminal liability as 
set forth below and in 5 U.S.C. 552a (i):
    (a) Willful disclosure. Any officer or employee of SSA, who by 
virtue of his employment or official position, has possession of, or 
access to, agency records which contain individually identifiable 
information the disclosure of which is prohibited by the Privacy Act or 
by rules or regulations established thereunder, and who, knowing that 
disclosure of the specific material is so prohibited, willfully 
discloses the material in any manner to any person or agency not 
entitled to

[[Page 23]]

receive it, shall be guilty of a misdemeanor and may be fined not more 
than $5,000.
    (b) Notice requirements. Any officer or employee of SSA who 
willfully maintains a system of records without meeting the notice 
requirements [of the Privacy Act] shall be guilty of a misdemeanor and 
may be fined not more than $5,000.
    (c) Rules governing employees not working with systems of records. 
Employees whose duties do not involve working with systems of records 
will not generally disclose to any one, without specific authorization 
from their supervisors, records pertaining to employees or other 
individuals which by reason of their official duties are available to 
them. Notwithstanding the above, the following records concerning 
Federal employees are a matter of public record and no further 
authorization is necessary for disclosure:
    (1) Name and title of individual.
    (2) Grade classification or equivalent and annual rate of salary.
    (3) Position description.
    (4) Location of duty station, including room number and telephone 
number.
    In addition, employees shall disclose records which are listed in 
SSA's Freedom of Information Regulation as being available to the 
public. Requests for other records will be referred to the responsible 
SSA Freedom of Information Officer. This does not preclude employees 
from discussing matters which are known to them personally, and without 
resort to a record, to official investigators of Federal agencies for 
official purposes such as suitability checks, Equal Employment 
Opportunity investigations, adverse action proceedings, grievance 
proceedings, etc.
    (d) Rules governing employees whose duties require use or reference 
to systems of records. Employees whose official duties require that they 
refer to, maintain, service, or otherwise deal with systems of records 
(hereinafter referred to as ``Systems Employees'') are governed by the 
general provisions. In addition, extra precautions are required and 
systems employees are held to higher standards of conduct.
    (1) Systems Employees shall:
    (a) Be informed with respect to their responsibilities under the 
Privacy Act;
    (b) Be alert to possible misuses of the system and report to their 
supervisors any potential or actual use of the system which they believe 
is not in compliance with the Privacy Act and regulation;
    (c) Disclose records within SSA only to an employee who has a 
legitimate need to know the record in the course of his or her official 
duties;
    (d) Maintain records as accurately as practicable.
    (e) Consult with a supervisor prior to taking any action where they 
are in doubt whether such action is in conformance with the Act and 
regulation.
    (2) Systems employees shall not:
    (a) Disclose in any form records from a system of records except (1) 
with the consent or at the request of the subject individual; or (2) 
where its disclosure is permitted under Sec. 401.110.
    (b) Permit unauthorized individuals to be present in controlled 
areas. Any unauthorized individuals observed in controlled areas shall 
be reported to a supervisor or to the guard force.
    (c) Knowingly or willfully take action which might subject SSA to 
civil liability.
    (d) Make any arrangements for the design, development, or operation 
of any system of records without making reasonable effort to provide 
that the system can be maintained in accordance with the Act and 
regulation.
    (e) Contracting officers. In addition to any applicable provisions 
set forth above, those employees whose official duties involve entering 
into contracts on behalf of SSA shall also be governed by the following 
provisions:
    (1) Contracts for design, or development of systems and equipment. 
The contracting officer shall not enter into any contract for the design 
or development of a system of records, or for equipment to store, 
service or maintain a system of records unless the contracting officer 
has made reasonable effort to ensure that the product to be purchased is 
capable of being used without violation of the Privacy Act or the 
regulations in this part. He shall give special attention to provision 
of physical safeguards.
    (2) Contracts for the operation of systems of records. The 
Contracting Officer, in conjunction with other officials whom he feels 
appropriate, shall review all proposed contracts providing for the 
operation of systems of records prior to execution of the contracts to 
determine whether operation of the system of records is for the purpose 
of accomplishing a Department function. If it is determined that the 
operation of the system is to accomplish an SSA function, the 
contracting officer shall be responsible for including in the contract 
appropriate provisions to apply the provisions of the Privacy Act and 
regulation to the system, including prohibitions against improper 
release by the contractor, his employees, agents, or subcontractors.
    (3) Other service contracts. Contracting officers entering into 
general service contracts shall be responsible for determining the 
appropriateness of including provisions in the contract to prevent 
potential misuse (inadvertent or otherwise) by employees, agents, or 
subcontractors of the contractor.
    (f) Rules governing SSA officials responsible for managing systems 
of records. In addition to the requirements for Systems Employees, SSA 
officials responsible for managing systems of records as described in 
Sec. 401.40(c) (system managers) shall:
    (1) Respond to all requests for notification of or access, 
disclosure, or amendment of

[[Page 24]]

records in a timely fashion in accordance with the Privacy Act and 
regulation;
    (2) Make any amendment of records accurately and in a timely 
fashion;
    (3) Inform all persons whom the accounting records show have 
received copies of the record prior to the amendments of the correction; 
and
    (4) Associate any statement of disagreement with the disputed 
record, and
    (a) Transmit a copy of the statement to all persons whom the 
accounting records show have received a copy of the disputed record, and
    (b) Transmit that statement with any future disclosure.



PART 402--AVAILABILITY OF INFORMATION AND RECORDS TO THE PUBLIC--Table of Contents




Sec.
402.5  Scope and purpose.
402.10  Policy.
402.15  Relationship between the FOIA and the Privacy Act of 1974.
402.20  Requests not handled under the FOIA.
402.25  Referral of requests outside of SSA.
402.30  Definitions.
402.35  Publication.
402.40  Publications for sale.
402.45  Availability of records.
402.50  Availability of administrative staff manuals.
402.55  Materials available at district offices and branch offices.
402.60  Materials in field offices of the Office of Hearings and 
          Appeals.
402.65  Health care information.
402.70  Reasons for withholding some records.
402.75  Exemption one for withholding records: National defense and 
          foreign policy.
402.80  Exemption two for withholding records: Internal personnel rules 
          and practices.
402.85  Exemption three for withholding records: Records exempted by 
          other statutes.
402.90  Exemption four for withholding records: Trade secrets and 
          confidential commercial or financial information.
402.95  Exemption five for withholding records: Internal memoranda.
402.100  Exemption six: Clearly unwarranted invasion of personal 
          privacy.
402.105  Exemption seven for withholding records: Law enforcement.
402.110  Exemptions eight and nine for withholding records: Records on 
          financial institutions; records on wells.
402.125  Who may release a record.
402.130  How to request a record.
402.135  Where to send a request.
402.140  How a request for a record is processed.
402.145  Responding to your request.
402.150  Release of records.
402.155  Fees to be charged--categories of requests.
402.160  Fees to be charged--general provisions.
402.165  Fee schedule.
402.170  Fees for providing records and related services for program 
          purposes pursuant to section 1106 of the Social Security Act.
402.175  Fees for providing information and related services for non-
          program purposes.
402.180  Procedure on assessing and collecting fees for providing 
          records.
402.185  Waiver or reduction of fees in the public interest.
402.190  Officials who may deny a request for records under FOIA.
402.195  How a request is denied.
402.200  How to appeal a decision denying all or part of a request.
402.205  U.S. District Court action.

    Authority: Secs. 205, 702(a)(5), and 1106 of the Social Security 
Act; (42 U.S.C. 405, 902(a)(5), and 1306); 5 U.S.C. 552 and 552a; 8 
U.S.C. 1360; 18 U.S.C. 1905; 26 U.S.C. 6103; 30 U.S.C. 923b; 31 U.S.C. 
9701; E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p. 235.

    Source: 62 FR 4154, Jan. 29, 1997, unless otherwise noted.



Sec. 402.5  Scope and purpose.

    The rules in this part relate to the availability to the public, 
pursuant to the Freedom of Information Act (FOIA) 5 U.S.C. 552, of 
records of the Social Security Administration (SSA). They describe how 
to make a FOIA request; who can release records and who can decide not 
to release; how much time it should take to make a determination 
regarding release; what fees may be charged; what records are available 
for public inspection; why some records are not released; and your right 
to appeal and then go to court if we refuse to release records. The 
rules in this part do not revoke, modify, or supersede the regulations 
of SSA relating to disclosure of information in part 401 of this 
chapter.



Sec. 402.10  Policy.

    As a general policy, SSA follows a balanced approach in 
administering FOIA. We not only recognize the right of public access to 
information in the possession of SSA, but also protect the

[[Page 25]]

integrity of internal processes. In addition, we recognize the 
legitimate interests of organizations or persons who have submitted 
records to SSA or who would otherwise be affected by release of records. 
For example, we have no discretion to release certain records, such as 
trade secrets and confidential commercial information, prohibited from 
release by law. This policy calls for the fullest responsible disclosure 
consistent with those requirements of administrative necessity and 
confidentiality which are recognized in the FOIA.



Sec. 402.15  Relationship between the FOIA and the Privacy Act of 1974.

    (a) Coverage. The FOIA and the rules in this part apply to all SSA 
records. The Privacy Act, 5 U.S.C. 552a, applies to records that are 
about individuals, but only if the records are in a system of records. 
``Individuals'' and ``system of records'' are defined in the Privacy Act 
and in 20 CFR 401.25.
    (b) Requesting your own records. If you are an individual and 
request records, then to the extent you are requesting your own records 
in a system of records, we will handle your request under the Privacy 
Act. If there is any record that we need not release to you under those 
provisions, we will also consider your request under the FOIA and this 
rule, and we will release the record to you if the FOIA requires it.
    (c) Requesting another individual's record. Whether or not you are 
an individual, if you request records that are about an individual 
(other than yourself) and that are in a system of records, we will 
handle your request under the FOIA and the rules in this part. However, 
if our disclosure in response to your request would be permitted by the 
Privacy Act's disclosure provision, (5 U.S.C. 552a(b)), for reasons 
other than the requirements of the FOIA, and if we decide to make the 
disclosure, then we will not handle your request under the FOIA and the 
rules in this part. For example, when we make routine use disclosures 
pursuant to requests, we do not handle them under the FOIA and the rules 
in this part. (``Routine use'' is defined in the Privacy Act and in 20 
CFR 401.25.) If we handle your request under the FOIA and the rules in 
this part and the FOIA does not require releasing the record to you, 
then the Privacy Act may prohibit the release and remove our discretion 
to release.



Sec. 402.20  Requests not handled under the FOIA.

    (a) We will not handle your request under the FOIA and the 
regulations in this part to the extent it asks for records that are 
currently available, either from SSA or from another part of the Federal 
Government, under a separate statute that provides specific activity for 
charging fees for those records. For example, we will not handle your 
request under the FOIA and the regulations in this part to the extent it 
asks for detailed earnings statements under the Social Security program.
    (b) We will not handle your request under the FOIA and the 
regulations in this part if you are seeking a record that is distributed 
by SSA as part of its regular program activity, for example, public 
information leaflets distributed by SSA.



Sec. 402.25  Referral of requests outside of SSA.

    If you request records that were created by, or provided to us by, 
another Federal agency, and if that agency asserts control over the 
records, we may refer the records and your request to that agency. We 
may likewise refer requests for classified records to the agency that 
classified them. In these cases, the other agency will process and 
respond to your request, to the extent it concerns those records, under 
that agency's regulation, and you need not make a separate request to 
that agency. We will notify you when we refer your request to another 
agency.



Sec. 402.30  Definitions.

    As used in this part,
    Agency means any executive department, military department, 
government corporation, government controlled corporation, or other 
establishment in the executive branch of the Federal Government, or any 
independent regulatory agency. A private organization is not an agency 
even if it is performing work under contract

[[Page 26]]

with the Government or is receiving Federal financial assistance. 
Grantee and contractor records are not subject to the FOIA unless they 
are in the possession or under the control of SSA or its agents. Solely 
for the purpose of disclosure under the FOIA, we consider records of 
individual beneficiaries located in the State Disability Determination 
Services (DDS) to be agency records.
    Commercial use means, when referring to a request, that the request 
is from or on behalf of one who seeks information for a use or purpose 
that furthers the commercial, trade, or profit interests of the 
requester or of a person on whose behalf the request is made. Whether a 
request is for a commercial use depends on the purpose of the request 
and the use to which the records will be put. The identity of the 
requester (individual, non-profit corporation, for-profit corporation) 
and the nature of the records, while in some cases indicative of that 
purpose or use, are not necessarily determinative. When a request is 
from a representative of the news media, a purpose or use supporting the 
requester's news dissemination function is not a commercial use.
    Duplication means the process of making a copy of a record and 
sending it to the requester, to the extent necessary to respond to the 
request. Such copies include paper copy, microfilm, audio-visual 
materials, and magnetic tapes, cards, and discs.
    Educational institution means a preschool, elementary or secondary 
school, institution of undergraduate or graduate higher education, or 
institution of professional or vocational education, which operates a 
program of scholarly research.
    Freedom of Information Act or FOIA means 5 U.S.C. 552.
    Freedom of Information Officer means an SSA official who has been 
delegated the authority to authorize disclosure of or withhold records 
and assess, waive, or reduce fees in response to FOIA requests.
    Non-commercial scientific institution means an institution that is 
not operated substantially for purposes of furthering its own or someone 
else's business, trade, or profit interests, and that is operated for 
purposes of conducting scientific research whose results are not 
intended to promote any particular product or industry.
    Records means any information maintained by an agency, regardless of 
forms or characteristics, that is made or received in connection with 
official business. This includes handwritten, typed, or printed 
documents (such as memoranda, books, brochures, studies, writings, 
drafts, letters, transcripts, and minutes) and material in other forms, 
such as punchcards; magnetic tapes; cards; computer discs or other 
electronic formats; paper tapes; audio or video recordings; maps; 
photographs; slides; microfilm; and motion pictures. It does not include 
objects or articles such as exhibits, models, equipment, and duplication 
machines, audiovisual processing materials, or computer software. It 
does not include personal records of an employee, or books, magazines, 
pamphlets, or other reference material in formally organized and 
officially designated SSA libraries, where such materials are available 
under the rules of the particular library.
    Representative of the news media means a person actively gathering 
information for an entity organized and operated to publish or broadcast 
news to the public. News media entities include television and radio 
broadcasters, publishers of periodicals who distribute their products to 
the general public or who make their products available for purchase or 
subscription by the general public, and entities that may disseminate 
news through other media (e.g., electronic dissemination of text). We 
will treat freelance journalists as representatives of a news media 
entity if they can show a likelihood of publication through such an 
entity. A publication contract is such a basis, and the requester's past 
publication record may show such a basis.
    Request means asking for records, whether or not you refer 
specifically to the FOIA. Requests from Federal agencies and court 
orders for documents are not included within this definition.
    Review means, when used in connection with processing records for a 
commercial use request, examining the records to determine what 
portions, if any, may be withheld, and any other

[[Page 27]]

processing that is necessary to prepare the records for release. It 
includes only the examining and processing that are done the first time 
we analyze whether a specific exemption applies to a particular record 
or portion of a record. It does not include examination done in the 
appeal stage with respect to an exemption that was applied at the 
initial request stage. However, if we initially withhold a record under 
one exemption, and on appeal we determine that that exemption does not 
apply, then examining the record in the appeal stage for the purpose of 
determining whether a different exemption applies is included in review. 
It does not include the process of researching or resolving general 
legal or policy issues regarding exemptions.
    Search means looking for records or portions of records responsive 
to a request. It includes reading and interpreting a request, and also 
page-by-page and line-by-line examination to identify responsive 
portions of a document. However, it does not include line-by-line 
examination where merely duplicating the entire page would be a less 
expensive and quicker way to comply with the request.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998, 66 
FR 2809, Jan. 12, 2001]



Sec. 402.35  Publication.

    (a) Methods of publication. Materials we are required to publish 
pursuant to the provisions of 5 U.S.C. 552 (a)(1) and (a)(2), we publish 
in one of the following ways:
    (1) By publication in the Federal Register of Social Security 
Administration regulations, and by their subsequent inclusion in the 
Code of Federal Regulations;
    (2) By publication in the Federal Register of appropriate general 
notices;
    (3) By other forms of publication, when incorporated by reference in 
the Federal Register with the approval of the Director of the Federal 
Register; and
    (4) By publication in the ``Social Security Rulings'' of indexes of 
precedential social security orders and opinions issued in the 
adjudication of claims, statements of policy and interpretations which 
have been adopted but have not been published in the Federal Register. 
The ``Social Security Rulings'' may be purchased through the Government 
Printing Office (See Sec. 402.40).
    (b) Publication of rulings. Although not required pursuant to 5 
U.S.C. 552 (a)(1) and (a)(2), we publish the following rulings in the 
Federal Register as well as by other forms of publication:
    (1) We publish Social Security Rulings in the Federal Register under 
the authority of the Commissioner of Social Security. They are binding 
on all components of the Social Security Administration. These rulings 
represent precedent final opinions and orders and statements of policy 
and interpretations that we have adopted.
    (2) We publish Social Security Acquiescence Rulings in the Federal 
Register under the authority of the Commissioner of Social Security. 
They are binding on all components of the Social Security 
Administration, except with respect to claims subject to the 
relitigation procedures established in 20 CFR 404.984, 410.610, and 
416.1484. For a description of Social Security Acquiescence Rulings, see 
20 CFR 404.984(b), 410.610c(b), and 416.1484(b) of this title.
    (c) Availability for inspection. To the extent practicable and to 
further assist the public, we make available for inspection at the 
address specified in Sec. 402.135 those materials which are published in 
the Federal Register pursuant to 5 U.S.C. 552(a)(1).
    (d) Availability by Telecommunications. To the extent practicable, 
we will make available by means of computer telecommunications the 
indices and other records that are available for inspection.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998; 65 
FR 16813, Mar. 30, 2000]



Sec. 402.40  Publications for sale.

    The following publications containing information pertaining to the 
program, organization, functions, and procedures of the Social Security 
Administration may be purchased from the Superintendent of Documents, 
Government Printing Office, Washington, DC 20402:

[[Page 28]]

    (a) Title 20, parts 400-499 of the Code of Federal Regulations.
    (b) Federal Register issues.
    (c) Compilation of the Social Security Laws.
    (d) Social Security Rulings.
    (e) Social Security Handbook. The information in the Handbook is not 
of precedent or interpretative force.
    (f) Social Security Bulletin.
    (g) Social Security Acquiescence Rulings.
    (h) SSA Publications on CD-ROM.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998]



Sec. 402.45  Availability of records.

    (a) What records are available. 5 U.S.C. 552, also known as the 
FOIA, permits any person to see, and get a copy of, any Federal agency's 
records unless the material is exempt from mandatory disclosure as 
described in Sec. 402.70 of this part.
    (b) FOIA. Under the FOIA, we are also required to make available to 
the public the instructional manuals issued to our employees, general 
statements of policy, and other materials which are used in processing 
claims and which are not published in the Federal Register, and an index 
of these manuals and materials.
    (c) Record citation as precedent. We will not use or cite any record 
described in paragraph (b) of this section as a precedent for an action 
against a person unless we have indexed the record and published it or 
made it available, or unless the person has timely notice of the record.
    (d) Electronic Reading Room. We will prepare an index of records 
which have become or are likely to become the subject of subsequent 
requests. The index, and, to the extent practicable, the records will be 
made available on the Internet or by other computer telecommunications 
means.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998]



Sec. 402.50  Availability of administrative staff manuals.

    All administrative staff manuals of the Social Security 
Administration and instructions to staff personnel which contain 
policies, procedures, or interpretations that affect the public are 
available for inspection and copying. A complete listing of such 
materials is published in the Index of Administrative Staff Manuals and 
Instructions. These manuals are generally not printed in a sufficient 
quantity to permit sale or other general distribution to the public. 
Selected material is maintained at district offices and field offices 
and may be inspected there. See Secs. 402.55 and 402.60 for a listing of 
this material.



Sec. 402.55  Materials available at district offices and branch offices.

    (a) Materials available for inspection. The following are available 
or will be made available for inspection at the district offices and 
branch offices:
    (1) Compilation of the Social Security Laws.
    (2) Social Security Administration regulations under the retirement, 
survivors, disability, and supplemental security income programs, i.e., 
20 CFR parts 401, 402, 404, 416, and 422; and the Social Security 
Administration's regulations under part B of title IV (Black Lung 
Benefits) of the Federal Coal Mine Health and Safety Act of 1969, 20 CFR 
part 410.
    (3) Social Security Rulings.
    (4) Social Security Handbook.
    (5) Social Security Acquiescence Rulings.
    (b) Materials available for inspection and copying. The following 
materials are available or will be made available for inspection and 
copying at the district offices and branch offices (fees may be 
applicable per Secs. 402.155 through 402.185):
    (1) SSA Program Operations Manual System.
    (2) SSA Organization Manual.
    (3) Handbook for State Social Security Administrators.
    (4) Indexes to the materials listed in paragraph (a) of this section 
and in this paragraph (b) and an index to the Hearings, Appeals and 
Litigation Law (HALLEX) manual.
    (5) Index of Administrative Staff Manuals and Instructions.



Sec. 402.60  Materials in field offices of the Office of Hearings and Appeals.

    (a) Materials available for inspection. The following materials are 
available

[[Page 29]]

for inspection in the field offices of the Office of Hearings and 
Appeals:
    (1) Regulations of the Social Security Administration (see 
Sec. 402.55(a)(2)).
    (2) Title 5, United States Code.
    (3) Compilation of the Social Security Laws.
    (4) Social Security Rulings.
    (5) Social Security Handbook.
    (6) Social Security Acquiescence Rulings.
    (b) The Hearings, Appeals and Litigation Law (HALLEX) manual is 
available for inspection and copying in the field offices of the Office 
of Hearings and Appeals (fees may be applicable per Secs. 402.155 
through 402.185).



Sec. 402.65  Health care information.

    We have some information about health care programs under titles 
XVIII and XIX (Medicare and Medicaid) of the Social Security Act. We 
follow the rules in 42 CFR part 401 in determining whether to provide 
any portion of it to a requester.



Sec. 402.70  Reasons for withholding some records.

    Section 552(b) of the Freedom of Information Act contains nine 
exemptions to the mandatory disclosure of records. We describe these 
exemptions in Secs. 402.75 through 402.110 of this part and explain how 
we apply them to disclosure determinations. (In some cases more than one 
exemption may apply to the same document.) Information obtained by the 
agency from any individual or organization, furnished in reliance on a 
provision for confidentiality authorized by applicable statute or 
regulation, will not be disclosed, to the extent it can be withheld 
under one of these exemptions. This section does not itself authorize 
the giving of any pledge of confidentiality by any officer or employee 
of the agency.



Sec. 402.75  Exemption one for withholding records: National defense and foreign policy.

    We are not required to release records that, as provided by FOIA, 
are ``(a) specifically authorized under criteria established by an 
Executive Order to be kept secret in the interest of national defense or 
foreign policy and (b) are in fact properly classified pursuant to such 
Executive Order.'' Executive Order No. 12958 (1995) (3 CFR, 1987 Comp., 
p. 235) provides for such classification. When the release of certain 
records may adversely affect U.S. relations with foreign countries, we 
usually consult with officials of those countries or officials of the 
Department of State. Also, we may on occasion have in our possession 
records classified by some other agency. We may refer your request for 
such records to the agency that classified them and notify you that we 
have done so.



Sec. 402.80  Exemption two for withholding records: Internal personnel rules and practices.

    We are not required to release records that are ``related solely to 
the internal personnel rules and practices of an agency.'' Under this 
exemption, we may withhold routine internal agency practices and 
procedures. For example, we may withhold guard schedules and rules 
governing parking facilities or lunch periods. Also under this 
exemption, we may withhold internal records whose release would help 
some persons circumvent the law or agency regulations. For example, we 
ordinarily do not disclose manuals that instruct our investigators or 
auditors how to investigate possible violations of law, to the extent 
that this release would help some persons circumvent the law.



Sec. 402.85  Exemption three for withholding records: Records exempted by other statutes.

    We are not required to release records if another statute 
specifically allows or requires us to withhold them. We may use another 
statute to justify withholding only if it absolutely prohibits 
disclosure or if it sets forth criteria to guide our decision on 
releasing or identifies particular types of material to be withheld. We 
often use this exemption to withhold information regarding a worker's 
earnings which is tax return information under section 6103 of the 
Internal Revenue Code.

[[Page 30]]



Sec. 402.90  Exemption four for withholding records: Trade secrets and confidential commercial or financial information.

    We will withhold trade secrets and commercial or financial 
information that is obtained from a person and is privileged or 
confidential.
    (a) Trade secrets. A trade secret is a secret, commercially valuable 
plan, formula, process, or device that is used for the making, 
preparing, compounding, or processing of trade commodities and that can 
be said to be the end product of either innovation or substantial 
effort. There must be a direct relationship between the trade secret and 
the productive process.
    (b) Commercial or financial information. We will not disclose 
records whose information is ``commercial or financial,'' is obtained 
from a person, and is ``privileged or confidential.''
    (1) Information is ``commercial or financial'' if it relates to 
businesses, commerce, trade, employment, profits, or finances (including 
personal finances). We interpret this category broadly.
    (2) Information is ``obtained from a person'' if SSA or another 
agency has obtained it from someone outside the Federal Government or 
from someone within the Government who has a commercial or financial 
interest in the information. ``Person'' includes an individual, 
partnership, corporation, association, State or foreign government, or 
other organization. Information is not ``obtained from a person'' if it 
is generated by SSA or another Federal agency. However, information is 
``obtained from a person'' if it is provided by someone, including but 
not limited to an agency employee, who retains a commercial or financial 
interest in the information.
    (3) Information is ``privileged'' if it would ordinarily be 
protected from disclosure in civil discovery by a recognized evidentiary 
privilege, such as the attorney-client privilege or the work product 
privilege. Information may be privileged for this purpose under a 
privilege belonging to a person outside the government, unless the 
providing of the information to the government rendered the information 
no longer protectable in civil discovery.
    (4) Information is ``confidential'' if it meets one of the following 
tests:
    (i) Disclosure may impair the government's ability to obtain 
necessary information in the future;
    (ii) Disclosure would substantially harm the competitive position of 
the person who submitted the information;
    (iii) Disclosure would impair other government interests, such as 
program effectiveness and compliance; or
    (iv) Disclosure would impair other private interests, such as an 
interest in controlling availability of intrinsically valuable records, 
which are sold in the market by their owner.
    (c) Analysis under tests in this section. The following questions 
may be relevant in analyzing whether a record meets one or more of the 
above tests:
    (1) Is the information of a type customarily held in strict 
confidence and not disclosed to the public by the person to whom it 
belongs?
    (2) What is the general custom or usage with respect to such 
information in the relevant occupation or business?
    (3) How many, and what types of, individuals have access to the 
information?
    (4) What kind and degree of financial injury can be expected if the 
information is disclosed?
    (d) Designation of certain confidential information. A person who 
submits records to the government may designate part or all of the 
information in such records as exempt from disclosure under Exemption 4 
of the FOIA. The person may make this designation either at the time the 
records are submitted to the government or within a reasonable time 
thereafter. The designation must be in writing. Where a legend is 
required by a request for proposals or request for quotations, pursuant 
to 48 CFR 352.215-12, then that legend is necessary for this purpose. 
Any such designation will expire ten years after the records were 
submitted to the government.
    (e) Predisclosure notification. The procedures in this paragraph 
apply to records on which the submitter has designated information as 
provided in paragraph (d) of this section. They also apply to records 
that were submitted

[[Page 31]]

to the government where we have substantial reason to believe that 
information in the records could reasonably be considered exempt under 
Exemption 4. Certain exceptions to these procedures are stated in 
paragraph (f) of this section.
    (1) When we receive a request for such records, and we determine 
that we may be required to disclose them, we will make reasonable 
efforts to notify the submitter about these facts. The notice will 
include a copy of the request, and it will inform the submitter about 
the procedures and time limits for submission and consideration of 
objections to disclosure. If we must notify a large number of 
submitters, we may do this by posting or publishing a notice in a place 
where the submitters are reasonably likely to become aware of it.
    (2) The submitter has five working days from receipt of the notice 
to object to disclosure of any part of the records and to state all 
bases for its objections.
    (3) We will give consideration to all bases that have been timely 
stated by the submitter. If we decide to disclose the records, we will 
notify the submitter in writing. This notice will briefly explain why we 
did not sustain its objections. We will include with the notice a copy 
of the records about which the submitter objected, as we propose to 
disclose them. The notice will state that we intend to disclose the 
records five working days after the submitter receives the notice unless 
we are ordered by a United States District Court not to release them.
    (4) When a requester files suit under the FOIA to obtain records 
covered by this paragraph, we will promptly notify the submitter.
    (5) Whenever we send a notice to a submitter under paragraph (e)(1) 
of this section, we will notify the requester that we are giving the 
submitter a notice and an opportunity to object. Whenever we send a 
notice to a submitter under paragraph (e)(3) of this section, we will 
notify the requester of this fact.
    (f) Exceptions to predisclosure notification. The notice 
requirements in paragraph (e) of this section do not apply in the 
following situations:
    (1) We decided not to disclose the records;
    (2) The information has previously been published or made generally 
available;
    (3) Disclosure is required by a regulation, issued after notice and 
opportunity for public comment, that specifies narrow categories of 
records that are to be disclosed under the FOIA, but in this case a 
submitter may still designate records as described in paragraph (d) of 
this section, and in exceptional cases, we may, at our discretion, 
follow the notice procedures in paragraph (e) of this section; or
    (4) The designation appears to be obviously frivolous, but in this 
case we will still give the submitter the written notice required by 
paragraph (e)(3) of this section (although this notice need not explain 
our decision or include a copy of the records), and we will notify the 
requester as described in paragraph (e)(5) of this section.



Sec. 402.95  Exemption five for withholding records: Internal memoranda.

    This exemption covers internal government communications and notes 
that fall within a generally recognized evidentiary privilege. Internal 
government communications include an agency's communications with an 
outside consultant or other outside person, with a court, or with 
Congress, when those communications are for a purpose similar to the 
purpose of privileged intra-agency communications. Some of the most-
commonly applicable privileges are described in the following 
paragraphs:
    (a) Deliberative process privilege. This privilege protects 
predecisional deliberative communications. A communication is protected 
under this privilege if it was made before a final decision was reached 
on some question of policy and if it expressed recommendations or 
opinions on that question. The purpose of the privilege is to prevent 
injury to the quality of the agency decisionmaking process by 
encouraging open and frank internal policy discussions, by avoiding 
premature disclosure of policies not yet adopted, and by avoiding the 
public confusion that might result from disclosing reasons

[[Page 32]]

that were not in fact the ultimate grounds for an agency's decision. 
Purely factual material in a deliberative document is within this 
privilege only if it is inextricably intertwined with the deliberative 
portions so that it cannot reasonably be segregated, if it would reveal 
the nature of the deliberative portions, or if its disclosure would in 
some other way make possible an intrusion into the decisionmaking 
process. We will release purely factual material in a deliberative 
document unless that material is otherwise exempt. The privilege 
continues to protect predecisional documents even after a decision is 
made.
    (b) Attorney work product privilege. This privilege protects 
documents prepared by or for an agency, or by or for its representative 
(typically, our attorneys) in anticipation of litigation or for trial. 
It includes documents prepared for purposes of administrative 
adjudications as well as court litigation. It includes documents 
prepared by program offices as well as by attorneys. It includes factual 
material in such documents as well as material revealing opinions and 
tactics. Finally, the privilege continues to protect the documents even 
after the litigation is closed.
    (c) Attorney-client communication privilege. This privilege protects 
confidential communications between a lawyer and an employee or agent of 
the Government where there is an attorney-client relationship between 
them (typically, where the lawyer is acting as attorney for the agency 
and the employee is communicating on behalf of the agency) and where the 
employee has communicated information to the attorney in confidence in 
order to obtain legal advice or assistance.



Sec. 402.100  Exemption six: Clearly unwarranted invasion of personal privacy.

    (a) Documents affected. We may withhold records about individuals if 
disclosure would constitute a clearly unwarranted invasion of their 
personal privacy.
    (b) Balancing test. In deciding whether to release records to you 
that contain personal or private information about someone else, we 
weigh the foreseeable harm of invading a person's privacy against the 
public interest in disclosure. In determining whether disclosure would 
be in the public interest, we will consider whether disclosure of the 
requested information would shed light on how a Government agency 
performs its statutory duties. However, in our evaluation of requests 
for records we attempt to guard against the release of information that 
might involve a violation of personal privacy because of a requester 
being able to ``read between the lines'' or piece together items that 
would constitute information that normally would be exempt from 
mandatory disclosure under Exemption Six.
    (c) Examples. Some of the information that we frequently withhold 
under Exemption Six is: Home addresses, ages, and minority group status 
of our employees or former employees; social security numbers; medical 
information about individuals who have filed a claim for disability 
benefits; names and addresses of individual beneficiaries of our 
programs, or benefits such individuals receive; earnings records, claim 
files, and other personal information SSA maintains.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998]



Sec. 402.105  Exemption seven for withholding records: Law enforcement.

    We are not required to disclose information or records that the 
government has compiled for law enforcement purposes. The records may 
apply to actual or potential violations of either criminal or civil laws 
or regulations. We can withhold these records only to the extent that 
releasing them would cause harm in at least one of the following 
situations:
    (a) Enforcement proceedings. We may withhold information whose 
release could reasonably be expected to interfere with prospective or 
ongoing law enforcement proceedings. Investigations of fraud and 
mismanagement, employee misconduct, and civil rights violations may fall 
into this category. In certain cases--such as when a fraud investigation 
is likely--we may refuse to confirm or deny the existence of records 
that relate to the violations in

[[Page 33]]

order not to disclose that an investigation is in progress, or may be 
conducted.
    (b) Fair trial or impartial adjudication. We may withhold records 
whose release would deprive a person of a fair trial or an impartial 
adjudication because of prejudicial publicity.
    (c) Personal privacy. We are careful not to disclose information 
that could reasonably be expected to constitute an unwarranted invasion 
of personal privacy. When a name surfaces in an investigation, that 
person is likely to be vulnerable to innuendo, rumor, harassment, and 
retaliation.
    (d) Confidential sources and information. We may withhold records 
whose release could reasonably be expected to disclose the identity of a 
confidential source of information. A confidential source may be an 
individual; a State, local, or foreign government agency; or any private 
organization. The exemption applies whether the source provides 
information under an express promise of confidentiality or under 
circumstances from which such an assurance could be reasonably inferred. 
Also, where the record, or information in it, has been compiled by a law 
enforcement authority conducting a criminal investigation, or by an 
agency conducting a lawful national security investigation, the 
exemption also protects all information supplied by a confidential 
source. Also protected from mandatory disclosure is any information 
which, if disclosed, could reasonably be expected to jeopardize the 
system of confidentiality that assures a flow of information from 
sources to investigatory agencies.
    (e) Techniques and procedures. We may withhold records reflecting 
special techniques or procedures of investigation or prosecution, not 
otherwise generally known to the public. In some cases, it is not 
possible to describe even in general terms those techniques without 
disclosing the very material to be withheld. We may also withhold 
records whose release would disclose guidelines for law enforcement 
investigations or prosecutions if this disclosure could reasonably be 
expected to create a risk that someone could circumvent requirements of 
law or of regulation.
    (f) Life and physical safety. We may withhold records whose 
disclosure could reasonably be expected to endanger the life or physical 
safety of any individual. This protection extends to threats and 
harassment as well as to physical violence.

[62 FR 4154, Jan. 29, 1997. Redesignated at 63 FR 35132, June 29, 1998]



Sec. 402.110  Exemptions eight and nine for withholding records: Records on financial institutions; records on wells.

    Exemption eight permits us to withhold records about regulation or 
supervision of financial institutions. Exemption nine permits the 
withholding of geological and geophysical information and data, 
including maps, concerning wells.



Sec. 402.125  Who may release a record.

    Except as otherwise provided by regulation, only the Director, 
Office of Disclosure Policy, SSA, or her or his designee may determine 
whether to release any record in SSA's control and possession. This 
official is SSA's Freedom of Information Officer. Sections 402.40, 
402.55, and 402.60 list some of the materials which we have determined 
may be released.



Sec. 402.130  How to request a record.

    You may request a record in person or by mail or by electronic 
telecommunications. To the extent practicable, and in the future, we 
will attempt to provide access for requests by telephone, fax, Internet, 
and e-mail. Any request should reasonably describe the record you want. 
If you have detailed information which would assist us in identifying 
that record, please submit it with your request. We may charge fees for 
some requests (Secs. 402.145-402.175 explain our fees). You should 
identify the request as a Freedom of Information Act request and mark 
the outside of any envelope used to submit your request as a ``Freedom 
of Information Request.'' The staff at any Social Security office can 
help you prepare this request.

[63 FR 35132, June 29, 1998]

[[Page 34]]



Sec. 402.135  Where to send a request.

    You may send your request for a record to: The Director, Office of 
Disclosure Policy, Social Security Administration, 6401 Security 
Boulevard, Baltimore, Maryland 21235.



Sec. 402.140  How a request for a record is processed.

    (a) In general, we will make a determination as to whether a 
requested record will be provided within 20 days (excepting Saturdays, 
Sundays, and legal public holidays) after receipt of a request by the 
appropriate official (see Sec. 402.135). This 20-day period may be 
extended in unusual circumstances by written notice to you, explaining 
why we need additional time, and the extension may be for up to 10 
additional working days when one or more of the following situations 
exist:
    (1) The office processing the request needs to locate and then 
obtain the record from another facility;
    (2) We need to locate, obtain, and appropriately examine a large 
number of records which are requested in a single request; or
    (3) The office processing the request needs to consult with another 
agency which has a substantial interest in the subject matter of the 
request. This consultation shall be conducted with all practicable 
speed.
    (b) If we cannot process your request within 10 additional days, we 
will notify you and provide you an opportunity to limit the scope of the 
request so that it may be processed within the additional 10 days, or we 
will provide you with an opportunity to arrange with us an alternative 
time frame for processing the request, or for processing a modified 
request.
    (c) Multi-tracking procedures. We will establish four tracks for 
handling requests and the track to which a request is assigned will 
depend on the nature of the request and the estimated processing time:
    (1) Track 1--Requests that can be answered with readily available 
records or information. These are the fastest to process.
    (2) Track 2--Requests where we need records or information from 
other offices throughout the Agency but we do not expect that the 
decision on disclosure will be as time consuming as for requests in 
Track 3.
    (3) Track 3--Requests which require a decision or input from another 
office or agency and a considerable amount of time will be needed for 
that, or the request is complicated or involves a large number of 
records. Usually, these cases will take the longest to process.
    (4) Track 4--Requests that will be expedited.
    (d) We will provide for expedited access for requesters who show a 
``compelling need'' for a speedy response. The EFOIA describes 
compelling need as when the failure to obtain the records on an 
expedited basis could reasonably be expected to pose ``an imminent 
threat to the life or physical safety of an individual,'' or when the 
request is from a person primarily engaged in disseminating information 
(such as a member of the news media), and there is an ``urgency to 
inform the public concerning actual or alleged Federal Government 
activity.'' We also will expedite processing of a request if the 
requester explains in detail to our satisfaction that a prompt response 
is needed because the requester may be denied a legal right, benefit, or 
remedy without the requested information, and that it cannot be obtained 
elsewhere in a reasonable amount of time. We will respond within 10 days 
to a request for expedited processing and, if we decide to grant 
expedited processing, we will then notify you of our decision whether or 
not to disclose the records requested as soon as practicable.

[63 FR 35133, June 29, 1998]



Sec. 402.145  Responding to your request.

    (a) Retrieving records. We are required to furnish copies of records 
only when they are in our possession or we can retrieve them from 
storage. We will make reasonable efforts to search for records manually 
or by automated means, including any information stored in an electronic 
form or format, except when such efforts would significantly interfere 
with the operation of our automated information system. If we have 
stored the records you want in the National Archives or another storage 
center, we will retrieve and review them for possible disclosure. 
However, the Federal Government destroys

[[Page 35]]

many old records, so sometimes it is impossible to fill requests. 
Various laws, regulations, and manuals give the time periods for keeping 
records before they may be destroyed. For example, there is information 
about retention of records in the Records Disposal Act of 1944, 44 
U.S.C. 3301 through 3314; the Federal Property Management Regulations, 
41 CFR 101-11.4; and the General Records Schedules of the National 
Archives and Records Administration.
    (b) Furnishing records. We will furnish copies only of records that 
we have or can retrieve. We are not required to create new records or to 
perform research for you. We may decide to conserve Government resources 
and at the same time supply the records you need by consolidating 
information from various records rather than copying them all. For 
instance, we could extract sections from various similar records instead 
of providing repetitious information. We generally will furnish only one 
copy of a record. We will make reasonable efforts to provide the records 
in the form or format you request if the record is readily reproducible 
in that form or format.
    (c) Deletions. When we publish or otherwise make available any 
record, we may delete information that is exempt from disclosure. For 
example, in an opinion or order, statement of policy, or other record 
which relates to a private party or parties, the name or names and other 
identifying details may be deleted. When technically feasible, we will 
indicate the extent of deletions on the portion of the record that is 
released or published at the place of the deletion unless including that 
indication would harm an interest protected by an exemption. If we deny 
a request, in whole or in part, we will make a reasonable effort to 
estimate the volume of any requested matter that is not disclosed, 
unless such an estimate would harm an interest protected by an 
exemption.
    (d) Creation of records. We are not required to create new records 
merely to satisfy a request. However, we will search manually or by 
automated means to locate information that is responsive to the request. 
If extensive computer programming is needed to respond to a request, we 
may decline to commit such resources, or if we agree to do so, we may 
charge you for the reasonable cost of doing so. We do not mean that we 
will never help you get information that does not already exist in our 
records. However, diverting staff and equipment from our other 
responsibilities may not always be possible.

[63 FR 35133, June 29, 1998]



Sec. 402.150  Release of records.

    (a) Records previously released. If we have released a record, or a 
part of a record, to others in the past, we will ordinarily release it 
to you also. However, we will not release it to you if a statute forbids 
this disclosure, and we will not necessarily release it to you if an 
exemption applies in your situation and it did not apply, or applied 
differently, in the previous situation(s) or if the previous release was 
unauthorized. See Sec. 402.45(d) regarding records in electronic reading 
rooms.
    (b) Poor copy. If we cannot make a legible copy of a record to be 
released, we do not attempt to reconstruct it. Instead, we furnish the 
best copy possible and note its poor quality in our reply.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35133, June 29, 1998]



Sec. 402.155  Fees to be charged--categories of requests.

    Paragraphs (a) through (c) of this section state, for each category 
of request, the type of fees that we will generally charge. However, for 
each of these categories, the fees may be limited, waived, or reduced 
for the reasons given below or for other reasons.
    (a) Commercial use request. If your request is for a commercial use, 
we will charge you the costs of search, review, and duplication.
    (b) Educational and scientific institutions and news media. If you 
are an educational institution or a non-commercial scientific 
institution, operated primarily for scholarly or scientific research, or 
a representative of the news media, and your request is not for a 
commercial use, we will charge you only for the duplication of 
documents. Also, we will not charge you the copying costs for the first 
100 pages of duplication.

[[Page 36]]

    (c) Other requesters. If your request is not the kind described by 
paragraph (a) or (b) of this section, then we will charge you only for 
the search and the duplication. Also, we will not charge you for the 
first two hours of search time or for the copying costs of the first 100 
pages of duplication.



Sec. 402.160  Fees to be charged--general provisions.

    (a) We may charge search fees even if the records we find are exempt 
from disclosure, or even if we do not find any records at all.
    (b) If we are not charging you for the first two hours of search 
time, under paragraph (c) of Sec. 402.155, and those two hours are spent 
on a computer search, then the two free hours are the first two hours of 
the time needed to access the information in the computer.
    (c) If we are not charging you for the first 100 pages of 
duplication, under paragraph (b) or (c) of Sec. 402.155, then those 100 
pages are the first 100 pages of photocopies of standard size pages, or 
the first 100 pages of computer printout.
    (d) We will charge interest on unpaid bills beginning on the 31st 
day following the day the bill was sent.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35134, June 29, 1998]



Sec. 402.165  Fee schedule.

    The following is our fee schedule for providing records and related 
services under the FOIA:
    (a) Manual searching for or reviewing of records. When the search or 
review is performed by employees at grade GS-1 through GS-8, we will 
charge an hourly rate based on the salary of a GS-5, step 7, employee; 
when done by a GS-9 through GS-14, an hourly rate based on the salary of 
a GS-12, step 4, employee; and when done by a GS-15 or above, an hourly 
rate based on the salary of a GS-15, step 7, employee. In each case, we 
will compute the hourly rate by taking the current hourly rate for the 
specified grade and step, adding 16% of that rate to cover benefits, and 
rounding to the nearest whole dollar. As of January 5, 1997, these rates 
were $14, $28, and $50 respectively. These rates are adjusted as Federal 
salaries change. When a search involves employees at more than one of 
these levels, we will charge the rate appropriate for each.
    (b) Computer searching and printing. We will charge the actual cost 
of operating the computer plus charges for the time spent by the 
operator, at the rates given in paragraph (a) of this section.
    (c) Photocopying standard size pages. We will charge $0.10 per page. 
The Freedom of Information (FOI) Officer may charge lower fees for 
particular documents where--
    (1) The document has already been printed in large numbers;
    (2) The program office determines that using existing stock to 
answer this request, and any other anticipated FOI requests, will not 
interfere with program requirements; and
    (3) The FOI Officer determines that the lower fee is adequate to 
recover the prorated share of the original printing costs.
    (d) Photocopying odd-size documents. For photocopying documents such 
as punchcards or blueprints, or reproducing other records such as tapes, 
we will charge the actual costs of operating the machine, plus the 
actual cost of the materials used, plus charges for the time spent by 
the operator, at the rates given in paragraph (a) of this section.
    (e) Certifying that records are true copies. This service is not 
required by the FOIA. If we agree to provide it, we will charge $10 per 
certification.
    (f) Sending records by express mail, certified mail, or other 
special methods. This service is not required by the FOIA. If we agree 
to provide it, we will charge our actual costs.
    (g) Other special services. For performing any other special service 
that you request and we agree to, we will charge the actual costs of 
operating any machinery, plus actual cost of any materials used, plus 
charges for the time of our employees, at the rates given in paragraph 
(a) of this section.
    (h) Billing exceeds cost of service. Generally we will not charge 
you a fee when the cost of the service is less than the cost of sending 
you a bill. However, where an individual, organization, or governmental 
unit makes multiple separate requests, we will

[[Page 37]]

total the costs incurred and periodically bill the requester for the 
services rendered.
    (i) Fee for copies of printed materials. When extra copies of 
printed material are available, the charge is generally 1 cent per page. 
If the material may be purchased from the Superintendent of Documents, 
the charge is that set by the Superintendent. The Superintendent's 
address is in Sec. 402.40.
    (j) When not applicable. This fee schedule does not apply to 
requests for records of Social Security number holders, wage earners, 
employers, and claimants when the requests are governed by section 1106 
of the Social Security Act and by Secs. Sections 402.170 and 402.175.



Sec. 402.170  Fees for providing records and related services for program purposes pursuant to section 1106 of the Social Security Act.

    (a) Program purposes described. (1) We consider a request to be 
program related if the information must be disclosed under the Social 
Security Act. For example, section 205(c)(2)(A) of the Act (42 U.S.C. 
405(c)(2)(A)) requires that we provide certain information upon request 
to a worker, her or his legal representative, her or his survivor, or 
the legal representative of the worker's estate. That information is the 
amounts of the worker's wages and self-employment income and the periods 
during which they were paid or derived, as shown by our records.
    (2) We also consider a request to be program related if the 
requester indicates the needed information will be used for a purpose 
which is directly related to the administration of a program under the 
Social Security Act.
    (i) The major criteria we consider in deciding whether a proposed 
use is so related are:
    (A) Is the information needed to pursue some benefit under the Act?
    (B) Is the information needed solely to verify the accuracy of 
information obtained in connection with a program administered under the 
Act?
    (C) Is the information needed in connection with an activity which 
has been authorized under the Act?
    (D) Is the information needed by an employer to carry out her or his 
taxpaying responsibilities under the Federal Insurance Contributions Act 
or section 218 of the Act?
    (ii) We will consider on a case by case basis those requests which 
do not meet these criteria but are claimed to be program related.
    (b) When we charge. If we determine the request for information is 
program related, we may or may not charge for the information. For 
example, as stated in paragraph (a) of this section, we generally will 
not charge you for information needed to assure the accuracy of our 
records on which your present or future Social Security benefits depend. 
In addition, we generally will not charge for furnishing information 
under section 205(c)(2)(A) of the Act. However, if we do charge for a 
program related request (for example, if more detailed information or 
special services are requested) we will use the fee schedule in 
Sec. 402.165 if information is being disclosed under the FOIA and the 
fee schedule in 20 CFR 401.95 if access to the information is being 
granted under the Privacy Act. (Exception: If the request is for 
purposes of administering employee benefits covered by the Employee 
Retirement Income Security Act of 1974 (ERISA), even if the request is 
covered by section 205(c)(2)(A) of the Act, we will charge under 
Sec. 402.175.)



Sec. 402.175  Fees for providing information and related services for non-program purposes.

    (a) General. Section 1106(c) of the Social Security Act permits the 
Commissioner to require requesters of information to pay the full cost 
of supplying the information where the information is requested to 
comply with the ERISA, or ``* * * for any other purpose not directly 
related to the administration of the program or programs under * * *'' 
the Social Security Act. This may be done notwithstanding the fee 
provisions of the FOIA and the Privacy Act or any other provision of 
law. As used in this section--
    (1) Full cost includes the direct and indirect costs to SSA 
(including costs of duplication) of providing information and related 
services under section 1106(c) of the Act; and

[[Page 38]]

    (2) Full cost of an employee's time includes fringe benefits and 
overhead costs such as rent and utilities.
    (b) Non-program related requests. We consider a request for 
information which does not meet or equal any of the criteria in 
Sec. 402.170 to be non-program related. (Whether a request for 
information about an individual is made by that individual or by someone 
else is not a factor.) In responding to these requests, or requests for 
ERISA purposes, we will charge the full cost of our services as 
described in paragraph (c) of this section.
    (c) Fee schedule. Our fee schedule for non-program related requests 
is:
    (1) Manual searching for records. Full cost of the employee's time.
    (2) Photocopying, or reproducing records such as magnetic tapes or 
punch cards. Full cost of the operator's time plus the full cost of the 
machine time and the materials used.
    (3) Use of electronic data processing equipment to obtain records. 
Our full cost for the service, including computer search time, computer 
runs and printouts, and the time of computer programmers and operators 
and other employees.
    (4) Certification or authentication of records. Full cost of 
certification or authentication.
    (5) Forwarding materials to destination. If you request special 
arrangements for forwarding the material, we will charge you the full 
cost of this service (e.g., you request express mail or a commercial 
delivery service). If no special forwarding arrangements are requested, 
we will charge you the full cost of the service, including the U.S. 
Postal Service cost.
    (6) Performing other special services. If we agree to provide any 
special services you request, we will charge you the full cost of the 
time of the employee who performs the service, plus the full cost of any 
machine time and materials that the employee uses.
    (7) Billing exceeds cost of service. Generally we will not charge 
you a fee when the cost of the service is less than the cost of sending 
you a bill. However, where an individual, organization, or governmental 
unit makes multiple separate requests, we will total the costs incurred 
and bill the requester for the services rendered.
    (d) Fee for copies of printed materials. When extra copies of 
printed material are available, the charge is generally 1 cent per page. 
If the material may be purchased from the Superintendent of Documents, 
the charge is that set by the Superintendent. The Superintendent's 
address is in Sec. 402.40.
    (e) Charging when requested record not found. We may charge you for 
search time, even though we fail to find the records. We may also charge 
you for search time if the records we locate are exempt from disclosure.



Sec. 402.180  Procedure on assessing and collecting fees for providing records.

    (a) We will generally assume that when you send us a request, you 
agree to pay for the services needed to locate and send that record to 
you. You may specify in your request a limit on the amount you are 
willing to spend. If you do that or include with your request a payment 
that does not cover our fee, we will notify you if it appears that the 
fee will exceed that amount and ask whether you want us to continue to 
process your request. Also, before we start work on your request under 
Sec. 402.120, we will generally notify you of our exact or estimated 
charge for the information, unless it is clear that you have a 
reasonable idea of the cost.
    (b) If you have failed to pay previous bills in a timely fashion, or 
if our initial review of your request indicates that we will charge you 
fees exceeding $250, we will require you to pay your past due fees and/
or the estimated fees, or a deposit, before we start searching for the 
records you want. If so, we will let you know promptly upon receiving 
your request. In such cases, administrative time limits (i.e., ten 
working days from receipt of initial requests and 20 working days from 
receipt of appeals from initial denials, plus permissible extensions of 
these time limits) will begin only after we come to an agreement with 
you over payment of fees, or decide that fee waiver or reduction is 
appropriate.
    (c) We will normally require you to pay all fees before we furnish 
the

[[Page 39]]

records to you. We may, at our discretion, send you a bill along with or 
following the furnishing of the records. For example, we may do this if 
you have a history of prompt payment. We may also, at our discretion, 
aggregate the charges for certain time periods in order to avoid sending 
numerous small bills to frequent requesters, or to businesses or agents 
representing requesters. For example, we might send a bill to such a 
requester once a month. Fees should be paid in accordance with the 
instructions furnished by the person who responds to your requests.
    (d) Payment of fees will be made by check or money order payable to 
``Social Security Administration''.



Sec. 402.185  Waiver or reduction of fees in the public interest.

    (a) Standard. We will waive or reduce the fees we would otherwise 
charge if disclosure of the information meets both tests which are 
explained in paragraphs (b) and (c) of this section:
    (1) It is in the public interest because it is likely to contribute 
significantly to public understanding of the operations or activities of 
the government; and
    (2) It is not primarily in the commercial interest of the requester.
    (b) Public interest. The disclosure passes the first test only if it 
furthers the specific public interest of being likely to contribute 
significantly to public understanding of government operations or 
activities, regardless of any other public interest it may further. In 
analyzing this question, we will consider the following factors:
    (1) How, if at all, do the records to be disclosed pertain to the 
operations or activities of the Federal Government?
    (2) Would disclosure of the records reveal any meaningful 
information about government operations or activities? Can one learn 
from these records anything about such operations that is not already 
public knowledge?
    (3) Will the disclosure advance the understanding of the general 
public as distinguished from a narrow segment of interested persons? 
Under this factor we may consider whether the requester is in a position 
to contribute to public understanding. For example, we may consider 
whether the requester has such knowledge or expertise as may be 
necessary to understand the information, and whether the requester's 
intended use of the information would be likely to disseminate the 
information among the public. An unsupported claim to be doing research 
for a book or article does not demonstrate that likelihood, while such a 
claim by a representative of the news media is better evidence.
    (4) Will the contribution to public understanding be a significant 
one? Will the public's understanding of the government's operations be 
substantially greater as a result of the disclosure?
    (c) Not primarily in the requester's commercial interest. If the 
disclosure passes the test of furthering the specific public interest 
described in paragraph (b) of this section, we will determine whether it 
also furthers the requester's commercial interest and, if so, whether 
this effect outweighs the advancement of that public interest. In 
applying this second test, we will consider the following factors:
    (1) Would the disclosure further a commercial interest of the 
requester, or of someone on whose behalf the requester is acting? 
``Commercial interests'' include interests relating to business, trade, 
and profit. Not only profit-making corporations have commercial 
interests--so do nonprofit corporations, individuals, unions, and other 
associations. The interest of a representative of the news media in 
using the information for news dissemination purposes will not be 
considered a commercial interest.
    (2) If disclosure would further a commercial interest of the 
requester, would that effect outweigh the advancement of the public 
interest defined in paragraph (b) of this section? Which effect is 
primary?
    (d) Deciding between waiver and reduction. If the disclosure passes 
both tests, we will normally waive fees. However, in some cases we may 
decide only to reduce the fees. For example, we may do this when 
disclosure of some but not all of the requested records passes the 
tests.
    (e) Procedure for requesting a waiver or reduction. You must make 
your request for a waiver or reduction at the same time you make your 
request for

[[Page 40]]

records. You should explain why you believe a waiver or reduction is 
proper under the analysis in paragraphs (a) through (d) of this section. 
Only FOI Officers may make the decision whether to waive, or reduce, the 
fees. If we do not completely grant your request for a waiver or 
reduction, the denial letter will designate a review official. You may 
appeal the denial to that official. In your appeal letter, you should 
discuss whatever reasons are given in our denial letter. The process 
prescribed in Sec. 402.190 of this part will also apply to these 
appeals.



Sec. 402.190  Officials who may deny a request for records under FOIA.

    Only the Director, Office of Disclosure Policy, SSA, or her or his 
designee is authorized to deny a written request to obtain, inspect, or 
copy any social security record.



Sec. 402.195  How a request is denied.

    (a) Oral requests. If we cannot comply with your oral request 
because the Director of the Office of Disclosure Policy (or designee) 
has not previously made a determination to release the record you want, 
we will tell you that fact. If you still wish to pursue your request, 
you must put your request in writing.
    (b) Written requests. If you make a written request and the 
information or record you requested will not be released, we will send 
you an official denial in writing. We will explain why the request was 
denied (for example, the reasons why the requested document is subject 
to one or more clearly described exemptions), will include the name and 
title or position of the person who made the decision, and what your 
appeal rights are.
    (c) Unproductive searches. We make a diligent search for records to 
satisfy your request. Nevertheless, we may not be able always to find 
the records you want using the information you provided, or they may not 
exist. If we advise you that we have been unable to find the records 
despite a diligent search, this does not constitute a denial of your 
request.



Sec. 402.200  How to appeal a decision denying all or part of a request.

    (a) How to appeal. If all or part of your written request was 
denied, you may request that the Commissioner of Social Security, 6401 
Security Boulevard, Baltimore, MD 21235 review that determination. Your 
request for review:
    (1) Must be in writing;
    (2) Must be mailed within 30 days after you received notification 
that all or part of your request was denied or, if later, 30 days after 
you received materials in partial compliance with your request; and
    (3) May include additional information or evidence to support your 
request.
    (b) How the review is made. After reviewing the prior decision and 
after considering anything else you have submitted, the Commissioner or 
his or her designee will affirm or revise all or part of the prior 
decision. The Commissioner (or a designee) will affirm a denial only 
after consulting with the appropriate SSA official(s), including legal 
counsel. The decision must be made within 20 working days after your 
appeal is received. The Commissioner or a designee may extend this time 
limit up to 10 additional working days if one of the situations in 
Sec. 402.140(a) exists, provided that, if a prior extension was used to 
process this request, the sum of the extensions may not exceed 10 
working days. You will be notified in writing of any extension, the 
reason for the extension, and the date by which your appeal will be 
decided.
    (c) How you are notified of the Commissioner's decision. The 
Commissioner or a designee will send you a written notice of the 
decision explaining the basis of the decision (for example, the reasons 
why an exemption applies) which will include the name and title or 
position of the person who made the decision. The notice will tell you 
that if any part of your request remains unsatisfied, you have the right 
to seek court review.



Sec. 402.205  U.S. District Court action.

    If the Commissioner or a designee, upon review, affirms the denial 
of your request for records, in whole or in part,

[[Page 41]]

you may ask a U.S. District Court to review that denial. See 5 U.S.C. 
552(a)(4)(B). If we fail to act on your request for a record or for 
review of a denial of such a request within the time limits in 
Sec. 402.140(a) or in Sec. 402.190(b), you may ask a U.S. District Court 
to treat this as if the Commissioner had denied your request.



PART 403--TESTIMONY BY EMPLOYEES AND THE PRODUCTION OF RECORDS AND INFORMATION IN LEGAL PROCEEDINGS--Table of Contents




Sec.
403.100  When can an SSA employee testify or produce information or 
          records in legal proceedings?
403.105  What is the relationship between this part and 20 CFR parts 401 
          and 402?
403.110  What special definitions apply to this part?
403.115  When does this part apply?
403.120  How do you request testimony?
403.125  How will we handle requests for records, information, or 
          testimony involving SSA's Office of the Inspector General?
403.130  What factors may the Commissioner consider in determining 
          whether SSA will grant your application for testimony?
403.135  What happens to your application for testimony?
403.140  If the Commissioner authorizes testimony, what will be the 
          scope and form of that testimony?
403.145  What will SSA do if you have not satisfied the conditions in 
          this part or in 20 CFR part 401 or 402?
403.150  Is there a fee for our services?
403.155  Does SSA certify records?

    Authority: Secs. 702(a)(5) and 1106 of the Act, (42 U.S.C. 902(a)(5) 
and 1306); 5 U.S.C. 301; 31 U.S.C. 9701.

    Source: 66 FR 2809, Jan. 12, 2001, unless otherwise noted.



Sec. 403.100  When can an SSA employee testify or produce information or records in legal proceedings?

    An SSA employee can testify concerning any function of SSA or any 
information or record created or acquired by SSA as a result of the 
discharge of its official duties in any legal proceeding covered by this 
part only with the prior authorization of the Commissioner. An SSA 
employee can provide records or other information in a legal proceeding 
covered by this part only to the extent that doing so is consistent with 
20 CFR parts 401 and 402. A request for both testimony and records or 
other information is considered two separate requests--one for testimony 
and one for records or other information. SSA maintains a policy of 
strict impartiality with respect to private litigants and seeks to 
minimize the disruption of official duties.



Sec. 403.105  What is the relationship between this part and 20 CFR parts 401 and 402?

    (a) General. Disclosure of SSA's records and information contained 
in those records is governed by the regulations at 20 CFR parts 401 and 
402. SSA employees will not disclose records or information in any legal 
proceeding covered by this part except as permitted by 20 CFR parts 401 
and 402.
    (b) Requests for information or records that do not include 
testimony.
    (1) If you do not request testimony, Secs. 403.120-403.140 do not 
apply.
    (2) If 20 CFR part 401 or 402 permits disclosure to you of any 
requested record or information, we will make every reasonable effort to 
provide the disclosable information or record to you on or before the 
date specified in your request.
    (3) If neither 20 CFR part 401 nor 402 permits disclosure of 
information or a record you request, we will notify you as provided in 
Sec. 403.145. We will also send you any notices required by part 401 or 
402.



Sec. 403.110  What special definitions apply to this part?

    The following definitions apply:
    (a) Application means a written request for testimony that conforms 
to the requirements of Sec. 403.120.
    (b)(1) Employee includes--
    (i) Any person employed in any capacity by SSA, currently or in the 
past;
    (ii) Any person appointed by, or subject to the supervision, 
jurisdiction, or control of SSA, the Commissioner of Social Security, or 
any other SSA official, currently or in the past; and
    (iii) Any person who is not described elsewhere in this definition 
but whose disclosure of information is subject to

[[Page 42]]

the regulations at 20 CFR part 401, currently or in the past.
    (2) For purposes of this paragraph (b), a person subject to SSA's 
jurisdiction or control includes any person hired as a contractor by 
SSA, any person performing services for SSA under an agreement (such as 
an officer or employee of a State agency involved in determining 
disability for SSA), and any consultant (including medical or vocational 
experts or medical services or consultative examination providers), 
contractor, or subcontractor of such person. Such a person would also 
include any person who has served or is serving in any advisory 
capacity, formal or informal.
    (3) For purposes of this paragraph (b), a person employed by SSA in 
the past is considered an employee only when the matter about which the 
person would testify is one in which he or she was personally involved 
while at SSA; where the matter concerns official information that the 
employee acquired while working, such as sensitive or confidential 
agency information; where the person purports to speak for SSA; or where 
significant SSA resources would be required to prepare the person to 
testify. Such a person would not be considered an employee when the 
person will rely only on expertise or general knowledge he or she 
acquired while working at SSA.
    (c) Commissioner means the Commissioner of Social Security or his or 
her designee(s).
    (d) Legal proceeding includes any pretrial, trial, and post-trial 
stage of any existing or reasonably anticipated judicial or 
administrative action, hearing, investigation, or similar proceeding 
before a court, commission, board, agency, or other tribunal, authority 
or entity, foreign or domestic. Legal proceeding also includes any 
deposition or other pretrial proceeding, including a formal or informal 
request for testimony by an attorney or any other person.
    (e) Record has the same meaning as ``record'' in 20 CFR 402.30.
    (f) Request means any attempt to obtain the production, disclosure, 
or release of information, records, or the testimony of an SSA employee, 
including any order, subpoena, or other command issued in a legal 
proceeding as well as any informal or other attempt (by any method) by a 
party or a party's representative.
    (g) SSA means the Social Security Administration.
    (h) Testimony includes any sworn statement (oral or written), 
including (but not limited to)--
    (1) Any statement provided through personal appearance; deposition; 
or recorded interview; or provided by telephone, television, or 
videotape;
    (2) Any response during discovery or other similar proceedings that 
would involve more than the mere physical production of records; and
    (3) Any declaration made under penalty of perjury or any affidavit.
    (i) We or our means the Social Security Administration.
    (j) You or your means an individual or entity that submits a request 
for records, information or testimony.



Sec. 403.115  When does this part apply?

    (a) Except as specified in paragraph (b) of this section, this part 
applies to any request in connection with any legal proceeding for SSA 
records or other information or for testimony from SSA or its employees. 
This part applies to requests for testimony related to SSA's functions 
or to any information or record created or acquired by SSA as a result 
of the discharge of its official duties.
    (b) This part does not apply to requests for testimony--
    (1) In an SSA administrative proceeding;
    (2) In a legal proceeding to which SSA is a party (``SSA'' here 
includes the Commissioner and any employee acting in his or her official 
capacity);
    (3) From the United States Department of Justice;
    (4) In a criminal proceeding in which the United States is a party;
    (5) In a legal proceeding initiated by state or local authorities 
arising from an investigation or audit initiated by, or conducted in 
cooperation with, SSA's Office of the Inspector General;
    (6) From either house of Congress;
    (7) In a law enforcement proceeding related to threats or acts 
against SSA, its employees, or its operations (``SSA'' here includes the 
Commissioner and

[[Page 43]]

any employee acting in his or her official capacity); or
    (8) Where Federal law or regulations expressly require a Federal 
employee to provide testimony.



Sec. 403.120  How do you request testimony?

    (a) You must submit a written application for testimony of an SSA 
employee. Your application must-
    (1) Describe in detail the nature and relevance of the testimony 
sought in the legal proceeding;
    (2) Include a detailed explanation as to why you need the testimony, 
why you cannot obtain the information you need from an alternative 
source, and why providing it to you would be in SSA's interest; and
    (3) Provide the date and time that you need the testimony and the 
place where SSA would present it.
    (b) You must submit a complete application to SSA at least 30 days 
in advance of the date that you need the testimony. If your application 
is submitted fewer than 30 days before that date, you must provide, in 
addition to the requirements set out above, a detailed explanation as to 
why--
    (1) You did not apply in a timely fashion; and
    (2) It is in SSA's interest to review the untimely application.
    (c) You must send your application for testimony to: Social Security 
Administration, Office of the General Counsel, Office of General Law, 
P.O. Box 17779, Baltimore, MD 21235-7779, Attn: Touhy Officer. (If you 
are requesting testimony of an employee of the Office of the Inspector 
General, send your application to the address in Sec. 403.125.)
    (d) The Commissioner has the sole discretion to waive any 
requirement in this section.
    (e) If your application does not include each of the items required 
by paragraph (a) of this section, we may return it to you for additional 
information. Unless the Commissioner waives one or more requirements, we 
will not process an incomplete or untimely application.

[66 FR 2809, Jan. 12, 2001; 66 FR 14316, Mar. 12, 2001]



Sec. 403.125  How will we handle requests for records, information, or testimony involving SSA's Office of the Inspector General?

    A request for records or information of the Office of the Inspector 
General or the testimony of an employee of the Office of the Inspector 
General will be handled in accordance with the provisions of this part, 
except that the Inspector General or the Inspector General's designee 
will make those determinations that the Commissioner otherwise would 
make. Send your request for records or information pertaining to the 
Office of the Inspector General or your application for testimony of an 
employee of the Office of the Inspector General to: Office of the 
Inspector General, Social Security Administration, 300 Altmeyer 
Building, 6401 Security Blvd., Baltimore, MD 21235-6401.



Sec. 403.130  What factors may the Commissioner consider in determining whether SSA will grant your application for testimony?

    In deciding whether to authorize the testimony of an SSA employee, 
the Commissioner will consider applicable law and factors relating to 
your need and the burden to SSA. The considerations include, but are not 
limited to, the following:
    (a) Risk of law violation or compromise of Government privilege.
    (1) Would providing the testimony violate a statute (such as 26 
U.S.C. 6103 or section 1106 of the Social Security Act, 42 U.S.C. 1306), 
Executive Order, or regulation (such as 20 CFR part 401)?
    (2) Would providing the testimony put confidential, sensitive, or 
privileged information at risk?
    (b) Burden on SSA. (1) Would granting the application unduly expend 
for private purposes the resources of the United States (including the 
time of SSA employees needed for official duties)?
    (2) Would the testimony be available in a less burdensome form or 
from another source?
    (3) Would the testimony be limited to the purpose of the request?
    (4) Did you previously request the same testimony in the same or a 
related proceeding?

[[Page 44]]

    (c) Interests served by allowing testimony. (1) Would providing the 
testimony serve SSA's interest?
    (2) Would providing the testimony maintain SSA's policy of 
impartiality among private litigants?
    (3) Is another government agency involved in the proceeding?
    (4) Do you need the testimony to prevent fraud or similar 
misconduct?
    (5) Would providing the testimony be necessary to prevent a 
miscarriage of justice or to preserve the rights of an accused 
individual to due process in a criminal proceeding?



Sec. 403.135  What happens to your application for testimony?

    (a) If 20 CFR part 401 or 402 does not permit disclosure of 
information about which you seek testimony from an SSA employee, we will 
notify you under Sec. 403.145.
    (b) If 20 CFR part 401 or 402 permits disclosure of the information 
about which you seek testimony,
    (1) The Commissioner makes the final decision on your application;
    (2) All final decisions are in the sole discretion of the 
Commissioner; and
    (3) We will notify you of the final decision on your application.



Sec. 403.140  If the Commissioner authorizes testimony, what will be the scope and form of that testimony?

    The employee's testimony must be limited to matters that were 
specifically approved. We will provide testimony in the form that is 
least burdensome to SSA unless you provide sufficient information in 
your application for SSA to justify a different form. For example, we 
will provide an affidavit or declaration rather than a deposition and a 
deposition rather than trial testimony.



Sec. 403.145  What will SSA do if you have not satisfied the conditions in this part or in 20 CFR part 401 or 402?

    (a) We will provide the following information, as appropriate, to 
you or the court or other tribunal conducting the legal proceeding if 
your request states that a response is due on a particular date and the 
conditions prescribed in this part, or the conditions for disclosure in 
20 CFR part 401 or 402, are not satisfied or we anticipate that they 
will not be satisfied by that date:
    (1) A statement that compliance with the request is not authorized 
under 20 CFR part 401 or 402, or is prohibited without the 
Commissioner's approval;
    (2) The requirements for obtaining the approval of the Commissioner 
for testimony or for obtaining information, records, or testimony under 
20 CFR part 401 or 402; and
    (3) If the request complies with Sec. 403.120, the estimated time 
necessary for a decision. We will make every reasonable effort to 
provide this information in writing on or before the date specified in 
your request.
    (b) Generally, if a response to a request for information, records, 
or testimony is due before the conditions of this Part or the conditions 
for disclosure in 20 CFR part 401 or 402 are met, no SSA employee will 
appear.
    (c) SSA will seek the advice and assistance of the Department of 
Justice when appropriate.



Sec. 403.150  Is there a fee for our services?

    (a) General. Unless the Commissioner grants a waiver, you must pay 
fees for our services in providing information, records, or testimony. 
You must pay the fees as prescribed by the Commissioner. In addition, 
the Commissioner may require that you pay the fees in advance as a 
condition of providing the information, records, or testimony. Make fees 
payable to the Social Security Administration by check or money order.
    (b) Records or information. Unless the Commissioner grants a waiver, 
you must pay the fees for production of records or information 
prescribed in 20 CFR Sec. Sec. 401.95 and 402.155 through 402.185, as 
appropriate.
    (c) Testimony. Unless the Commissioner grants a waiver, you must pay 
fees calculated to reimburse the United States Government for the full 
cost of providing the testimony. Those costs include, but are not 
limited to--
    (1) The salary or wages of the witness and related costs for the 
time necessary to prepare for and provide the testimony and any travel 
time, and
    (2) Other travel costs.

[[Page 45]]

    (d) Waiver or reduction of fees. The Commissioner may waive or 
reduce fees for providing information, records, or testimony under this 
Part. The rules in 20 CFR Sec. 402.185 apply in determining whether to 
waive fees for the production of records. In deciding whether to waive 
or reduce fees for testimony or for production of information that does 
not constitute a record, the Commissioner may consider other factors, 
including but not limited to--
    (1) The ability of the party responsible for the application to pay 
the full amount of the chargeable fees;
    (2) The public interest, as described in 20 CFR Sec. 402.185, 
affected by complying with the application;
    (3) The need for the testimony or information in order to prevent a 
miscarriage of justice;
    (4) The extent to which providing the testimony or information 
serves SSA's interest; and
    (5) The burden on SSA's resources required to provide the 
information or testimony.



Sec. 403.155  Does SSA certify records?

    We can certify the authenticity of copies of records we disclose 
pursuant to 20 CFR parts 401 and 402, and this part. We will provide 
this service only in response to your written request. If we certify, we 
will do so at the time of the disclosure and will not certify copies of 
records that have left our custody. A request for certified copies of 
records previously released is considered a new request for records. 
Fees for this certification are set forth in 20 CFR 402.165(e).



PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-    )--Table of Contents




       Subpart A--Introduction, General Provisions and Definitions

Sec.
404.1  Introduction.
404.2  General definitions and use of terms.
404.3  General provisions.

           Subpart B--Insured Status and Quarters of Coverage

                                 General

404.101  Introduction.
404.102  Definitions.

                          Fully Insured Status

404.110  How we determine fully insured status.
404.111  When we consider a person fully insured based on World War II 
          active military or naval service.
404.112  When we consider certain employees of private nonprofit 
          organizations to be fully insured.
404.115  Table for determining the quarters of coverage you need to be 
          fully insured.

                        Currently Insured Status

404.120  How we determine currently insured status.

                        Disability Insured Status

404.130  How we determine disability insured status.
404.131  When you must have disability insured status.
404.132  How we determine fully insured status for a period of 
          disability or disability insurance benefits.
404.133  When we give you quarters of coverage based on military service 
          to establish a period of disability.

                          Quarters of Coverage

404.140  What is a quarter of coverage.
404.141  How we credit quarters of coverage for calendar years before 
          1978.
404.142  How we credit self-employment income to calendar quarters for 
          taxable years beginning before 1978.
404.143  How we credit quarters of coverage for calendar years after 
          1977.
404.144  How we credit self-employment income to calendar years for 
          taxable years beginning after 1977.
404.145  When you acquire a quarter of coverage.
404.146  When a calendar quarter cannot be a quarter of coverage.

Appendix to Subpart B--Quarter of Coverage Amounts for Calendar Years 
          After 1978

             Subpart C--Computing Primary Insurance Amounts

                                 General

404.201  Introduction.
404.202  Other regulations related to this subpart.
404.203  Definitions.
404.204  Methods of computing primary insurance amounts--general.

[[Page 46]]

 Average-Indexed-Monthly Earnings Method of Computing Primary Insurance 
                                 Amounts

404.210  Average-indexed-monthly-earnings method.
404.211  Computing your average indexed monthly earnings.
404.212  Computing your primary insurance amount from your average 
          indexed monthly earnings.
404.213  Computation where you are eligible for a pension based on your 
          noncovered employment.

   Average-Monthly-Wage Method of Computing Primary Insurance Amounts

404.220  Average-monthly-wage method.
404.221  Computing your average monthly wage.
404.222  Use of benefit table in finding your primary insurance amount 
          from your average monthly wage.

Guaranteed Alternative for People Reaching Age 62 After 1978 but Before 
                                  1984

404.230  Guaranteed alternative.
404.231  Steps in computing your primary insurance amount under the 
          guaranteed alternative--general.
404.232  Computing your average monthly wage under the guaranteed 
          alternative.
404.233  Adjustment of your guaranteed alternative when you become 
          entitled after age 62.

         Old-Start Method of Computing Primary Insurance Amounts

404.240  Old-start method--general.
404.241  1977 simplified old-start method.
404.242  Use of old-start primary insurance amount as guaranteed 
          alternative.
404.243  Computation where you are eligible for a pension based on 
          noncovered employment.

   Special Computation Rules for People Who Had a Period of Disability

404.250  Special computation rules for people who had a period of 
          disability.
404.251  Subsequent entitlement to benefits less than 12 months after 
          entitlement to disability benefits ended.
404.252  Subsequent entitlement to benefits 12 months or more after 
          entitlement to disability benefits ended.

                Special Minimum Primary Insurance Amounts

404.260  Special minimum primary insurance amounts.
404.261  Computing your special minimum primary insurance amount.

                        Cost-of-Living Increases

404.270  Cost-of-living increases.
404.271  When automatic cost-of-living increases apply.
404.272  Indexes we use to measure the rise in the cost-of-living.
404.273  When automatic cost-of-living increases are to be made.
404.274  Measuring the increase in the indexes.
404.275  Amount of automatic cost-of-living increases.
404.276  Publication of notice of increase.
404.277  Automatic increases of ``frozen'' minimum primary insurance 
          amount.
404.278  Additional cost-of-living increase.

                Recomputing Your Primary Insurance Amount

404.280  Recomputations.
404.281  Why your primary insurance amount may be recomputed.
404.282  Effective date of recomputations.
404.283  Recomputation under method other than that used to find your 
          primary insurance amount.
404.284  Recomputations for people who reach age 62, or become disabled, 
          or die before age 62 after 1978.
404.285  Recomputations performed automatically.
404.286  How to request an immediate recomputation.
404.287  Waiver of recomputation.
404.288  Recomputing when you are entitled to a monthly pension based on 
          noncovered employment.

               Recalculations of Primary Insurance Amounts

404.290  Recalculations.

Appendix I to Subpart C--Average of the Total Wages for Years After 1950
Appendix II to Subpart C--Benefit Formulas Used With Average Indexed 
          Monthly Earnings
Appendix III to Subpart C--Benefit Table
Appendix IV to Subpart C--Earnings Needed for a Year of Coverage After 
          1950
Appendix V to Subpart C--Computing the Special Minimum Primary Insurance 
          Amount and Related Maximum Family Benefits
Appendix VI to Subpart C--Percentage of Automatic Increases in Primary 
          Insurance Amounts Since 1978
Appendix VII to Subpart C--``Old-Law'' Contribution and Benefit Base

  Subpart D--Old-Age, Disability, Dependents' and Survivors' Insurance 
                     Benefits; Period of Disability

                                 General

404.301  Introduction.
404.302  Other regulations related to this subpart.
404.303  Definitions.

[[Page 47]]

404.304  General rules on benefit amounts.
404.305  When you may not be entitled to benefits.

                     Old-Age and Disability Benefits

404.310  Who is entitled to old-age benefits.
404.311  When entitlement to old-age benefits begins and ends.
404.312  Old-age benefit amounts.
404.313  Using delayed retirement credit to increase old-age benefit 
          amount.
404.315  Who is entitled to disability benefits.
404.316  When entitlement to disability benefits begins and ends.
404.317  Disability benefit amounts.
404.320  Who is entitled to a period of disability.
404.321  When a period of disability begins and ends.
404.322  When you may apply for a period of disability after a delay due 
          to a physical or mental condition.
404.325  The termination month.

                Benefits for Spouses and Divorced Spouses

404.330  Who is entitled to wife's or husband's benefits.
404.331  Who is entitled to wife's or husband's benefits as a divorced 
          spouse.
404.332  When wife's and husband's benefits begin and end.
404.333  Wife's and husband's benefit amounts.
404.335  Who is entitled to widow's or widower's benefits.
404.336  Who is entitled to widow's or widower's benefits as a surviving 
          divorced spouse.
404.337  When widow's and widower's benefits begin and end.
404.338  Widow's and widower's benefits amounts.
404.339  Who is entitled to mother's or father's benefits.
404.340  Who is entitled to mother's or father's benefits as a surviving 
          divorced spouse.
404.341  When mother's and father's benefits begin and end.
404.342  Mother's and father's benefit amounts.
404.344  Your relationship by marriage to the insured.
404.345  Your relationship as wife, husband, widow, or widower under 
          State law.
404.346  Your relationship as wife, husband, widow, or widower based 
          upon a deemed valid marriage.
404.347  ``Living in the same household'' defined.
404.348  When a child living with you is ``in your care''.
404.349  When a child living apart from you is ``in your care''.

                            Child's Benefits

404.350  Who is entitled to child's benefits.
404.351  Who may be reentitled to child's benefits.
404.352  When child's benefits begin and end.
404.353  Child's benefit amounts.
404.354  Your relationship to the insured.
404.355  Who is the insured's natural child.
404.356  Who is the insured's legally adopted child.
404.357  Who is the insured's stepchild.
404.358  Who is the insured's grandchild or stepgrandchild.
404.359  Who is the insured's equitably adopted child.
404.360  When a child is dependent upon the insured person.
404.361  When a natural child is dependent.
404.362  When a legally adopted child is dependent.
404.363  When a stepchild is dependent.
404.364  When a grandchild or stepgrandchild is dependent.
404.365  When an equitably adopted child is dependent.
404.366  ``Contributions for support,'' ``one-half support,'' and 
          ``living with'' the insured defined--determining first month 
          of entitlement.
404.367  When you are a ``full-time elementary or secondary school 
          student''.
404.368  When you are considered a full-time student during a period of 
          nonattendance.

                            Parent's Benefits

404.370  Who is entitled to parent's benefits.
404.371  When parent's benefits begin and end.
404.373  Parent's benefit amounts.
404.374  Parent's relationship to the insured.

                       Special Payments at Age 72

404.380  General.
404.381  Who is entitled to special age 72 payments.
404.382  When special age 72 payments begin and end.
404.383  Special age 72 payment amounts.
404.384  Reductions, suspensions, and nonpayments of special age 72 
          payments.

                         Lump-Sum Death Payment

404.390  General.
404.391  Who is entitled to the lump-sum death payment as a widow or 
          widower who was living in the same household.
404.392  Who is entitled to the lump-sum death payment when there is no 
          widow(er) who was living in the same household.

[[Page 48]]

     Subpart E--Deductions; Reductions; and Nonpayments of Benefits

404.401  Deduction, reduction, and nonpayment of monthly benefits or 
          lump-sum death payments.
404.401a  When we do not pay benefits because of a disability 
          beneficiary's work activity.
404.402  Interrelationship of deductions, reductions, adjustments, and 
          nonpayment of benefits.
404.403  Reduction where total monthly benefits exceed maximum family 
          benefits payable.
404.404  How reduction for maximum affects insured individual and other 
          persons entitled on his earnings record.
404.405  Situations where total benefits can exceed maximum because of 
          ``savings clause.''
404.406  Reduction for maximum because of retroactive effect of 
          application for monthly benefits.
404.407  Reduction because of entitlement to other benefits.
404.408  Reduction of benefits based on disability on account of receipt 
          of certain other disability benefits provided under Federal, 
          State, or local laws or plans.
404.408a  Reduction where spouse is receiving a Government pension.
404.408b  Reduction of retroactive monthly social security benefits 
          where supplemental security income (SSI) payments were 
          received for the same period.
404.409  [Reserved]
404.410  Reduction in benefits for age--general.
404.411  Special reduction in benefits for age involving entitlement to 
          two or more benefits.
404.412  Adjustments in benefit reductions for age.
404.413  Reduction in benefits for age following an increase in primary 
          insurance amounts.
404.415  Deductions because of excess earnings; annual earnings test.
404.416  Amount of deduction because of excess earnings.
404.417  Deductions because of noncovered remunerative activity outside 
          the United States; 45 hour and 7-day work test.
404.418  ``Noncovered remunerative activity outside the United States,'' 
          defined.
404.420  Persons deemed entitled to benefits based on an individual's 
          earnings record.
404.421  Deductions because beneficiary failed to have a child in his or 
          her care.
404.422  Deductions because of refusal to accept rehabilitation 
          services.
404.423  Manner of making deductions.
404.424  Total amount of deductions where more than one deduction event 
          occurs in a month.
404.425  Total amount of deductions where deduction events occur in more 
          than 1 month.
404.428  Earnings in a taxable year.
404.429  Earnings; defined.
404.430  Excess earnings defined for taxable years ending after December 
          1972; monthly exempt amount defined.
404.434  Excess earnings; method of charging.
404.435  Excess earnings; months to which excess earnings cannot be 
          charged.
404.436  Excess earnings; months to which excess earnings cannot be 
          charged because individual is deemed not entitled to benefits.
404.437  Excess earnings; benefit rate subject to deductions because of 
          excess earnings.
404.439  Partial monthly benefits; excess earnings of the individual 
          charged against his benefits and the benefits of persons 
          entitled (or deemed entitled) to benefits on his earnings 
          record.
404.440  Partial monthly benefits; prorated share of partial payment 
          exceeds the benefit before deduction for excess earnings.
404.441  Partial monthly benefits; insured individual and another person 
          entitled (or deemed entitled) on the same earnings record both 
          have excess earnings.
404.446  Definition of ``substantial services'' and ``services''.
404.447  Evaluation of factors involved in substantial services test.
404.450  Required reports of work outside the United States or failure 
          to have care of a child.
404.451  Penalty deductions for failure to report within prescribed time 
          limit noncovered remunerative activity outside the United 
          States or not having care of a child.
404.452  Reports to Social Security Administration of earnings; wages; 
          net earnings from self-employment.
404.453  Penalty deductions for failure to report earnings timely.
404.454  Good cause for failure to make required reports.
404.455  Request by Social Security Administration for reports of 
          earnings and estimated earnings; effect of failure to comply 
          with request.
404.456  Current suspension of benefits because an individual works or 
          engages in self-employment.
404.457  Deductions where taxes neither deducted from wages of certain 
          maritime employees nor paid.
404.458  Limiting deductions where total family benefits payable would 
          not be affected or would be only partly affected.
404.459  Penalty for false or misleading statements.
404.460  Nonpayment of monthly benefits of aliens outside the United 
          States.

[[Page 49]]

404.461  Nonpayment of lump sum after death of alien outside United 
          States for more than 6 months.
404.462  Nonpayment of hospital and medical insurance benefits of alien 
          outside United States for more than 6 months.
404.463  Nonpayment of benefits of aliens outside the United States; 
          ``foreign social insurance system,'' and ``treaty obligation'' 
          exceptions defined.
404.464  Nonpayment of benefits where individual is deported; 
          prohibition against payment of lump sum based on deported 
          individual's earnings records.
404.465  Conviction for subversive activities; effect on monthly 
          benefits and entitlement to hospital insurance benefits.
404.466  Conviction for subversive activities; effect on enrollment for 
          supplementary medical insurance benefits.
404.467  Nonpayment of benefits; individual entitled to disability 
          insurance benefits or childhood disability benefits based on 
          statutory blindness is engaging in substantial gainful 
          activity.
404.468  Nonpayment of benefits to prisoners.
404.469  Nonpayment of benefits where individual has not furnished or 
          applied for a Social Security number.
404.470  Nonpayment of disability benefits due to noncompliance with 
          rules regarding treatment for drug addiction or alcoholism.
404.480  Paying benefits in installments: Drug addiction or alcoholism.

Subpart F--Overpayments, Underpayments, Waiver of Adjustment or Recovery 
         of Overpayments, and Liability of a Certifying Officer

404.501  General applicability of section 204 of the Act.
404.502  Overpayments.
404.502a  Notice of right to waiver consideration.
404.503  Underpayments.
404.504  Relation to provisions for reductions and increases.
404.505  Relationship to provisions requiring deductions.
404.506  When waiver may be applied and how to process the request.
404.507  Fault.
404.508  Defeat the purpose of Title II.
404.509  Against equity and good conscience; defined.
404.510  When an individual is ``without fault'' in a deduction 
          overpayment.
404.510a  When an individual is ``without fault'' in an entitlement 
          overpayment.
404.511  When an individual is at ``fault'' in a deduction overpayment.
404.512  When adjustment or recovery of an overpayment will be waived.
404.513  Liability of a certifying officer.
404.515  Collection and compromise of claims for overpayment.
404.520  Referral of overpayments to the Department of the Treasury for 
          tax refund offset--General.
404.521  Notice to overpaid individual.
404.522  Review within SSA that an overpayment is past due and legally 
          enforceable.
404.523  Findings by SSA.
404.524  Review of our records related to the overpayment.
404.525  Suspension of offset.
404.526  Tax refund insufficient to cover amount of overpayment.
404.527  Additional methods for recovery of title II benefit 
          overpayments.

            Subpart G--Filing of Applications and Other Forms

                           General Provisions

404.601  Introduction.
404.602  Definitions.
404.603  You must file an application to receive benefits.

                              Applications

404.610  What makes an application a claim for benefits.
404.611  Filing of application with Social Security Administration.
404.612  Who may sign an application.
404.613  Evidence of authority to sign an application for another.
404.614  When an application or other form is considered filed.
404.615  Claimant must be alive when an application is filed.

                 Effective Filing Period of Application

404.620  Filing before the first month you meet the requirements for 
          benefits.
404.621  Filing after the first month you meet the requirements for 
          benefits.
404.622  Limiting an application.
404.623  Filing by person eligible for old-age and husband's or wife's 
          benefits.

                 Filing Date Based on Written Statement

404.630  Use of date of written statement as filing date.
404.631  Statements filed with the Railroad Retirement Board.
404.632  Statements filed with a hospital.

               Deemed Filing Date Based on Misinformation

404.633  Deemed filing date in a case of misinformation.

                        Withdrawal of Application

404.640  Withdrawal of an application.
404.641  Cancellation of a request to withdraw.

[[Page 50]]

                           Subpart H--Evidence

                                 General

404.701  Introduction.
404.702  Definitions.
404.703  When evidence is needed.
404.704  Your responsibility for giving evidence.
404.705  Failure to give requested evidence.
404.706  Where to give evidence.
404.707  Original records or copies as evidence.
404.708  How we decide what is enough evidence.
404.709  Preferred evidence and other evidence.

                  Evidence of Age, Marriage, and Death

404.715  When evidence of age is needed.
404.716  Type of evidence of age to be given.
404.720  Evidence of a person's death.
404.721  Evidence to presume a person is dead.
404.722  Rebuttal of a presumption of death.
404.723  When evidence of marriage is required.
404.725  Evidence of a valid ceremonial marriage.
404.726  Evidence of common-law marriage.
404.727  Evidence of a deemed valid marriage.
404.728  Evidence a marriage has ended.

               Evidence for Child's and Parent's Benefits

404.730  When evidence of a parent or child relationship is needed.
404.731  Evidence you are a natural parent or child.
404.732  Evidence you are a stepparent or stepchild.
404.733  Evidence you are the legally adopting parent or legally adopted 
          child.
404.734  Evidence you are an equitably adopted child.
404.735  Evidence you are the grandchild or stepgrandchild.
404.736  Evidence of a child's dependency.
404.745  Evidence of school attendance for child age 18 or older.
404.750  Evidence of a parent's support.

                       Other Evidence Requirements

404.760  Evidence of living in the same household with insured person.
404.762  Evidence of having a child in your care.
404.770  Evidence of where the insured person had a permanent home.
404.780  Evidence of ``good cause'' for exceeding time limits on 
          accepting proof of support or application for a lump-sum death 
          payment.

                     Subpart I--Records of Earnings

                           General Provisions

404.801  Introduction.
404.802  Definitions.
404.803  Conclusiveness of the record of your earnings.

                     Obtaining Earnings Information

404.810  How to obtain a statement of earnings and a benefit estimate 
          statement.
404.811  The statement of earnings and benefit estimates you requested.
404.812  Statement of earnings and benefit estimates sent without 
          request.

                     Correcting the Earnings Record

404.820  Filing a request for correction of the record of your earnings.
404.821  Correction of the record of your earnings before the time limit 
          ends.
404.822  Correction of the record of your earnings after the time limit 
          ends.
404.823  Correction of the record of your earnings for work in the 
          employ of the United States.

         Notice of Removal or Reduction of an Entry of Earnings

404.830  Notice of removal or reduction of your wages.
404.831  Notice of removal or reduction of your self-employment income.

Subpart J--Determinations, Administrative Review Process, and Reopening 
                     of Determinations and Decisions

          Introduction, Definitions, and Initial Determinations

404.900  Introduction.
404.901  Definitions.
404.902  Administrative actions that are initial determinations.
404.903  Administrative actions that are not initial determinations.
404.904  Notice of the initial determination.
404.905  Effect of an initial determination.
404.906  Testing modifications to the disability determination 
          procedures.

                             Reconsideration

404.907  Reconsideration--general.
404.908  Parties to a reconsideration.
404.909  How to request reconsideration.
404.911  Good cause for missing the deadline to request review.
404.913  Reconsideration procedures.
404.914  Disability hearing--general.
404.915  Disability hearing--disability hearing officers.
404.916  Disability hearing--procedures.
404.917  Disability hearing--disability hearing officer's reconsidered 
          determination.

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404.918  Disability hearing--review of the disability hearing officer's 
          reconsidered determination before it is issued.
404.919  Notice of another person's request for reconsideration.
404.920  Reconsidered determination.
404.921  Effect of a reconsidered determination.
404.922  Notice of a reconsidered determination.

                        Expedited Appeals Process

404.923  Expedited appeals process--general.
404.924  When the expedited appeals process may be used.
404.925  How to request expedited appeals process.
404.926  Agreement in expedited appeals process.
404.927  Effect of expedited appeals process agreement.
404.928  Expedited appeals process request that does not result in 
          agreement.

               Hearing Before an Administrative Law Judge

404.929  Hearing before an administrative law judge--general.
404.930  Availability of a hearing before an administrative law judge.
404.932  Parties to a hearing before an administrative law judge.
404.933  How to request a hearing before an administrative law judge.
404.935  Submitting evidence prior to a hearing before an administrative 
          law judge.
404.936  Time and place for a hearing before an administrative law 
          judge.
404.938  Notice of a hearing before an administrative law judge.
404.939  Objections to the issues.
404.940  Disqualification of the administrative law judge.
404.941  Prehearing case review.
404.942  Prehearing proceedings and decisions by attorney advisors.
404.943  Responsibilities of the adjudication officer.

               Administrative Law Judge Hearing Procedures

404.944  Administrative law judge hearing procedures--general.
404.946  Issues before an administrative law judge.
404.948  Deciding a case without an oral hearing before an 
          administrative law judge.
404.949  Presenting written statements and oral arguments.
404.950  Presenting evidence at a hearing before an administrative law 
          judge.
404.951  When a record of a hearing before an administrative law judge 
          is made.
404.952  Consolidated hearing before an administrative law judge.
404.953  The decision of an administrative law judge.
404.955  The effect of an administrative law judge's decision.
404.956  Removal of a hearing request from an administrative law judge 
          to the Appeals Council.
404.957  Dismissal of a request for a hearing before an administrative 
          law judge.
404.958  Notice of dismissal of a request for a hearing before an 
          administrative law judge.
404.959  Effect of dismissal of a request for a hearing before an 
          administrative law judge.
404.960  Vacating a dismissal of a request for a hearing before an 
          administrative law judge.
404.961  Prehearing and posthearing conferences.
404.965  [Reserved]

                         Appeals Council Review

404.966  Testing elimination of the request for Appeals Council review.
404.967  Appeals Council review--general.
404.968  How to request Appeals Council review.
404.969  Appeals Council initiates review.
404.970  Cases the Appeals Council will review.
404.971  Dismissal by Appeals Council.
404.972  Effect of dismissal of request for Appeals Council review.
404.973  Notice of Appeals Council review.
404.974  Obtaining evidence from Appeals Council.
404.975  Filing briefs with the Appeals Council.
404.976  Procedures before Appeals Council on review.
404.977  Case remanded by Appeals Council.
404.979  Decision of Appeals Council.
404.981  Effect of Appeals Council's decision or denial of review.
404.982  Extension of time to file action in Federal district court.

                           Court Remand Cases

404.983  Case remanded by a Federal court.
404.984  Appeals Council review of administrative law judge decision in 
          a case remanded by a Federal court.
404.985  Application of circuit court law.

           Reopening and Revising Determinations and Decisions

404.987  Reopening and revising determinations and decisions.
404.988  Conditions for reopening.
404.989  Good cause for reopening.
404.990  Finality of determinations and decisions on revision of an 
          earnings record.
404.991  Finality of determinations and decisions to suspend benefit 
          payments for entire taxable year because of earnings.

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404.991a  Late completion of timely investigation.
404.992  Notice of revised determination or decision.
404.993  Effect of revised determination or decision.
404.994  Time and place to request a hearing on revised determination or 
          decision.
404.995  Finality of findings when later claim is filed on same earnings 
          record.
404.996  Increase in future benefits where time period for reopening 
          expires.

                   Payment of Certain Travel Expenses

404.999a  Payment of certain travel expenses--general.
404.999b  Who may be reimbursed.
404.999c  What travel expenses are reimbursable.
404.999d  When and how to claim reimbursement.

   Subpart K--Employment, Wages, Self-Employment, and Self-Employment 
                                 Income

404.1001  Introduction.
404.1002  Definitions.

                               Employment

404.1003  Employment.
404.1004  What work is covered as employment.
404.1005  Who is an employee.
404.1006  Corporation officer.
404.1007  Common-law employee.
404.1008  Agent-driver or commission-driver, full-time life insurance 
          salesman, home worker, or traveling or city salesman.
404.1009  Who is an employer.
404.1010  Farm crew leader as employer.

                      Work Excluded From Employment

404.1012  Work excluded from employment.
404.1013  Included-excluded rule.
404.1014  Domestic service by a student for a local college club, 
          fraternity or sorority.
404.1015  Family services.
404.1016  Foreign agricultural workers.
404.1017  Sharefarmers.
404.1018  Work by civilians for the United States Government or its 
          instrumentalities--wages paid after 1983.
404.1018a  Work by civilians for the United States Government or its 
          instrumentalities--remuneration paid prior to 1984.
404.1018b  Medicare qualified government employment.
404.1019  Work as a member of a uniformed service of the United States.
404.1020  Work for States and their political subdivisions and 
          instrumentalities.
404.1021  Work for the District of Columbia.
404.1022  American Samoa or Guam.
404.1023  Ministers of churches and members of religious orders.
404.1024  Election of coverage by religious orders.
404.1025  Work for religious, charitable, educational, or certain other 
          organizations exempt from income tax.
404.1026  Work for a church or qualified church-controlled organization.
404.1027  Railroad work.
404.1028  Student working for a school, college, or university.
404.1029  Student nurses.
404.1030  Delivery and distribution or sale of newspapers, shopping 
          news, and magazines.
404.1031  Fishing.
404.1032  Work for a foreign government.
404.1033  Work for a wholly owned instrumentality of a foreign 
          government.
404.1034  Work for an international organization.
404.1035  Work for a communist organization.
404.1036  Certain nonresident aliens.
404.1037  Work on or in connection with a non-American vessel or 
          aircraft.
404.1038  Domestic employees under age 18.

       Exemption From Social Security by Reason of Religous Belief

404.1039  Employers (including partnerships) and employees who are both 
          members of certain religious groups opposed to insurance.

                                  Wages

404.1041  Wages.
404.1042  Wages when paid and received.
404.1043  Facilities or privileges--meals and lodging.
404.1044  Vacation pay.
404.1045  Employee expenses.
404.1046  Pay for work by certain members of religious orders.
404.1047  Annual wage limitation.
404.1048  Contribution and benefit base after 1992.
404.1049  Payments under an employer plan or system.
404.1050  Retirement payments.
404.1051  Payments on account of sickness or accident disability, or 
          related medical or hospitalization expenses.
404.1052  Payments from or to certain tax-exempt trusts or payments 
          under or into certain annuity plans.
404.1053  ``Qualified benefits'' under a cafeteria plan.
404.1054  Payments by an employer of employee's tax or employee's 
          contribution under State law.
404.1055  Payments for agricultural labor.
404.1056  Explanation of agricultural labor.
404.1057  Domestic service in the employer's home.
404.1058  Special situations.
404.1059  Deemed wages for certain individuals interned during World War 
          II.

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404.1060  [Reserved]

                             Self-Employment

404.1065  Self-employment coverage.
404.1066  Trade or business in general.
404.1068  Employees who are considered self-employed.
404.1069  Real estate agents and direct sellers.
404.1070  Christian Science practitioners.
404.1071  Ministers and members of religious orders.
404.1073  Public office.
404.1074  Farm crew leader who is self-employed.
404.1075  Members of certain religious groups opposed to insurance.
404.1077  Individuals under railroad retirement system.

                         Self-Employment Income

404.1080  Net earnings from self-employment.
404.1081  General rules for figuring net earnings from self-employment.
404.1082  Rentals from real estate; material participation.
404.1083  Dividends and interest.
404.1084  Gain or loss from disposition of property; capital assets; 
          timber, coal, and iron ore; involuntary conversion.
404.1085  Net operating loss deduction.
404.1086  Community income.
404.1087  Figuring partner's net earnings from self-employment for 
          taxable year which ends as a result of death.
404.1088  Retirement payment to retired partners.
404.1089  Figuring net earnings for residents and nonresidents of Puerto 
          Rico.
404.1090  Personal exemption deduction.
404.1091  Figuring net earnings for ministers and members of religious 
          orders.
404.1092  Figuring net earnings for U.S. citizens or residents living 
          outside the United States.
404.1093  Possession of the United States.
404.1094  Options available for figuring net earnings from self-
          employment.
404.1095  Agricultural trade or business.
404.1096  Self-employment income.

Subpart L [Reserved]

     Subpart M--Coverage of Employees of State and Local Governments

                                 General

404.1200  General.
404.1201  Scope of this subpart regarding coverage and wage reports and 
          adjustments.
404.1202  Definitions.
404.1203  Evidence--for wages paid prior to 1987.
404.1204  Designating officials to act on behalf of the State.

                 What Groups of Employees May Be Covered

404.1205  Absolute coverage groups.
404.1206  Retirement system coverage groups.
404.1207  Divided retirement system coverage groups.
404.1208  Ineligible employees.
404.1209   Mandatorily excluded services.
404.1210   Optionally excluded services.
404.1211  Interstate instrumentalities.
404.1212  Police officers and firefighters.

         How Coverage Under Agreements Is Obtained and Continues

404.1214  Agreement for coverage.
404.1215  Modification of agreement.
404.1216  Modification of agreement to correct an error.
404.1217  Continuation of coverage.
404.1218  Resumption of coverage.
404.1219  Dissolution of political subdivision.

                    How To Identify Covered Employees

404.1220  Identification numbers.

                  What Records of Coverage Must Be Kept

404.1225  Records--for wages paid prior to 1987.

            Review of Compliance by State With Its Agreement

404.1230  Onsite review program.
404.1231  Scope of review.
404.1232  Conduct of review.
404.1234  Reports of review's findings.

   How To Report Wages and Contributions--for Wages Paid Prior to 1987

404.1237  Wage reports and contribution returns--general--for wages paid 
          prior to 1987.
404.1239  Wage reports for employees performing services in more than 
          one coverage group--for wages paid prior to 1987.
404.1242  Back pay.
404.1243  Use of reporting forms--for wages paid prior to 1987.
404.1247  When to report wages--for wages paid prior to 1987.
404.1249  When and where to make deposits of contributions and to file 
          contribution returns and wage reports--for wages paid prior to 
          1987.
404.1251  Final reports--for wages paid prior to 1987.

 What Is a State's Liability for Contributions--for Wages Paid Prior to 
                                  1987

404.1255  State's liability for contributions--for wages paid prior to 
          1987.
404.1256  Limitation on State's liability for contributions for multiple 
          employment situations--for wages paid prior to 1987.

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 Figuring the Amount of the State's Contributions--for Wages Paid Prior 
                                 to 1987

404.1260  Amount of contributions--for wages paid prior to 1987.
404.1262  Manner of payment of contributions by State--for wages paid 
          prior to 1987.
404.1263  When fractional part of a cent may be disregarded--for wages 
          paid prior to 1987.

 If a State Fails To Make Timely Payments--for Wages Paid Prior to 1987

404.1265  Addition of interest to contributions--for wages paid prior to 
          1987.
404.1267  Failure to make timely payments--for wages paid prior to 1987.

  How Errors in Reports and Contributions Are Adjusted--for Wages Paid 
                              Prior to 1987

404.1270  Adjustments in general--for wages paid prior to 1987.
404.1271  Adjustment of overpayment of contributions--for wages paid 
          prior to 1987.
404.1272  Refund or recomputation of overpayments which are not 
          adjustable--for wages paid prior to 1987.
404.1275  Adjustment of employee contributions--for wages paid prior to 
          1987.
404.1276  Reports and payments erroneously made to Internal Revenue 
          Service-transfer of funds--for wages paid prior to 1987.

 How Overpayments of Contributions Are Credited or Refunded--for Wages 
                           Paid Prior to 1987

404.1280  Allowance of credits or refunds--for wages paid prior to 1987.
404.1281  Credits or refunds for periods of time during which no 
          liability exists--for wages paid prior to 1987.
404.1282  Time limitations on credits or refunds--for wages paid prior 
          to 1987.
404.1283  Exceptions to the time limitations on credits or refunds--for 
          wages paid prior to 1987.
404.1284  Offsetting underpayments against overpayments--for wages paid 
          prior to 1987.

 How Assessments for Underpayments of Contributions Are Made--for Wages 
                           Paid Prior to 1987

404.1285  Assessments of amounts due--for wages paid prior to 1987.
404.1286  Time limitations on assessments--for wages paid prior to 1987.
404.1287  Exceptions to the time limitations on assessments--for wages 
          paid prior to 1987.
404.1289  Payment after expiration of time limitation for assessment--
          for wages paid prior to 1987.

Secretary's Review of Decisions on Credits, Refunds, or Assessments--for 
                        Wages Paid Prior to 1987

404.1290  Review of decisions by the Secretary--for wages paid prior to 
          1987.
404.1291  Reconsideration--for wages paid prior to 1987.
404.1292  How to request review--for wages paid prior to 1987.
404.1293  Time for filing request for review--for wages paid prior to 
          1987.
404.1294  Notification to State after reconsideration--for wages paid 
          prior to 1987.
404.1295  Commissioner's review--for wages paid prior to 1987.
404.1296  Commissioner's notification to the State--for wages paid prior 
          to 1987.

  How a State May Seek Court Review of Secretary's Decision--for Wages 
                           Paid Prior to 1987

404.1297  Review by court--for wages paid prior to 1987.
404.1298  Time for filing civil action--for wages paid prior to 1987.
404.1299  Final judgments--for wages paid prior to 1987.

   Subpart N--Wage Credits for Veterans and Members of the Uniformed 
                                Services

                                 General

404.1301  Introduction.
404.1302  Definitions.

                          World War II Veterans

404.1310  Who is a World War II veteran.
404.1311  Ninety-day active service requirement for World War II 
          veterans.
404.1312  World War II service included.
404.1313  World War II service excluded.

                       Post-World War II Veterans

404.1320  Who is a post-World War II veteran.
404.1321  Ninety-day active service requirement for post-World War II 
          veterans.
404.1322  Post-World War II service included.
404.1323  Post-World War II service excluded.

                     Separation From Active Service

404.1325  Separation from active service under conditions other than 
          dishonorable.

                    Members of the Uniformed Services

404.1330  Who is a member of a uniformed service.

             Amounts of Wage Credits and Limits on Their Use

404.1340  Wage credits for World War II and post-World War II veterans.
404.1341  Wage credits for a member of a uniformed service.

[[Page 55]]

404.1342  Limits on granting World War II and post-World War II wage 
          credits.
404.1343  When the limits on granting World War II and post-World War II 
          wage credits do not apply.

             Deemed Insured Status for World War II Veterans

404.1350  Deemed insured status.
404.1351  When deemed insured status does not apply.
404.1352  Benefits and payments based on deemed insured status.

  Effect of Other Benefits on Payment of Social Security Benefits and 
                                Payments

404.1360  Veterans Administration pension or compensation payable.
404.1361  Federal benefit payable other than by Veterans Administration.
404.1362  Treatment of social security benefits or payments where 
          Veterans Administration pension or compensation payable.
404.1363  Treatment of social security benefits or payments where 
          Federal benefit payable other than by Veterans Administration.

    Evidence of Active Service and Membership in a Uniformed Service

404.1370  Evidence of active service and separation from active service.
404.1371  Evidence of membership in a uniformed service during the years 
          1957 through 1967.

   Subpart O--Interrelationship of Old-Age, Survivors and Disability 
         Insurance Program With the Railroad Retirement Program

404.1401  General relationship of Railroad Retirement Act with the old-
          age, survivors and disability insurance program of the Social 
          Security Act.
404.1402  When services in the railroad industry are covered.
404.1403  Definition of ``years of service''.
404.1404  Effective date of coverage of railroad services under the act.
404.1405  When the provisions of Sec. 404.1402 do not apply.
404.1406  Eligibility to railroad retirement benefits as a bar to 
          payment of social security benefits.
404.1407  When railroad retirement benefits do not bar payment of social 
          security benefits.
404.1408  Compensation to be treated as wages.
404.1409  Purposes of using compensation.
404.1410  Presumption on basis of certified compensation record.
404.1412  Compensation quarters of coverage.
404.1413  Certification of payment to Railroad Retirement Board.

             Subpart P--Determining Disability and Blindness

                                 General

404.1501  Scope of subpart.
404.1502  General definitions and terms for this subpart.

                             Determinations

404.1503  Who makes disability and blindness determinations.
404.1503a  Program integrity.
404.1504  Determinations by other organizations and agencies.

                        Definition of Disability

404.1505  Basic definition of disability.
404.1506  When we will not consider your impairment.
404.1508  What is needed to show an impairment.
404.1509  How long the impairment must last.
404.1510  Meaning of substantial gainful activity.
404.1511  Definition of disabling impairment.

                                Evidence

404.1512  Evidence of your impairment.
404.1513  Medical and other evidence of your impairment(s).
404.1514  When we will purchase existing evidence.
404.1515  Where and how to submit evidence.
404.1516  If you fail to submit medical and other evidence.
404.1517  Consultative examination at our expense.
404.1518  If you do not appear at a consultative examination.

Standards To Be Used in Determining When a Consultative Examination Will 
        Be Obtained in Connection With Disability Determinations

404.1519  The consultative examination.
404.1519a  When we will purchase a consultative examination and how we 
          will use it.
404.1519b  When we will not purchase a consultative examination.

        Standards for the Type of Referral and for Report Content

404.1519f  Type of purchased examinations.
404.1519g  Who we will select to perform a consultative examination.
404.1519h  Your treating source.
404.1519i  Other sources for consultative examinations.

[[Page 56]]

404.1519j  Objections to the medical source designated to perform the 
          consultative examination.
404.1519k  Purchase of medical examinations, laboratory tests, and other 
          services.
404.1519m  Diagnostic tests or procedures.
404.1519n  Informing the medical source of examination scheduling, 
          report content, and signature requirements.
404.1519o  When a properly signed consultative examination report has 
          not been received.
404.1519p  Reviewing reports of consultative examinations.
404.1519q  Conflict of interest.

             Authorizing and Monitoring the Referral Process

404.1519s  Authorizing and monitoring the consultative examination.

           Procedures To Monitor the Consultative Examination

404.1519t  Consultative examination oversight.

                        Evaluation of Disability

404.1520  Evaluation of disability in general.
404.1520a  Evaluation of mental impairments.
404.1521  What we mean by an impairment(s) that is not severe.
404.1522  When you have two or more unrelated impairments--initial 
          claims.
404.1523  Multiple impairments.

                         Medical Considerations

404.1525  Listing of Impairments in appendix 1.
404.1526  Medical equivalence.
404.1527  Evaluating opinion evidence.
404.1528  Symptoms, signs, and laboratory findings.
404.1529  How we evaluate symptoms, including pain.
404.1530  Need to follow prescribed treatment.
404.1535  How we will determine whether your drug addiction or 
          alcoholism is a contributing factor material to the 
          determination of disability.
404.1536  Treatment required for individuals whose drug addiction or 
          alcoholism is a contributing factor material to the 
          determination of disability.
404.1537  What we mean by appropriate treatment.
404.1538  What we mean by approved institutions or facilities.
404.1539  How we consider whether treatment is available.
404.1540  Evaluating compliance with the treatment requirements.
404.1541  Establishment and use of referral and monitoring agencies.

                      Residual Functional Capacity

404.1545  Your residual functional capacity.
404.1546  Responsibility for assessing and determining residual 
          functional capacity.

                        Vocational Considerations

404.1560  When your vocational background will be considered.
404.1561  Your ability to do work depends upon your residual functional 
          capacity.
404.1562  If you have done only arduous unskilled physical labor.
404.1563  Your age as a vocational factor.
404.1564  Your education as a vocational factor.
404.1565  Your work experience as a vocational factor.
404.1566  Work which exists in the national economy.
404.1567  Physical exertion requirements.
404.1568  Skill requirements.
404.1569  Listing of Medical-Vocational Guidelines in appendix 2.
404.1569a  Exertional and nonexertional limitations.

                      Substantial Gainful Activity

404.1571  General.
404.1572  What we mean by substantial gainful activity.
404.1573  General information about work activity.
404.1574  Evaluation guides if you are an employee.
404.1574a  When and how we will average your earnings.
404.1575  Evaluation guides if you are self-employed.
404.1576  Impairment-related work expenses.

            Widows, Widowers, and Surviving Divorced Spouses

404.1577  Disability defined for widows, widowers, and surviving 
          divorced spouses for monthly benefits payable for months prior 
          to January 1991.
404.1578  How we determine disability for widows, widowers, and 
          surviving divorced spouses for monthly benefits payable for 
          months prior to January 1991.
404.1579  How we will determine whether your disability continues or 
          ends.

                                Blindness

404.1581  Meaning of blindness as defined in the law.
404.1582  A period of disability based on blindness.
404.1583  How we determine disability for blind persons who are age 55 
          or older.
404.1584  Evaluation of work activity of blind people.
404.1585  Trial work period for persons age 55 or older who are blind.
404.1586  Why and when we will stop your cash benefits.

[[Page 57]]

404.1587  Circumstances under which we may suspend your benefits before 
          we make a determination.

                    Continuing or Stopping Disability

404.1588  Your responsibility to tell us of events that may change your 
          disability status.
404.1589  We may conduct a review to find out whether you continue to be 
          disabled.
404.1590  When and how often we will conduct a continuing disability 
          review.
404.1591  If your medical recovery was expected and you returned to 
          work.
404.1592  The trial work period.
404.1592a  The reentitlement period.
404.1593  Medical evidence in continuing disability review cases.
404.1594  How we will determine whether your disability continues or 
          ends.
404.1595  When we determine that you are not now disabled.
404.1596  Circumstances under which we may suspend your benefits before 
          we make a determination.
404.1597  After we make a determination that you are not now disabled.
404.1597a  Continued benefits pending appeal of a medical cessation 
          determination.
404.1598  If you become disabled by another impairment(s).
404.1599  Work incentive experiments and rehabilitation demonstration 
          projects in the disability program.

Appendix 1 to Subpart P--Listing of Impairments
Appendix 2 to Subpart P--Medical-Vocational Guidelines

                 Subpart Q--Determinations of Disability

                           General Provisions

404.1601  Purpose and scope.
404.1602  Definitions.
404.1603  Basic responsibilities for us and the State.

  Responsibilities for Performing the Disability Determination Function

404.1610  How a State notifies us that it wishes to perform the 
          disability determination function.
404.1611  How we notify a State whether it may perform the disability 
          determination function.
404.1613  Disability determinations the State makes.
404.1614  Responsibilities for obtaining evidence to make disability 
          determinations.
404.1615  Making disability determinations.
404.1616  Medical or psychological consultants.
404.1617  Reasonable efforts to obtain review by a qualified 
          psychiatrist or psychologist.
404.1618  Notifying claimants of the disability determination.

            Administrative Responsibilities and Requirements

404.1620  General administrative requirements.
404.1621  Personnel.
404.1622  Training.
404.1623  Facilities.
404.1624  Medical and other purchased services.
404.1625  Records and reports.
404.1626  Fiscal.
404.1627  Audits.
404.1628  Property.
404.1629  Participation in research and demonstration projects.
404.1630  Coordination with other agencies.
404.1631  Confidentiality of information and records.
404.1632  Other Federal laws and regulations.
404.1633  Policies and operating instructions.

                          Performance Standards

404.1640  General.
404.1641  Standards of performance.
404.1642  Processing time standards.
404.1643  Performance accuracy standard.
404.1644  How and when we determine whether the processing time 
          standards are met.
404.1645  How and when we determine whether the performance accuracy 
          standard is met.
404.1650  Action we will take if a State agency does not meet the 
          standards.

                   Performance Monitoring and Support

404.1660  How we will monitor.
404.1661  When we will provide performance support.
404.1662  What support we will provide.

                           Substantial Failure

404.1670  General.
404.1671  Good cause for not following the Act, our regulations, or 
          other written guidelines.
404.1675  Finding of substantial failure.

                          Hearings and Appeals

404.1680  Notice of right to hearing on proposed finding of substantial 
          failure.
404.1681  Disputes on matters other than substantial failure.
404.1682  Who conducts the hearings.
404.1683  Hearings and appeals process.

             Assumption of Disability Determination Function

404.1690  Assumption when we make a finding of substantial failure.
404.1691  Assumption when State no longer wishes to perform the 
          disability determination function.

[[Page 58]]

404.1692  Protection of State employees.
404.1693  Limitation on State expenditures after notice.
404.1694  Final accounting by the State.

                  Subpart R--Representation of Parties

404.1700  Introduction.
404.1703  Definitions.
404.1705  Who may be your representative.
404.1706  Notification of options for obtaining attorney representation.
404.1707  Appointing a representative.
404.1710  Authority of a representative.
404.1715  Notice or request to a representative.
404.1720  Fee for a representative's services.
404.1725  Request for approval of a fee.
404.1728  Proceedings before a State or Federal court.
404.1730  Payment of fees.
404.1735  Services in a proceeding under title II of the Act.
404.1740  Rules of conduct and standards of responsibility for 
          representatives.
404.1745  Violations of our requirements, rules, or standards.
404.1750  Notice of charges against a representative.
404.1755  Withdrawing charges against a representative.
404.1765  Hearing on charges.
404.1770  Decision by hearing officer.
404.1775  Requesting review of the hearing officer's decision.
404.1776  Assignment of request for review of the hearing officer's 
          decision.
404.1780  Appeals Council's review of hearing officer's decision.
404.1785  Evidence permitted on review.
404.1790  Appeals Council's decision.
404.1795  When the Appeals Council will dismiss a request for review.
404.1797  Reinstatement after suspension--period of suspension expired.
404.1799  Reinstatement after suspension or disqualification--period of 
          suspension not expired.

                      Subpart S--Payment Procedures

404.1800  Introduction.
404.1805  Paying benefits.
404.1807  Monthly payment day.
404.1810  Expediting benefit payments.
404.1815  Withholding certification or payments.
404.1820  Transfer or assignment of payments.
404.1825  Joint payments to a family.

                   Subpart T--Totalization Agreements

                           General Provisions

404.1901  Introduction.
404.1902  Definitions.
404.1903  Negotiating totalization agreements.
404.1904  Effective date of a totalization agreement.
404.1905  Termination of agreements.

                           Benefit Provisions

404.1908  Crediting foreign periods of coverage.
404.1910  Person qualifies under more than one totalization agreement.
404.1911  Effects of a totalization agreement on entitlement to hospital 
          insurance benefits.

                           Coverage Provisions

404.1913  Precluding dual coverage.
404.1914  Certificate of coverage.
404.1915  Payment of contributions.

                         Computation Provisions

404.1918  How benefits are computed.
404.1919  How benefits are recomputed.
404.1920  Supplementing the U.S. benefit if the total amount of the 
          combined benefits is less than the U.S. minimum benefit.
404.1921  Benefits of less than $1 due.

                            Other Provisions

404.1925  Applications.
404.1926  Evidence.
404.1927  Appeals.
404.1928  Effect of the alien non-payment provision.
404.1929  Overpayments.
404.1930  Disclosure of information.

                    Subpart U--Representative Payment

404.2001  Introduction.
404.2010  When payment will be made to a representative payee.
404.2015  Information considered in determining whether to make 
          representative payments.
404.2020  Information considered in selecting a representative payee.
404.2021  Order of preference in selecting a representative payee.
404.2025  Information to be submitted by a representative payee.
404.2030  Advance notice of the determination to make representative 
          payment.
404.2035  Responsibilities of a representative payee.
404.2040  Use of benefit payments.
404.2040a  Compensation for qualified organizations serving as 
          representative payees.
404.2041  Liability for misuse of benefit payments.
404.2045  Conservation and investment of benefit payments.
404.2050  When a new representative payee will be selected.

[[Page 59]]

404.2055  When representative payment will be stopped.
404.2060  Transfer of accumulated benefit payments.
404.2065  Accounting for benefit payments.

       Subpart V--Payments for Vocational Rehabilitation Services

                           General Provisions

404.2101  General.
404.2102  Purpose and scope.
404.2103  Definitions.
404.2104  Participation by State VR agencies or alternate participants.
404.2106  Basic qualifications for alternate participants.

                           Payment Provisions

404.2108  Requirements for payment.
404.2109  Responsibility for making payment decisions.
404.2110  What we mean by ``SGA'' and by ``a continuous period of 9 
          months''.
404.2111  Criteria for determining when VR services will be considered 
          to have contributed to a continuous period of 9 months.
404.2112  Payment for VR services in a case where an individual 
          continues to receive disability payments based on 
          participation in an approved VR program.
404.2113  Payment for VR services in a case of VR refusal.
404.2114  Services for which payment may be made.
404.2115  When services must have been provided.
404.2116  When claims for payment for VR services must be made (filing 
          deadlines).
404.2117  What costs will be paid.

                        Administrative Provisions

404.2118  Applicability of these provisions to alternate participants.
404.2119  Method of payment.
404.2120  Audits.
404.2121  Validation reviews.
404.2122  Confidentiality of information and records.
404.2123  Other Federal laws and regulations.
404.2127  Resolution of disputes.



       Subpart A--Introduction, General Provisions and Definitions

    Authority: Secs. 203, 205(a), 216(j), and 702(a)(5) of the Social 
Security Act (42 U.S.C. 403, 405(a), 416(j), and 902(a)(5)).



Sec. 404.1  Introduction.

    The regulations in this part 404 (Regulations No. 4 of the Social 
Security Administration) relate to the provisions of title II of the 
Social Security Act as amended on August 28, 1950, and as further 
amended thereafter. The regulations in this part are divided into 22 
subparts:
    (a) Subpart A contains provisions relating to general definitions 
and use of terms.
    (b) Subpart B relates to quarters of coverage and insured status 
requirements.
    (c) Subpart C relates to the computation and recomputation of the 
primary insurance amount.
    (d) Subpart D relates to the requirements for entitlement to monthly 
benefits and to the lump-sum death payment duration of entitlement and 
benefit rates.
    (e) Subpart E contains provisions relating to the reduction and 
increase of insurance benefits and to deductions from benefits and lump-
sum death payments.
    (f) Subpart F relates to overpayments, underpayments, waiver of 
adjustment or recovery of overpayments and liability of certifying 
officers.
    (g) Subpart G relates to filing of applications and other forms.
    (h) Subpart H relates to evidentiary requirements for establishing 
an initial and continuing right to monthly benefits and for establishing 
a right to lump-sum death payment. (Evidentiary requirements relating to 
disability are contained in subpart P.)
    (i) Subpart I relates to maintenance and revision of records of 
wages and self-employment income.
    (j) Subpart J relates to initial determinations, the administrative 
review process, and reopening of determinations and decisions.
    (k) Subpart K relates to employment, wages, self-employment and 
self-employment income.
    (l) Subpart L is reserved.
    (m) Subpart M relates to coverage of employees of State and local 
Governments.
    (n) Subpart N relates to benefits in cases involving veterans.
    (o) Subpart O relates to the interrelationship of the old-age, 
survivors and disability insurance program with the railroad retirement 
program.
    (p) Subpart P relates to the determination of disability or 
blindness.

[[Page 60]]

    (q) Subpart Q relates to standards, requirements and procedures for 
States making determinations of disability for the Commissioner. It also 
sets out the Commissioner's responsibilities in carrying out the 
disability determination function.
    (r) Subpart R relates to the provisions applicable to attorneys and 
other individuals who represent applicants in connection with claims for 
benefits.
    (s) Subpart S relates to the payment of benefits to individuals who 
are entitled to benefits.
    (t) Subpart T relates to the negotiation and administration of 
totalization agreements between the United States and foreign countries.
    (u) Subpart U relates to the selection of a representative payee to 
receive benefits on behalf of a beneficiary and to the duties and 
responsibilities of a representative payee.
    (v) Subpart V relates to payments to State vocational rehabilitative 
agencies (or alternate participants) for vocational rehabilitation 
services.

[26 FR 7054, Aug. 5, 1961; 26 FR 7760, Aug. 19, 1961, as amended at 27 
FR 4513, May 11, 1962; 28 FR 14492, Dec. 31, 1963; 51 FR 11718, Apr. 7, 
1986; 62 FR 38450, July 18, 1997]



Sec. 404.2  General definitions and use of terms.

    (a) Terms relating to the Act and regulations. (1) The Act means the 
Social Security Act, as amended (42 U.S.C. Chapter 7).
    (2) Section means a section of the regulations in part 404 of this 
chapter unless the context indicates otherwise.
    (b) Commissioner; Appeals Council; Administrative Law Judge defined. 
(1) Commissioner means the Commissioner of Social Security.
    (2) Appeals Council means the Appeals Council of the Office of 
Hearings and Appeals in the Social Security Administration or such 
member or members thereof as may be designated by the Chairman.
    (3) Administrative Law Judge means an Administrative Law Judge in 
the Office of Hearings and Appeals in the Social Security 
Administration.
    (c) Miscellaneous. (1) Certify, when used in connection with the 
duty imposed on the Commissioner by section 205(i) of the act, means 
that action taken by the Administration in the form of a written 
statement addressed to the Managing Trustee, setting forth the name and 
address of the person to whom payment of a benefit or lump sum, or any 
part thereof, is to be made, the amount to be paid, and the time at 
which payment should be made.
    (2) Benefit means an old-age insurance benefit, disability insurance 
benefit, wife's insurance benefit, husband's insurance benefit, child's 
insurance benefit, widow's insurance benefit, widower's insurance 
benefit, mother's insurance benefit, father's insurance benefit, 
parent's insurance benefit, or special payment at age 72 under title II 
of the Act. (Lump sums, which are death payments under title II of the 
Act, are excluded from the term benefit as defined in this part to 
permit greater clarity in the regulations.)
    (3) Lump sum means a lump-sum death payment under title II of the 
act or any person's share of such a payment.
    (4) Attainment of age. An individual attains a given age on the 
first moment of the day preceding the anniversary of his birth 
corresponding to such age.
    (5) State, unless otherwise indicated, includes (i) the District of 
Columbia, (ii) the Virgin Islands, (iii) the Commonwealth of Puerto Rico 
effective January 1, 1951, (iv) Guam and American Samoa, effective 
September 13, 1960, generally, and for purposes of sections 210(a) and 
211 of the act effective after 1960 with respect to service performed 
after 1960, and effective for taxable years beginning after 1960 with 
respect to crediting net earnings from self-employment and self-
employment income, and (v) the Territories of Alaska and Hawaii prior to 
January 3, 1959, and August 21, 1959, respectively when those 
territories acquired statehood.
    (6) United States, when used in a geographical sense, includes, 
unless otherwise indicated, (i) the States, (ii) the Territories of 
Alaska and Hawaii prior to January 3, 1959, and August 21, 1959, 
respectively, when they acquired statehood, (iii) the District of 
Columbia, (iv) the Virgin Islands, (v) the Commonwealth of Puerto Rico 
effective January 1, 1951, and (vi) Guam and American Samoa, effective 
September 13,

[[Page 61]]

1960, generally, and for purposes of sections 210(a) and 211 of the act, 
effective after 1960 with respect to service performed after 1960, and 
effective for taxable years beginning after 1960 with respect to 
crediting net earnings from self-employment and self-employment income.
    (7) Masculine gender includes the feminine, unless otherwise 
indicated.
    (8) The terms defined in sections 209, 210, and 211 of the act shall 
have the meanings therein assigned to them.

[26 FR 7055, Aug. 5, 1961; 26 FR 7760, Aug. 19, 1961, as amended at 28 
FR 1037, Feb. 2, 1963; 28 FR 14492, Dec. 31, 1963; 29 FR 15509, Nov. 19, 
1964; 41 FR 32886, Aug. 6, 1976; 51 FR 11718, Apr. 7, 1986; 61 FR 41330, 
Aug. 8, 1996; 62 FR 38450, July 18, 1997]



Sec. 404.3  General provisions.

    (a) Effect of cross references. The cross references in the 
regulations in this part 404 to other portions of the regulations, when 
the word see is used, are made only for convenience and shall be given 
no legal effect.
    (b) Periods of limitation ending on nonwork days. Pursuant to the 
provisions of section 216(j) of the act, effective September 13, 1960, 
where any provision of title II, or any provision of another law of the 
United States (other than the Internal Revenue Code of 1954) relating to 
or changing the effect of title II, or any regulation of the 
Commissioner issued under title II, provides for a period within which 
an act is required to be done which affects eligibility for or the 
amount of any benefit or payment under this title or is necessary to 
establish or protect any rights under this title, and such period ends 
on a Saturday, Sunday or Federal legal holiday or on any other day all 
or part of which is declared to be a nonwork day for Federal employees 
by statute or Executive Order, then such act shall be considered as done 
within such period if it is done on the first day thereafter which is 
not a Saturday, Sunday, or legal holiday or any other day all or part of 
which is declared to be a nonwork day for Federal employees either by 
statute or Executive Order. For purposes of this paragraph, the day on 
which a period ends shall include the final day of any extended period 
where such extension is authorized by law or by the Commissioner 
pursuant to law. Such extension of any period of limitation does not 
apply to periods during which benefits may be paid for months prior to 
the month an application for such benefits is filed pursuant to 
Sec. 404.621, or to periods during which an application for benefits may 
be accepted as such pursuant to Sec. 404.620.

[26 FR 7055, Aug. 5, 1961, as amended at 29 FR 15509, Nov. 19, 1964; 51 
FR 11718, Apr. 7, 1986; 61 FR 41330, Aug. 8, 1996; 62 FR 38450, July 18, 
1997]



           Subpart B--Insured Status and Quarters of Coverage

    Authority: Secs. 205(a), 212, 213, 214, 216, 217, 223, and 702(a)(5) 
of the Social Security Act (42 U.S.C. 405(a), 412, 413, 414, 416, 417, 
423, and 902(a)(5)).

    Source: 45 FR 25384, Apr. 15, 1980, unless otherwise noted.

                                 General



Sec. 404.101  Introduction.

    (a) Insured status. This subpart explains what we mean when we say 
that a person has insured status under the social security program. It 
also describes how a person may become fully insured, currently insured 
or insured for disability benefits. Your insured status is a basic 
factor in determining if you are entitled to old-age or disability 
insurance benefits or to a period of disability. It is also a basic 
factor in determining if dependents' or survivors' insurance benefits or 
a lump-sum death payment are payable based on your earnings record. If 
you are neither fully nor currently insured, no benefits are payable 
based on your earnings. (Subpart D of this part describes these benefits 
and the kind of insured status required for each.) In Secs. 404.110 
through 404.120 we tell how we determine if you are fully or currently 
insured. The rules for determining if you are insured for purposes of 
establishing a period of disability or becoming entitled to disability 
insurance benefits are in Secs. 404.130 through 404.133. Whether you 
have the required insured status depends on the number of quarters of 
coverage (QCs) you have acquired.

[[Page 62]]

    (b) QCs. This subpart also sets out our rules on crediting you with 
QCs. QCs are used in determining insured status. In general, you are 
credited with QCs based on the wages you are paid and the self-
employment income you derive during certain periods. (See subpart K of 
this part for a definition of wages and self-employment income.) Our 
rules on how and when you acquire a QC are contained in Secs. 404.140 
through 404.146.



Sec. 404.102  Definitions.

    For the purpose of this subpart--
    Act means the Social Security Act, as amended.
    Age means how many years old you are. You reach a particular age on 
the day before your birthday. For example, if your sixty-second birthday 
is on July 1, 1979, you became age 62 on June 30, 1979.
    Quarter or calendar quarter means a period of three calendar months 
ending March 31, June 30, September 30, or December 31 of any year.
    We, our, or us means the Social Security Administration.
    You or your means the worker whose insured status is being 
considered.

                          Fully Insured Status



Sec. 404.110  How we determine fully insured status.

    (a) General. We describe how we determine the number of quarters of 
coverage (QCs) you need to be fully insured in paragraphs (b), (c), and 
(d) of this section. The table in Sec. 404.115 may be used to determine 
the number of QCs you need to be fully insured under paragraph (b) of 
this section. We consider certain World War II veterans to have died 
fully insured (see Sec. 404.111). We also consider certain employees of 
private nonprofit organizations to be fully insured if they meet special 
requirements (see Sec. 404.112).
    (b) How many QCs you need to be fully insured. (1) You need at least 
6 QCs but not more than 40 QCs to be fully insured. A person who died 
before 1951 with at least 6 QCs is fully insured.
    (2) You are fully insured for old-age insurance benefits if you have 
one QC (whenever acquired) for each calendar year elapsing after 1950 
or, if later, after the year in which you became age 21, and before the 
year you reach retirement age, that is, before--
    (i) The year you become age 62, if you are a woman;
    (ii) The year you become age 62, if you are a man who becomes age 62 
after 1974;
    (iii) The year 1975, if you are a man who became age 62 in 1973 or 
1974; or
    (iv) The year you became age 65, if you are a man who became age 62 
before 1973.
    (3) A person who is otherwise eligible for survivor's benefits and 
who files an application will be entitled to benefits based on your 
earnings if you die fully insured. You will be fully insured if you had 
one QC (whenever acquired) for each calendar year elapsing after 1950 
or, if later, after the year you became age 21, and before the earlier 
of the following years:
    (i) The year you die; or
    (ii) The year you reach retirement age as shown in paragraph (b)(2) 
of this section.
    (c) How a period of disability affects the number of QCs you need. 
In determining the number of elapsed years under paragraph (b) of this 
section, we do not count as an elapsed year any year which is wholly or 
partly in a period of disability we established for you. For example, if 
we established a period of disability for you from December 5, 1975 
through January 31, 1977, the three years, 1975, 1976 and 1977, would 
not be counted as elapsed years.
    (d) How we credit QCs for fully insured status based on your total 
wages before 1951--(1) General. For purposes of paragraph (b) of this 
section, we may use the following rules in crediting QCs based on your 
wages before 1951 instead of the rule in Sec. 404.141(b)(1).
    (i) We may consider you to have one QC for each $400 of your total 
wages before 1951, as defined in paragraph (d)(2) of this section, if 
you have at least 7 elapsed years as determined under paragraph (b)(2) 
or (b)(3) of this section; and the number of QCs determined under this 
paragraph plus the number of QCs credited to you for periods after 1950 
make you fully insured.
    (ii) If you file an application in June 1992 or later and you are 
not entitled to a benefit under Sec. 404.380 or section 227

[[Page 63]]

of the Act in the month the application is made, we may consider you to 
have at least one QC before 1951 if you have $400 or more total wages 
before 1951, as defined in paragraph (d)(2) of this section, provided 
that the number of QCs credited to you under this paragraph plus the 
number of QCs credited to you for periods after 1950 make you fully 
insured.
    (2) What are total wages before 1951. For purposes of paragraph 
(d)(1) of this section, your total wages before 1951 include--
    (i) Remuneration credited to you before 1951 on the records of the 
Secretary;
    (ii) Wages considered paid to you before 1951 under section 217 of 
the Act (relating to benefits in case of veterans);
    (iii) Compensation under the Railroad Retirement Act of 1937 before 
1951 that can be credited to you under title II of the Social Security 
Act; and
    (iv) Wages considered paid to you before 1951 under section 231 of 
the Act (relating to benefits in case of certain persons interned in the 
United States during World War II).
    (e) When your fully insured status begins. You are fully insured as 
of the first day of the calendar quarter in which you acquire the last 
needed QC (see Sec. 404.145).

[45 FR 25384, Apr. 15, 1980, as amended at 50 FR 36573, Sept. 9, 1985; 
57 FR 23156, June 2, 1992]



Sec. 404.111  When we consider a person fully insured based on World War II active military or naval service.

    We consider that a person, who was not otherwise fully insured, died 
fully insured if--
    (a) The person was in the active military or naval service of the 
United States during World War II;
    (b) The person died within three years after separation from service 
and before July 27, 1954; and
    (c) The conditions in Sec. 404.1350 that permit us to consider the 
person fully insured are met.
    (d) The provisions of this section do not apply to persons filing 
applications after May 31, 1992, unless a survivor is entitled to 
benefits under section 202 of the Act based on the primary insurance 
amount of the fully insured person for the month preceding the month in 
which the application is made.

[45 FR 25384, Apr. 15, 1980, as amended at 57 FR 23157, June 2, 1992]



Sec. 404.112  When we consider certain employees of private nonprofit organizations to be fully insured.

    If you are age 55 or over on January 1, 1984, and are on that date 
an employee of an organization described in Sec. 404.1025(a) which does 
not have in effect a waiver certificate under section 3121(k) of the 
Code on that date and whose employees are mandatorily covered as a 
result of section 102 of Pub. L. 98-21, we consider you to be fully 
insured if you meet the following requirements:

------------------------------------------------------------------------
                                                                 QC's
                                                               acquired
              Your age on January 1, 1984 is--                after Dec.
                                                               31, 1983
------------------------------------------------------------------------
60 or over.................................................            6
59 or over but less than age 60............................            8
58 or over but less than age 59............................           12
57 or over but less than age 58............................           16
55 or over but less than age 57............................           20
------------------------------------------------------------------------


[50 FR 36573, Sept. 9, 1985]



Sec. 404.115  Table for determining the quarters of coverage you need to be fully insured.

    (a) General. You may use the following table to determine the number 
of quarters of coverage (QCs) you need to be fully insured under 
Sec. 404.110. Paragraphs (b) and (c) of this section tell you how to use 
this table.

----------------------------------------------------------------------------------------------------------------
 Worker who reaches retirement age as described in Sec.  404.110(b)(2)       Worker who dies before reaching
-----------------------------------------------------------------------    retirement age as described in Sec.
                                                    Col. II \1\                       404.110(b)(2)
                                           ---------------------------------------------------------------------
           Col. I--Date of birth                                        Col. III \2\-               Col. V \4\--
                                                 Men          Women       -Year of     Col. IV \3\   Age in year
                                                                            death                     of death
----------------------------------------------------------------------------------------------------------------
Jan. 1, 1893 or earlier...................             6             6      \5\ 1957             6        \6\ 28
Jan. 2, 1893 to Jan. 1, 1894..............             7             6          1958             7            29
Jan. 2, 1894 to Jan. 1, 1895..............             8             6          1959             8            30

[[Page 64]]

 
Jan. 2, 1895 to Jan. 1, 1896..............             9             6          1960             9            31
Jan. 2, 1896 to Jan. 1, 1897..............            10             7          1961            10            32
Jan. 2, 1897 to Jan. 1, 1898..............            11             8          1962            11            33
Jan. 2, 1898 to Jan. 1, 1899..............            12             9          1963            12            34
Jan. 2, 1899 to Jan. 1, 1900..............            13            10          1964            13            35
Jan. 2, 1900 to Jan. 1, 1901..............            14            11          1965            14            36
Jan. 2, 1901 to Jan. 1, 1902..............            15            12          1966            15            37
Jan. 2, 1902 to Jan. 1, 1903..............            16            13          1967            16            38
Jan. 2, 1903 to Jan. 1, 1904..............            17            14          1968            17            39
Jan. 2, 1904 to Jan. 1, 1905..............            18            15          1969            18            40
Jan. 2, 1905 to Jan. 1, 1906..............            19            16          1970            19            41
Jan. 2, 1906 to Jan. 1, 1907..............            20            17          1971            20            42
Jan. 2, 1907 to Jan. 1, 1908..............            21            18          1972            21            43
Jan. 2, 1908 to Jan. 1, 1909..............            22            19          1973            22            44
Jan. 2, 1909 to Jan. 1, 1910..............            23            20          1974            23            45
Jan. 2, 1910 to Jan. 1, 1911..............            24            21          1975            24            46
Jan. 2, 1911 to Jan. 1, 1912..............            24            22          1976            25            47
Jan. 2, 1912 to Jan. 1, 1913..............            24            23          1977            26            48
Jan. 2, 1913 to Jan. 1, 1914..............            24            24          1978            27            49
Jan. 2, 1914 to Jan. 1, 1915..............            25            25          1979            28            50
Jan. 2, 1915 to Jan. 1, 1916..............            26            26          1980            29            51
Jan. 2, 1916 to Jan. 1, 1917..............            27            27          1981            30            52
Jan. 2, 1917 to Jan. 1, 1918..............            28            28          1982            31            53
Jan. 2, 1918 to Jan. 1, 1919..............            29            29          1983            32            54
Jan. 2, 1919 to Jan. 1, 1920..............            30            30          1984            33            55
Jan. 2, 1920 to Jan. 1, 1921..............            31            31          1985            34            56
Jan. 2, 1921 to Jan. 1, 1922..............            32            32          1986            35            57
Jan. 2, 1922 to Jan. 1, 1923..............            33            33          1987            36            58
Jan. 2, 1923 to Jan. 1, 1924..............            34            34          1988            37            59
Jan. 2, 1924 to Jan. 1, 1925..............            35            35          1989            38            60
Jan. 2, 1925 to Jan. 1, 1926..............            36            36          1990            39            61
Jan. 2, 1926 to Jan. 1, 1927..............            37            37      \7\ 1991            40            62
Jan. 2, 1927 to Jan. 1, 1928..............            38            38  ............  ............  ............
Jan. 2, 1928 to Jan. 1, 1929..............            39            39  ............  ............  ............
Jan. 2, 1929 or later.....................            40  ............  ............  ............
----------------------------------------------------------------------------------------------------------------
\1\ Number of QCs required for fully insured status; living worker or worker who dies after reaching retirement
  age.
\2\ Worker born before Jan. 2, 1930 who dies before reaching retirement age.
\3\ Number of QCs required for fully insured status.
\4\ Worker born Jan. 2, 1930 or later, who dies before reaching retirement age.
\5\ Or earlier.
\6\ Or younger.
\7\ Or later.

    (b) Number of QCs you need. The QCs you need for fully insured 
status are in column II opposite your date of birth in column I. If a 
worker dies before reaching retirement age as described in 
Sec. 404.110(b)(2), the QCs needed for fully insured status are shown in 
column IV opposite--
    (1) The year of death in column III, if the worker was born before 
January 2, 1930; or
    (2) The age in the year of death in column V, if the worker was born 
after January 1, 1930.
    (c) How a period of disability affects the number of QCs you need. 
If you had a period of disability established for you, it affects the 
number of QCs you need to be fully insured (see Sec. 404.110(c)). For 
each year which is wholly or partly in a period of disability, subtract 
one QC from the number of QCs shown in the appropriate line and column 
of the table as explained in paragraph (b) of this section.

                        Currently Insured Status



Sec. 404.120  How we determine currently insured status.

    (a) What the period is for determining currently insured status. You 
are currently insured if you have at least 6 quarters of coverage (QCs) 
during the 13-quarter period ending with the quarter in which you--
    (1) Die;
    (2) Most recently became entitled to disability insurance benefits; 
or

[[Page 65]]

    (3) Became entitled to old-age insurance benefits.
    (b) What quarters are not counted as part of the 13-quarter period. 
We do not count as part of the 13-quarter period any quarter all or part 
of which is included in a period of disability established for you, 
except that the first and last quarters of the period of disability may 
be counted if they are QCs (see Sec. 404.146(d)).

                        Disability Insured Status



Sec. 404.130  How we determine disability insured status.

    (a) General. We have four different rules for determining if you are 
insured for purposes of establishing a period of disability or becoming 
entitled to disability insurance benefits. To have disability insured 
status, you must meet one of these rules and you must be fully insured 
(see Sec. 404.132 which tells when the period ends for determining the 
number of quarters of coverage (QCs) you need to be fully insured).
    (b) Rule I--You must meet the 20/40 requirement. You are insured in 
a quarter for purposes of establishing a period of disability or 
becoming entitled to disability insurance benefits if in that quarter--
    (1) You are fully insured; and
    (2) You have at least 20 QCs in the 40-quarter period (see paragraph 
(f) of this section) ending with that quarter.
    (c) Rule II--You become disabled before age 31. You are insured in a 
quarter for purposes of establishing a period of disability or becoming 
entitled to disability insurance benefits if in that quarter--
    (1) You have not become (or would not become) age 31;
    (2) You are fully insured; and
    (3) You have QCs in at least one-half of the quarters during the 
period ending with that quarter and beginning with the quarter after the 
quarter you became age 21; however--
    (i) If the number of quarters during this period is an odd number, 
we reduce the number by one; and
    (ii) If the period has less than 12 quarters, you must have at least 
6 QCs in the 12-quarter period ending with that quarter.
    (d) Rule III--You had a period of disability before age 31. You are 
insured in a quarter for purposes of establishing a period of disability 
or becoming entitled to disability insurance benefits if in that 
quarter--
    (1) You are disabled again at age 31 or later after having had a 
prior period of disability established which began before age 31 and for 
which you were only insured under paragraph (c) of this section; and
    (2) You are fully insured and have QCs in at least one-half the 
calendar quarters in the period beginning with the quarter after the 
quarter you became age 21 and through the quarter in which the later 
period of disability begins, up to a maximum of 20 QCs out of 40 
calendar quarters; however--
    (i) If the number of quarters during this period is an odd number, 
we reduce the number by one;
    (ii) If the period has less than 12 quarters, you must have at least 
6 QCs in the 12-quarter period ending with that quarter; and
    (iii) No monthly benefits may be paid or increased under Rule III 
before May 1983.
    (e) Rule IV--You are statutorily blind. You are insured in a quarter 
for purposes of establishing a period of disability or becoming entitled 
to disability insurance benefits if in that quarter--
    (1) You are disabled by blindness as defined in Sec. 404.1581; and
    (2) You are fully insured.
    (f) How we determine the 40-quarter or other period. In determining 
the 40-quarter period or other period in paragraph (b), (c), or (d) of 
this section, we do not count any quarter all or part of which is in a 
prior period of disability established for you, unless the quarter is 
the first or last quarter of this period and the quarter is a QC. 
However, we will count all the quarters in the prior period of 
disability established for you if by doing so you would be entitled to 
benefits or the amount of the benefit would be larger.

[49 FR 28547, July 13, 1984, as amended at 55 FR 7313, Mar. 1, 1990]



Sec. 404.131  When you must have disability insured status.

    (a) For a period of disability. To establish a period of disability, 
you must have disability insured status in the

[[Page 66]]

quarter in which you become disabled or in a later quarter in which you 
are disabled.
    (b) For disability insurance benefits. (1) To become entitled to 
disability insurance benefits, you must have disability insured status 
in the first full month that you are disabled as described in 
Sec. 404.1501(a), or if later--
    (i) The 17th month (if you have to serve a waiting period described 
in Sec. 404.315(d)) before the month in which you file an application 
for disability insurance benefits; or
    (ii) The 12th month (if you do not have to serve a waiting period) 
before the month in which you file an application for disability 
insurance benefits.
    (2) If you do not have disability insured status in a month 
specified in paragraph (b)(1) of this section, you will be insured for 
disability insurance benefits beginning with the first month after that 
month in which you do meet the insured status requirement and you also 
meet all other requirements for disability insurance benefits described 
in Sec. 404.315.



Sec. 404.132  How we determine fully insured status for a period of disability or disability insurance benefits.

    In determining if you are fully insured for purposes of paragraph 
(b), (c), (d), or (e) of Sec. 404.130 on disability insured status, we 
use the fully insured status requirements in Sec. 404.110, but apply the 
following rules in determining when the period of elasped years ends:
    (a) If you are a woman, or a man born after January 1, 1913, the 
period of elapsed years in Sec. 404.110(b) used in determining the 
number of quarters of coverage (QCs) you need to be fully insured ends 
as of the earlier of--
    (1) The year you become age 62; or
    (2) The year in which--
    (i) Your period of disability begins;
    (ii) Your waiting period begins (see Sec. 404.315(d)); or
    (iii) You become entitled to disability insurance benefits (if you 
do not have to serve a waiting period).
    (b) If you are a man born before January 2, 1913, the period of 
elapsed years in Sec. 404.110(b) used in determining the number of QCs 
you need to be fully insured ends as of the earlier of--
    (1) The year 1975; or
    (2) The year specified in paragraph (a)(2) of this section.

[45 FR 25384, Apr. 15, 1980, as amended at 49 FR 28547, July 13, 1984]



Sec. 404.133  When we give you quarters of coverage based on military service to establish a period of disability.

    For purposes of establishing a period of disability only, we give 
you quarters of coverage (QCs) for your military service before 1957 
(see subpart N of this part). We do this even though we may not use that 
military service for other purposes of title II of the Act because a 
periodic benefit is payable from another Federal agency based in whole 
or in part on the same period of military service.

                          Quarters of Coverage



Sec. 404.140  What is a quarter of coverage.

    (a) General. A quarter of coverage (QC) is the basic unit of social 
security coverage used in determining a worker's insured status. We 
credit you with QCs based on your earnings covered under social 
security.
    (b) How we credit QCs based on earnings before 1978 (General). 
Before 1978, wages were generally reported on a quarterly basis and 
self-employment income was reported on an annual basis. For the most 
part, we credit QCs for calendar years before 1978 based on your 
quarterly earnings. For these years, as explained in Sec. 404.141, we 
generally credit you with a QC for each calendar quarter in which you 
were paid at least $50 in wages or were credited with at least $100 of 
self-employment income. Section 404.142 tells how self-employment income 
derived in a taxable year beginning before 1978 is credited to specific 
calendar quarters for purposes of Sec. 404.141.
    (c) How we credit QCs based on earnings after 1977 (General). After 
1977, both wages and self-employment income are generally reported on an 
annual basis. For calendar years after 1977, as explained in 
Sec. 404.143, we generally credit you with a QC for each part of your 
total covered earnings in a calendar year that equals the amount 
required for a QC in that year. Section 404.143

[[Page 67]]

also tells how the amount required for a QC will be increased in the 
future as average wages increase. Section 404.144 tells how self-
employment income derived in a taxable year beginning after 1977 is 
credited to specific calendar years for purposes of Sec. 404.143.
    (d) When a QC is acquired and when a calendar quarter is not a QC 
(general). Section 404.145 tells when a QC is acquired and Sec. 404.146 
tells when a calendar quarter cannot be a QC. These rules apply when we 
credit QCs under Sec. 404.141 or Sec. 404.143.



Sec. 404.141  How we credit quarters of coverage for calendar years before 1978.

    (a) General. The rules in this section tell how we credit calendar 
quarters as quarters of coverage (QCs) for calendar years before 1978. 
We credit you with a QC for a calendar quarter based on the amount of 
wages you were paid and self-employment income you derived during 
certain periods. The rules in paragraphs (b), (c), and (d) of this 
section are subject to the limitations in Sec. 404.146, which tells when 
a calendar quarter cannot be a QC.
    (b) How we credit QCs based on wages paid in, or self-employment 
income credited to, a calendar quarter. We credit you with a QC for a 
calendar quarter in which--
    (1) You were paid wages of $50 or more (see paragraph (c) of this 
section for an exception relating to wages paid for agricultural labor); 
or
    (2) You were credited (under Sec. 404.142) with self-employment 
income of $100 or more.
    (c) How we credit QCs based on wages paid for agricultural labor in 
a calendar year after 1954. (1) We credit QCs based on wages for 
agricultural labor depending on the amount of wages paid during a 
calendar year for that work. If you were paid wages for agricultural 
labor in a calendar year after 1954 and before 1978, we credit you with 
QCs for calendar quarters in that year which are not otherwise QCs 
according to the following table.

------------------------------------------------------------------------
  If the wages paid to you in a
 calendar year for agricultural   We credit you with    And assign: \1\
           labor were
------------------------------------------------------------------------
$400 or more....................  4 QCs.............  All.
At least $300 but less than $400  3 QCs.............  Last 3.
At least $200 but less than $300  2 QCs.............  Last 2.
At least $100 but less than $200  1 QC..............  Last.
Less than $100..................  No QCs............
------------------------------------------------------------------------
\1\ One QC to each of the following calendar quarters in that year.

    (2) When we assign QCs to calendar quarters in a year as shown in 
the table in paragraph (c)(1) of this section, you might not meet (or 
might not meet as early in the year as otherwise possible) the 
requirements to be fully or currently insured, to be entitled to a 
computation or recomputation of your primary insurance amount, or to 
establish a period of disability. If this happens, we assign the QCs to 
different quarters in that year than those shown in the table if this 
assignment permits you to meet these requirements (or meet them earlier 
in the year). We can only reassign QCs for purposes of meeting these 
requirements.
    (d) How we credit QCs based on wages paid or self-employment income 
derived in a year. (1) If you were paid wages in a calendar year after 
1950 and before 1978 at least equal to the annual wage limitation in 
effect for that year as described in Sec. 404.1027(a), we credit you 
with a QC for each quarter in that calendar year. If you were paid at 
least $3,000 wages in a calendar year before 1951, we credit you with a 
QC for each quarter in that calendar year.
    (2) If you derived self-employment income (or derived self-
employment income and also were paid wages) during a taxable year 
beginning after 1950 and before 1978 at least equal to the self-
employment income and wage limitation in effect for that year as 
described in Sec. 404.1068(b), we credit you with a QC for each calendar 
quarter wholly or partly in that taxable year.

[45 FR 25384, Apr. 15, 1980; 45 FR 41931, June 23, 1980]



Sec. 404.142  How we credit self-employment income to calendar quarters for taxable years beginning before 1978.

    In crediting quarters of coverage under Sec. 404.141(b)(2), we 
credit any self-

[[Page 68]]

employment income you derived during a taxable year that began before 
1978 to calendar quarters as follows:
    (a) If your taxable year was a calendar year, we credit your self-
employment income equally to each quarter of that calendar year.
    (b) If your taxable year was not a calendar year (that is, it began 
on a date other than January 1, or was less than a calendar year), we 
credit your self-employment income equally--
    (1) To the calendar quarter in which your taxable year ended; and
    (2) To each of the next three or fewer preceding quarters that were 
wholly or partly in your taxable year.



Sec. 404.143  How we credit quarters of coverage for calendar years after 1977.

    (a) Crediting quarters of coverage (QCs). For calendar years after 
1977, we credit you with a QC for each part of the total wages paid and 
self-employment income credited (under Sec. 404.144) to you in a 
calendar year that equals the amount required for a QC in that year. For 
example, if the total of your wages and self-employment income for a 
calendar year is more than twice, but less than 3 times, the amount 
required for a QC in that year, we credit you with only 2 QCs for the 
year. The rules for crediting QCs in this section are subject to the 
limitations in Sec. 404.146, which tells when a calendar quarter cannot 
be a QC. In addition, we cannot credit you with more than four QCs for 
any calendar year. The amount of wages and self-employment income that 
you must have for each QC is--
    (1) $250 for calendar year 1978; and
    (2) For each calendar year after 1978, an amount determined by the 
Commissioner for that year (on the basis of a formula in section 
213(d)(2) of the Act which reflects national increases in average 
wages). The amount determined by the Commissioner is published in the 
Federal Register on or before November 1 of the preceding year and 
included in the appendix to this subpart.
    (b) Assigning QCs. We assign a QC credited under paragraph (a) of 
this section to a specific calendar quarter in the calendar year only if 
the assignment is necessary to--
    (1) Give you fully or currently insured status;
    (2) Entitle you to a computation or recomputation of your primary 
insurance amount; or
    (3) Permit you to establish a period of disability.

[45 FR 25834, Apr. 15, 1980, as amended at 62 FR 38450, July 18, 1997]



Sec. 404.144  How we credit self-employment income to calendar years for taxable years beginning after 1977.

    In crediting quarters of coverage under Sec. 404.143(a), we credit 
self-employment income you derived during a taxable year that begins 
after 1977 to calendar years as follows:
    (a) If your taxable year is a calendar year or begins and ends 
within the same calendar year, we credit your self-employment income to 
that calendar year.
    (b) If your taxable year begins in one calendar year and ends in the 
following calendar year, we allocate proportionately your self-
employment income to the two calendar years on the basis of the number 
of months in each calendar year which are included completely within 
your taxable year. We consider the calendar month in which your taxable 
year ends as included completely within your taxable year.

    Example: For the taxable year beginning May 15, 1978, and ending May 
14, 1979, your self-employment income is $1200. We credit 7/12 ($700) of 
your self-employment income to calendar year 1978 and 5/12 ($500) of 
your self-employment income to calendar year 1979.



Sec. 404.145  When you acquire a quarter of coverage.

    If we credit you with a quarter of coverage (QC) for a calendar 
quarter under paragraph (b), (c), or (d) of Sec. 404.141 for calendar 
years before 1978 or assign it to a specific calendar quarter under 
paragraph (b) of Sec. 404.143 for calendar years after 1977, you acquire 
the QC as of the first day of the calendar quarter.



Sec. 404.146  When a calendar quarter cannot be a quarter of coverage.

    This section applies when we credit you with quarters of coverage 
(QCs) under Sec. 404.141 for calendar years before 1978 and under 
Sec. 404.143 for calendar

[[Page 69]]

years after 1977. We cannot credit you with a QC for--
    (a) A calendar quarter that has not begun;
    (b) A calendar quarter that begins after the quarter of your death;
    (c) A calendar quarter that has already been counted as a QC; or
    (d) A calendar quarter that is included in a period of disability 
established for you, unless--
    (1) The quarter is the first or the last quarter of this period; or
    (2) The period of disability is not taken into consideration (see 
Sec. 404.320(a)).

   Appendix to Subpart B of Part 404--Quarter of Coverage Amounts for 
                        Calendar Years After 1978

    This appendix shows the amount determined by the Commissioner that 
is needed for a quarter of coverage for each year after 1978 as 
explained in Sec. 404.143. We publish the amount as a Notice in the 
Federal Register on or before November 1 of the preceding year. The 
amounts determined by the Commissioner are as follows:

------------------------------------------------------------------------
                                                                 Amount
                         Calendar year                           needed
------------------------------------------------------------------------
1979..........................................................      $260
1980..........................................................       290
1981..........................................................       310
1982..........................................................       340
1983..........................................................       370
1984..........................................................       390
1985..........................................................       410
1986..........................................................       440
1987..........................................................       460
1988..........................................................       470
1989..........................................................       500
1990..........................................................       520
1991..........................................................       540
1992..........................................................       570
------------------------------------------------------------------------


[45 FR 25384, Apr. 15, 1980, as amended at 52 FR 8247, Mar. 17, 1987; 57 
FR 44096, Sept 24, 1992; 62 FR 38450, July 18, 1997]



             Subpart C--Computing Primary Insurance Amounts

    Authority: Secs. 202(a), 205(a), 215, and 702(a)(5) of the Social 
Security Act (42 U.S.C. 402(a), 405(a), 415, and 902(a)(5)).

    Source: 47 FR 30734, July 15, 1982, unless otherwise noted.

                                 General



Sec. 404.201  Introduction.

    In this subpart we describe how we compute your primary insurance 
amount, which is the first step in finding your monthly social security 
benefit amount. Your primary insurance amount is the basic figure we use 
in finding the monthly benefit actually payable to you and to members of 
your family. For example, if you retire at age 65 or become disabled, 
your monthly benefit is equal to your primary insurance amount. In other 
situations, your benefit does not equal your primary insurance amount. 
For example, if you become entitled to old-age benefits before you reach 
age 65, your benefit is less than your primary insurance amount, as 
described in Secs. 404.410 through 404.413. Benefits payable to members 
of your family are a specified percentage of your primary insurance 
amount. (See subpart D.) We explain how we automatically increase your 
primary insurance amount to keep it up to date with rises in the cost of 
living. We also explain how and when we recompute your primary insurance 
amount and how and when we recalculate your primary insurance amount. We 
have organized this subpart as follows:
    (a) In Secs. 404.210 through 404.212, we describe the average-
indexed-monthly-earnings method we use for computing primary insurance 
amounts of workers who after 1978 reach age 62, or become disabled or 
die before age 62;
    (b) In Secs. 404.220 through 404.222, we describe the average-
monthly-wage method we use for computing primary insurance amounts of 
workers who reach age 62, become disabled, or die before 1979;
    (c) In Secs. 404.230 through 404.233, we describe the guaranteed 
alternative method of computing primary insurance amounts that applies 
to people who reach age 62 after 1978 but before 1984;
    (d) In Secs. 404.240 through 404.242, we describe a method of 
computing primary insurance amounts (called the old-start method) for 
people who had all or substantially all their social security earnings 
before 1951;

[[Page 70]]

    (e) In Secs. 404.250 through 404.252, we describe special rules we 
apply in computing primary insurance amounts of people who had a period 
of disability at some time in their lives;
    (f) In Secs. 404.260 through 404.261, we describe how we compute the 
special minimum primary insurance amount for long-term, low-paid 
workers;
    (g) In Secs. 404.270 through 404.277, we describe how we 
automatically adjust primary insurance amounts to take account of rises 
in the cost of living;
    (h) In Secs. 404.280 through 404.287, we describe how and when we 
recompute primary insurance amounts to take into account additional 
earnings;
    (i) In Sec. 404.290, we describe how and when we recalculate primary 
insurance amounts; and
    (j) Appendices I-VI contain material such as figures and formulas 
that we use in finding a primary insurance amount under various 
circumstances.



Sec. 404.202  Other regulations related to this subpart.

    This subpart is related to several others. In subpart B of this 
part, we describe how you become insured for social security benefits as 
a result of your work in covered employment. In subpart D, we discuss 
the different kinds of social security benefits available--old-age and 
disability benefits for you and benefits for your dependents and 
survivors--the amount of the benefits, and the requirements you and your 
family must meet to qualify for them; your work status, your age, the 
size of your family, and other factors may affect the amount of the 
benefits for you and your family. Rules relating to deductions, 
reductions, and nonpayment of benefits we describe in subpart E. In 
subpart F of this part, we describe what we do when a recalculation or 
recomputation of your primary insurance amount (as described in this 
subpart) results in our finding that you and your family have been 
overpaid or underpaid. In subparts G and H of this part, we tell how to 
apply for benefits and what evidence is needed to establish entitlement 
to them. In subpart J of this part, we describe how benefits are paid. 
Then in subparts I, K, N, and O of this part, we discuss your earnings 
that are taxable and creditable for social security purposes (and how we 
keep records of them), and deemed military wage credits which may be 
used in finding your primary insurance amount.



Sec. 404.203  Definitions.

    (a) General definitions. As used in this subpart--
    Ad hoc increase in primary insurance amounts means an increase in 
primary insurance amounts enacted by the Congress and signed into law by 
the President.
    Entitled means that a person has applied for benefits and has proven 
his or her right to them for a given period of time.
    We, us, or our means the Social Security Administration.
    You or your means the insured worker who has applied for benefits or 
a deceased insured worker on whose social security earnings record 
someone else has applied.
    (b) Other definitions. To make it easier to find them, we have 
placed other definitions in the sections of this subpart in which they 
are used.

[47 FR 30734, July 15, 1982, as amended at 62 FR 38450, July 18, 1997]



Sec. 404.204  Methods of computing primary insurance amounts--general.

    (a) General. We compute most workers' primary insurance amounts 
under one of two major methods. There are, in addition, several special 
methods of computing primary insurance amounts which we apply to some 
workers. Your primary insurance amount is the highest of all those 
computed under the methods for which you are eligible.
    (b) Major methods. (1) If after 1978 you reach age 62, or become 
disabled or die before age 62, we compute your primary insurance amount 
under what we call the average-indexed-monthly-earnings method, which is 
described in Secs. 404.210 through 404.212. The earliest of the three 
dates determines the computation method we use.
    (2) If before 1979 you reached age 62, became disabled, or died, we 
compute your primary insurance amount under what we call the average-
monthly-wage method, described in Secs. 404.220 through 404.222.

[[Page 71]]

    (c) Special methods. (1) Your primary insurance amount, computed 
under any of the special methods for which you are eligible as described 
in this paragraph, may be substituted for your primary insurance amount 
computed under either major method described in paragraph (b) of this 
section.
    (2) If you reach age 62 during the period 1979-1983, your primary 
insurance amount is guaranteed to be the highest of--
    (i) The primary insurance amount we compute for you under the 
average-indexed-monthly-earnings method;
    (ii) The primary insurance amount we compute for you under the 
average-monthly-wage method, as modified by the rules described in 
Secs. 404.230 through 404.233; or
    (iii) The primary insurance amount computed under what we call the 
old-start method; as described in Secs. 404.240 through 404.242.
    (3) If you had all or substantially all of your social security 
earnings before 1951, we will also compute your primary insurance amount 
under what we call the old-start method.
    (4) We compute your primary insurance amount under the rules in 
Secs. 404.250 through 404.252, if--
    (i) You were disabled and received social security disability 
insurance benefits sometime in your life;
    (ii) Your disability insurance benefits were terminated because of 
your recovery or because you engaged in substantial gainful activity; 
and
    (iii) You are, after 1978, re-entitled to disability insurance 
benefits, or entitled to old-age insurance benefits, or have died.
    (5) In some situations, we use what we call a special minimum 
computation, described in Secs. 404.260 through 404.261, to find your 
primary insurance amount. Computations under this method reflect long-
term, low-wage attachment to covered work.

 Average-Indexed-Monthly Earnings Method of Computing Primary Insurance 
                                 Amounts



Sec. 404.210  Average-indexed-monthly-earnings method.

    (a) Who is eligible for this method. If after 1978, you reach age 
62, or become disabled or die before age 62, we will compute your 
primary insurance amount under the average-indexed-monthly-earnings 
method.
    (b) Steps in computing your primary insurance amount under the 
average-indexed-monthly-earnings method. We follow these three major 
steps in computing your primary insurance amount:
    (1) First, we find your average indexed monthly earnings, as 
described in Sec. 404.211;
    (2) Second, we find the benefit formula in effect for the year you 
reach age 62, or become disabled or die before age 62, as described in 
Sec. 404.212; and
    (3) Then, we apply that benefit formula to your average indexed 
monthly earnings to find your primary insurance amount, as described in 
Sec. 404.212.
    (4) Next, we apply any automatic cost-of-living or ad hoc increases 
in primary insurance amounts that became effective in or after the year 
you reached age 62, unless you are receiving benefits based on the 
minimum primary insurance amount, in which case not all the increases 
may be applied, as described in Sec. 404.277.



Sec. 404.211  Computing your average indexed monthly earnings.

    (a) General. In this method, your social security earnings after 
1950 are indexed, as described in paragraph (d) of this section, then 
averaged over the period of time you can reasonably have been expected 
to have worked in employment or self-employment covered by social 
security. (Your earnings before 1951 are not used in finding your 
average indexed monthly earnings.)
    (b) Which earnings may be used in computing your average indexed 
monthly earnings--(1) Earnings. In computing your average indexed 
monthly earnings, we use wages, compensation, self-employment income, 
and deemed military wage credits (see Secs. 404.1340 through 404.1343) 
that are creditable to you for social security purposes for years after 
1950.
    (2) Computation base years. We use your earnings in your computation 
base years in finding your average indexed monthly earnings. All years 
after 1950 up to (but not including) the year you become entitled to 
old-age or disability insurance benefits, and through the

[[Page 72]]

year you die if you had not been entitled to old-age or disability 
benefits, are computation base years for you. The year you become 
entitled to benefits and following years may be used as computation base 
years in a recomputation if their use would result in a higher primary 
insurance amount. (See Secs. 404.280 through 404.287.) However, years 
after the year you die may not be used as computation base years even if 
you have earnings credited to you in those years. Computation base years 
do not include years wholly within a period of disability unless your 
primary insurance amount would be higher by using the disability years. 
In such situations, we count all the years during the period of 
disability, even if you had no earnings in some of them.
    (c) Average of the total wages. Before we compute your average 
indexed monthly earnings, we must first know the ``average of the total 
wages'' of all workers for each year from 1951 until the second year 
before you become eligible. The average of the total wages for years 
after 1950 are shown in appendix I. Corresponding figures for more 
recent years which have not yet been incorporated into this appendix are 
published in the Federal Register on or before November 1 of the 
succeeding year. ``Average of the total wages'' (or ``average wage'') 
means:
    (1) For the years 1951 through 1977, four times the amount of 
average taxable wages that were reported to the Social Security 
Administration for the first calendar quarter of each year for social 
security tax purposes. For years prior to 1973, these average wages were 
determined from a sampling of these reports.
    (2) For the years 1978 through 1990, all remuneration reported as 
wages on Form W-2 to the Internal Revenue Service for all employees for 
income tax purposes, divided by the number of wage earners. We adjusted 
those averages to make them comparable to the averages for 1951-1977. 
For years after 1977, the term includes remuneration for services not 
covered by social security and remuneration for covered employment in 
excess of that which is subject to FICA contributions.
    (3) For years after 1990, all remuneration reported as wages on Form 
W-2 to the Internal Revenue Service for all employees for income tax 
purposes, including remuneration described in paragraph (c)(2) of this 
section, plus contributions to certain deferred compensation plans 
described in section 209(k) of the Social Security Act (also reported on 
Form W-2), divided by the number of wage earners. If both distributions 
from and contributions to any such deferred compensation plan are 
reported on Form W-2, we will include only the contributions in the 
calculation of the average of the total wages. We will adjust those 
averages to make them comparable to the averages for 1951-1990.
    (d) Indexing your earnings. (1) The first step in indexing your 
social security earnings is to find the relationship (under paragraph 
(d)(2) of this section) between--
    (i) The average wage of all workers in your computation base years; 
and
    (ii) The average wage of all workers in your indexing year. As a 
general rule, your indexing year is the second year before the earliest 
of the year you reach age 62, or become disabled or die before age 62. 
However, your indexing year is determined under paragraph (d)(4) of this 
section if you die before age 62, your surviving spouse or surviving 
divorced spouse is first eligible for benefits after 1984, and the 
indexing year explained in paragraph (d)(4) results in a higher 
widow(er)'s benefit than results from determining the indexing year 
under the general rule.
    (2) To find the relationship, we divide the average wages for your 
indexing year, in turn, by the average wages for each year beginning 
with 1951 and ending with your indexing year. We use the quotients found 
in these divisions to index your earnings as described in paragraph 
(d)(3) of this section.
    (3) The second step in indexing your social security earnings is to 
multiply the actual year-by-year dollar amounts of your earnings (up to 
the maximum amounts creditable, as explained in Secs. 404.1047 and 
404.1096 of this part) by the quotients found in paragraph (d)(2) of 
this section for each of those years. We round the results to the nearer 
penny. (The quotient for your indexing

[[Page 73]]

year is 1.0; this means that your earnings in that year are used in 
their actual dollar amount; any earnings after your indexing year that 
may be used in computing your average indexed monthly earnings are also 
used in their actual dollar amount.)

    Example: Ms. A reaches age 62 in July 1979. Her year-by-year social 
security earnings since 1950 are as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $3,200
1952.......................................................        3,400
1953.......................................................        3,300
1954.......................................................        3,600
1955.......................................................        3,700
1956.......................................................        3,700
1957.......................................................        4,000
1958.......................................................        4,200
1959.......................................................        4,400
1960.......................................................        4,500
1961.......................................................        2,800
1962.......................................................        2,200
1963.......................................................            0
1964.......................................................            0
1965.......................................................        3,700
1966.......................................................        4,500
1967.......................................................        5,400
1968.......................................................        6,200
1969.......................................................        6,900
1970.......................................................        7,300
1971.......................................................        7,500
1972.......................................................        7,800
1973.......................................................        8,200
1974.......................................................        9,000
1975.......................................................        9,900
1976.......................................................       11,100
1977.......................................................        9,900
1978.......................................................       11,000
------------------------------------------------------------------------

    Step 1. The first step in indexing Ms. A's earnings is to find the 
relationship between the general wage level in Ms. A's indexing year 
(1977) and the general wage level in each of the years 1951-1976. We 
refer to appendix I for average wage figures, and perform the following 
computations:

------------------------------------------------------------------------
                                                    II.      III. Column
                                      I. 1977   Nationwide  I divided by
               Year                   general   average of    column II
                                    wage level   the total     equals
                                                   wages    relationship
------------------------------------------------------------------------
1951..............................   $9,779.44   $2,799.16    3.4937053
1952..............................    9,779.44    2,973.32    3.2890641
1953..............................    9,779.44    3,139.44    3.1150269
1954..............................    9,779.44    3,155.64    3.0990354
1955..............................    9,779.44    3,301.44    2.9621741
1956..............................    9,779.44    3,532.36    2.7685287
1957..............................    9,779.44    3,641.72    2.6853904
1958..............................    9,779.44    3,673.80    2.6619413
1959..............................    9,779.44    3,855.80    2.5362934
1960..............................    9,779.44    4,007.12    2.4405159
1961..............................    9,779.44    4,086.76    2.3929568
1962..............................    9,779.44    4,291.40    2.2788461
1963..............................    9,779.44    4,396.64    2.2242986
1964..............................    9,779.44    4,576.32    2.1369659
1965..............................    9,779.44    4,658.72    2.0991689
1966..............................    9,779.44    4,938.36    1.9803012
1967..............................    9,779.44    5,213.44    1.8758133
1968..............................    9,779.44    5,571.76    1.7551797
1969..............................    9,779.44    5,893.76    1.6592871
1970..............................    9,779.44    6,186.24    1.5808375
1971..............................    9,779.44    6,497.08    1.5052054
1972..............................    9,779.44    7,133.80    1.3708599
1973..............................    9,779.44    7,580.16    1.2901364
1974..............................    9,779.44    8,030.76    1.2177478
1975..............................    9,779.44    8,630.92    1.1330704
1976..............................    9,779.44    9,226.48    1.0599318
1977..............................    9,779.44    9,779.44    1.0000000
------------------------------------------------------------------------

    Step 2. After we have found these indexing quotients, we multiply 
Ms. A's actual year-by-year earnings by them to find her indexed 
earnings, as shown below:

------------------------------------------------------------------------
                                                                 III.
                                                               Column I
                                                      II.     multiplied
                Year                   I. Actual   Indexing    by column
                                       earnings    quotient    II equals
                                                                indexed
                                                               earnings
------------------------------------------------------------------------
1951................................      $3,200   3.4937053  $11,179.86
1952................................       3,400   3.2890641   11,182.82
1953................................       3,300   3.1150269   10,279.59
1954................................       3,600   3.0990354   11,156.53
1955................................       3,700   2.9621741   10,960.04
1956................................       3,700   2.7685287   10,243.56
1957................................       4,000   2.6853904   10,741.56
1958................................       4,200   2.6619413   11,180.15
1959................................       4,400   2.5362934   11,159.69
1960................................       4,500   2.4405159   10,982.32
1961................................       2,800   2.3929568    6,700.28
1962................................       2,200   2.2788461    5,013.46
1963................................           0   2.2242986           0
1964................................           0   2.1369659           0
1965................................       3,700   2.0991689    7,766.92
1966................................       4,500   1.9803012    8,911.36
1967................................       5,400   1.8758133   10,129.39
1968................................       6,200   1.7551797   10,882.11
1969................................       6,900   1.6592871   11,449.08
1970................................       7,300   1.5808375   11,540.11
1971................................       7,500   1.5052054   11,289.04
1972................................       7,800   1.3708599   10,692.71
1973................................       8,200   1.2901364   10,579.12
1974................................       9,000   1.2177478   10,959.73
1975................................       9,900   1.1330704   11,217.40
1976................................      11,100   1.0599318   11,765.24
1977................................       9,900   1.0000000    9,900.00
1978................................      11,000           0   11,000.00
------------------------------------------------------------------------

    (4) We calculate your indexing year under this paragraph if you, the 
insured worker, die before reaching age 62, your surviving spouse or 
surviving divorced spouse is first eligible after 1984, and the indexing 
year calculated under this paragraph results in a higher widow(er)'s 
benefit than results from the indexing year calculated under the general 
rule explained in paragraph (d)(1)(ii). For purposes of this paragraph, 
the indexing year is never earlier than the second year before the

[[Page 74]]

year of your death. Except for this limitation, the indexing year is the 
earlier of--
    (i) The year in which you, the insured worker, attained age 60, or 
would have attained age 60 if you had lived, and
    (ii) The second year before the year in which the surviving spouse 
or the surviving divorced spouse becomes eligible for widow(er)'s 
benefits, i.e. has attained age 60, or is age 50-59 and disabled.
    (e) Number of years to be considered in finding your average indexed 
monthly earnings. To find the number of years to be used in computing 
your average indexed monthly earnings--
    (1) We count the years beginning with 1951, or (if later) the year 
you reach age 22, and ending with the earliest of the year before you 
reach age 62, become disabled, or die. Years wholly or partially within 
a period of disability (as defined in Sec. 404.1501(b) of subpart P of 
this part) are not counted unless your primary insurance amount would be 
higher. In that case, we count all the years during the period of 
disability, even though you had no earnings in some of those years. 
These are your elapsed years. From your elapsed years, we then subtract 
up to 5 years, the exact number depending on the kind of benefits to 
which you are entitled. You cannot, under this procedure, have fewer 
than 2 benefit computation years.
    (2) For computing old-age insurance benefits and survivors insurance 
benefits, we subtract 5 from the number of your elapsed years. See 
paragraphs (e) (3) and (4) of this section for the dropout as applied to 
disability benefits. This is the number of your benefit computation 
years; we use the same number of your computation base years (see 
paragraph (b)(2) of this section) in computing your average indexed 
monthly earnings. For benefit computation years, we use the years with 
the highest amounts of earnings after indexing. They may include 
earnings from years that were not indexed, and must include years of no 
earnings if you do not have sufficient years with earnings. You cannot 
have fewer than 2 benefit computation years.
    (3) Where the worker is first entitled to disability insurance 
benefits (DIB) after June 1980, there is an exception to the usual 5 
year dropout provision explained in paragraph (e)(2) of this section. 
(For entitlement before July 1980, we use the usual dropout.) We call 
this exception the disability dropout. We divide the elapsed years by 5 
and disregard any fraction. The result, which may not exceed 5, is the 
number of dropout years. We subtract that number from the number of 
elapsed years to get the number of benefit computation years, which may 
not be fewer than 2. After the worker dies, the disability dropout no 
longer applies and we use the basic 5 dropout years to compute benefits 
for survivors. We continue to apply the disability dropout when a person 
becomes entitled to old-age insurance benefits (OAIB), unless his or her 
entitlement to DIB ended at least 12 months before he or she became 
eligible for OAIB. For first DIB entitlement before July 1980, we use 
the rule in paragraph (e)(2) of this section.
    (4) For benefits payable after June 1981, the disability dropout 
might be increased by the child care dropout. If the number of 
disability dropout years is fewer than 3, we will drop out a benefit 
computation year for each benefit computation year that the worker meets 
the child care requirement and had no earnings, until the total of all 
dropout years is 3. The child care requirement for any year is that the 
worker must have been living with his or her child (or his or her 
spouse's child) substantially throughout any part of any calendar year 
that the child was alive and under age 3. In actual practice, no more 
than 2 child care years may be dropped, because of the combined effect 
of the number of elapsed years, 1-for-5 dropout years (if any), and the 
computation years required for the computation.

    Example: Ms. M., born August 4, 1953, became entitled to disability 
insurance benefits (DIB) beginning in July 1980 based on a disability 
which began January 15, 1980. In computing the DIB, we determined that 
the elapsed years are 1975 through 1979, the number of dropout years is 
1 (5 elapsed years divided by 5), and the number of computation years is 
4. Since Ms. M. had no earnings in 1975 and 1976, we drop out 1975 and 
use her earnings for the years 1977 through 1979.

[[Page 75]]

    Ms. M. lived with her child, who was born in 1972, in all months of 
1973 and 1974 and did not have any earnings in those years. We, 
therefore, recompute Ms. M.'s DIB beginning with July 1981 to give her 
the advantage of the child care dropout. To do this, we reduce the 4 
computation years by 1 child care year to get 3 computation years. 
Because the child care dropout cannot be applied to computation years in 
which the worker had earnings, we can drop only one of Ms. M.'s 
computation years, i.e., 1976, in addition to the year 1975 which we 
dropped in the initial computation.

    (i) Living with means that you and the child ordinarily live in the 
same home and you exercise, or have the right to exercise, parental 
control. See Sec. 404.366(c) for a further explanation.
    (ii) Substantially throughout any part of any calendar year means 
that any period you were not living with the child during a calendar 
year did not exceed 3 months. If the child was either born or attained 
age 3 during the calendar year, the period of absence in the year cannot 
have exceeded the smaller period of 3 months, or one-half the time after 
the child's birth or before the child attained age 3.
    (iii) Earnings means wages for services rendered and net earnings 
from self-employment minus any net loss for a taxable year. See 
Sec. 404.429 for a further explanation.
    (f) Your average indexed monthly earnings. After we have indexed 
your earnings and found your benefit computation years, we compute your 
average indexed monthly earnings by--
    (1) Totalling your indexed earnings in your benefit computation 
years;
    (2) Dividing the total by the number of months in your benefit 
computation years; and
    (3) Rounding the quotient to the next lower whole dollar. if not 
already a multiple of $1.

    Example: From the example in paragraph (d) of this section, we see 
that Ms. A reaches age 62 in 1979. Her elapsed years are 1951-1978 (28 
years). We subtract 5 from her 28 elapsed years to find that we must use 
23 benefit computation years. This means that we will use her 23 highest 
computation base years to find her average indexed monthly earnings. We 
exclude the 5 years 1961-1965 and total her indexed earnings for the 
remaining years, i.e., the benefit computation years (including her 
unindexed earnings in 1977 and 1978) and get $249,381.41. We then divide 
that amount by the 276 months in her 23 benefit computation years and 
find her average indexed monthly earnings to be $903.56, which is 
rounded down to $903.

[47 FR 30734, July 15, 1982; 47 FR 35479, Aug. 13, 1982, as amended at 
48 FR 11695, Mar. 21, 1983; 51 FR 4482, Feb. 5, 1986; 57 FR 1381, Jan. 
14, 1992]



Sec. 404.212  Computing your primary insurance amount from your average indexed monthly earnings.

    (a) General. We compute your primary insurance amount under the 
average-indexed-monthly-earnings method by applying a benefit formula to 
your average indexed monthly earnings.
    (b) Benefit formula. (1) We use the applicable benefit formula in 
appendix II for the year you reach age 62, become disabled, or die 
whichever occurs first. If you die before age 62, and your surviving 
spouse or surviving divorced spouse is first eligible after 1984, we may 
compute the primary insurance amount, for the purpose of paying benefits 
to your widow(er), as if you had not died but reached age 62 in the 
second year after the indexing year that we computed under the 
provisions of Sec. 404.211(d)(4). We will not use this primary insurance 
amount for computing benefit amounts for your other survivors or for 
computing the maximum family benefits payable on your earnings record. 
Further, we will only use this primary insurance amount if it results in 
a higher widow(er)'s benefit than would result if we did not use this 
special computation.
    (2) The dollar amounts in the benefit formula are automatically 
increased each year for persons who attain age 62, or who become 
disabled or die before age 62 in that year, by the same percentage as 
the increase in the average of the total wages (see appendix I).
    (3) We will publish benefit formulas for years after 1979 in the 
Federal Register at the same time we publish the average of the total 
wage figures. We begin to use a new benefit formula as soon as it is 
applicable, even before we periodically update appendix II.
    (4) We may use a modified formula, as explained in Sec. 404.213, if 
you are entitled to a pension based on your employment which was not 
covered by Social Security.

[[Page 76]]

    (c) Computing your primary insurance amount from the benefit 
formula. We compute your primary insurance amount by applying the 
benefit formula to your average indexed monthly earnings and adding the 
results for each step of the formula. For computations using the benefit 
formulas in effect for 1979 through 1982, we round the total amount to 
the next higher multiple of $0.10 if it is not a multiple of $0.10 and 
for computations using the benefit formulas effective for 1983 and later 
years, we round to the next lower multiple of $0.10. (See paragraph (e) 
of this section for a discussion of the minimum primary insurance 
amount.)
    (d) Adjustment of your primary insurance amount when entitlement to 
benefits occurs in a year after attainment of age 62, disability or 
death. If you (or your survivors) do not become entitled to benefits in 
the same year you reach age 62, become disabled, or die before age 62, 
we compute your primary insurance amount by--
    (1) Computing your average indexed monthly earnings as described in 
Sec. 404.211;
    (2) Applying to your average indexed monthly earnings the benefit 
formula for the year in which you reach age 62, or become disabled or 
die before age 62; and
    (3) Applying to the primary insurance amount all automatic cost-of-
living and ad hoc increases in primary insurance amounts that have gone 
into effect in or after the year you reached age 62, became disabled, or 
died before age 62. (See Sec. 404.277 for special rules on minimum 
benefits, and appendix VI for a table of percentage increases in primary 
insurance amounts since December 1978. Increases in primary insurance 
amounts are published in the Federal Register and we periodically update 
appendix VI.)
    (e) Minimum primary insurance amount. If you were eligible for 
benefits, or died without having been eligible, before 1982, your 
primary insurance amount computed under this method cannot be less than 
$122. This minimum benefit provision has been repealed effective with 
January 1982 for most workers and their families where the worker 
initially becomes eligible for benefits in that or a later month, or 
dies in January 1982 or a later month without having been eligible 
before January 1982. For members of a religious order who are required 
to take a vow of poverty, as explained in 20 CFR 404.1024, and which 
religious order elected Social Security coverage before December 29, 
1981, the repeal is effective with January 1992 based on first 
eligibility or death in that month or later.

[47 FR 30734, July 15, 1982, as amended at 48 FR 46142, Oct. 11, 1983; 
51 FR 4482, Feb. 5, 1986; 52 FR 47916, Dec. 17, 1987]



Sec. 404.213  Computation where you are eligible for a pension based on your noncovered employment.

    (a) When applicable. Except as provided in paragraph (d) of this 
section, we will modify the formula prescribed in Sec. 404.212 and in 
appendix II of this subpart in the following situations:
    (1) You become eligible for old-age insurance benefits after 1985; 
or
    (2) You become eligible for disability insurance benefits after 
1985; and
    (3) For the same months after 1985 that you are entitled to old-age 
or disability benefits, you are also entitled to a monthly pension(s) 
for which you first became eligible after 1985 based in whole or part on 
your earnings in employment which was not covered under Social Security. 
We consider you to first become eligible for a monthly pension in the 
first month for which you met all requirements for the pension except 
that you were working or had not yet applied. In determining whether you 
are eligible for a pension before 1986, we consider all applicable 
service used by the pension-paying agency. (Noncovered employment 
includes employment outside the United States which is not covered under 
the United States Social Security system. Pensions from noncovered 
employment outside the United States include both pensions from social 
insurance systems that base benefits on earnings but not on residence or 
citizenship, and those from private employers. However, for benefits 
payable for months prior to January 1995, we will not modify the 
computation of a totalization benefit (see Secs. 404.1908 and 404.1918) 
as a result of your entitlement to another pension

[[Page 77]]

based on employment covered by a totalization agreement. Beginning 
January 1995, we will not modify the computation of a totalization 
benefit in any case (see Sec. 404.213(e)(8)).
    (b) Amount of your monthly pension that we use. For purposes of 
computing your primary insurance amount, we consider the amount of your 
monthly pension(s) (or the amount prorated on a monthly basis) which is 
attributable to your noncovered work after 1956 that you are entitled to 
for the first month in which you are concurrently entitled to Social 
Security benefits. For applications filed before December 1988, we will 
use the month of earliest concurrent eligibility. In determining the 
amount of your monthly pension we will use, we will consider the 
following:
    (1) If your pension is not paid on a monthly basis or is paid in a 
lump-sum, we will allocate it proportionately as if it were paid 
monthly. We will allocate this the same way we allocate lump-sum 
payments for a spouse or surviving spouse whose benefits are reduced 
because of entitlement to a Government pension. (See Sec. 404.408a.)
    (2) If your monthly pension is reduced to provide a survivor's 
benefit, we will use the unreduced amount.
    (3) If the monthly pension amount which we will use in computing 
your primary insurance amount is not a multiple of $0.10, we will round 
it to the next lower multiple of $0.10.
    (c) How we compute your primary insurance amount. When you become 
entitled to old-age or disability insurance benefits and to a monthly 
pension, we will compute your primary insurance amount under the 
average-indexed-monthly-earnings method (Sec. 404.212) as modified by 
paragraph (c) (1) and (2) of this section. Where applicable, we will 
also consider the 1977 simplified old-start method (Sec. 404.241) as 
modified by Sec. 404.243 and a special minimum primary insurance amount 
as explained in Secs. 404.260 and 404.261. We will use the highest 
result from these three methods as your primary insurance amount. We 
compute under the average-indexed-monthly-earnings method, and use the 
higher primary insurance amount resulting from the application of 
paragraphs (c) (1) and (2) of this section, as follows:
    (1) The formula in appendix II, except that instead of the first 
percentage figure (i.e., 90 percent), we use--
    (i) 80 percent if you initially become eligible for old-age or 
disability insurance benefits in 1986;
    (ii) 70 percent for initial eligibility in 1987;
    (iii) 60 percent for initial eligibility in 1988;
    (iv) 50 percent for initial eligibility in 1989;
    (v) 40 percent for initial eligibility in 1990 and later years, or
    (2) The formula in appendix II minus one-half the portion of your 
monthly pension which is due to noncovered work after 1956 and for which 
you were entitled in the first month you were entitled to both Social 
Security benefits and the monthly pension. If the monthly pension amount 
is not a multiple of $0.10, we will round to the next lower multiple of 
$0.10. To determine the portion of your pension which is due to 
noncovered work after 1956, we consider the total number of years of 
work used to compute your pension and the percentage of those years 
which are after 1956, and in which your employment was not covered. We 
take that percentage of your total pension as the amount which is due to 
your noncovered work after 1956.
    (d) Alternate computation. (1) If you have more than 20 but less 
than 30 years of coverage as defined in the column headed ``Alternate 
Computation Under Sec. 404.213(d)'' in appendix IV of this subpart, we 
will compute your primary insurance amount using the applicable 
percentage given below instead of the first percentage in appendix II of 
this subpart if the applicable percentage below is larger than the 
percentage specified in paragraph (c) of this section:
    (i) For benefits payable for months before January 1989--

------------------------------------------------------------------------
                       Years of coverage                         Percent
------------------------------------------------------------------------
29............................................................        80
28............................................................        70
27............................................................        60
26............................................................        50
------------------------------------------------------------------------

    (ii) For benefits payable for months after December 1988--

[[Page 78]]



------------------------------------------------------------------------
                       Years of coverage                         Percent
------------------------------------------------------------------------
29............................................................        85
28............................................................        80
27............................................................        75
26............................................................        70
25............................................................        65
24............................................................        60
23............................................................        55
22............................................................        50
21............................................................        45
------------------------------------------------------------------------

    (2) If you later earn additional year(s) of coverage, we will 
recompute your primary insurance amount, effective with January of the 
following year.
    (e) Exceptions. The computations in paragraph (c) of this section do 
not apply in the following situations:
    (1) Payments made under the Railroad Retirement Act are not 
considered to be a pension from noncovered employment for the purposes 
of this section. See subpart O of this part for a discussion of railroad 
retirement benefits.
    (2) You were entitled before 1986 to disability insurance benefits 
in any of the 12 months before you reach age 62 or again become 
disabled. (See Sec. 404.251 for the appropriate computation.)
    (3) You were a Federal employee performing service on January 1, 
1984 to which Social Security coverage was extended on that date solely 
by reason of the amendments made by section 101 of the Social Security 
Amendments of 1983.
    (4) You were an employee of a nonprofit organization who was exempt 
from Social Security coverage on December 31, 1983 unless you were 
previously covered under a waiver certificate which was terminated prior 
to that date..
    (5) You have 30 years of coverage as defined in the column headed 
``Alternate Computation Under Sec. 404.213(d)'' in appendix IV of this 
subpart.
    (6) Your survivors are entitled to benefits on your record of 
earnings. (After your death, we will recompute the primary insurance 
amount to nullify the effect of any monthly pension, based in whole or 
in part on noncovered employment, to which you had been entitled.)
    (7) For benefits payable for months after December 1994, payments by 
the social security system of a foreign country which are based on a 
totalization agreement between the United States and that country are 
not considered to be a pension from noncovered employment for purposes 
of this section. See subpart T of this part for a discussion of 
totalization agreements.
    (8) For benefits payable for months after December 1994, the 
computations in paragraph (c) do not apply in the case of an individual 
whose entitlement to U.S. social security benefits results from a 
totalization agreement between the United States and a foreign country.
    (9) For benefits payable for months after December 1994, you are 
eligible after 1985 for monthly periodic benefits based wholly on 
service as a member of a uniformed service, including inactive duty 
training.
    (f) Entitlement to a totalization benefit and a pension based on 
noncovered employment. If, before January 1995, you are entitled to a 
totalization benefit and to a pension based on noncovered employment 
that is not covered by a totalization agreement, we count your coverage 
from a foreign country with which the United States (U.S.) has a 
totalization agreement and your U.S. coverage to determine if you meet 
the requirements for the modified computation in paragraph (d) of this 
section or the exception in paragraph (e)(5) of this section.
    (1) Where the amount of your totalization benefit will be determined 
using a computation method that does not consider foreign earnings (see 
Sec. 404.1918), we will find your total years of coverage by adding 
your--
    (i) Years of coverage from the agreement country (quarters of 
coverage credited under Sec. 404.1908 divided by four) and
    (ii) Years of U.S. coverage as defined for the purpose of computing 
the special minimum primary insurance amount under Sec. 404.261.
    (2) Where the amount of your totalization benefit will be determined 
using a computation method that does consider foreign earnings, we will 
credit your foreign earnings to your U.S. earnings record and then find 
your

[[Page 79]]

total years of coverage using the method described in Sec. 404.261.

[52 FR 47916, Dec. 17, 1987, as amended at 55 FR 21382, May 24, 1990; 57 
FR 22429, May 28, 1992; 60 FR 17444, Apr. 6, 1995; 60 FR 56513, Nov. 9, 
1995]

   Average-Monthly-Wage Method of Computing Primary Insurance Amounts



Sec. 404.220  Average-monthly-wage method.

    (a) Who is eligible for this method. You must before 1979, reach age 
62, become disabled or die to be eligible for us to compute your primary 
insurance amount under the average-monthly-wage method. Also, as 
explained in Sec. 404.230, if you reach age 62 after 1978 but before 
1984, you are eligible to have your primary insurance amount computed 
under a modified average-monthly-wage method if it is to your advantage. 
Being eligible for either the average-monthly-wage method or the 
modified average-monthly-wage method does not preclude your eligibility 
under the old-start method described in Secs. 404.240 through 404.242.
    (b) Steps in computing your primary insurance amount under the 
average-monthly-wage method. We follow these three major steps in 
computing your primary insurance amount under the average-monthly-wage 
method:
    (1) First, we find your average monthly wage, as described in 
Sec. 404.221;
    (2) Second, we look at the benefit table in appendix III; and
    (3) Then we find your primary insurance amount in the benefit table, 
as described in Sec. 404.222.
    (4) Finally, we apply any automatic cost-of-living or ad hoc 
increases that became effective in or after the year you reached age 62, 
or became disabled, or died before age 62, as explained in Secs. 404.270 
through 404.277.



Sec. 404.221  Computing your average monthly wage.

    (a) General. Under the average-monthly-wage method, your social 
security earnings are averaged over the length of time you can 
reasonably have been expected to have worked under social security after 
1950 (or after you reached age 21, if later).
    (b) Which of your earnings may be used in computing your average 
monthly wage. (1) In computing your average monthly wage, we consider 
all the wages, compensation, self-employment income, and deemed military 
wage credits that are creditable to you for social security purposes. 
(The maximum amounts creditable are explained in Secs. 404.1047 and 
404.1096 of this part.)
    (2) We use your earnings in your computation base years in computing 
your average monthly wage. All years after 1950 up to (but not 
including) the year you become entitled to old-age or disability 
insurance benefits, or through the year you die if you had not been 
entitled to old-age or disability benefits, are computation base years 
for you. Years after the year you die may not be used as computation 
base years even if you have earnings credited to you in them. However, 
years beginning with the year you become entitled to benefits may be 
used for benefits beginning with the following year if using them would 
give you a higher primary insurance amount. Years wholly within a period 
of disability are not computation base years unless your primary 
insurance amount would be higher if they were. In such situations, we 
count all the years during the period of disability, even if you had no 
earnings in some of them.
    (c) Number of years to be considered in computing your average 
monthly wage. To find the number of years to be used in computing your 
average monthly wage--
    (1) We count the years beginning with 1951 or (if later) the year 
you reached age 22 and ending with the year before you reached age 62, 
or became disabled, or died before age 62. Any part of a year--or years-
-in which you were disabled, as defined in Sec. 404.1505, is not counted 
unless doing so would give you a higher average monthly wage. In that 
case, we count all the years during the period of disability, even if 
you had no earnings in some of those years. These are your elapsed 
years. (If you are a male and you reached age 62 before 1975, see 
paragraph (c)(2) of this section for the rules on finding your elapsed 
years.)
    (2) If you are a male and you reached age 62 in--

[[Page 80]]

    (i) 1972 or earlier, we count the years beginning with 1951 and 
ending with the year before you reached age 65, or became disabled or 
died before age 65 to find your elapsed years;
    (ii) 1973, we count the years beginning with 1951 and ending with 
the year before you reached age 64, or became disabled or died before 
age 64 to find your elapsed years; or
    (iii) 1974, we count the years beginning with 1951 and ending with 
the year before you reached age 63, became disabled, or died before age 
63 to find your elapsed years.
    (3) Then we subtract 5 from the number of your elapsed years. This 
is the number of your benefit computation years; we use the same number 
of your computation base years in computing your average monthly wage. 
For benefit computation years, we use the years with the highest amounts 
of earnings, but they may include years of no earnings. You cannot have 
fewer than 2 benefit computation years.
    (d) Your average monthly wage. After we find your benefit 
computation years, we compute your average monthly wage by--
    (1) Totalling your creditable earnings in your benefit computation 
years;
    (2) Dividing the total by the number of months in your benefit 
computation years; and
    (3) Rounding the quotient to the next lower whole dollar if not 
already a multiple of $1.

    Example: Mr. B reaches age 62 and becomes entitled to old-age 
insurance benefits in August 1978. He had no social security earnings 
before 1951 and his year-by-year social security earnings after 1950 are 
as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $2,700
1952.......................................................        2,700
1953.......................................................        3,400
1954.......................................................        3,100
1955.......................................................        4,000
1956.......................................................        4,100
1957.......................................................        4,000
1958.......................................................        4,200
1959.......................................................        4,800
1960.......................................................        4,800
1961.......................................................        4,800
1962.......................................................        4,800
1963.......................................................        4,800
1964.......................................................        1,500
1965.......................................................          0
1966.......................................................          0
1967.......................................................          0
1968.......................................................        3,100
1969.......................................................        5,200
1970.......................................................        7,100
1971.......................................................        7,800
1972.......................................................        8,600
1973.......................................................        8,900
1974.......................................................        9,700
1975.......................................................       10,100
1976.......................................................       10,800
1977.......................................................       11,900
------------------------------------------------------------------------

    We first find Mr. B's elapsed years, which are the 27 years 1951-
1977. We subtract 5 from his 27 elapsed years to find that we must use 
22 benefit computation years in computing his average monthly wage. His 
computation base years are 1951-1977, which are the years after 1950 and 
prior to the year he became entitled. This means that we will use his 22 
computation base years with the highest earnings to compute his average 
monthly wage. Thus, we exclude the years 1964-1967 and 1951.
    We total his earnings in his benefit computation years and get 
$132,700. We then divide that amount by the 264 months in his 22 benefit 
computation years and find his average monthly wage to be $502.65, which 
is rounded down to $502.

    (e) ``Deemed'' average monthly wage for certain deceased veterans of 
World War II. Certain deceased veterans of World War II are ``deemed'' 
to have an average monthly wage of $160 (see Secs. 404.1340 through 
404.1343 of this part) unless their actual average monthly wage, as 
found in the method described in paragraphs (a) through (d) of this 
section is higher.



Sec. 404.222  Use of benefit table in finding your primary insurance amount from your average monthly wage.

    (a) General. We find your primary insurance amount under the 
average-monthly-wage method in the benefit table in appendix III.
    (b) Finding your primary insurance amount from benefit table. We 
find your average monthly wage in column III of the table. Your primary 
insurance amount appears on the same line in column IV (column II if you 
are entitled to benefits for any of the 12 months preceding the 
effective month in column IV). As explained in Sec. 404.212(e), there is 
a minimum primary insurance amount of $122 payable for persons who 
became eligible or died after 1978 and before January 1982. There is 
also an alternative minimum of $121.80 (before the application of

[[Page 81]]

cost-of-living increases) for members of this group whose benefits were 
computed from the benefit table in effect in December 1978 on the basis 
of either the old-start computation method in Secs. 404.240 through 
404.242 or the guaranteed alternative computation method explained in 
Secs. 404.230 through 404.233. However, as can be seen from the extended 
table in appendix III, the lowest primary insurance amount under this 
method is now $1.70 for individuals for whom the minimum benefit has 
been repealed.

    Example: In the example in Sec. 404.221(d), we computed Mr. B's 
average monthly wage to be $502. We refer to the December 1978 benefit 
table in appendix III. Then we find his average monthly wage in column 
III of the table. Reading across, his primary insurance amount is on the 
same line in column IV and is $390.50. A 9.9 percent automatic cost-of-
living benefit increase was effective for June 1979, increasing Mr. B's 
primary insurance amount to $429.20, as explained in Secs. 404.270 
through 404.277. Then, we increase the $429.20 by the 14.3 percent June 
1980 cost-of-living benefit increase and get $490.60, and by the 11.2 
percent June 1981 increase to get $545.60.

[47 FR 30734, July 15, 1982, as amended at 48 FR 46142, Oct. 11, 1983]

Guaranteed Alternative for People Reaching Age 62 After 1978 but Before 
                                  1984



Sec. 404.230  Guaranteed alternative.

    (a) General. If you reach age 62 after 1978 but before 1984, we 
compute your primary insurance amount under a modified average-monthly-
wage method as a guaranteed alternative to your primary insurance amount 
computed under the average-indexed-monthly-earnings method. We also 
compute your primary insurance amount under the old-start method 
(Secs. 404.240 through 404.242) and under the special rules for a person 
who had a period of disability (Secs. 404.250 through 404.252), if you 
are eligible. In Secs. 404.231 through 404.233, we explain the average-
monthly-wage method as the alternative to the average-indexed-monthly-
earnings method.
    (b) Restrictions. (1) To qualify for this guaranteed-alternative 
computation, you must have some creditable earnings before 1979.
    (2) You or your survivors do not qualify for a guaranteed-
alternative computation if you were eligible (you attained age 62, 
became disabled, or died before age 62) for social security benefits 
based on your own earnings at any time before 1979 unless--
    (i) Those benefits were disability insurance benefits which were 
terminated because you recovered from your disability or you engaged in 
substantial gainful activity; and
    (ii) You spent at least 12 months without being eligible for 
disability benefits again.
    (3) This guaranteed alternative method applies only to old-age 
insurance benefits and to survivor benefits where the deceased worker 
reached the month of his or her 62nd birthday after 1978 but before 1984 
and died after reaching age 62.



Sec. 404.231  Steps in computing your primary insurance amount under the guaranteed alternative--general.

    If you reach age 62 after 1978 but before 1984, we follow three 
major steps in finding your guaranteed alternative:
    (a) First, we compute your average monthly wage, as described in 
Sec. 404.232;
    (b) Second, we find the primary insurance amount that corresponds to 
your average monthly wage in the benefit table in appendix III.
    (c) Then we apply any automatic cost-of-living or ad hoc increases 
in primary insurance amounts that have become effective in or after the 
year you reached age 62.



Sec. 404.232  Computing your average monthly wage under the guaranteed alternative.

    (a) General. With the exception described in paragraph (b) of this 
section, we follow the rules in Sec. 404.221 to compute your average 
monthly wage.
    (b) Exception. We do not use any year after the year you reach age 
61 as a computation base year in computing your average monthly wage for 
purposes of the guaranteed alternative.



Sec. 404.233  Adjustment of your guaranteed alternative when you become entitled after age 62.

    (a) If you do not become entitled to benefits at the time you reach 
age 62, we adjust the guaranteed alternative computed for you under 
Sec. 404.232 as described in paragraph (b) of this section.

[[Page 82]]

    (b) To the primary insurance amount computed under the guaranteed 
alternative, we apply any automatic cost-of-living or ad hoc increases 
in primary insurance amounts that go into effect in the year you reach 
age 62 and in years up through the year you become entitled to benefits. 
(See appendix VI for a list of the percentage increases in primary 
insurance amounts since December 1978.)

    Example: Mr. C reaches age 62 in January 1981 and becomes entitled 
to old-age insurance benefits in April 1981. He had no social security 
earnings before 1951 and his year-by-year social security earnings after 
1950 are as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $3,600
1952.......................................................        3,600
1953.......................................................        3,600
1954.......................................................        3,600
1955.......................................................        4,200
1956.......................................................        4,200
1957.......................................................        4,200
1958.......................................................        4,200
1959.......................................................        4,800
1960.......................................................        4,800
1961.......................................................        4,800
1962.......................................................        4,800
1963.......................................................        4,800
1964.......................................................        4,800
1965.......................................................        4,800
1966.......................................................        6,600
1967.......................................................        6,600
1968.......................................................        7,800
1969.......................................................        7,800
1970.......................................................        7,800
1971.......................................................        7,800
1972.......................................................        9,000
1973.......................................................       10,800
1974.......................................................       13,200
1975.......................................................       14,100
1976.......................................................       15,300
1977.......................................................       16,500
1978.......................................................       17,700
1979.......................................................       22,900
1980.......................................................       25,900
1981.......................................................       29,700
------------------------------------------------------------------------

    Mr. C's elapsed years are the 30 years 1951 through 1980. We 
subtract 5 from his 30 elapsed years to find that we must use 25 benefit 
computation years in computing his average monthly wage. His computation 
base years are 1951 through 1980 which are years after 1950 up to the 
year he reached age 62. We will use his 25 computation base years with 
the highest earnings to compute his average monthly wage. Thus, we 
exclude the years 1951-1955. The year 1981 is not a base year for this 
computation.
    We total his earnings in his benefit computation years and get 
$236,000. We then divide by the 300 months in his 25 benefit computation 
years, and find his average monthly wage to be $786.66 which is rounded 
down to $786.
    The primary insurance amount in the benefit table in appendix III 
that corresponds to Mr. C's average monthly wage is $521.70. The 9.9 
percent and 14.3 percent cost of living increase for 1979 and 1980, 
respectively, are not applicable because Mr. C reached age 62 in 1981.
    The average indexed monthly earnings method described in 
Secs. 404.210 through 404.212 considers all of the earnings after 1950, 
including 1981 earnings which, in Mr. C's case cannot be used in the 
guaranteed alternative method. Mr. C's primary insurance amount under 
the average indexed earnings method is $548.40. Therefore, his benefit 
is based upon the $548.40 primary insurance amount. As in the guaranteed 
alternative method, Mr. C is not entitled to the cost of living 
increases for years before the year he reaches age 62.

         Old-Start Method of Computing Primary Insurance Amounts



Sec. 404.240  Old-start method--general.

    If you had all or substantially all your social security earnings 
before 1951, your primary insurance amount computed under the ``1977 
simplified old-start'' method may be higher than any other primary 
insurance amount computed for you under any other method for which you 
are eligible. As explained in Sec. 404.242, if you reach age 62 after 
1978, your primary insurance amount computed under the old-start method 
is used, for purposes of the guaranteed alternative described in 
Sec. 404.230, if the old-start primary insurance amount is higher than 
the one found under the average-monthly-wage method. We may use a 
modified computation, as explained in Sec. 404.243, if you are entitled 
to a pension based on your employment which was not covered by Social 
Security.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47917, Dec. 17, 1987]



Sec. 404.241  1977 simplified old-start method.

    (a) Who is qualified. To qualify for the old-start computation, you 
must meet the conditions in paragraphs (a) (1), (2), or (3) of this 
section:
    (1) You must--
    (i) Have one ``quarter of coverage'' (see Secs. 404.101 and 404.110 
of this part) before 1951;

[[Page 83]]

    (ii) Have attained age 21 after 1936 and before 1950, or attained 
age 22 after 1950 and earned fewer than 6 quarters of coverage after 
1950;
    (iii) Have not had a period of disability which began before 1951, 
unless it can be disregarded, as explained in Sec. 404.320 of this part; 
and,
    (iv) Have attained age 62, become disabled, or died, after 1977.
    (2)(i) You or your survivor becomes entitled to benefits for June 
1992 or later;
    (ii) You do not meet the conditions in paragraph (a)(1) of this 
section, and,
    (iii) No person is entitled to benefits on your earnings record in 
the month before the month you or your survivor becomes entitled to 
benefits.
    (3) A recomputation is first effective for June 1992 or later based 
on your earnings for 1992 or later.
    (b) Steps in old-start computation. (1) First, we allocate your 
earnings during the period 1937-1950 as described in paragraph (c) of 
this section.
    (2) Next, we compute your average monthly wage, as described in 
paragraph (d) of this section.
    (3) Next, we apply the old-start formula to your average monthly 
wage, as described in paragraph (e)(1) of this section.
    (4) Next, we apply certain increments to the amount computed in step 
(3), as described in paragraph (e)(2) of this section.
    (5) Next, we find your primary insurance amount in the benefit table 
in appendix III, as described in paragraph (f)(1) of this section.
    (6) Then, we apply automatic cost-of-living or ad hoc increases in 
primary insurance amounts to the primary insurance amount found in step 
(5), as described in paragraph (f)(2) of this section.
    (c) Finding your computation base years under the old-start method. 
(1) Instead of using your actual year-by-year earnings before 1951, we 
find your computation base years for 1937-1950 (and the amount of 
earnings for each of them) by allocating your total 1937-1950 earnings 
among the years before 1951 under the following procedure:
    (i) If you reached age 21 before 1950 and your total 1937-1950 
earnings are not more than $3,000 times the number of years after the 
year you reached age 20 and before 1951 (a maximum of 14 years), we 
allocate your earnings equally among those years, and those years are 
your computation base years before 1951.
    (ii) If you reached age 21 before 1950 and your total 1937-1950 
earnings are more than $3,000 times the number of years after the year 
you reached age 20 and before 1951, we allocate your earnings at the 
rate of $3,000 per year for each year after you reached age 20 and 
before 1951 up to a maximum of 14 years. We credit any remainder in 
reverse order to years before age 21 in $3,000 increments and any amount 
left over of less than $3,000 to the year before the earliest year to 
which we credited $3,000. No more than $42,000 may be credited in this 
way and to no more than 14 years. Those years are your computation base 
years before 1951.
    (iii) If you reached age 21 in 1950 or later and your total pre-1951 
earnings are $3,000 or less, we credit the total to the year you reached 
age 20 and that year is your pre-1951 computation base year.
    (iv) If you reached age 21 in 1950 or later and your total pre-1951 
earnings are more than $3,000, we credit $3,000 to the year you reached 
age 20 and credit the remainder to earlier years (or year) in blocks of 
$3,000 in reverse order. We credit any remainder of less than $3,000 to 
the year before the earliest year to which we had credited $3,000. No 
more than $42,000 may be credited in this way and to no more than 14 
years. Those years are your computation base years before 1951.
    (v) If you die before 1951, we allocate your 1937-1950 earnings 
under paragraphs (c)(1) (i) through (iv), except that in determining the 
number of years, we will use the year of death instead of 1951. If you 
die before you attain age 21, the number of years in the period is equal 
to 1.
    (vi) For purposes of paragraphs (c)(1) (i) through (v), if you had a 
period of disability which began before 1951, we will exclude the years 
wholly within a period of disability in determining the number of years.
    (2)(i) All years after 1950 up to (but not including) the year you 
become entitled to old-age insurance or disability

[[Page 84]]

insurance benefits (or through the year you die if you had not become 
entitled to old-age or disability benefits) are also computation base 
years for you.
    (ii) Years wholly within a period of disability are not computation 
base years unless your primary insurance amount would be higher if they 
were. In such situations, we count all the years during the period of 
disability, even if you had no earnings in some of them.

    Example: Ms. D reaches age 62 in June 1979. Her total 1937-1950 
social security earnings are $40,000 and she had social security 
earnings of $7,100 in 1976 and $6,300 in 1977. Since she reaches age 62 
after 1978, we first compute her primary insurance amount under the 
average-indexed-monthly-earnings method (Secs. 404.210 through 404.212). 
As of June 1981, it is $170.50, which is the minimum primary insurance 
amount applicable, because her average indexed monthly earnings of $50 
would yield only $56.50 under the benefit formula. Ms. D reached age 62 
after 1978 but before 1984 and her guaranteed alternative under the 
average-monthly-wage method as of June 1981 is $170.30, which is the 
minimum primary insurance amount based on average monthly wages of $48. 
(These amounts include the 9.9, the 14.3, and the 11.2 percent cost-of-
living increases effective June 1979, June 1980, and June 1981 
respectively.)
    Ms. D is also eligible for the old-start method. We first allocate 
$3,000 of her 1937-1950 earnings to each of her 13 computation base 
years starting with the year she reached age 21 (1938) and ending with 
1950. The remaining $1,000 is credited to the year she reached age 20. 
Ms. D, then, has 42 computation base years (14 before 1951 and 28 after 
1950).

    (d) Computing your average monthly wage under the old-start method. 
(1) First, we count your elapsed years, which are the years beginning 
with 1937 (or the year you reach 22, if later) and ending with the year 
before you reach age 62, or become disabled or die before age 62. (See 
Sec. 404.211(e)(1) for the rule on how we treat years wholly or 
partially within a period of disability.)
    (2) Next, we subtract 5 from the number of your elapsed years, and 
this is the number of computation years we must use. We then choose this 
number of your computation base years in which you had the highest 
earnings. These years are your benefit computation years. You must have 
at least 2 benefit computation years.
    (3) Then we compute your average monthly wage by dividing your total 
creditable earnings in your benefit computation years by the number of 
months in these years and rounding the quotient to the next lower dollar 
if not already a multiple of $1.
    (e) Old-start computation formula. We use the following formula to 
compute your primary insurance benefit, which we will convert to your 
primary insurance amount:
    (1) We take 40 percent of the first $50 of your average monthly 
wage, plus 10 percent of the next $200 of your average monthly wage up 
to a total average monthly wage of $250. (We do not use more than $250 
of your average monthly wage.)
    (2) We increase the amount found in paragraph (e)(1) of this section 
by 1 percent for each $1,650 in your pre-1951 earnings, disregarding any 
remainder less than $1,650. We always increase the amount by at least 4 
of these 1 percent increments but may not increase it by more than 14 of 
them.
    (f) Finding your primary insurance amount under the old-start 
method. (1) In column I of the benefit table in appendix III we locate 
the amount (the primary insurance benefit) computed in paragraph (e) of 
this section and find the corresponding primary insurance amount on the 
same line in column IV of the table.
    (2) We increase that amount by any automatic cost-of-living or ad 
hoc increases in primary insurance amounts effective since the beginning 
of the year in which you reached age 62, or became disabled or died 
before age 62. (See Secs. 404.270 through 404.277.)

    Example: From the example in paragraph (c)(2) of this section, we 
see that Ms. D's elapsed years total 40 (number of years at ages 22 to 
61, both inclusive). Her benefit computation years, therefore, must 
total 35. Since she has only 16 years of actual earnings, we must 
include 19 years of zero earnings in this old-start computation to reach 
the required 35 benefit computation years.
    We next divide her total social security earnings ($53,400) by the 
420 months in her benefit computation years and find her average monthly 
wage to be $127.
    We apply the old-start computation formula to Ms. D's average 
monthly wage as follows: 40 percent of the first $50 of her average 
monthly wage ($20.00), plus 10 percent of

[[Page 85]]

the remaining $77 of her average monthly wage ($7.70), for a total of 
$27.70.
    We then apply 14 1-percent increments to that amount, increasing it 
by $3.88 to $31.58. We find $31.58 in column I of the December 1978 
benefit table in appendix III and find her primary insurance amount of 
$195.90 on the same line in column IV. We apply the 9.9 percent 
automatic cost-of-living increase effective for June 1979 to $195.90 and 
get an old-start primary insurance amount of $215.30 which we then 
increase to $246.10 to reflect the 14.3 percent cost-of-living increase 
effective for June 1980, and to $273.70 to reflect the June 1981 
increase. Since that primary insurance amount is higher than the $153.10 
primary insurance amount computed under the average-monthly-wage method 
and the $153.30 primary insurance amount computed under the average-
indexed-monthly-earnings method, we base Ms. D's benefits (and those of 
her family) on $215.30 (plus later cost-of-living increases), which is 
the highest primary insurance amount.

[47 FR 30734, July 15, 1982, as amended at 55 FR 21382, May 24, 1990; 57 
FR 23157, June 2, 1992]



Sec. 404.242  Use of old-start primary insurance amount as guaranteed alternative.

    If your primary insurance amount as computed under the old-start 
method is higher than your primary insurance amount computed under the 
average-monthly-wage method, your old-start primary insurance amount 
will serve as the guaranteed alternative to your primary insurance 
amount computed under the average-indexed-monthly-earnings method, as 
described in Sec. 404.230. However, earnings that you have in or after 
the year you reach age 62, or become disabled or die before age 62 are 
not used in an old-start computation in this situation.



Sec. 404.243  Computation where you are eligible for a pension based on noncovered employment.

    The provisions of Sec. 404.213 are applicable to computations under 
the old-start method, except for paragraphs (c) (1) and (2) and (d) of 
that section. Your primary insurance amount will be whichever of the 
following two amounts is larger:
    (a) One-half the primary insurance amount computed according to 
Sec. 404.241 (before application of the cost of living amount); or
    (b) The primary insurance amount computed according to Sec. 404.241 
(before application of the cost of living amount), minus one-half the 
portion of your monthly pension which is due to noncovered work after 
1956 and for which you were eligible in the first month you became 
eligible for Social Security benefits. If the result is not a multiple 
of $0.10, we will round to the next lower multiple of $0.10. (See 
Sec. 404.213 (b)(3) if you are not eligible for a monthly pension in the 
first month you are entitled to Social Security benefits.) To determine 
the portion of your pension which is due to noncovered work after 1956, 
we consider the total number of years of work used to compute your 
pension and the percentage of those years which are after 1956 and in 
which your employment was not covered. We take that percentage of your 
total pension as the amount which is due to your noncovered work after 
1956.

[52 FR 47918, Dec. 17, 1987]

   Special Computation Rules for People Who Had a Period of Disability



Sec. 404.250  Special computation rules for people who had a period of disability.

    If you were disabled at some time in your life, received disability 
insurance benefits, and those benefits were terminated because you 
recovered from your disability or because you engaged in substantial 
gainful activity, special rules apply in computing your primary 
insurance amount when you become eligible after 1978 for old-age 
insurance benefits or if you become re-entitled to disability insurance 
benefits or die. (For purposes of Secs. 404.250 through 404.252, we use 
the term second entitlement to refer to this situation.) There are two 
sets of rules:
    (a) Second entitlement within 12 months. If 12 months or fewer pass 
between the last month for which you received a disability insurance 
benefit and your second entitlement, see the rules in Sec. 404.251; and
    (b) Second entitlement after more than 12 months. If more than 12 
months pass between the last month for which you received a disability 
insurance benefit

[[Page 86]]

and your second entitlement, see the rules in Sec. 404.252.



Sec. 404.251  Subsequent entitlement to benefits less than 12 months after entitlement to disability benefits ended.

    (a) Disability before 1979; second entitlement after 1978. In this 
situation, we compute your second-entitlement primary insurance amount 
by selecting the highest of the following:
    (1) The primary insurance amount to which you were entitled when you 
last received a benefit, increased by any automatic cost-of-living or ad 
hoc increases in primary insurance amounts that took effect since then;
    (2) The primary insurance amount resulting from a recomputation of 
your primary insurance amount, if one is possible; or
    (3) The primary insurance amount computed for you as of the time of 
your second entitlement under any method for which you are qualified at 
that time, including the average-indexed-monthly-earnings method if the 
previous period of disability is disregarded.
    (b) Disability and second entitlement after 1978. In this situation, 
we compute your second-entitlement primary insurance amount by selecting 
the highest of the following:
    (1) The primary insurance amount to which you were entitled when you 
last received a benefit, increased by any automatic cost-of-living or ad 
hoc increases in primary insurance amount that took effect since then;
    (2) The primary insurance amount resulting from a recomputation of 
your primary insurance amount, if one is possible (this recomputation 
may be under the average-indexed-monthly-earnings method only); or
    (3) The primary insurance amount computed for you as of the time of 
your second entitlement under any method (including an old-start method) 
for which you are qualifed at that time.
    (c) Disability before 1986; second entitlement after 1985. When 
applying the rule in paragraph (b)(3) of this section, we must consider 
your receipt of a monthly pension based on noncovered employment. (See 
Sec. 404.213). However, we will disregard your monthly pension if you 
were previously entitled to disability benefits before 1986 and in any 
of the 12 months before your second entitlement.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]



Sec. 404.252  Subsequent entitlement to benefits 12 months or more after entitlement to disability benefits ended.

    In this situation, we compute your second-entitlement primary 
insurance amount by selecting the higher of the following:
    (a) New primary insurance amount. The primary insurance amount 
computed as of the time of your second entitlement under any of the 
computation methods for which you qualify at the time of your second 
entitlement; or
    (b) Previous primary insurance amount. The primary insurance amount 
to which you were entitled in the last month for which you were entitled 
to a disability insurance benefit.

                Special Minimum Primary Insurance Amounts



Sec. 404.260  Special minimum primary insurance amounts.

    Regardless of the method we use to compute your primary insurance 
amount, if the special minimum primary insurance amount described in 
Sec. 404.261 is higher, then your benefits (and those of your dependents 
or survivors) will be based on the special minimum primary insurance 
amount. Special minimum primary insurance amounts are not based on a 
worker's average earnings, as are primary insurance amounts computed 
under other methods. Rather, the special minimum primary insurance 
amount is designed to provide higher benefits to people who worked for 
long periods in low-paid jobs covered by social security.



Sec. 404.261  Computing your special minimum primary insurance amount.

    (a) Years of coverage. (1) The first step in computing your special 
minimum primary insurance amount is to find the number of your years of 
coverage, which is the sum of--

[[Page 87]]

    (i) The quotient found by dividing your total creditable social 
security earnings during the period 1937-1950 by $900, disregarding any 
fractional remainder; plus
    (ii) The number of your computation base years after 1950 in which 
your social security earnings were at least the amounts shown in 
appendix IV. (Computation base years mean the same here as in other 
computation methods discussed in this subpart.)
    (2) You must have at least 11 years of coverage to qualify for a 
special minimum primary insurance amount computation. However, special 
minimum primary insurance amounts based on little more than 10 years of 
coverage are usually lower than the regular minimum benefit that was in 
effect before 1982 (see Secs. 404.212(e) and 404.222(b) of this part). 
In any situation where your primary insurance amount computed under 
another method is higher, we use that higher amount.
    (b) Computing your special minimum primary insurance amount. (1) 
First, we subtract 10 from your years of coverage and multiply the 
remainder (at least 1 and no more than 20) by $11.50;
    (2) Then we increase the amount found in paragraph (b)(1) of this 
section by any automatic cost-of-living or ad hoc increases that have 
become effective since December 1978 to find your special minimum 
primary insurance amount. See appendix V for the applicable table, which 
includes the 9.9 percent cost-of-living increase that became effective 
June 1979, the 14.3 percent increase that became effective June 1980, 
and the 11.2 percent increase that became effective June 1981.

    Example: Ms. F, who attained age 62 in January 1979, had $10,000 in 
total social security earnings before 1951 and her post-1950 earnings 
are as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $1,100
1952.......................................................          950
1953.......................................................            0
1954.......................................................        1,000
1955.......................................................        1,100
1956.......................................................        1,200
1957.......................................................            0
1958.......................................................        1,300
1959.......................................................            0
1960.......................................................        1,300
1961.......................................................            0
1962.......................................................        1,400
1963.......................................................        1,300
1964.......................................................            0
1965.......................................................          500
1966.......................................................          700
1967.......................................................          650
1968.......................................................          900
1969.......................................................        1,950
1970.......................................................        2,100
1971.......................................................        2,000
1972.......................................................        1,500
1973.......................................................        2,700
1974.......................................................        2,100
1975.......................................................        2,600
1976.......................................................        3,850
1977.......................................................        4,150
1978.......................................................            0
------------------------------------------------------------------------

    Her primary insurance amount under the average-indexed-monthly-
earnings method as of June 1981 is $240.40 (based on average indexed 
monthly earnings of $229). Her guaranteed-alternative primary insurance 
amount under the average-monthly-wage method as of June 1981 is $255.80 
(based on average monthly wages of $131).
    However, Ms. F has enough earnings before 1951 to allow her 11 years 
of coverage before 1951 ($10,000/$900=11, plus a remainder, which we 
drop). She has sufficient earnings in 1951-52, 1954-56, 1958, 1960, 
1962-63, 1969-71, 1973, and 1976-77 to have a year of coverage for each 
of those years. She thus has 15 years of coverage after 1950 and a total 
of 26 years of coverage. We subtract 10 from her years of coverage, 
multiply the remainder (16) by $11.50 and get $184.00. We then apply the 
June 1979, June 1980, and June 1981 automatic cost-of-living increases 
(9.9 percent, 14.3 percent, and 11.2 percent, respectively) to that 
amount to find her special minimum primary insurance amount of $202.30 
effective June 1979, $231.30 effective June 1980, and $257.30 effective 
June 1981. (See appendices V and VI.) Since her special minimum primary 
insurance amount is higher than the primary insurance amounts computed 
for her under the other methods described in this subpart for which she 
is eligible, her benefits (and those of her family) are based on the 
special minimum primary insurance amount.

[47 FR 30734, July 15, 1982, as amended at 48 FR 46143, Oct. 11, 1983]

                        Cost-of-Living Increases



Sec. 404.270  Cost-of-living increases.

    Your primary insurance amount may be automatically increased each 
December so it keeps up with rises in the cost of living. These 
automatic increases also apply to other benefit amounts, as described in 
Sec. 404.271.

[47 FR 30734, July 15, 1982, as amended at 51 FR 12603, Apr. 14, 1986]

[[Page 88]]



Sec. 404.271  When automatic cost-of-living increases apply.

    Besides increases in the primary insurance amounts of current 
beneficiaries, automatic cost-of-living increases also apply to--
    (a) The benefits of certain uninsured people age 72 and older (see 
Sec. 404.380);
    (b) The special minimum primary insurance amounts (described in 
Secs. 404.260 through 404.261) of current and future beneficiaries;
    (c) The primary insurance amounts of people who after 1978 become 
eligible for benefits or die before becoming eligible (beginning with 
December of the year they become eligible or die), although certain 
limitations are placed on the automatic adjustment of the frozen minimum 
primary insurance amount (as described in Sec. 404.277); and
    (d) The maximum family benefit amounts in column V of the benefit 
table in appendix III.

[47 FR 30734, July 15, 1982, as amended at 51 FR 12603, Apr. 14, 1986]



Sec. 404.272  Indexes we use to measure the rise in the cost-of-living.

    (a) The bases. To measure increases in the cost-of-living for annual 
automatic increase purposes, we use either:
    (1) The revised Consumer Price Index (CPI) for urban wage earners 
and clerical workers as published by the Department of Labor, or
    (2) The average wage index (AWI), which is the average of the annual 
total wages that we use to index (i.e., update) a worker's past earnings 
when we compute his or her primary insurance amount (Sec. 404.211(c)).
    (b) Effect of the OASDI fund ratio. Which of these indexes we use to 
measure increases in the cost-of-living depends on the Old-Age, 
Survivors, and Disability Insurance (OASDI) fund ratio.
    (c) OASDI fund ratio for years after 1984. For purposes of cost-of-
living increases, the OASDI fund ratio is the ratio of the combined 
assets in the Federal Old-Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund (see section 201 of the Social 
Security Act) on January 1 of a given year, to the estimated 
expenditures from the Funds in the same year. The January 1 balance 
consists of the assets (i.e., government bonds and cash) in the Federal 
Old-Age and Survivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund, plus Federal Insurance Contributions Act (FICA) 
and Self-Employment Contributions Act (SECA) taxes transferred to these 
trust funds on January 1 of the given year, minus the outstanding 
amounts (principal and interest) owed to the Federal Hospital Insurance 
Trust Fund as a result of interfund loans. Estimated expenditures are 
amounts we expect to pay from the Old-Age and Survivors Insurance and 
the Disability Insurance Trust Funds during the year, including the net 
amount that we pay into the Railroad Retirement Account, but excluding 
principal repayments and interest payments to the Hospital Insurance 
Trust Fund and transfer payments between the Old-Age and Survivors 
Insurance and the Disability Insurance Trust Funds. The ratio as 
calculated under this rule is rounded to the nearest 0.1 percent.
    (d) Which index we use. We use the CPI if the OASDI fund ratio is 
15.0 percent or more for any year from 1984 through 1988, and if the 
ratio is 20.0 percent or more for any year after 1988. We use either the 
CPI or the AWI, depending on which has the lower percentage increase in 
the applicable measuring period (see Sec. 404.274), if the OASDI fund 
ratio is less than 15.0 percent for any year from 1984 through 1988, and 
if the ratio is less than 20.0 percent for any year after 1988. For 
example, if the OASDI fund ratio for a year is 17.0 percent, the cost-
of-living increase effective December of that year will be based on the 
CPI.

[51 FR 12603, Apr. 14, 1986]



Sec. 404.273  When automatic cost-of-living increases are to be made.

    We make automatic cost-of-living increases if the applicable index, 
either the CPI or the AWI, rises by 3.0 percent or more over a specified 
measuring period (see the rules in Sec. 404.274). If the cost-of-living 
increase is to be based on an increase of 3.0 percent or more in the 
CPI, the increase becomes effective in December of the year in which the 
measuring period ends. If the increase

[[Page 89]]

is to be based on an increase of 3.0 percent or more in the AWI, the 
increase becomes effective in December of the year after the year in 
which the measuring period ends.

[51 FR 12603, Apr. 14, 1986]



Sec. 404.274  Measuring the increase in the indexes.

    (a) General. Depending on the OASDI fund ratio, we measure the rise 
in one index or in both indexes during the applicable measuring period 
(described in paragraphs (b) and (c) of this section) to determine 
whether there will be an automatic cost-of-living increase and if so, 
its amount.
    (b) Measuring period based on CPI. For the increase effective 
December 1984 and later years, the measuring period we use for finding 
the amount of the CPI increase--
    (1) Begins with--
    (i) Any calendar quarter in which an ad hoc benefit increase is 
effective; or, if later,
    (ii) The third calendar quarter of any year in which the last 
automatic increase became effective; and
    (2) Ends with the third calendar quarter of the following year, but 
only if the CPI has increased by at least 3.0 percent (after rounding to 
the nearest one-tenth of one percent) since the beginning of the 
measuring period. (If the CPI increase is less than 3.0 percent, we 
extend the measuring period to the third quarter of the next year, doing 
so repeatedly until the 3.0 percent level is reached.) If this measuring 
period ends in a year after the year in which an ad hoc increase was 
enacted into law or took effect, there can be no cost-of-living increase 
based on this measuring period, and we will apply the rule in paragraph 
(d) of this section.
    (c) Measuring period based on AWI. The measuring period we use for 
finding the amount of the AWI increase--
    (1) Begins with--
    (i) The calendar year before the year in which an ad hoc benefit 
increase is effective; or, if later,
    (ii) The calendar year before the year in which the last automatic 
increase became effective; and
    (2) Ends with the following year, but only if the AWI has increased 
by at least 3.0 percent (after rounding to the nearest one-tenth of one 
percent) in that one-year period. (If the AWI increase is less than 3.0 
percent, we extend the measuring period to the next year, doing so 
repeatedly until the 3.0 percent level is reached.) If this measuring 
period ends in a year in which an ad hoc increase was enacted into law 
or took effect, there can be no cost-of-living increase based on this 
measuring period, and we will apply the rule in paragraph (d) of this 
section.
    (d) When no automatic cost-of-living increase is possible. No 
automatic cost-of-living increase is possible for the calendar year that 
immediately follows a year in which an ad hoc increase was enacted into 
law or took effect. The measuring period for the next automatic cost-of-
living increase--
    (1) Where the measuring period is based on the CPI,
    (i) Begins with the calendar quarter in which the ad hoc increase 
took effect; and
    (ii) Ends with the third calendar quarter of the next year in which 
the CPI has risen by at least 3.0 percent if an ad hoc increase was not 
enacted or effective in the preceding year. (If the CPI increase is less 
than 3.0 percent, or an ad hoc increase was enacted or effective in the 
prior year, we extend the end of the measuring period to the third 
quarter of the following year, doing so repeatedly until the 3.0 percent 
level is reached in a year which does not immediately follow an ad hoc 
increase year.)
    (2) Where the measuring period is based on the AWI,
    (i) Begins with the calendar year before the year in which the ad 
hoc increase took effect; and
    (ii) Ends with the next calendar year in which the AWI has increased 
by at least 3.0 percent and in which an ad hoc increase is not enacted 
or effective. (If the AWI increase is less than 3.0 percent, we extend 
the end of the measuring period to the following year, doing so 
repeatedly until the 3.0 percent level is reached in a year in which an 
ad hoc increase is not enacted or effective.)

[51 FR 12603, Apr. 21, 1986]

[[Page 90]]



Sec. 404.275  Amount of automatic cost-of-living increases.

    (a) Based on CPI. When the average of the CPI for the three months 
of the quarter ending the measuring period is at least 3.0 percent 
higher than the average of the CPI for the three months of the quarter 
in which the measuring period began, we compute an automatic cost-of-
living increase percentage to be effective beginning with benefits 
payable for December of the year in which the measuring period ended. To 
compute the average of the CPI, the three monthly CPI figures (which are 
published to one decimal place) are added, the total is divided by 3, 
and the result is rounded to the nearest 0.1. If the CPI is the 
applicable index (see Sec. 404.272(d)), we apply the increase (rounded 
to the nearest one-tenth of one percent) to the amounts described in 
Sec. 404.271. We round the resulting amounts to the next lower multiple 
of $0.10 if not already a multiple of $0.10.
    (b) Based on AWI. When the AWI for the year which ends the measuring 
period is at least 3.0 percent higher than the AWI for the year which 
begins the measuring period and all the other conditions for an AWI-
based increase are met, that percent is the automatic cost-of-living 
increase which is due beginning with benefits payable for December of 
the year after the measuring period ended. If the AWI is the applicable 
index (see Sec. 404.272(d)), we apply that percentage increase (rounded 
to the nearest one-tenth of one percent) to the amounts described in 
Sec. 404.271. We round the resulting amounts to the next lower multiple 
of $0.10 if not already a multiple of $0.10.
    (c) Additional increase. See Sec. 404.278 for the additional 
increase which might be possible.

[51 FR 12604, Apr. 21, 1986]



Sec. 404.276  Publication of notice of increase.

    When we determine that an automatic cost-of-living increase is due, 
we publish in the Federal Register within 45 days of the end of the 
measuring period used in finding the amount of the increase--
    (a) The fact that an increase is due;
    (b) The amount of the increase;
    (c) The increased special minimum primary insurance amounts; and
    (d) The range of increased maximum family benefits that corresponds 
to the range of increased special minimum primary insurance amounts.



Sec. 404.277  Automatic increases of ``frozen'' minimum primary insurance amount.

    (a) General. There are special rules for automatic cost-of-living 
increases in the minimum primary insurance amount for people whose 
primary insurance amount is computed under the average-indexed-monthly-
earnings method. The minimum primary insurance amount is frozen, for 
people becoming eligible after 1978, and before 1982, at $122 (the least 
amount in the benefit table in effect in December 1978, rounded to the 
next higher $1.00. See appendix III.). The frozen minimum is subject to 
automatic cost-of-living increases only in years in which you or your 
dependents or survivors are entitled to benefits.
    (b) Old-age insurance benefit based on frozen minimum primary 
insurance amount. We apply automatic cost-of-living increases to your 
minimum primary insurance amount beginning with the earliest of--
    (1) December of the year you become entitled to benefits and get at 
least a partial benefit; or
    (2) December of the year you reach age 65 if you are entitled to 
benefits at or before age 65, regardless of whether you get at least a 
partial benefit; or
    (3) December of the year you become entitled to benefits if that is 
not until after you reach age 65.
    (c) Survivor benefits based on minimum primary insurance amount 
either before or after the worker's entitlement to old-age insurance 
benefits. (1) We apply automatic cost-of-living increases to your 
minimum primary insurance amount for purposes of adjusting the benefits 
of your survivors--
    (i) In June of any year in which your children, your surviving 
spouse caring for your children, or your parents are entitled to 
survivors benefits for at least one month; and
    (ii) Beginning with June of the earlier of--

[[Page 91]]

    (A) The year your aged surviving spouse (as defined in Secs. 404.335 
and 404.336) becomes entitled to benefits and gets at least a partial 
benefit; or
    (B) The year your surviving spouse is 65 or older and becomes 
entitled to benefits.
    (2) Automatic cost-of-living increases are not applied to your 
minimum primary insurance amount in any year in which no survivor of 
yours is entitled to benefits on your social security record.

[47 FR 30734, July 15, 1982, as amended at 48 FR 46143, Oct. 11, 1983; 
51 FR 12604, Apr. 14, 1986]



Sec. 404.278  Additional cost-of-living increase.

    (a) General. In addition to the cost-of-living increase explained in 
Sec. 404.275 for a given year, we will further increase the amounts in 
Sec. 404.271 if--
    (1) The OASDI fund ratio is more than 32.0 percent in the given year 
in which a cost-of-living increase is due; and
    (2) In any prior year, the cost-of-living increase was based on the 
AWI as the lower of the CPI and AWI (or would have been based on the AWI 
except that it was less than the required 3.0 percent increase).
    (b) Measuring period for the additional increase--(1) Beginning. To 
compute the additional increase, we begin with--
    (i) In the case of certain uninsured beneficiaries age 72 and older 
(see Sec. 404.380), the first calendar year in which a cost-of-living 
adjustment was based on the AWI rather than the CPI;
    (ii) For all other individuals and for maximum benefits payable to a 
family, the year in which the insured individual became eligible for 
old-age or disability benefits to which he or she is currently entitled, 
or died before becoming eligible.
    (2) Ending. The end of the measuring period is the year before the 
first year in which a cost-of-living increase is due based on the CPI 
and in which the OASDI fund ratio is more than 32.0 percent.
    (c)Compounded percentage benefit increase. To compute the additional 
cost-of-living increase, we must first compute the compounded percentage 
benefit increase (CPBI) for both the cost-of-living increases that were 
actually paid during the measuring period and for the increases that 
would have been paid if the CPI had been the basis for all the 
increases.
    (d) Computing the CPBI. The computation of the CPBI is as follows--
    (1) Obtain the sum of (i) 1.000 and (ii) the actual cost-of-living 
increase percentage (expressed as a decimal) for each year in the 
measuring period;
    (2) Multiply the resulting amount for the first year by that for the 
second year, then multiply that product by the amount for the third 
year, and continue until the last amount has been multiplied by the 
product of the preceding amounts;
    (3) Subtract 1 from the last product;
    (4) Multiply the remaining product by 100. The result is what we 
call the actual CPBI.
    (5) Substitute the cost-of-living increase percentage(s) that would 
have been used if the increase(s) had been based on the CPI (for some 
years, this will be the percentage that was used), and do the same 
computations as in paragraphs (d) (1) through (4) of this section. The 
result is what we call the assumed CPBI.
    (e) Computing the additional cost-of-living increase. To compute the 
precentage increase, we--
    (1) Subtract the actual CPBI from the assumed CPBI;
    (2) Add 100 to the actual CPBI;
    (3) Divide the answer from paragraph (e)(1) of this section by the 
answer from paragraph (e)(2) of this section, multiply the quotient by 
100, and round to the nearest 0.1. The result is the additional increase 
percentage, which we apply to the appropriate amount described in 
Sec. 404.271 after that amount has been increased under Sec. 404.275 for 
a given year. If that increased amount is not a multiple of $0.10, we 
will decrease it to the next lower multiple of $0.10.
    (f) Restrictions on paying an additional cost-of-living increase. We 
will pay the additional increase to the extent necessary to bring the 
benefits up to the level they would have been if they had been increased 
based on the CPI. However, we will pay the additional increase only to 
the extent payment will not cause the OASDI fund ratio to drop below 
32.0 percent for the year after

[[Page 92]]

the year in which the increase is effective.

[51 FR 12604, Apr. 21, 1986]

                Recomputing Your Primary Insurance Amount



Sec. 404.280  Recomputations.

    At times after you or your survivors become entitled to benefits, we 
will recompute your primary insurance amount. Usually we will recompute 
only if doing so will increase your primary insurance amount. However, 
we will also recompute your primary insurance amount if you first became 
eligible for old-age or disability insurance benefits after 1985, and 
later become entitled to a pension based on your noncovered employment, 
as explained in Sec. 404.213. There is no limit on the number of times 
your primary insurance amount may be recomputed, and we do most 
recomputations automatically. In the following sections, we explain:
    (a) Why a recomputation is made (Sec. 404.281),
    (b) When a recomputation takes effect (Sec. 404.282),
    (c) Methods of recomputing (Secs. 404.283 and 404.284),
    (d) Automatic recomputations (Sec. 404.285),
    (e) Requesting a recomputation (Sec. 404.286),
    (f) Waiving a recomputation (Sec. 404.287), and
    (g) Recomputing when you are entitled to a pension based on 
noncovered employment (Sec. 404.288).

[52 FR 47918, Dec. 17, 1987]



Sec. 404.281  Why your primary insurance amount may be recomputed.

    (a) Earnings not included in earlier computation or recomputation. 
The most common reason for recomputing your primary insurance amount is 
to include earnings of yours that were not used in the first computation 
or in an earlier recomputation, as described in paragraphs (c) through 
(e) of this section. These earnings will result in a revised average 
monthly wage or revised average indexed monthly earnings.
    (b) New computation method enacted. If a new method of computing or 
recomputing primary insurance amounts is enacted into law and you are 
eligible to have your primary insurance amount recomputed under the new 
method, we will recompute it under the new method if doing so would 
increase your primary insurance amount.
    (c) Earnings in the year you reach age 62 or become disabled. In the 
initial computation of your primary insurance amount, we do not use your 
earnings in the year you become entitled to old-age insurance benefits 
or become disabled. However, we can use those earnings (called lag 
earnings) in a recomputation of your primary insurance amount. We 
recompute and begin paying you the higher benefits in the year after the 
year you become entitled to old-age benefits or become disabled.
    (d) Earnings not reported to us in time to use them in the 
computation of your primary insurance amount. Because of the way reports 
of earnings are required to be submitted to us for years after 1977, the 
earnings you have in the year before you become entitled to old-age 
insurance benefits, or become disabled or in the year you die might not 
be reported to us in time to use them in computing your primary 
insurance amount. We recompute your primary insurance amount based on 
the new earnings information and begin paying you (or your survivors) 
the higher benefits based on the additional earnings, beginning with the 
month you became entitled or died.
    (e) Earnings after entitlement that are used in a recomputation. 
Earnings that you have after you become entitled to benefits will be 
used in a recomputation of your primary insurance amount.
    (f) Entitlement to a monthly pension. We will recompute your primary 
insurance amount if in a month after you became entitled to old-age or 
disability insurance benefits, you become entitled to a pension based on 
noncovered employment, as explained in Sec. 404.213. Further, we will 
recompute your primary insurance amount after your death to disregard a 
monthly pension based on noncovered employment which affected your 
primary insurance amount.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]

[[Page 93]]



Sec. 404.282  Effective date of recomputations.

    Most recomputations are effective beginning with January of the 
calendar year after the year in which the additional earnings used in 
the recomputation were paid. However, a recomputation to include 
earnings in the year of death (whether or not paid before death) is 
effective for the month of death. Additionally if you first became 
eligible for old-age or disability insurance benefits after 1985 and you 
later also become entitled to a monthly pension based on noncovered 
employment, we will recompute your primary insurance amount under the 
rules in Sec. 404.213; this recomputed Social Security benefit amount is 
effective for the first month you are entitled to the pension. Finally, 
if your primary insurance amount was affected by your entitlement to a 
pension, we will recompute the amount to disregard the pension, 
effective with the month of your death.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]



Sec. 404.283  Recomputation under method other than that used to find your primary insurance amount.

    In some cases, we may recompute your primary insurance amount under 
a computation method different from the method used in the computation 
(or earlier recomputation) of your primary insurance amount, if you are 
eligible for a computation or recomputation under the different method.



Sec. 404.284  Recomputations for people who reach age 62, or become disabled, or die before age 62 after 1978.

    (a) General. Years of your earnings after 1978 not used in the 
computation of your primary insurance amount (or in earlier 
recomputations) under the average-indexed-monthly-earnings method may be 
substituted for earlier years of your indexed earnings in a 
recomputation, but only under the average-indexed-monthly-earnings 
method. See Sec. 404.288 for the rules on recomputing when you are 
entitled to a monthly pension based on noncovered employment.
    (b) Substituting actual dollar amounts in earnings for earlier years 
of indexed earnings. When we recompute your primary insurance amount 
under the average-indexed-monthly earnings method, we use actual dollar 
amounts, i.e., no indexing, for earnings not included in the initial 
computation or earlier recomputation. These later earnings are 
substituted for earlier years of indexed or actual earnings that are 
lower.
    (c) Benefit formula used in recomputation. The formula that was used 
in the first computation of your primary insurance amount is also used 
in recomputations of your primary insurance amount.
    (d) Your recomputed primary insurance amount. We recompute your 
primary insurance amount by applying the benefit formula to your average 
indexed monthly earnings as revised to include additional earnings. See 
Sec. 404.281. We then increase the recomputed PIA by the amounts of any 
automatic cost-of-living or ad hoc increases in primary insurance 
amounts that have become effective since you reached age 62, or became 
disabled or died before age 62.
    (e) Minimum increase in primary insurance amounts. Your primary 
insurance amount may not be recomputed unless doing so would increase it 
by at least $1.

    Example 1. Ms. A, whose primary insurance amount we computed to be 
$432.40 in June 1979 in Secs. 404.210 through 404.212 (based on average 
indexed monthly earnings of $903), had earnings of $11,000 in 1979 which 
were not used in the initial computation of her primary insurance 
amount. We may recompute her primary insurance amount effective for 
January 1980. In this recomputation, her 1979 earnings may be 
substituted in their actual dollar amount for the lowest year of her 
indexed earnings that was used in the initial computation. In Ms. A's 
case, we substitute the $11,000 for her 1966 indexed earnings of 
$8,911.36. Her total indexed earnings are now $251,470.05 and her new 
average indexed monthly earnings are $911. We apply to Ms. A's new 
average indexed monthly earnings the same benefit formula we used in the 
initial computation. Doing so produces an amount of $396.00. An 
automatic cost-of-living increase of 9.9 percent was effective in June 
1979. We increase the $396.00 amount by 9.9 percent to find Ms. A's 
recomputed primary insurance amount of $435.30. Later we increased the 
primary insurance amount to

[[Page 94]]

$497.60 to reflect the 14.3 percent cost-of-living increase beginning 
June 1980 and to $553.40 to reflect the 11.2 percent cost-of-living 
increase beginning June 1981.
    Example 2. Mr. B, whose primary insurance amount we computed to be 
$429.20 (based on average monthly wages of $502) in June 1978 in 
Secs. 404.220 through 404.222, had earnings of $12,000 in 1978 which 
were not used in the initial computation of his primary insurance 
amount. We may recompute his primary insurance amount effective for 
January 1979. In this recomputation, his 1978 earnings are substituted 
for the lowest year of earnings used in the initial computation ($2,700 
in 1952). Mr. B's total earnings are now $142,000 and his new average 
monthly wage is $537.
    We next find Mr. B's new average monthly wage in column III of the 
December 1978 benefit table in appendix III. Reading across, we find his 
recomputed primary insurance amount on the same line in column IV, which 
is $407.70. We then apply the 9.9 percent, the 14.3 percent and the 11.2 
percent automatic cost-of-living increases for June 1979, June 1980, and 
June 1981, respectively, to compute Mr. B's primary insurance amount of 
$569.60.

    (f) Guaranteed alternatives. We may recompute your primary insurance 
amount by any of the following methods for which you qualify, if doing 
so would result in a higher amount than the one computed under the 
average-indexed-monthly-earnings method. Earnings in or after the year 
you reach age 62 cannot be used.
    (1) If you reached age 62 after 1978 and before 1984, we may 
recompute to include earnings for years before the year you reached age 
62 by using the guaranteed alternative (Sec. 404.231). We will increase 
the result by any cost-of-living or ad hoc increases in the primary 
insurance amounts that have become effective in and after the year you 
reached age 62.
    (2) We will also recompute under the old-start guarantee 
(Sec. 404.242) and the prior-disability guarantee (Sec. 404.252) if you 
meet the requirements of either or both these methods.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]



Sec. 404.285  Recomputations performed automatically.

    Each year, we examine the earnings record of every retired, 
disabled, and deceased worker to see if the worker's primary insurance 
amount may be recomputed under any of the methods we have described. 
When a recomputation is called for, we perform it automatically and 
begin paying the higher benefits based on your recomputed primary 
insurance amount for the earliest possible month that the recomputation 
can be effective. You do not have to request this service, although you 
may request a recomputation at an earlier date than one would otherwise 
be performed (see Sec. 404.286). Doing so, however, does not allow your 
increased primary insurance amount to be effective any sooner than it 
would be under an automatic recomputation. You may also waive a 
recomputation if one would disadvantage you or your family (see 
Sec. 404.287).



Sec. 404.286  How to request an immediate recomputation.

    You may request that your primary insurance amount be recomputed 
sooner than it would be recomputed automatically. To do so, you must 
make the request in writing to us and provide acceptable evidence of 
your earnings not included in the first computation or earlier 
recomputation of your primary insurance amount. If doing so will 
increase your primary insurance amount, we will recompute it. However, 
we cannot begin paying higher benefits on the recomputed primary 
insurance amount any sooner than we could under an automatic 
recomputation, i.e., for January of the year following the year in which 
the earnings were paid or derived.



Sec. 404.287  Waiver of recomputation.

    If you or your family would be disadvantaged in some way by a 
recomputation of your primary insurance amount, or you and every member 
of your family do not want your primary insurance amount to be 
recomputed for any other reason, you may waive (that is, give up your 
right to) a recomputation, but you must do so in writing. That you waive 
one recomputation, however, does not mean that you also waive future 
recomputations for which you might be eligible.

[[Page 95]]



Sec. 404.288  Recomputing when you are entitled to a monthly pension based on noncovered employment.

    (a) After entitlement to old-age or disability insurance benefits. 
If you first become eligible for old-age or disability insurance 
benefits after 1985 and you later become entitled to a monthly pension 
based on noncovered employment, we may recompute your primary insurance 
amount under the rules in Sec. 404.213. When recomputing, we will use 
the amount of the pension to which you are entitled or deemed entitled 
in the first month that you are concurrently eligible for both the 
pension and old-age or disability insurance benefits. We will disregard 
the rule in Sec. 404.284(e) that the recomputation must increase your 
primary insurance amount by at least $1.
    (b) Already entitled to benefits and to a pension based on 
noncovered employment. If we have already computed or recomputed your 
primary insurance amount to take into account your monthly pension, we 
may later recompute for one of the reasons explained in Sec. 404.281. We 
will recompute your primary insurance amount under the rules in 
Secs. 404.213 and 404.284. Any increase resulting from the recomputation 
under the rules of Sec. 404.284 will be added to the most recent primary 
insurance amount which we had computed to take into account your monthly 
pension.
    (c) After your death. If one or more survivors are entitled to 
benefits after your death, we will recompute the primary insurance 
amount as though it had never been affected by your entitlement to a 
monthly pension based in whole or in part on noncovered employment.

[52 FR 47918, Dec. 17, 1987]

               Recalculations of Primary Insurance Amounts



Sec. 404.290  Recalculations.

    (a) Your primary insurance amount may be ``recalculated'' in certain 
instances. When we recalculate your primary amount, we refigure it under 
the same method we used in the first computation by taking into account-
-
    (1) Earnings (including compensation for railroad service) 
incorrectly included or excluded in the first computation;
    (2) Special deemed earnings credits including credits for military 
service (see subpart N of this part) and for individuals interned during 
World War II (see subpart K of this part), not available at the time of 
the first computation;
    (3) Correction of clerical or mathematical errors; or
    (4) Other miscellaneous changes in status.
    (b) Unlike recomputations, which may only serve to increase your 
primary insurance amount, recalculations may serve to either increase or 
reduce it.

                         Appendices to Subpart C

    The following appendices contain data that are needed in computing 
primary insurance amounts. Appendix I contains average of the total 
wages figures, which we use to index a worker's earnings for purposes of 
computing his or her average indexed monthly earnings. Appendix II 
contains benefit formulas which we apply to a worker's average indexed 
monthly earnings to find his or her primary insurance amount. Appendix 
III contains the benefit table we use to find a worker's primary 
insurance amount from his or her average monthly wage. We use the 
figures in appendix IV to find your years of coverage for years after 
1950 for purposes of your special minimum primary insurance amount. 
Appendix V contains the table for computing the special minimum primary 
insurance amount. Appendix VI is a table of the percentage increases in 
primary insurance amounts since 1978. Appendix VII is a table of the 
old-law contribution and benefit base that would have been effective 
under the Social Security Act without enactment of the 1977 amendments.
    The figures in the appendices are by law automatically adjusted each 
year. We are required to announce the changes through timely publication 
in the Federal Register. The only exception to the requirement of 
publication in the Federal Register is the update of benefit amounts 
shown in appendix III. We update the benefit amounts for payment 
purposes but are not required by law to publish this extensive table in 
the Federal Register. We have not updated the table in appendix III, but 
the introductory paragraphs at appendix III explain how you can compute 
the current benefit amount.
    When we publish the figures in the Federal Register, we do not 
change every one of these figures. Instead, we provide new ones for each 
year that passes. We continue to use the old ones for various 
computation

[[Page 96]]

purposes, as the regulations show. Most of the new figures for these 
appendices are required by law to be published by November 1 of each 
year. Notice of automatic cost-of-living increases in primary insurance 
amounts is required to be published within 45 days of the end of the 
applicable measuring period for the increase (see Secs. 404.274 and 
404.276). In effect, publication is required within 45 days of the end 
of the third calendar quarter of any year in which there is to be an 
automatic cost-of-living increase.
    We begin to use the new data in computing primary insurance amounts 
as soon as required by law, even before we periodically update these 
appendices. If the data you need to find your primary insurance amount 
have not yet been included in the appendices, you may find the figures 
in the Federal Register on or about November 1.

[52 FR 8247, Mar. 17, 1987]

  Appendix I to Subpart C of Part 404--Average of the Total Wages for 
                            Years After 1950

    Explanation: We use these figures to index your social security 
earnings (as described in Sec. 404.211) for purposes of computing your 
average indexed monthly earnings.

------------------------------------------------------------------------
                                                              Average of
                       Calendar year                          the total
                                                                wages
------------------------------------------------------------------------
1951.......................................................    $2,799.16
1952.......................................................     2,973.32
1953.......................................................     3,139.44
1954.......................................................     3,155.64
1955.......................................................     3,301.44
1956.......................................................     3,532.36
1957.......................................................     3,641.72
1958.......................................................     3,673.80
1959.......................................................     3,855.80
1960.......................................................     4,007.12
1961.......................................................     4,086.76
1962.......................................................     4,291.40
1963.......................................................     4,396.64
1964.......................................................     4,576.32
1965.......................................................     4,658.72
1966.......................................................     4,938.36
1967.......................................................     5,213.44
1968.......................................................     5,571.76
1969.......................................................     5,893.76
1970.......................................................     6,186.24
1971.......................................................     6,497.08
1972.......................................................     7,133.80
1973.......................................................     7,580.16
1974.......................................................     8,030.76
1975.......................................................     8,630.92
1976.......................................................     9,226.48
1977.......................................................     9,779.44
1978.......................................................    10,556.03
1979.......................................................    11,479.46
1980.......................................................    12,513.46
1981.......................................................    13,773.10
1982.......................................................    14,531.34
1983.......................................................    15,239.24
1984.......................................................    16,135.07
1985.......................................................    16,822.51
1986.......................................................    17,321.82
1987.......................................................    18,426.51
1988.......................................................    19,334.04
1989.......................................................    20,099.55
1990.......................................................    21,027.98
------------------------------------------------------------------------


[47 FR 30734, July 15, 1982, as amended at 52 FR 8247, Mar. 17, 1987; 57 
FR 44096, Sept. 24, 1992]

Appendix II to Subpart C of Part 404--Benefit Formulas Used With Average 
                        Indexed Monthly Earnings

    As explained in Sec. 404.212, we use one of the formulas below to 
compute your primary insurance amount from your average indexed monthly 
earnings (AIME). To select the appropriate formula, we find in the left-
hand column the year after 1978 in which you reach age 62, or become 
disabled, or die before age 62. The benefit formula to be used in 
computing your primary insurance amount is on the same line in the 
right-hand columns. For example, if you reach age 62 or become disabled 
or die before age 62 in 1979, then we compute 90 percent of the first 
$180 of AIME, 32 percent of the next $905 of AIME, and 15 percent of 
AIME over $1,085. After we figure your amount for each step in the 
formula, we add the amounts. If the total is not already a multiple of 
$0.10, we round the total as follows:
    (1) For computations using the benefit formulas in effect for 1979 
through 1982, we round the total upward to the nearest $0.10, and
    (2) For computations using the benefit formulas in effect for 1983 
and later, we round the total downward to the nearest $0.10.

                            Benefit Formulas
------------------------------------------------------------------------
                                              90     plus 32    plus 15
                                           percent   percent    percent
        Year you reach age 62 \1\           of the    of the    of AIME
                                           first--    next--     over--
------------------------------------------------------------------------
1979.....................................     $180       $905     $1,085
1980.....................................      194        977      1,171
1981.....................................      211      1,063      1,274
1982.....................................      230      1,158      1,388
1983.....................................      254      1,274      1,528
1984.....................................      267      1,345      1,612
1985.....................................      280      1,411      1,691
1986.....................................      297      1,493      1,790
1987.....................................      310      1,556      1,866
1988.....................................      319      1,603      1,922
1989.....................................      339      1,705      2,044
1990.....................................      356      1,789      2,145
1991.....................................      370      1,860      2,230
1992.....................................      387      1,946      2,333
------------------------------------------------------------------------
\1\ Or become disabled or die before age 62.


[57 FR 44096, Sept. 24, 1992; 57 FR 45878, Oct. 5, 1992]

[[Page 97]]

          Appendix III to Subpart C of Part 404--Benefit Table

    This benefit table shows primary insurance amounts and maximum 
family benefits in effect in December 1978 based on cost-of-living 
increases which became effective for June 1978. (See Sec. 404.403 for 
information on maximum family benefits.) You will also be able to find 
primary insurance amounts for an individual whose entitlement began in 
the period June 1977 through May 1978.
    The benefit table in effect in December 1978 had a minimum primary 
insurance amount of $121.80. As explained in Sec. 404.222(b), certain 
workers eligible, or who died without having been eligible, before 1982 
had their benefit computed from this table. However, the minimum benefit 
provision was repealed for other workers by the 1981 amendments to the 
Act (the Omnibus Budget Reconciliation Act of 1981, Pub. L. 97-35 as 
modified by Pub. L. 97-123). As a result, this benefit table includes a 
downward extension from the former minimum of $121.80 to the lowest 
primary insurance amount now possible. The extension is calculated as 
follows. For each single dollar of average monthly wage in the benefit 
table, the primary insurance amount shown for December 1978 is $121.80 
multiplied by the ratio of that average monthly wage to $76. The upper 
limit of each primary insurance benefit range in column I of the table 
is $16.20 multiplied by the ratio of the average monthly wage in column 
III of the table to $76. The maximum family benefit is 150 percent of 
the corresponding primary insurance amount.
    The repeal of the minimum benefit provision is effective with 
January 1982 for most workers and their families where the worker 
initially becomes eligible for benefits after 1981 or dies after 1981 
without having been eligible before January 1982. For members of a 
religious order who are required to take a vow of poverty, as explained 
in 20 CFR 404.1024, and which religious order elected Social Security 
coverage before December 29, 1981, the repeal is effective with January 
1992 based on first eligibility or death in that month or later.
    To use this table, you must first compute the primary insurance 
benefit (column I) or the average monthly wage (column III), then move 
across the same line to either column II or column IV as appropriate. To 
determine increases in primary insurance amounts since December 1978 you 
should see appendix VI. Appendix VI tells you, by year, the percentage 
of the increases. In applying each cost-of-living increase to primary 
insurance amounts, we round the increased primary insurance amount to 
the next lower multiple of $0.10 if not already a multiple of $0.10. 
(For cost-of-living increases which are effective before June 1982, we 
round to the next higher multiple of $0.10.)

     Extended December 1978 Table of Benefits Effective January 1982
                              [In dollars]
------------------------------------------------------------------------
     I. Primary                    III. Average               V. Maximum
 insurance benefit:              monthly wage: Or     IV.       family
 If an individual's      II.        his or her      Primary    benefits:
 primary insurance     Primary    average monthly  insurance    And the
    benefit (as       insurance      wage (as        amount     maximum
  determined under     amount    determined under  effective   amount of
 Sec.  404.241(e))    effective   Sec.  404.221)    January    benefits
        is--         June 1977:        is--          1982:    payable on
--------------------  Or his or ------------------  Then his   the basis
                         her                         or her    of his or
                       primary                      primary    her wages
At least-  But not    insurance     At    But not  insurance   and self-
    -     more than- amount is-- least--    more   amount is- employment
              -                            than--      -      income is--
 
------------------------------------------------------------------------
                                                1       1.70       2.60
               0.42                    2        2       3.30       5.00
   0.43         .63                    3        3       4.90       7.40
    .64         .85                    4        4       6.50       9.80
    .86        1.06                    5        5       8.10      12.20
   1.07        1.27                    6        6       9.70      14.60
   1.28        1.49                    7        7      11.30      17.00
   1.50        1.70                    8        8      12.90      19.40
   1.71        1.91                    9        9      14.50      21.80
   1.92        2.13                   10       10      16.10      24.20
   2.14        2.34                   11       11      17.70      26.60
   2.35        2.55                   12       12      19.30      29.00
   2.56        2.77                   13       13      20.90      31.40
   2.78        2.98                   14       14      22.50      33.80
   2.99        3.19                   15       15      24.10      36.20
   3.20        3.41                   16       16      25.70      38.60
   3.42        3.62                   17       17      27.30      41.00
   3.63        3.83                   18       18      28.90      43.40
   3.84        4.05                   19       19      30.50      45.80
   4.06        4.26                   20       20      32.10      48.20
   4.27        4.47                   21       21      33.70      50.60
   4.48        4.68                   22       22      35.30      53.00
   4.69        4.90                   23       23      36.90      55.40
   4.91        5.11                   24       24      38.50      57.80

[[Page 98]]

 
   5.12        5.32                   25       25      40.10      60.20
   5.33        5.54                   26       26      41.70      62.60
   5.55        5.75                   27       27      43.30      65.00
   5.76        5.96                   28       28      44.90      67.40
   5.97        6.18                   29       29      46.50      69.80
   6.19        6.39                   30       30      48.10      72.20
   6.40        6.60                   31       31      49.70      74.60
   6.61        6.82                   32       32      51.30      77.00
   6.83        7.03                   33       33      52.90      79.40
   7.04        7.24                   34       34      54.50      81.80
   7.25        7.46                   35       35      56.10      84.20
   7.47        7.67                   36       36      57.70      86.60
   7.68        7.88                   37       37      59.30      89.00
   7.89        8.10                   38       38      60.90      91.40
   8.11        8.31                   39       39      62.60      93.90
   8.32        8.52                   40       40      64.20      96.30
   8.53        8.73                   41       41      65.80      98.70
   8.74        8.95                   42       42      67.40     101.10
   8.96        9.16                   43       43      69.00     103.50
   9.17        9.37                   44       44      70.60     105.90
   9.38        9.59                   45       45      72.20     108.30
   9.60        9.80                   46       46      73.80     110.70
   9.81       10.01                   47       47      75.40     113.10
  10.02       10.23                   48       48      77.00     115.50
  10.24       10.44                   49       49      78.60     117.90
  10.45       10.65                   50       50      80.20     120.30
  10.66       10.87                   51       51      81.80     122.70
  10.88       11.08                   52       52      83.40     125.10
  11.09       11.29                   53       53      85.00     127.50
  11.30       11.51                   54       54      86.60     129.90
  11.52       11.72                   55       55      88.20     132.30
  11.73       11.93                   56       56      89.80     134.70
  11.94       12.15                   57       57      91.40     137.10
  12.16       12.36                   58       58      93.00     139.50
  12.37       12.57                   59       59      94.60     141.90
  12.58       12.78                   60       60      96.20     144.30
  12.79       13.00                   61       61      97.80     146.70
  13.01       13.21                   62       62      99.40     149.10
  13.22       13.42                   63       63     101.00     151.50
  13.43       13.64                   64       64     102.60     153.90
  13.65       13.85                   65       65     104.20     156.30
  13.86       14.06                   66       66     105.80     158.70
  14.07       14.28                   67       67     107.40     161.10
  14.29       14.49                   68       68     109.00     163.50
  14.50       14.70                   69       69     110.60     165.90
  14.71       14.92                   70       70     112.20     168.30
  14.93       15.13                   71       71     113.80     170.70
  15.14       15.34                   72       72     115.40     173.10
  15.35       15.56                   73       73     117.00     175.50
  15.57       15.77                   74       74     118.60     177.90
  15.78       15.98                   75       75     120.20     180.30
  15.99       16.20                   76       76     121.80     182.70
------------------------------------------------------------------------


[[Page 99]]


              Table of Benefits in Effect in December 1978
                              [In dollars]
------------------------------------------------------------------------
     I. Primary                    III. Average               V. Maximum
 insurance benefit:              monthly wage: Or     IV.       family
 If an individual's      II.        his or her      Primary    benefits:
 primary insurance     Primary    average monthly  insurance    And the
    benefit (as       insurance      wage (as        amount     maximum
  determined under     amount    determined under  effective   amount of
 Sec.  404.241(e))    effective   Sec.  404.221)      June     benefits
        is--         June 1977:        is--          1978:    payable on
--------------------  Or his or ------------------  Then his   the basis
                         her                         or her    of his or
                       primary                      primary    her wages
At least-  But not    insurance     At    But not  insurance   and self-
    -     more than- amount is-- least--    more   amount is- employment
              -                            than--      -      income is--
 
------------------------------------------------------------------------
              16.20     114.30                 76     121.80     182.70
  16.21       16.84     116.10        77       78     123.70     185.60
  16.85       17.60     118.80        79       80     126.60     189.90
  17.61       18.40     121.00        81       81     128.90     193.50
  18.41       19.24     123.00        82       83     131.20     196.80
  19.25       20.00     125.80        84       85     134.00     201.00
  20.01       20.64     128.10        86       87     136.50     204.80
  20.65       21.28     130.10        88       89     138.60     207.90
  21.29       21.88     132.70        90       90     141.40     212.10
  21.89       22.28     135.00        91       92     143.80     215.70
  22.29       22.68     137.20        93       94     146.20     219.20
  22.59       23.08     139.40        95       96     148.50     222.80
  23.09       23.44     142.00        97       97     151.30     227.00
  23.45       23.76     144.30        98       99     153.70     230.60
  23.77       24.20     147.10       100      101     156.70     235.10
  24.21       24.60     149.20       102      102     158.90     238.50
  24.61       25.00     151.70       103      104     161.60     242.40
  25.01       25.48     154.50       105      106     164.60     246.90
  25.49       25.92     157.00       107      107     167.30     251.00
  25.93       26.40     159.40       108      109     169.80     254.80
  26.41       26.94     161.90       110      113     172.50     258.80
  26.95       27.46     164.20       114      118     174.90     262.40
  27.47       28.00     166.70       119      122     177.60     266.50
  28.01       28.68     169.30       123      127     180.40     270.60
  28.69       29.25     171.80       128      132     183.00     274.60
  29.26       29.68     174.10       133      136     185.50     278.30
  29.69       30.36     176.50       137      141     188.00     282.10
  30.37       30.92     179.10       142      146     190.80     286.20
  30.93       31.36     181.70       147      150     193.60     290.40
  31.37       32.00     183.90       151      155     195.90     293.90
  32.01       32.60     186.50       156      160     198.70     298.10
  32.61       33.20     189.00       161      164     201.30     302.00
  33.21       33.88     191.40       165      169     203.90     305.90
  33.89       34.50     194.00       170      174     206.70     310.10
  34.51       35.00     196.30       175      178     209.10     313.70
  35.01       35.80     198.90       179      183     211.90     318.00
  35.81       36.40     201.30       184      188     214.40     321.70
  36.41       37.08     203.90       189      193     217.20     326.00
  37.09       37.60     206.40       194      197     219.90     329.90
  37.61       38.20     208.80       198      202     222.40     333.60
  38.21       39.12     211.50       203      207     225.30     338.00
  39.13       39.68     214.00       208      211     228.00     342.00
  39.69       40.33     216.00       212      216     230.10     345.20
  40.34       41.12     218.70       217      221     233.00     349.50
  41.13       41.76     221.20       222      225     235.60     353.40
  41.77       42.44     223.90       226      230     238.50     357.80
  42.45       43.20     226.30       231      235     241.10     361.70
  43.21       43.76     229.10       236      239     244.00     366.10
  43.77       44.44     231.20       240      244     246.30     371.10
  44.45       44.88     233.50       245      249     248.70     378.80
  44.89       45.60     236.40       250      253     251.80     384.90
                        238.70       254      258     254.30     392.50
                        240.80       259      263     256.50     400.00
                        243.70       264      267     259.60     206.00
                        246.10       268      272     262.10     413.70
                        248.70       273      277     264.90     421.20
                        251.00       278      281     267.40     427.20
                        253.50       282      286     270.00     434.90
                        256.20       287      291     272.90     442.60
                        258.30       292      295     275.10     448.50
                        261.10       296      300     278.10     456.10
                        263.50       301      305     280.70     463.80
                        265.80       306      309     283.10     469.80

[[Page 100]]

 
                        268.50       310      314     286.00     477.40
                        270.70       315      319     288.30     485.10
                        273.20       320      323     291.00     491.10
                        275.80       324      328     293.80     498.70
                        278.10       329      333     296.20     506.20
                        281.00       334      337     299.30     512.50
                        283.00       338      342     301.40     519.90
                        285.60       343      347     304.20     527.50
                        288.30       348      351     307.10     533.60
                        290.50       352      356     309.40     541.20
                        293.30       357      361     312.40     548.80
                        295.60       362      365     314.90     554.90
                        297.90       366      370     317.30     562.50
                        300.60       371      375     320.20     569.90
                        303.10       376      379     322.90     576.30
                        305.70       380      384     325.60     583.90
                        307.90       385      389     328.00     591.30
                        310.30       390      393     330.50     597.40
                        313.00       394      398     333.40     605.10
                        315.40       399      403     336.00     612.70
                        318.20       404      407     338.90     618.60
                        320.20       408      412     341.10     626.30
                        322.50       413      417     343.50     633.80
                        324.80       418      421     346.00     639.90
                        327.40       422      426     348.70     647.50
                        329.60       427      431     351.10     655.10
                        331.60       432      436     353.20     662.70
                        334.40       437      440     356.20     665.70
                        336.50       441      445     358.40     669.70
                        338.70       446      450     360.80     673.40
                        341.30       451      454     363.50     676.30
                        343.50       455      459     365.90     680.10
                        345.80       460      464     368.30     683.80
                        347.90       465      468     370.60     687.10
                        350.70       469      473     373.50     690.80
                        352.60       474      478     375.60     694.60
                        354.90       479      482     378.00     697.70
                        357.40       483      487     380.70     701.60
                        359.70       488      492     383.10     705.40
                        361.90       493      496     385.50     708.40
                        364.50       497      501     388.20     712.10
                        366.60       502      506     390.50     715.80
                        368.90       507      510     392.90     719.00
                        371.10       511      515     395.30     722.80
                        373.70       516      520     398.00     726.70
                        375.80       521      524     400.30     729.50
                        378.10       525      529     402.70     733.40
                        380.80       530      534     405.60     737.10
                        382.80       535      538     407.70     740.20
                        385.10       539      543     410.20     744.10
                        387.60       544      548     412.80     747.80
                        389.90       549      553     415.30     751.60
                        392.10       554      556     417.60     753.90
                        393.90       557      560     419.60     756.90
                        396.10       561      563     421.90     759.30
                        398.20       564      567     424.10     762.30
                        400.40       568      570     426.50     764.50
                        402.30       571      574     428.50     767.50
                        404.40       575      577     430.70     769.90
                        406.20       578      581     432.70     772.80
                        408.40       582      584     435.00     775.20
                        410.20       585      588     436.90     778.20
                        412.60       589      591     439.50     780.50

[[Page 101]]

 
                        414.60       592      595     441.60     783.50
                        416.70       596      598     443.80     785.60
                        418.70       599      602     446.00     788.90
                        420.70       603      605     448.10     791.10
                        422.80       606      609     450.30     794.00
                        424.90       610      612     452.60     796.50
                        426.90       613      616     454.70     799.50
                        428.90       617      620     456.80     802.50
                        431.00       621      623     459.10     804.80
                        433.00       624      627     461.20     807.90
                        435.10       628      630     463.40     810.70
                        437.10       631      634     465.60     814.70
                        439.20       635      637     467.80     818.50
                        441.40       638      641     470.10     822.40
                        443.20       642      644     472.10     826.10
                        445.40       645      648     474.40     830.10
                        447.40       649      652     476.50     833.70
                        448.60       653      656     477.80     836.10
                        449.90       657      660     479.20     838.40
                        451.50       661      665     480.90     841.50
                        453.10       666      670     482.60     844.50
                        454.80       671      675     484.40     847.40
                        456.40       676      680     486.10     850.50
                        458.00       681      685     487.80     853.50
                        459.80       686      690     489.70     856.40
                        461.20       691      695     491.20     859.60
                        462.80       696      700     492.90     862.60
                        464.50       701      705     494.70     865.60
                        466.10       706      710     496.40     868.60
                        467.70       711      715     498.20     871.50
                        469.40       716      720     500.00     874.60
                        471.00       721      725     501.70     877.60
                        472.60       726      730     503.40     880.70
                        474.20       731      735     505.10     883.80
                        475.90       736      740     506.90     886.70
                        477.40       741      745     508.50     889.90
                        478.90       746      750     510.10     892.70
                        480.40       751      755     511.70     896.40
                        481.80       756      760     513.20     897.80
                        483.20       761      765     514.70     900.40
                        484.50       766      770     516.00     903.00
                        485.80       771      775     517.40     905.40
                        487.20       776      780     518.90     907.90
                        488.60       781      785     520.40     910.40
                        489.80       786      790     521.70     912.90
                        491.10       791      795     523.10     915.40
                        492.50       796      800     524.60     918.00
                        494.00       801      805     526.20     920.50
                        495.30       806      810     527.50     923.00
                        496.70       811      815     529.00     925.60
                        498.00       816      820     530.40     928.00
                        499.40       821      825     531.90     930.60
                        500.70       826      830     533.30     933.10
                        502.00       831      835     534.70     935.70
                        503.30       836      840     536.10     938.10
                        504.70       841      845     537.60     940.80
                        506.00       846      850     538.90     943.00
                        507.50       851      855     540.50     945.70
                        508.80       856      860     541.90     948.10
                        510.20       861      865     543.40     950.70
                        511.50       866      870     544.80     953.20
                        512.90       871      875     546.30     955.70
                        514.10       876      880     547.60     958.20

[[Page 102]]

 
                        515.50       881      885     549.10     960.80
                        516.80       886      890     550.40     963.20
                        518.20       891      895     551.90     966.00
                        519.60       896      900     553.40     968.30
                        521.00       901      905     554.90     970.90
                        522.30       906      910     556.30     973.50
                        523.70       911      915     557.80     976.00
                        525.10       916      920     559.30     978.30
                        526.30       921      925     560.60     961.00
                        527.60       926      930     561.90     983.40
                        529.00       931      935     563.40     985.90
                        530.40       936      940     564.90     988.50
                        531.70       941      945     566.30     991.00
                        533.00       946      950     567.70     993.50
                        534.50       951      955     569.30     996.10
                        535.90       956      960     570.80     998.60
                        537.30       961      965     572.30   1,001.00
                        538.40       966      970     573.40   1,003.60
                        539.80       971      975     574.90   1,006.20
                        541.20       976      980     576.40   1,008.50
                        542.60       981      985     577.90   1,011.10
                        543.80       986      990     579.20   1,013.60
                        545.20       991      995     580.70   1,016.20
                        546.60       996    1,000     582.20   1,018.60
                        547.80     1,001    1,005     583.50   1,020.70
                        548.90     1,006    1,010     584.60   1,023.20
                        550.20     1,011    1,015     586.00   1,025.30
                        551.50     1,016    1,020     587.40   1,027.80
                        552.60     1,021    1,025     588.60   1,029.90
                        553.80     1,026    1,030     589.80   1,032.20
                        555.10     1,031    1,035     591.20   1,034.50
                        556.20     1,036    1,040     592.40   1,036.70
                        557.50     1,041    1,045     593.80   1,039.10
                        558.80     1,046    1,050     595.20   1,041.30
                        559.80     1,051    1,055     596.20   1,043.40
                        561.10     1,056    1,060     597.60   1,045.90
                        562.40     1,061    1,065     599.00   1,048.00
                        563.60     1,066    1,070     600.30   1,050.50
                        564.80     1,071    1,075     601.60   1,052.60
                        566.00     1,076    1,080     602.80   1,054.90
                        567.30     1,081    1,085     604.20   1,057.10
                        568.40     1,086    1,090     605.40   1,059.40
                        569.70     1,091    1,095     606.80   1,061.70
                        571.00     1,096    1,100     608.20   1,064.00
                        572.00     1,101    1,105     609.20   1,066.10
                        573.30     1,106    1,110     610.60   1.068.50
                        574.60     1,111    1,115     612.00   1,070.70
                        575.70     1,116    1,120     613.20   1,073.10
                        577.00     1,121    1,125     614.60   1,075.30
                        578.20     1,126    1,130     615.80   1,077.60
                        579.40     1,131    1,135     617.10   1,079.70
                        580.60     1,136    1,140     618.40   1,082.20
                        581.90     1,141    1,145     619.80   1,084.40
                        583.10     1,146    1,150     621.10   1,086.70
                        584.20     1,151    1,555     622.20   1,088.80
                        585.50     1,156    1,160     623.60   1,091.10
                        586.70     1,161    1,165     624.90   1,093.40
                        587.90     1,166    1,170     626.20   1,095.80
                        589.20     1,171    1,175     627.50   1,098.00
                        590.30     1,176    1,180     628.70   1,100.20
                        591.40     1,181    1,185     629.90   1,102.20
                        592.60     1,186    1,190     631.20   1,104.30
                        593.70     1,191    1,195     632.30   1,106.50

[[Page 103]]

 
                        594.80     1,196    1,200     633.50   1,108.60
                        595.90     1,201    1,205     634.70   1,110.60
                        597.10     1,206    1,210     636.00   1,112.90
                        598.20     1,211    1,215     637.10   1,114.90
                        599.30     1,216    1,220     638.30   1,117.00
                        600.40     1,221    1,225     639.50   1,119.00
                        601.60     1,226    1,230     640.80   1,121.20
                        602.70     1,231    1,235     641.90   1,123.30
                        603.80     1,236    1,240     643.10   1,125.40
                        605.00     1,241    1,245     644.40   1,127.50
                        606.10     1,246    1,250     645.50   1,129.60
                        607.20     1,251    1,255     646.70   1,131.60
                        608.30     1,256    1,260     647.90   1,133.80
                        609.50     1,261    1,265     649.20   1,135.90
                        610.60     1,266    1,270     650.30   1,138.00
                        611.70     1,271    1,275     651.50   1,140.00
                        612.80     1,276    1,280     652.70   1,142.20
                        613.80     1,281    1,285     653.70   1,144.10
                        614.80     1,286    1,290     654.90   1,146.10
                        616.00     1,291    1,295     656.10   1,148.00
                        617.00     1,296    1,300     657.20   1,150.00
                        618.10     1,301    1,305     658.30   1,152.00
                        619.10     1,306    1,310     659.40   1,154.00
                        620.20     1,311    1,315     660.60   1,155.90
                        621.30     1,316    1,320     661.70   1,157.90
                        622.30     1,321    1,325     662.80   1,159.80
                        623.40     1,326    1,330     664.00   1,161.90
                        624.40     1,331    1,335     665.00   1,163.80
                        625.50     1,336    1,340     666.20   1,165.80
                        626.60     1,341    1,345     667.40   1,167.70
                        627.60     1,346    1,350     668.40   1,169.70
                        628.70     1,351    1,355     669.60   1,171.70
                        629.70     1,356    1,360     670.70   1,173.70
                        630.80     1,361    1,365     671.90   1,175.60
                        631.80     1,366    1,370     672.90   1,177.70
                        632.90     1,371    1,375     674.10   1,179.60
                        633.90     1,376    1,380     675.20   1,181.60
                        634.90     1,381    1,385     676.20   1,183.40
                        635.90     1,386    1,390     677.30   1,185.30
                        636.90     1,391    1,395     678.30   1,187.10
                        637.90     1,396    1,400     679.40   1,189.00
                        638.90     1,401    1,405     680.50   1,190.80
                        639.90     1,406    1,410     681.50   1,192.70
                        640.90     1,411    1,415     682.60   1,194.60
                        641.90     1,416    1,420     683.70   1,196.50
                        642.90     1,421    1,425     685.70   1,198.30
                        643.90     1,426    1,430     684.80   1,200.20
                        644.90     1,431    1,435     686.90   1,202.00
                        645.90     1,436    1,440     687.90   1,203.90
                        646.90     1,441    1,445     689.00   1,205.70
                        647.90     1,446    1,450     690.10   1,207.70
                        648.90     1,451    1,455     691.10   1,209.50
                        649.90     1,456    1,460     692.20   1,211.40
                        650.90     1,461    1,465     693.30   1,213.20
                        651.90     1,466    1,470     694.30   1,215.10
                        652.90     1,471    1,475     695.40   1,216.90
------------------------------------------------------------------------

[47 FR 30734, July 15, 1982; 47 FR 35479, Aug. 16, 1982, as amended at 
48 FR 46143, Oct. 11, 1983; 48 FR 50076, Oct. 31, 1983]

[[Page 104]]

  Appendix IV to Subpart C of Part 404--Earnings Needed for a Year of 
                           Coverage After 1950

Minimum Social Security Earnings to Qualify for a Year of Coverage After
                       1950 for Purposes of the--
------------------------------------------------------------------------
                                              Special        Benefit
                                              minimum      computations
                   Year                       primary      described in
                                             insurance       section
                                               amount     404.213(d) \2\
------------------------------------------------------------------------
1951-1954.................................         $900             $900
1955-1958.................................        1,050            1,050
1959-1965.................................        1,200            1,200
1966-1967.................................        1,650            1,650
1968-1971.................................        1,950            1,950
1972......................................        2,250            2,250
1973......................................        2,700            2,700
1974......................................        3,300            3,300
1975......................................        3,525            3,525
1976......................................        3,825            3,825
1977......................................        4,125            4,125
1978......................................        4,425            4,425
1979......................................        4,725            4,725
1980......................................        5,100            5,100
1981......................................        5,550            5,550
1982......................................        6,075            6,075
1983......................................        6,675            6,675
1984......................................        7,050            7,050
1985......................................        7,425            7,425
1986......................................        7,875            7,875
1987......................................        8,175            8,175
1988......................................        8,400            8,400
1989......................................        8,925            8,925
1990......................................        9,525            9,525
1991......................................        5,940            9,900
1992......................................        6,210           10,350
------------------------------------------------------------------------
\2\ Applies only to certain individuals with pensions from noncovered
  employment.

    Note: For 1951-78, the amounts shown are 25 percent of the 
contribution and benefit base (the contribution and benefit base is the 
same as the annual wage limitation as shown in Sec. 404.1047) in effect. 
For years after 1978, however, the amounts are 25 percent of what the 
contribution and benefit base would have been if the 1977 Social 
Security Amendments had not been enacted, except, for special minimum 
benefit purposes, the applicable percentage is 15 percent for years 
after 1990.

[57 FR 44096, Sept. 24, 1992]

   Appendix V to Subpart C of Part 404--Computing the Special Minimum 
      Primary Insurance Amount and Related Maximum Family Benefits

    These tables are based on section 215(a)(1)(C)(i) of the Social 
Security Act, as amended. They include the percent cost-of-living 
increase shown in appendix VI for each effective date.

                                June 1979
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $12.70      $19.10
12..............................................       25.30       38.00
13..............................................       38.00       57.00
14..............................................       50.60       75.90
15..............................................       63.20       94.90
16..............................................       75.90      113.90
17..............................................       88.50      132.80
18..............................................      101.20      151.80
19..............................................      113.80      170.70
20..............................................      126.40      189.60
21..............................................      139.10      208.70
22..............................................      151.70      227.60
23..............................................      164.40      246.60
24..............................................      177.00      265.50
25..............................................      189.60      284.50
26..............................................      202.30      303.50
27..............................................      214.90      322.40
28..............................................      227.50      341.30
29..............................................      240.20      360.30
30..............................................      252.80      379.20
------------------------------------------------------------------------


                                June 1980
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $14.60      $21.90
12..............................................       29.00       43.50
13..............................................       43.50       65.30
14..............................................       57.90       86.90
15..............................................       72.30      108.50
16..............................................       86.80      130.20
17..............................................      101.20      151.80
18..............................................      115.70      173.60
19..............................................      130.10      195.20
20..............................................      144.50      216.80
21..............................................      159.00      238.60
22..............................................      173.40      260.20
23..............................................      188.00      282.00
24..............................................      202.40      303.60
25..............................................      216.80      325.20
26..............................................      231.30      347.00
27..............................................      245.70      368.60
28..............................................      260.10      390.20
29..............................................      274.60      411.90
30..............................................      289.00      433.50
------------------------------------------------------------------------


                                June 1981
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount     benefits
------------------------------------------------------------------------
11..............................................      $16.30      $24.50
12..............................................       32.30       48.50
13..............................................       48.40       72.70
14..............................................       64.40       96.70
15..............................................       80.40      120.70
16..............................................       96.60      144.90
17..............................................      112.60      168.90
18..............................................      128.70      193.10
19..............................................      144.70      217.10
20..............................................      160.70      241.10
21..............................................      176.90      265.40
22..............................................      192.90      289.40
23..............................................      209.10      313.70
24..............................................      225.10      337.70
25..............................................      241.10      361.70

[[Page 105]]

 
26..............................................      257.30      386.00
27..............................................      273.30      410.00
28..............................................      289.30      434.00
29..............................................      305.40      458.10
30..............................................      321.40      482.10
------------------------------------------------------------------------


                                June 1982
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $17.50      $26.30
12..............................................       34.60       52.00
13..............................................       51.90       78.00
14..............................................       69.10      103.80
15..............................................       86.30      129.60
16..............................................      103.70      155.60
17..............................................      120.90      181.30
18..............................................      138.20      207.30
19..............................................      155.40      233.10
20..............................................      172.50      258.90
21..............................................      189.90      285.00
22..............................................      207.10      310.80
23..............................................      224.50      336.90
24..............................................      241.70      362.60
25..............................................      258.90      388.40
26..............................................      276.30      414.50
27..............................................      293.50      440.30
28..............................................      310.70      466.10
29..............................................      327.90      491.90
30..............................................      345.10      517.70
------------------------------------------------------------------------


                              December 1983
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $18.10      $27.20
12..............................................       35.80       53.80
13..............................................       53.70       80.70
14..............................................       71.50      107.40
15..............................................       89.30      134.10
16..............................................      107.30      161.00
17..............................................      125.10      187.60
18..............................................      143.00      214.50
19..............................................      160.80      241.20
20..............................................      178.50      267.90
21..............................................      196.50      294.90
22..............................................      214.30      321.60
23..............................................      232.30      348.60
24..............................................      250.10      375.20
25..............................................      267.90      401.90
26..............................................      285.90      429.00
27..............................................      303.70      455.70
28..............................................      321.50      482.40
29..............................................      339.30      509.10
30..............................................      357.10      535.80
------------------------------------------------------------------------


                              December 1984
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $18.70      $28.10
12..............................................       37.00       55.60
13..............................................       55.50       83.50
14..............................................       74.00      111.10
15..............................................       92.40      138.70
16..............................................      111.00      166.60
17..............................................      129.40      194.10
18..............................................      148.00      222.00
19..............................................      166.40      249.60
20..............................................      184.70      277.20
21..............................................      203.30      305.20
22..............................................      221.80      332.80
23..............................................      240.40      360.80
24..............................................      258.80      388.30
25..............................................      277.20      415.90
26..............................................      295.90      444.00
27..............................................      314.30      471.60
28..............................................      332.70      499.20
29..............................................      351.10      526.90
30..............................................      369.50      554.50
------------------------------------------------------------------------


                              December 1985
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $19.20      $28.90
12..............................................       38.10       57.30
13..............................................       57.20       86.00
14..............................................       76.20      114.50
15..............................................       95.20      142.90
16..............................................      114.40      171.70
17..............................................      133.40      200.10
18..............................................      152.50      228.80
19..............................................      171.50      257.30
20..............................................      190.40      285.70
21..............................................      209.60      314.60
22..............................................      228.60      343.10
23..............................................      247.80      371.90
24..............................................      266.80      400.30
25..............................................      285.70      428.70
26..............................................      305.00      457.70
27..............................................      324.00      486.20
28..............................................      343.00      514.60
29..............................................      361.90      543.20
30..............................................      380.90      571.60
------------------------------------------------------------------------


                              December 1986
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $19.40      $29.20
12..............................................       38.50       58.00
13..............................................       57.90       87.10
14..............................................       77.10      115.90
15..............................................       96.40      144.70
16..............................................      115.80      173.90
17..............................................      135.10      202.70
18..............................................      154.40      231.70
19..............................................      173.70      260.60
20..............................................      192.80      289.40
21..............................................      212.30      318.60
22..............................................      231.50      347.50
23..............................................      251.00      376.70
24..............................................      270.20      405.50
25..............................................      289.40      434.20
26..............................................      308.90      463.60
27..............................................      328.20      492.50
28..............................................      347.40      521.20

[[Page 106]]

 
29..............................................      366.60      550.20
30..............................................      385.80      579.00
------------------------------------------------------------------------


                              December 1987
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $20.20       $30.40
12............................................        40.10        60.40
13............................................        60.30        90.70
14............................................        80.30       120.70
15............................................       100.40       150.70
16............................................       120.60       181.20
17............................................       140.70       211.20
18............................................       160.80       241.40
19............................................       180.90       271.50
20............................................       200.80       301.50
21............................................       221.20       331.90
22............................................       241.20       362.00
23............................................       261.50       392.50
24............................................       281.50       422.50
25............................................       301.50       452.40
26............................................       321.80       483.00
27............................................       341.90       513.10
28............................................       361.90       543.00
29............................................       381.90       573.30
30............................................       402.00       603.30
------------------------------------------------------------------------


                              December 1988
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $21.00       $31.60
12............................................        41.70        62.80
13............................................        62.70        94.30
14............................................        83.50       125.50
15............................................       104.40       156.70
16............................................       125.40       188.40
17............................................       146.30       219.60
18............................................       167.20       251.00
19............................................       188.10       282.30
20............................................       208.80       313.50
21............................................       230.00       345.10
22............................................       250.80       376.40
23............................................       271.90       408.20
24............................................       292.70       439.40
25............................................       313.50       470.40
26............................................       334.60       502.30
27............................................       355.50       533.60
28............................................       376.30       564.70
29............................................       397.10       596.20
30............................................       418.00       627.40
------------------------------------------------------------------------


                              December 1989
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $21.90       $33.00
12............................................        43.60        65.70
13............................................        65.60        98.70
14............................................        87.40       131.30
15............................................       109.30       164.00
16............................................       131.20       197.20
17............................................       153.10       229.90
18............................................       175.00       262.70
19............................................       196.90       295.50
20............................................       218.60       328.20
21............................................       240.80       361.30
22............................................       262.50       394.00
23............................................       284.60       427.30
24............................................       306.40       460.00
25............................................       328.20       492.50
26............................................       350.30       525.90
27............................................       372.20       558.60
28............................................       393.90       591.20
29............................................       415.70       624.20
30............................................       437.60       656.80
------------------------------------------------------------------------


                              December 1990
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $23.00       $34.70
12............................................        45.90        69.20
13............................................        69.10       104.00
14............................................        92.10       138.30
15............................................       115.20       172.80
16............................................       138.20       207.80
17............................................       161.30       242.30
18............................................       184.40       276.80
19............................................       207.50       311.40
20............................................       230.40       345.90
21............................................       253.80       380.80
22............................................       276.60       415.20
23............................................       299.90       450.30
24............................................       322.90       484.80
25............................................       345.90       519.00
26............................................       369.20       554.20
27............................................       392.20       588.70
28............................................       415.10       623.10
29............................................       438.10       657.90
30............................................       461.20       692.20
------------------------------------------------------------------------


                              December 1991
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $23.80       $35.90
12............................................        47.50        71.70
13............................................        71.60       107.80
14............................................        95.50       143.40
15............................................       119.40       179.10
16............................................       143.30       215.40
17............................................       167.20       251.20
18............................................       191.20       287.00
19............................................       215.10       322.90
20............................................       238.90       358.60
21............................................       263.10       394.80
22............................................       286.80       430.50
23............................................       310.90       466.90
24............................................       334.80       502.70
25............................................       358.60       538.20
26............................................       382.80       574.70
27............................................       406.70       610.40
28............................................       430.40       646.10
29............................................       454.30       682.20

[[Page 107]]

 
30............................................       478.20       717.80
------------------------------------------------------------------------
Note: The amounts shown in the above table for years of coverage less
  than 19 are not payable for June 1981 through December 1981 because
  the corresponding values shown in column II are less than the $135.70
  minimum primary insurance amount payable for that period. For months
  after December 1981, a special minimum primary insurance amount of
  $128.70 will be payable.


[47 FR 30734, July 15, 1982, as amended at 52 FR 8248, Mar. 17, 1987; 57 
FR 44097, Sept. 24, 1992; 57 FR 45878, Oct. 5, 1992]

Appendix VI to Subpart C of Part 404--Percentage of Automatic Increases 
                 in Primary Insurance Amounts Since 1978

------------------------------------------------------------------------
                                                              Percentage
                       Effective date                          increase
------------------------------------------------------------------------
06/79......................................................          9.9
06/80......................................................         14.3
06/81......................................................         11.2
06/82......................................................          7.4
12/83......................................................          3.5
12/84......................................................          3.5
12/85......................................................          3.1
12/86......................................................          1.3
12/87......................................................          4.2
12/88......................................................          4.0
12/89......................................................          4.7
12/90......................................................          5.4
12/91......................................................          3.7
------------------------------------------------------------------------


[57 FR 44097, Sept. 24, 1992]

  Appendix VII to Subpart C of Part 404--``Old-Law'' Contribution and 
                              Benefit Base

    Explanation: We use these figures to determine the earnings needed 
for a year of coverage for years after 1978 (see Sec. 404.261 and 
appendix IV). This is the contribution and benefit base that would have 
been effective under the Social Security Act without the enactment of 
the 1977 amendments.

------------------------------------------------------------------------
                            Year                                Amount
------------------------------------------------------------------------
1979.......................................................      $18,900
1980.......................................................       20,400
1981.......................................................       22,200
1982.......................................................       24,300
1983.......................................................       26,700
1984.......................................................       28,200
1985.......................................................       29,700
1986.......................................................       31,500
1987.......................................................       32,700
1988.......................................................       33,600
1989.......................................................       35,700
1990.......................................................       38,100
1991.......................................................       39,600
1992.......................................................       41,400
------------------------------------------------------------------------


[52 FR 8248, Mar. 17, 1987, as amended at 57 FR 44097, Sept. 24, 1992; 
57 FR 45878, Oct. 5, 1992]



  Subpart D--Old-Age, Disability, Dependents' and Survivors' Insurance 
                     Benefits; Period of Disability

    Authority: Secs. 202, 203 (a) and (b), 205(a), 216, 223, 225, 
228(a)-(e), and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 403 
(a) and (b), 405(a), 416, 423, 425, 428(a)-(e), and 902(a)(5)).

    Source: 44 FR 34481, June 15, 1979, unless otherwise noted.

                                 General



Sec. 404.301  Introduction.

    This subpart sets out what requirements you must meet to qualify for 
social security benefits, how your benefit amounts are figured, when 
your right to benefits begins and ends, and how family relationships are 
determined. These benefits are provided by title II of the Social 
Security Act. They include--
    (a) For workers, old-age and disability benefits and benefit 
protection during periods of disability;
    (b) For a worker's dependents, benefits for a worker's wife, 
divorced wife, husband, divorced husband, and child;
    (c) For a worker's survivors, benefits for a worker's widow, 
widower, divorced wife, child, and parent, and a lump-sum death payment; 
and
    (d) For uninsured persons age 72 or older, special payments.



Sec. 404.302  Other regulations related to this subpart.

    This subpart is related to several others. Subpart H sets out what 
evidence you need to prove you qualify for benefits. Subpart P describes 
what is needed to prove you are disabled. Subpart E describes when your 
benefits may be reduced or stopped for a time. Subpart G describes the 
need for and the effect of an application for benefits. Part 410 
describes when you may qualify for black lung benefits. Part 416 
describes when you may qualify for supplemental security income. Also 42 
CFR part 405 describes when you may

[[Page 108]]

qualify for hospital and medical insurance if you are aged, disabled, or 
have chronic kidney disease.



Sec. 404.303  Definitions.

    As used in this subpart:
    Apply means to sign a form or statement that the Social Security 
Administration accepts as an application for benefits under the rules 
set out in subpart G.
    Eligible means that a person would meet all the requirements for 
entitlement to benefits for a period of time but has not yet applied.
    Entitled means that a person has applied and has proven his or her 
right to benefits for a period of time.
    Insured person or the insured means someone who has enough earnings 
under social security to permit payment of benefits on his or her 
earnings record. The requirements for becoming insured are described in 
subpart B.
    Permanent home means the true and fixed home (legal domicile) of a 
person. It is the place to which a person intends to return whenever he 
or she is absent.
    Primary insurance amount means an amount that is determined from the 
average monthly earnings creditable to the insured person. This term and 
the manner in which it is computed are explained in subpart C.
    We or Us means the Social Security Administration.
    You means the person who has applied for benefits or the person for 
whom someone else has applied.



Sec. 404.304  General rules on benefit amounts.

    This subpart describes how the highest monthly benefit amount you 
ordinarily could qualify for under each type of benefit is determined. 
However, the highest monthly benefit amount you could qualify for may 
not be the amount that you actually are paid each month. In a particular 
month, your benefit amount may be reduced or not paid at all. Under some 
circumstances, your benefit amount may be increased. The most common 
reasons for a change in the amount of your benefit payments are listed 
below:
    (a) Reductions based on age or earnings. As explained in 
Secs. 404.410 through 404.413, your old-age, wife's, husband's, widow's, 
or widower's benefits may be reduced if you choose to receive them 
before age 65. Also, as explained in Secs. 404.415 through 404.417, 
deductions may be made from your benefits if your earnings or the 
insured person's earnings go over certain limits.
    (b) Overpayments and underpayments. Your benefits may be increased 
or decreased for a time to make up for any previous overpayment or 
underpayment that was made on the insured person's record. For more 
information about this, see subpart F.
    (c) [Reserved]
    (d) Family maximum. As explained in Sec. 404.403, there is a maximum 
amount set for each insured person's earnings record that limits the 
total benefits payable on that record. If you are entitled to benefits 
as the insured's dependent or survivor, your benefits may be reduced to 
keep total benefits payable to the insured's family within these limits.
    (e) Government pension offset. If you are entitled to wife's, 
husband's, mother's, father's, widow's or widower's benefits and receive 
a Government pension for work that was not covered under social 
security, your benefits may be reduced by the amount of that pension. 
Special age 72 payments are also reduced by the amount of a Government 
pension. For more information about this, see Sec. 404.408(a) which 
covers benefits and Sec. 404.384(c) which covers special age 72 
payments.
    (f) Rounding. After all other deductions or reductions, any monthly 
benefit which is not a multiple of $1 is reduced to the next lower 
multiple of $1.

[44 FR 34481, June 15, 1979, as amended at 48 FR 46148, Oct. 11, 1983]



Sec. 404.305  When you may not be entitled to benefits.

    In addition to the situations described in Sec. 404.304 when you may 
not receive a benefit payment, there are special circumstances when you 
may not be entitled to benefits. These circumstances are--
    (a) Waiver of benefits. If you have waived benefits and been granted 
a tax exemption on religious grounds as described in Secs. 404.1039 and 
404.1075, no one may become entitled to any benefits or

[[Page 109]]

payments on your earnings record and you may not be entitled to benefits 
on anyone else's earnings record; and
    (b) Person's death caused by an intentional act. You may not become 
entitled to or continue to receive any survivor's benefits or payments 
on the earnings record of any person, or receive any underpayment due a 
person, if you were convicted of a felony or an act in the nature of a 
felony of intentionally causing that person's death. If you were subject 
to the juvenile justice system, you may not become entitled to or 
continue to receive survivor's benefits or payments on the earnings 
record of any person, or receive any underpayment due a person, if you 
were found by a court of competent jurisdiction to have intentionally 
caused that person's death by committing an act which, if committed by 
an adult, would have been considered a felony or an act in the nature of 
a felony.

[44 FR 34481, June 15, 1979, as amended at 47 FR 42098, Sept. 24, 1982; 
52 FR 19136, May 21, 1987, 52 FR 21410, June 5, 1987; 58 FR 64888, Dec. 
10, 1993]

                     Old-Age and Disability Benefits



Sec. 404.310  Who is entitled to old-age benefits.

    You are entitled to old-age benefits if--
    (a) You are at least 62 years old;
    (b) You have enough social security earnings to be fully insured as 
defined in Secs. 404.110 through 404.115; and
    (c) You apply; or you are entitled to disability benefits up to the 
month you become 65 years old. At age 65, your disability benefits 
automatically become old-age benefits.

[44 FR 34481, June 15, 1979, as amended at 51 FR 10616, Mar. 28, 1986]



Sec. 404.311  When entitlement to old-age benefits begins and ends.

    (a) You are entitled to old-age benefits at age 65 beginning with 
the first month covered by your application in which you meet all the 
requirements for entitlement.
    (b) You are entitled to old-age benefits if you have attained age 
62, but are under age 65, beginning with the first month covered by your 
application throughout which you meet all the requirements for 
entitlement.
    (c) Your entitlement to benefits ends with the month before the 
month of your death.

[48 FR 21926, May 16, 1983]



Sec. 404.312  Old-age benefit amounts.

    (a) If your old-age benefits begin at age 65, your monthly benefit 
is equal to the primary insurance amount.
    (b) If your old-age benefits begin after you become 65 years old, 
your monthly benefit is your primary insurance amount plus an increase 
for retiring after age 65. See Sec. 404.313 for a description of these 
increases.
    (c) If your old-age benefits begin before you become 65 years old, 
your monthly benefit amount is the primary insurance amount minus a 
reduction for each month you are entitled before you become 65 years 
old. These reductions are described in Secs. 404.410 through 404.413.

[44 FR 34481, June 15, 1979, as amended at 51 FR 12604, Apr. 14, 1986]



Sec. 404.313  Using delayed retirement credit to increase old-age benefit amount.

    (a) General. (1) If you do not receive old-age benefits for the 
month you reach age 65 (retirement age) or for any later month before 
the month in which you reach age 70 (72 before 1984), you may earn 
delayed retirement credits which will increase your benefit amount when 
you retire. You earn delayed retirement credits for each of those months 
for which you are fully insured and are eligible for but do not receive 
old-age benefits, either because of your work or earnings, or because 
you have not applied for benefits. If you were entitled to old-age 
benefits before age 65 you may still earn delayed retirement credit for 
months beginning with age 65 in which your benefits were reduced to zero 
because of your work or earnings.
    (2) Retirement age is the age at which entitlement to full benefits 
may begin and is the age at which you may begin to earn delayed 
retirement credits. Age 65 is the retirement age for workers who reach 
that age before the year 2003. For workers who reach age 65

[[Page 110]]

after 2002, retirement age will gradually increase from 65 to 67, 
depending on each person's date of birth.
    (b) How we determine delayed retirement credits--(1) General. The 
amount of the delayed retirement credit depends on the year you reach 
retirement age, and the number of months you are eligible for and do not 
receive old-age benefits from retirement age to age 70 (72 before 1984). 
We total these months, which need not be consecutive, multiply the total 
by the applicable percent as provided in paragraphs (b)(2), (3), and (4) 
of this section, multiply your benefit amount by this product, and round 
to the next lowest multiple of $0.10 if the answer is not already a 
multiple of $0.10. The result is your delayed retirement credit which we 
add to your benefit amount. The supplementary medical insurance premium, 
if any, is then deducted and the result is rounded to the next lowest 
multiple of $1.00 if it is not already a multiple of $1.00.
    (2) Before 1982. If you reach age 65 before 1982, your delayed 
retirement credit equals one-twelfth of one percent of your benefit 
amount times the number of months after 1970 in which you are age 65 or 
older and for which you are eligible but do not receive old-age 
benefits.
    (3) After 1981 and before 1990. If you reach age 65 after 1981 and 
before 1990, your delayed retirement credit equals one-fourth of one 
percent of your monthly benefit amount times the number of months in 
which you are age 65 or older and for which you are eligible but do not 
receive old-age benefits.
    (4) Beginning with 1990. If you reach age 65 in 1990 or later, the 
rate of the delayed retirement credit (i.e., one-fourth of one percent 
as stated in paragraph (b)(3) of this section) is increased by one-
twenty-fourth of one percent in each even year through 2008. Thus, 
depending on when you reach age 65, your delayed retirement credit 
percent will be as follows:

------------------------------------------------------------------------
                                            Delayed retirement credit
         Year you reach age 65                       percent
------------------------------------------------------------------------
1990...................................  \7/24\ of 1 percent.
1991...................................  \7/24\ of 1 percent.
1992...................................  \1/3\ of 1 percent.
1993...................................  \1/3\ of 1 percent.
1994...................................  \3/8\ of 1 percent.
1995...................................  \3/8\ of 1 percent.
1996...................................  \5/12\ of 1 percent.
1997...................................  \5/12\ of 1 percent.
1998...................................  \11/24\ of 1 percent.
1999...................................  \11/24\ of 1 percent.
2000...................................  \1/2\ of 1 percent.
2001...................................  \1/2\ of 1 percent.
2002...................................  \13/24\ of 1 percent.
2003...................................  \13/24\ of 1 percent.
2004...................................  \7/12\ of 1 percent.
2005...................................  \7/12\ of 1 percent.
2006...................................  \5/8\ of 1 percent.
2007...................................  \5/8\ of 1 percent.
2008 and later.........................  \2/3\ of 1 percent.
------------------------------------------------------------------------

    Example: Alan was qualified for old-age benefits when he reached age 
65 in January 1983, but decided not to apply for old-age benefits 
immediately because he was still working. When he became age 66 in 
January 1984, he stopped working and applied for these benefits 
beginning with that month. Based on his earnings, his primary insurance 
amount was $226.60, and his monthly old-age benefit after deducting his 
supplemental medical insurance premium was $211.00 ($226.60 minus $15.50 
SMI premium equals $211.10, rounded to $211.00), if no delayed 
retirement credits were added. However, he did not receive benefits for 
the 12 months from the month in which he became 65 (January 1983) until 
the first month in which he stopped working (January 1984). Therefore, 
his monthly old-age benefit of $226.60 was increased by three percent 
(one-quarter of one percent times 12 months) to yield a total $233.39, 
which rounded to the next lower multiple of $0.10 is $233.30. After 
deducting the SMI premium and rounding to the next lower multiple of $1, 
the benefit amount is $217.00.

    (c) Effective date of delayed retirement credit. If you are entitled 
to benefits, we examine our records after the end of each calendar year 
to determine whether you have earned the delayed retirement credit 
(i.e., whether there were months in which you were fully insured and 
eligible for benefits, but did not receive them). Any increase in your 
benefit amount due to the delayed retirement credit is effective 
beginning with January of the year after the year the credit is earned. 
If you are age 65 or older and eligible for old-age benefits but have 
not applied, we compute the delayed retirement credit for the year(s) 
before you applied and pay it to you as part of your first benefit 
check. The delayed retirement credit for the year you applied and later 
years is added to your benefits beginning with

[[Page 111]]

the following January. However, in either case, in the year in which you 
attain age 70 (72 before 1984), we compute the credit through the month 
before the month you reach that age and add it to your benefit amount 
beginning with that month.
    (d) Delayed retirement credit and special minimum primary insurance 
amounts. We do not add any delayed retirement credit to your old-age 
benefit if your benefit is based on the special minimum primary 
insurance amount described in Sec. 404.260. We add the delayed 
retirement credit only to old-age benefits based on your regular primary 
insurance amount, i.e., as computed under one of the other provisions of 
subpart C of this part. If your benefit based on the regular primary 
insurance amount plus your delayed retirement credit is higher than the 
benefit based on your special minimum primary insurance amount, we pay 
the higher amount to you. However, if the special minimum primary 
insurance amount is higher than the regular primary insurance amount 
without the delayed retirement credit, we use the special minimum 
primary insurance amount to determine the family maximum and the 
benefits of others entitled on your earnings record.
    (e) Effect of delayed retirement credit on other benefits--(1) 
Surviving spouse or surviving divorced spouse. If you earned delayed 
retirement credits during your lifetime, we compute your surviving 
spouse's or surviving divorced spouse's benefit based on your regular 
primary insurance amount plus the amount of the delayed retirement 
credit. All delayed retirement credits, including credits in the year of 
death, can be used in computing your surviving spouse's or surviving 
divorced spouse's benefit beginning with the month of death. We compute 
the delayed retirement credit up to, but not including, the month of 
death.
    (2) Other family members. We do not use your delayed retirement 
credits to increase the benefits of other family members entitled on 
your earnings record.
    (3) Family maximum. The delayed retirement credits are added to your 
benefit after we compute the family maximum. However, your delayed 
retirement credits which are used to compute your surviving spouse's or 
surviving divorced spouse's benefit are added to the spouse's benefits 
before we reduce for the family maximum.

[51 FR 12605, Apr. 14, 1986]



Sec. 404.315  Who is entitled to disability benefits.

    (a) General. You are entitled to disability benefits while disabled 
before age 65 if--
    (1) You have enough social security earnings to be insured for 
disability, as described in Sec. 404.130;
    (2) You apply;
    (3) You have a disability, as defined in Sec. 404.1505, or you are 
not disabled, but you had a disability that ended within the 12-month 
period before the month you applied; and
    (4) You have been disabled for 5 full consecutive months. This 5-
month waiting period begins with a month in which you were both insured 
for disability and disabled. Your waiting period can begin no earlier 
than the 17th month before the month you apply--no matter how long you 
were disabled before then. No waiting period is required if you were 
previously entitled to disability benefits or to a period of disability 
under Sec. 404.320 any time within 5 years of the month you again became 
disabled.
    (b) Prohibition against reentitlement to disability benefits if drug 
addiction or alcoholism is a contributing factor material to the 
determination of disability. You cannot be entitled to a period of 
disability payments if drug addiction or alcoholism is a contributing 
factor material to the determination of disability and your earlier 
entitlement to disability benefits on the same basis terminated after 
you received benefits for 36 months during which treatment was 
available.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21930, May 16, 1983; 51 
FR 10616, Mar. 28, 1986; 51 FR 16166, May 1, 1986; 53 FR 43681, Oct. 28, 
1988; 57 FR 30119, July 8, 1992; 60 FR 8145, Feb. 10, 1995]



Sec. 404.316  When entitlement to disability benefits begins and ends.

    (a) You are entitled to disability benefits beginning with the first 
month covered by your application in which

[[Page 112]]

you meet all the other requirements for entitlement. If a waiting period 
is required, your benefits cannot begin earlier than the first month 
following that period.
    (b) Your entitlement to disability benefits ends with the earliest 
of these months:
    (1) The month before the month of your death;
    (2) The month before the month you become 65 years old (at age 65 
your disability benefits will be automatically changed to old-age 
benefits);
    (3) The second month after the month in which your disability ends 
as provided in Sec. 404.1594(b)(1), unless continued subject to 
paragraph (c); or (4) subject to the provisions of paragraph (d) of this 
section, the month before your termination month (Sec. 404.325).
    (c)(1) Your benefits, and those of your dependents, may be continued 
after your impairment is no longer disabling if--
    (i) Your disability did not end before December 1980, the effective 
date of this provision of the law;
    (ii) You are participating in an appropriate program of vocational 
rehabilitation, that is, one that has been approved under a State plan 
approved under title I of the Rehabilitation Act of 1973 and which meets 
the requirements outlined in 34 CFR part 361 for a rehabilitation 
program;
    (iii) You began the program before your disability ended; and
    (iv) We have determined that your completion of the program, or your 
continuation in the program for a specified period of time, will 
significantly increase the likelihood that you will not have to return 
to the disability benefit rolls.

    Example: While under a disability from a severe back impairment, 
``A'' begins a vocational rehabilitation program under the direction of 
a State vocational rehabilitation agency with a vocational goal of 
jewelry repairman. ``A'' is 50 years old, has a high school education, 
and worked as a route salesman for a bread company for 6 years before 
becoming disabled. Before ``A'' completes his training, his disability 
status is reviewed and a determination is made that he is able to do 
light work. Considering his age, education and work experience, ``A'' is 
no longer disabled. However, if ``A'' is able to work as a jewelry 
repairman, he will be considered able to engage in substantial gainful 
activity even if he can do only sedentary work. Therefore, it is 
determined that ``A's'' completion of the vocational rehabilitation 
program will significantly increase the likelihood that he will be 
permanently removed from the disability rolls. ``A'' will continue to 
receive payments until he completes or stops his program, or until it is 
determined that continued participation will no longer significantly 
increase the likelihood of permanent removal from the disability rolls.

    (2) Your benefits generally will be stopped with the month--
    (i) You complete the program;
    (ii) You stop participating in the program for any reason; or
    (iii) We determine that your continuing participation in the program 
will no longer significantly increase the likelihood that you will be 
permanently removed from the disability benefit rolls.
    Exception: In no case will your benefits be stopped with a month 
earlier than the second month after the month your disability ends.
    (d) If, after November 1980, you have a disabling impairment 
(Sec. 404.1511), you will be paid benefits for all months in which you 
do not do substantial gainful activity during the reentitlement period 
(Sec. 404.1592a) following the end of your trial work period 
(Sec. 404.1592). If you are unable to do substantial gainful activity in 
the first month following the reentitlement period, we will pay you 
benefits until you are able to do substantial gainful activity. 
(Earnings during your trial work period do not affect the payment of 
your benefit.) You will also be paid benefits for the first month after 
the trial work period in which you do substantial gainful activity and 
the two succeeding months, whether or not you do substantial gainful 
activity during those succeeding months. After those three months, you 
cannot be paid benefits for any months in which you do substantial 
gainful activity.
    (e) If drug addiction or alcoholism is a contributing factor 
material to the determination of disability as described in 
Sec. 404.1535, you may receive disability benefits on that basis for no 
more than 36 months regardless of the number of entitlement periods you 
may have. Not included in these 36 months are months in which treatment 
for your drug addiction or alcoholism

[[Page 113]]

is not available, months before March 1995, and months for which your 
benefit payments were suspended for any reason. Benefits to your 
dependents may continue after the 36 months of benefits if, but for the 
operation of this paragraph, you would otherwise be entitled to benefits 
based on disability. The 36-month limit is no longer effective for 
benefits for months beginning after September 2004.
    (f) If drug addiction or alcoholism is a contributing factor 
material to the determination of disability as described in 
Sec. 404.1535 and your disability benefits are suspended for 12 
consecutive months because of your failure to comply with treatment 
requirements, your disability benefits will be terminated effective the 
first month after such 12-month period. Benefits to your dependents may 
continue after the 12-month period if, but for the operation of this 
paragraph, you would otherwise be entitled to benefits based on 
disability.

[44 FR 34481, June 15, 1979, as amended at 47 FR 31542, July 21, 1982; 
47 FR 52693, Nov. 23, 1982; 49 FR 22270, May 29, 1984; 51 FR 17617, May 
14, 1986; 60 FR 8145, Feb. 10, 1995]



Sec. 404.317  Disability benefit amounts.

    Your monthly benefit is equal to the primary insurance amount. This 
amount is computed under the rules in subpart C as if it were an old-age 
benefit, and as if you were 62 years old at the beginning of the 5-month 
waiting period mentioned in Sec. 404.315(d). If the 5-month waiting 
period is not required because of your previous entitlement, your 
primary insurance amount is figured as if you were 62 years old when you 
become entitled to benefits this time. Your monthly benefit amount may 
be reduced if you receive workmen's compensation payments before you 
become 62 years old as described in Sec. 404.408. Your benefits may also 
be reduced if you were entitled to other retirement-age benefits before 
you became 65 years old.



Sec. 404.320  Who is entitled to a period of disability.

    (a) General. A period of disability is a continuous period of time 
during which you are disabled. If you become disabled, you may apply to 
have our records show how long your disability lasts. You may do this 
even if you do not qualify for disability benefits. If we establish a 
period of disability for you, the months in that period of time will not 
be counted in figuring your average earnings. If benefits payable on 
your earnings record would be denied or reduced because of a period of 
disability, the period of disability will not be taken into 
consideration.
    (b) Who is entitled. You are entitled to a period of disability if 
you meet all the following conditions:
    (1) You have or had a disability as defined in Sec. 404.1505.
    (2) You are insured for disability, as defined in Sec. 404.130 in 
the calendar quarter in which you became disabled, or in a later 
calendar quarter in which you were disabled.
    (3) You file an application while disabled, or no later than 12 
months after the month in which your period of disability ended. If you 
were unable to apply within the 12-month period after your period of 
disability ended because of a physical or mental condition as described 
in Sec. 404.322, you may apply not more than 36 months after the month 
your disability ended.
    (4) At least 5 consecutive months go by from the month in which your 
period of disability begins and before the month in which it would end.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21930, May 16, 1983; 51 
FR 10616, Mar. 28, 1986]



Sec. 404.321  When a period of disability begins and ends.

    (a) When a period of disability begins. Your period of disability 
begins on the day your disability begins if you are insured for 
disability on that day. If you are not insured for disability on that 
day, your period of disability will begin on the first day of the first 
calender quarter after your disability began in which you become insured 
for disability. Your period of disability may not begin after you become 
65 years old.
    (b) When disability ended before December 1, 1980. Your period of 
disability ends on the last day of the month before the month in which 
you become 65 years old or, if earlier, the last day of

[[Page 114]]

the second month following the month in which your disability ended.
    (c) When disability ends after November 1980. Your period of 
disability ends with the close of whichever of the following is the 
earliest--
    (1) The month before the month in which you become 65 years old;
    (2) The month immediately preceding your termination month 
(Sec. 404.325); or
    (3) If you perform substantial gainful activity during the 
reentitlement period described in Sec. 404.1592a, the last month for 
which you received benefits.
    (d) When drug addiction or alcoholism is a contributing factor 
material to the determination of disability. (1) Your entitlement to 
receive disability benefit payments ends the month following the month 
in which, regardless of the number of entitlement periods you may have 
had based on disability where drug addiction or alcoholism is a 
contributing factor material to the determination of disability (as 
described in Sec. 404.1535)--
    (i) You have received a total of 36 months of disability benefits. 
Not included in these 36 months are months in which treatment for your 
drug addiction or alcoholism is not available, months before March 1995, 
and months for which your benefits were suspended for any reason; or
    (ii) Your benefits have been suspended for 12 consecutive months 
because of your failure to comply with treatment requirements.
    (2) For purposes other than payment of your disability benefits, 
your period of disability continues until the termination month as 
explained in Sec. 404.325.

[49 FR 22271, May 29, 1984, as amended at 60 FR 8145, Feb. 10, 1995; 65 
FR 42782, July 11, 2000]



Sec. 404.322  When you may apply for a period of disability after a delay due to a physical or mental condition.

    If because of a physical or mental condition you did not apply for a 
period of disability within 12 months after your period of disability 
ended, you may apply not more than 36 months after the month in which 
your disability ended. Your failure to apply within the 12-month time 
period will be considered due to a physical or mental condition if 
during this time--
    (a) Your physical condition limited your activities to such an 
extent that you could not complete and sign an application; or
    (b) You were mentally incompetent.



Sec. 404.325  The termination month.

    If you do not have a disabling impairment, your termination month is 
the third month following the month in which your impairment is not 
disabling even if it occurs during the trial work period or the 
reentitlement period. If you continue to have a disabling impairment and 
complete 9 months of trial work, your termination month will be the 
third month following the earliest month you perform substantial gainful 
activity or are determined able to perform substantial gainful activity; 
however, in no event will the termination month under these 
circumstances be earlier than the first month after the end of the 
reentitlement period described in Sec. 404.1592a.

    Example 1: You complete your trial work period in December 1999. You 
then work at the substantial gainful activity level and continue to do 
so throughout the 36 months following completion of your trial work 
period and thereafter. Your termination month will be January 2003, 
which is the first month in which you performed substantial gainful 
activity after the end of your 36-month reentitlement period. This is 
because, for individuals who have disabling impairments (see 
Sec. 404.1511) and who work, the termination month cannot occur before 
the first month after the end of the 36-month reentitlement period.
    Example 2: You complete your trial work period in December 1999, but 
you do not do work showing your ability to do substantial gainful 
activity during your trial work period or throughout your 36-month 
reentitlement period. In April 2003, 4 months after your reentitlement 
period ends, you become employed at work that we determine is 
substantial gainful activity, considering all of our rules in 
Sec. Sec. 404.1574 and 404.1574a. Your termination month will be July 
2003; that is, the third month after the earliest month you performed 
substantial gainful activity.

[65 FR 42782, July 11, 2000]

                Benefits for Spouses and Divorced Spouses



Sec. 404.330  Who is entitled to wife's or husband's benefits.

    You are entitled to benefits as the wife or husband of an insured 
person

[[Page 115]]

who is entitled to old-age or disability benefits if--
    (a) You are the insured's wife or husband based upon a relationship 
described in Secs. 404.345 through 404.346 and one of the following 
conditions is met:
    (1) Your relationship to the insured as a wife or husband has lasted 
at least 1 year. (You will be considered to meet the 1-year duration 
requirement throughout the month in which the first anniversary of the 
marriage occurs.)
    (2) You and the insured are the natural parents of a child; or
    (3) In the month before you married the insured you were entitled 
to, or if you had applied and been old enough you could have been 
entitled to, any of these benefits or payments: Wife's, husband's, 
widow's, widower's, or parent's benefits; disabled child's benefits; or 
annuity payments under the Railroad Retirement Act for widows, widowers, 
parents, or children 18 years old or older;
    (b) You apply;
    (c) You are age 62 or older throughout a month and you meet all 
other conditions of entitlement, or you are the insured's wife or 
husband and have in your care (as defined in Secs. 404.348 through 
404.349), throughout a month in which all other conditions of 
entitlement are met, a child who is entitled to child's benefits on the 
insured's earnings record and the child is either under age 16 or 
disabled; and
    (d) You are not entitled to an old-age or disability benefit based 
upon a primary insurance amount that is equal to or larger than the full 
wife's or husband's benefit.

[44 FR 34481, June 15, 1979; 44 FR 56691, Oct. 2, 1979, as amended at 45 
FR 68932, Oct. 17, 1980; 48 FR 21926, May 16, 1983]



Sec. 404.331  Who is entitled to wife's or husband's benefits as a divorced spouse.

    You are entitled to wife's or husband's benefits as the divorced 
wife or divorced husband of an insured person who is entitled to old-age 
or disability benefits if you meet the requirements of paragraphs (a) 
through (e). You are entitled to these benefits even though the insured 
person is not yet entitled to benefits, if the insured person is at 
least age 62 and if you meet the requirements of paragraphs (a) through 
(f). The requirements are that--
    (a) You are the insured's divorced wife or divorced husband and--
    (1) You were validly married to the insured under State law as 
described in Sec. 404.345 or you were deemed to be validly married as 
described in Sec. 404.346; and
    (2) You were married to the insured for at least 10 years 
immediately before your divorce became final;
    (b) You apply;
    (c) You are not married. (For purposes of meeting this requirement, 
you will be considered not to be married throughout the month in which 
the divorce occurred);
    (d) You are age 62 or older throughout a month in which all other 
conditions of entitlement are met; and
    (e) You are not entitled to an old-age or disability benefit based 
upon a primary insurance amount that is equal to or larger than the full 
wife's or husband's benefit.
    (f) You have been divorced from the insured person for at least 2 
years.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21926, May 16, 1983; 51 
FR 11911, Apr. 8, 1986; 58 FR 64891, Dec. 10, 1993]



Sec. 404.332  When wife's and husband's benefits begin and end.

    (a) You are entitled to wife's or husband's benefits beginning with 
the first month covered by your application in which you meet all the 
other requirements for entitlement under Sec. 404.330 or Sec. 404.331. 
However, if you are entitled as a divorced spouse before the insured 
person becomes entitled, your benefits cannot begin before January 1985 
based on an application filed no earlier than that month.
    (b) Your entitlement to benefits ends with the month before the 
month in which one of the following events first occurs:
    (1) You become entitled to an old-age or disability benefit based 
upon a primary insurance amount that is equal to or larger than the full 
wife's or husband's benefit.
    (2) You are the wife or husband and are divorced from the insured 
person unless you meet the requirements for

[[Page 116]]

benefits as a divorced wife or divorced husband as described in 
Sec. 404.331.
    (3) You are the divorced wife or divorced husband and you marry 
someone, other than the insured who is entitled to old-age benefits, 
unless that other person is someone entitled to benefits as a wife, 
husband, widow, widower, father, mother, parent or disabled child. Your 
benefits will end if you remarry the insured who is not yet entitled to 
old-age benefits.
    (4) If you are under age 62, there is no longer a child of the 
insured who is under age 16 or disabled and entitled to child's benefits 
on the insured's earnings record. (See paragraph (c) of this section if 
you were entitled to wife's or husband's benefits for August 1981 on the 
basis of having a child in care.) (If you no longer have in your care a 
child who is under age 16 or disabled and entitled to child's benefits 
on the insured's earnings record, your benefits may be subject to 
deductions as provided in Sec. 404.421.)
    (5) The insured person dies or is no longer entitled to old age or 
disability benefits. Exception: Your benefits will continue if the 
insured person was entitled to disability benefits based on a finding 
that drug addiction or alcoholism was a contributing factor material to 
the determination of his or her disability (as described in 
Sec. 404.1535), the insured person's benefits ended after 36 months of 
benefits (see Sec. 404.316(e)) or 12 consecutive months of suspension 
for noncompliance with treatment (see Sec. 404.316(f)), and but for the 
operation of these provisions, the insured person would remain entitled 
to benefits based on disability.
    (6) If your benefits are based upon a deemed valid marriage and you 
have not divorced the insured, you marry someone other than the insured.
    (7) You die.
    (8) You became entitled as the divorced wife or the divorced husband 
before the insured person became entitled, but he or she is no longer 
insured.
    (c) If you were entitled to wife's or husband's benefits for August 
1981 on the basis of having a child in care, your entitlement will 
continue until September 1983, until the child reaches 18 (unless 
disabled) or is otherwise no longer entitled to child's benefits, or 
until one of the events described in paragraph (b) (1), (2), (3), (5), 
(6) or (7) of this section occurs, whichever is earliest.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21926, May 16, 1983; 49 
FR 24115, June 12, 1984; 51 FR 11911, Apr. 8, 1986; 58 FR 64891, Dec. 
10, 1993; 60 FR 8145, Feb. 10, 1995; 64 FR 14608, Mar. 26, 1999]



Sec. 404.333  Wife's and husband's benefit amounts.

    Your wife's or husband's monthly benefit is equal to one-half the 
insured person's primary insurance amount. If you are entitled as a 
divorced wife or as a divorced husband before the insured person becomes 
entitled, we will compute the primary insurance amount as if he or she 
became entitled to old-age benefits in the first month you are entitled 
as a divorced wife or as a divorced husband. The amount of your monthly 
benefit may change as explained in Sec. 404.304.

[51 FR 11912, Apr. 8, 1986]



Sec. 404.335  Who is entitled to widow's or widower's benefits.

    You may be entitled to benefits as the widow or widower of a person 
who was fully insured when he or she died. You are entitled to these 
benefits if--
    (a) You are the insured's widow or widower based upon a relationship 
described in Secs. 404.345 through 404.346, and one of the following 
conditions is met:
    (1) Your relationship to the insured as a wife or husband lasted for 
at least 9 months immediately before the insured died.
    (2) Your relationship to the insured as a wife or husband did not 
last 9 months before the insured died, but at the time of your marriage 
the insured was reasonably expected to live for 9 months, and--
    (i) The death of the insured was accidental. The death is accidental 
if it was caused by an event that the insured did not expect; it was the 
result of bodily injuries received from violent and external causes; and 
as a direct result of these injuries, death occurred not later than 3 
months after the day on which the bodily injuries were received. An 
intentional and voluntary suicide will not be considered an accidental 
death;

[[Page 117]]

    (ii) The death of the insured occurred in the line of duty while he 
or she was serving on active duty as a member of the uniformed services 
as defined in Sec. 404.1019; or
    (iii) You had been previously married to the insured for at least 9 
months.
    (3) You and the insured were the natural parents of a child; or you 
were married to the insured when either of you adopted the other's child 
or when both of you adopted a child who was then under 18 years old.
    (4) In the month before you married the insured, you were entitled 
to or, if you had applied and had been old enough, could have been 
entitled to any of these benefits or payments: widow's, widower's, 
father's (based on the record of a fully insured individual), mother's 
(based on the record of a fully insured individual), wife's, husband's, 
parent's, or disabled child's benefits; or annuity payments under the 
Railroad Retirement Act for widows, widowers, parents, or children age 
18 or older;
    (b) You apply, except that you need not apply again if--
    (1) You are entitled to wife's or husband's benefits for the month 
before the month in which the insured dies and you are 65 years old or 
you are not entitled to either old-age or disability benefits;
    (2) You are entitled to mother's or father's benefits for the month 
before the month in which you become 65 years old;
    (3) You are entitled to wife's or husband's benefits and to either 
old-age or disability benefits in the month before the month of the 
insured's death, you are under age 65 in the month of death, and you 
have filed a Certificate of Election in which you elect to receive 
reduced widow's or widower's benefits; or
    (4) You applied in 1990 for widow's or widower's benefits based on 
disability, and:
    (i) You were entitled to disability insurance benefits for December 
1990, or eligible for supplemental security income or federally 
administered State supplementary payments, as specified in subparts B 
and T of part 416 of this chapter, respectively, for January 1991; and
    (ii) You were found not disabled for any month based on the 
definition of disability in Secs. 404.1577 and 404.1578, as in effect 
prior to January 1991, but would have been entitled if the standard in 
Sec. 404.1505(a) had applied. (This exception to the requirement for 
filing an application is effective only with respect to benefits payable 
for months after December 1990.);
    (c) You are at least 60 years old; or you are at least 50 years old 
and have a disability as defined in Sec. 404.1505 and--
    (1) Your disability started not later than 7 years after the insured 
died or 7 years after you were last entitled to mother's or father's 
benefits or to widow's or widower's benefits based upon a disability, 
whichever occurred last;
    (2) Your disability continued during a waiting period of 5 full 
consecutive months, unless months beginning with the first month of 
eligibility for supplemental security income or federally administered 
State supplementary payments are counted, as explained in paragraph 
(c)(3) of this section. The waiting period may begin no earlier than the 
17th month before you applied; the fifth month before the insured died; 
or if you were previously entitled to mother's, father's, widow's, or 
widower's benefits the 5th month before your entitlement to benefits 
ended. If you were previously entitled to widow's or widower's benefits 
based upon a disability, the waiting period is not required;
    (3) For monthly benefits payable for months after December 1990, if 
you were or have been eligible for supplemental security income or 
federally administered State supplementary payments, as specified in 
subparts B and T of part 416 of this chapter, respectively, your 
disability does not have to have continued through a separate, full 5-
month waiting period before you may begin receiving benefits. We will 
include as months of the 5-month waiting period the months in a period 
beginning with the first month you received supplemental security income 
or a federally administered State supplementary payment and continuing 
through all succeeding months, regardless of whether the months in the 
period coincide with the months in which

[[Page 118]]

your waiting period would have occurred, or whether you continued to be 
eligible for supplemental security income or a federally administered 
State supplementary payment after the period began, or whether you met 
the nondisability requirements for entitlement to widow's or widower's 
benefits. However, we will not pay you benefits under this provision for 
any month prior to January 1991; and
    (4) You have not previously received 36 months of payments based on 
disability when drug addiction or alcoholism was a contributing factor 
material to the determination of disability (as described in 
Sec. 404.1535), regardless of the number of entitlement periods you may 
have had, or your current application for widow(er)'s benefits is not 
based on a disability where drug addiction or alcoholism is a 
contributing factor material to the determination of disability.
    (d) You are not entitled to an old-age benefit that is equal to or 
larger than the insured person's primary insurance amount; and
    (e) You are unmarried, unless--
    (1) You remarried after you became 60 years old; or
    (2) For benefits for months after 1983--
    (i) You are now age 60 or older;
    (ii) You remarried after attaining age 50 but before attaining age 
60; and
    (iii) At the time of the remarriage, you were entitled to 
widow(er)'s benefits as a disabled widow(er); or
    (3) For benefits for months after 1983--
    (i) You are now at least age 50 but not yet age 60;
    (ii) You remarried after attaining age 50; and
    (iii) You met the disability requirements in paragraph (c) of this 
section at the time of your remarriage (i.e., your disability began 
within the specified time and before your remarriage).

[44 FR 34481, June 15, 1979, as amended at 47 FR 12162, Mar. 22, 1982; 
49 FR 24115, June 12, 1984; 51 FR 4482, Feb. 5, 1986; 51 FR 10616, Mar. 
28, 1986; 55 FR 25825, June 25, 1990; 57 FR 30119, July 8, 1992; 59 FR 
14747, Mar. 30, 1994; 60 FR 8145, Feb. 10, 1995]



Sec. 404.336  Who is entitled to widow's or widower's benefits as a surviving divorced spouse.

    You may be entitled to widow's or widower's benefits as the 
surviving divorced wife or the surviving divorced husband of a person 
who was fully insured when he or she died. You are entitled to these 
benefits if--
    (a) You are the insured's surviving divorced wife or surviving 
divorced husband and--
    (1) You were validly married to the insured under State law as 
described in Sec. 404.345 or are deemed to be validly married as 
described in Sec. 404.346; and
    (2) You were married to the insured for at least 10 years 
immediately before your divorce became final;
    (b) You apply, except that you need not apply again if--
    (1) You are entitled to wife's or husband's benefits for the month 
before the month in which the insured dies and you are 65 years old or 
you are not entitled to old-age or disability benefits;
    (2) You are entitled to mother's or father's benefits for the month 
before the month in which you become 65 years old;
    (3) You are entitled to wife's or husband's benefits and to either 
old-age or disability benefits in the month before the month of the 
insured's death, you are under age 65 in the month of death, and you 
have filed a Certificate of Election in which you elect to receive 
reduced widow's or widower's benefits; or
    (4) You applied in 1990 for widow's or widower's benefits based on 
disability, and:
    (i) You were entitled to disability insurance benefits for December 
1990, or eligible for supplemental security income or federally 
administered State supplementary payments, as specified in subparts B 
and T of part 416 of this chapter, respectively, for January 1991; and
    (ii) You were found not disabled for any month based on the 
definition of disability in Secs. 404.1577 and 404.1578, as in effect 
prior to January 1991, but would have been entitled if the standard in 
Sec. 404.1505(a) had applied. (This exception to the requirement for 
filing an

[[Page 119]]

application is effective only with respect to benefits payable for 
months after December 1990.);
    (c) You are at least 60 years old; or you are at least 50 years old 
and have a disability as defined in Sec. 404.1505 and--
    (1) Your disability started not later than 7 years after the insured 
died or 7 years after you were last entitled to mother's or father's 
benefits or to widow's or widower's benefits based upon a disability, 
whichever occurred last;
    (2) Your disability continued during a waiting period of 5 full 
consecutive months, unless months beginning with the first month of 
eligibility for supplemental security income or federally administered 
State supplementary payments are counted, as explained in paragraph 
(c)(3) of this section. This waiting period may begin no earlier than 
the 17th month before you applied; the fifth month before the insured 
died; or if you were previously entitled to mother's, father's, widow's, 
or widower's benefits, the 5th month before your previous entitlement to 
benefits ended. If you were previously entitled to widow's or widower's 
benefits based upon a disability, the waiting period is not required; 
and
    (3) For monthly benefits payable for months after December 1990, if 
you were or have been eligible for supplemental security income or a 
federally administered State supplementary payments, as specified in 
subparts B and T of part 416 of this chapter, respectively, your 
disability does not have to have continued through a separate, full 5-
month waiting period before you may begin receiving benefits. We will 
include as months of the 5-month waiting period the months in a period 
beginning with the first month you received supplemental security income 
or a federally administered State supplementary payment and continuing 
through all succeeding months, regardless of whether the months in the 
period coincide with the months in which your waiting period would have 
occurred, or whether you continued to be eligible for supplemental 
security income or a federally administered State supplementary payment 
after the period began, or whether you met the nondisability 
requirements for entitlement to widow's or widower's benefits. However, 
we will not pay you benefits under this provision for any month prior to 
January 1991;
    (d) You are not entitled to an old-age benefit that is equal to or 
larger than the insured person's primary insurance amount; and
    (e) You are unmarried, unless for benefits for months after 1983--
    (1) You remarried after you became 60 years old; or
    (2)(i) You are now age 60 or older;
    (ii) You remarried after attaining age 50 but before attaining age 
60; and
    (iii) At the time of the remarriage, you were entitled to 
widow(er)'s benefits as a disabled widow(er); or
    (3)(i) You are now at least age 50 but not yet age 60;
    (ii) You remarried after attaining age 50; and
    (iii) You met the disability requirements in paragraph (c) of this 
section at the time of your remarriage (i.e., your disability began 
within the specified time and before your remarriage).

[44 FR 34481, June 15, 1979, as amended at 47 FR 12162, Mar. 22, 1982; 
51 FR 4482, Feb. 5, 1986; 55 FR 25300, June 21, 1990; 55 FR 25825, June 
25, 1990; 57 FR 30119, July 8, 1992; 58 FR 64891, Dec. 10, 1993]



Sec. 404.337  When widow's and widower's benefits begin and end.

    (a) You are entitled to widow's or widower's benefits under 
Sec. 404.335 or Sec. 404.336 beginning with the first month covered by 
your application in which you meet all the other requirements for 
entitlement to such benefits.
    (b) Your entitlement to benefits ends at the earliest of the 
following times:
    (1) The month before the month in which you become entitled to an 
old-age benefit that is equal to or larger than the insured's primary 
insurance amount.
    (2) If your widow's or widower's benefit is based upon a disability, 
the second month after the month your disability ends or, where 
disability ends on or after December 1, 1980, the month before your 
termination month (Sec. 404.325). However payments are subject to the 
provisions of paragraphs (c) and (d) of this section. You may remain 
eligible for payment of benefits if you

[[Page 120]]

became 65 years old before your termination month and you met the other 
requirements for widow's or widower's benefits. If your widow's or 
widower's benefit is based on a finding that drug addiction or 
alcoholism is a contributing factor material to the determination of 
disability as described in Sec. 404.1535, your entitlement to benefits 
will terminate the month after the 12th consecutive month of suspension 
for noncompliance with treatment or after 36 months of benefits on that 
basis when treatment is available regardless of the number of 
entitlement periods you may have had, unless you are otherwise disabled 
without regard to drug addiction or alcoholism.
    (3) The month before the month in which you die.
    (c)(1) Your benefits may be continued after your impairment is no 
longer disabling if--
    (i) Your disability did not end before December 1980, the effective 
date of this provision of the law;
    (ii) You are participating in an appropriate program of vocational 
rehabilitation as described in Sec. 404.316(c)(1)(ii);
    (iii) You began the program before your disability ended; and
    (iv) We have determined that your completion of the program, or your 
continuation in the program for a specified period of time, will 
significantly increase the likelihood that you will not have to return 
to the disability benefit rolls.
    (2) Your benefits generally will be stopped with the month--
    (i) You complete the program;
    (ii) You stop participating in the program for any reason; or
    (iii) We determine that your continuing participation in the program 
will no longer significantly increase the likelihood that you will be 
permanently removed from the disability benefit rolls.


Exception: In no case will your benefits be stopped with a month earlier 
than the second month after the month your disability ends.

    (d) If, after November 1980, you have a disabling impairment 
(Sec. 404.1511), you will be paid benefits for all months in which you 
do not do substantial gainful activity during the reentitlement period 
(Sec. 404.1592a) following the end of your trial work period 
(Sec. 404.1592). If you are unable to do substantial gainful activity in 
the first month following the reentitlement period, we will pay you 
benefits until you are able to do substantial gainful activity. 
(Earnings during your trial work period do not affect the payment of 
your benefits.) You will also be paid benefits for the first month after 
the trial work period in which you do substantial gainful activity and 
the two succeeding months, whether or not you do substantial gainful 
activity during those succeeding months. After those three months, you 
cannot be paid benefits for any months in which you do substantial 
gainful activity.

[44 FR 34481, June 15, 1979, as amended at 47 FR 31542, July 21, 1982; 
49 FR 22271, May 29, 1984; 51 FR 4482, Feb. 5, 1986; 51 FR 17617, May 
14, 1986; 58 FR 64891, Dec. 10, 1993; 60 FR 8146, Feb. 10, 1995; 65 FR 
16813, Mar. 30, 2000]



Sec. 404.338  Widow's and widower's benefits amounts.

    Your widow's or widower's monthly benefit is equal to the insured 
person's primary insurance amount. If the insured person died before 
reaching age 62 and you are first eligible after 1984, we may compute a 
special primary insurance amount for the purpose of determining the 
amount of your monthly benefit (see Sec. 404.212(b)). We may increase 
your monthly benefit amount if the insured person earned delayed 
retirement credit after age 65 by working or by delaying filing for 
benefits (see Sec. 404.313). The amount of your monthly benefit may 
change as explained in Sec. 404.304. In addition, your monthly benefit 
will be reduced if the insured person had been entitled to old-age 
benefits that were reduced for age because he or she chose to receive 
them before becoming 65 years old. In this instance, your benefit is 
reduced, if it would otherwise be higher, to either the amount the 
insured would have been entitled to if still alive or 82\1/2\ percent of 
his or her primary insurance amount, whichever is larger.

[44 FR 34481, June 15, 1979, as amended at 51 FR 4482, Feb. 5, 1986]

[[Page 121]]



Sec. 404.339  Who is entitled to mother's or father's benefits.

    You may be entitled as the widow or widower to mother's or father's 
benefits on the earnings record of someone who was fully or currently 
insured when he or she died. You are entitled to these benefits if--
    (a) You are the widow or widower of the insured and meet the 
conditions described in Sec. 404.335(a)(1);
    (b) You apply for these benefits; or you were entitled to wife's 
benefits for the month before the insured died;
    (c) You are unmarried;
    (d) You are not entitled to widow's or widower's benefits, or to an 
old-age benefit that is equal to or larger than the full mother's or 
father's benefit; and
    (e) You have in your care the insured's child who is entitled to 
child's benefits and he or she is under 16 years old or is disabled. 
Sections 404.348 and 404.349 describe when a child is in your care.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983]



Sec. 404.340  Who is entitled to mother's or father's benefits as a surviving divorced spouse.

    You may be entitled to mother's or father's benefits as the suviving 
divorced wife or the surviving divorced husband of someone who was fully 
or currently insured when he or she died. You are entitled to these 
benefits if--
    (a) You were validly married to the insured under State law as 
described in Sec. 404.345 or you were deemed to be validly married as 
described in Sec. 404.346 but the marriage ended in a final divorce and-
-
    (1) You are the mother or father of the insured's child; or
    (2) You were married to the insured when either of you adopted the 
other's child or when both of you adopted a child and the child was then 
under 18 years old;
    (b) You apply for these benefits; or you were entitled to wife's or 
husband's benefits for the month before the insured died;
    (c) You are unmarried;
    (d) You are not entitled to widow's or widower's benefits, or to an 
old-age benefit that is equal to or larger than the full mother's or 
father's benefit; and
    (e) You have in your care the insured's child who is under age 16 or 
disabled, is your natural or adopted child, and is entitled to child's 
benefits on the insured person's record. Sections 404.348 and 404.349 
describe when a child is in your care.

[44 FR 34481, June 15, 1979, as amended at 45 FR 68932, Oct. 17, 1980; 
48 FR 21927, May 16, 1983; 58 FR 64891, Dec. 10, 1993]



Sec. 404.341  When mother's and father's benefits begin and end.

    (a) You are entitled to mother's or father's benefits beginning with 
the first month covered by your application in which you meet all the 
other requirements for entitlement.
    (b) Your entitlement to benefits ends with the month before the 
month in which one of the following events first occurs:
    (1) You become entitled to a widow's or widower's benefit or to an 
old-age benefit that is equal to or larger than the full mother's or 
father's benefit.
    (2) There is no longer a child of the insured who is under age 16 or 
disabled and entitled to a child's benefit on the insured's earnings 
record. (See paragraph (c) of this section if you were entitled to 
mother's or father's benefits for August 1981.) (If you no longer have 
in your care a child who is under age 16 or disabled and entitled to 
child's benefits on the insured's earnings record, your benefits may be 
subject to deductions as provided in Sec. 404.421.)
    (3) You remarry. Your benefits will not end, however, if you marry 
someone entitled to old-age, disability, wife's, husband's, widow's, 
widower's, father's, mother's, parent's or disabled child's benefits.
    (4) You die.
    (c) If you were entitled to spouse's benefits on the basis of having 
a child in care, or to mother's or father's benefits for August 1981, 
your entitlement will continue until September 1983, until the child 
reaches 18 (unless disabled) or is otherwise no longer entitled to 
child's benefits, or until one of the events described in paragraph (b)

[[Page 122]]

(1), (3), or (4) of this section occurs, whichever is earliest.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 49 
FR 24115, June 12, 1984; 58 FR 64891, Dec. 10, 1993; 64 FR 14608, Mar. 
26, 1999]



Sec. 404.342  Mother's and father's benefit amounts.

    Your mother's or father's monthly benefit is equal to 75 percent of 
the insured person's primary insurance amount. The amount of your 
monthly benefit may change as explained in Sec. 404.304.



Sec. 404.344  Your relationship by marriage to the insured.

    You may be eligible for benefits if you are related to the insured 
person as a wife, husband, widow, or widower. To decide your 
relationship to the insured, we look first to State laws. The State laws 
that we use are discussed in Sec. 404.345. If your relationship cannot 
be established under State law, you may still be eligible for benefits 
if your relationship as the insured's wife, husband, widow, or widower 
is based upon a deemed valid marriage as described in Sec. 404.346.



Sec. 404.345  Your relationship as wife, husband, widow, or widower under State law.

    To decide your relationship as the insured's wife or husband, we 
look to the laws of the State where the insured had a permanent home 
when you applied for wife's or husband's benefits. To decide your 
relationship as the insured's widow or widower, we look to the laws of 
the State where the insured had a permanent home when he or she died. If 
the insured's permanent home is not or was not in one of the 50 States, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American 
Samoa, we look to the laws of the District of Columbia. For a definition 
of permanent home, see Sec. 404.303. If you and the insured were validly 
married under State law at the time you apply for wife's or husband's 
benefits or at the time the insured died if you apply for widow's, 
widower's, mother's, or father's benefits, the relationship requirement 
will be met. The relationship requirement will also be met if under 
State law you would be able to inherit a wife's, husband's, widow's, or 
widower's share of the insured's personal property if he or she were to 
die without leaving a will.



Sec. 404.346  Your relationship as wife, husband, widow, or widower based upon a deemed valid marriage.

    (a) General. If your relationship as the insured's wife, husband, 
widow, or widower cannot be established under State law as explained in 
Sec. 404.345, you may be eligible for benefits based upon a deemed valid 
marriage. You will be deemed to be the wife, husband, widow, or widower 
of the insured if, in good faith, you went through a marriage ceremony 
with the insured that would have resulted in a valid marriage except for 
a legal impediment. A legal impediment includes only an impediment which 
results because a previous marriage had not ended at the time of the 
ceremony or because there was a defect in the procedure followed in 
connection with the intended marriage. For example, a defect in the 
procedure may be found where a marriage was performed through a 
religious ceremony in a country that requires a civil ceremony for a 
valid marriage. Good faith means that at the time of the ceremony you 
did not know that a legal impediment existed, or if you did know, you 
thought that it would not prevent a valid marriage.
    (b) Entitlement based upon a deemed valid marriage. To be entitled 
to benefits as a wife, husband, widow or widower as the result of a 
deemed valid marriage, you and the insured must have been living in the 
same household (see Sec. 404.347) at the time the insured died or, if 
the insured is living, at the time you apply for benefits. However, a 
marriage that had been deemed valid, shall continue to be deemed valid 
if the insured individual and the person entitled to benefits as the 
wife or husband of the insured individual are no longer living in the 
same household at the time of death of the insured individual.

[44 FR 34481, June 15, 1979, as amended at 45 FR 65540, Oct. 3, 1980; 48 
FR 21927, May 16, 1983; 58 FR 64892, Dec. 10, 1993]

[[Page 123]]



Sec. 404.347  ``Living in the same household'' defined.

    Living in the same household means that you and the insured 
customarily lived together as husband and wife in the same residence. 
You may be considered to be living in the same household although one of 
you is temporarily absent from the residence. An absence will be 
considered temporary if:
    (a) It was due to service in the U.S. Armed Forces;
    (b) It was 6 months or less and neither you nor the insured were 
outside of the United States during this time and the absence was due to 
business, employment, or confinement in a hospital, nursing home, other 
medical institution, or a penal institution;
    (c) It was for an extended separation, regardless of the duration, 
due to the confinement of either you or the insured in a hospital, 
nursing home, or other medical institution, if the evidence indicates 
that you were separated solely for medical reasons and you otherwise 
would have resided together; or
    (d) It was based on other circumstances, and it is shown that you 
and the insured reasonably could have expected to live together in the 
near future.

[61 FR 41330, Aug. 8, 1996]



Sec. 404.348  When a child living with you is ``in your care''.

    To become entitled to wife's benefits before you become 62 years old 
or to mother's or father's benefits, you must have the insured's child 
in your care. A child who has been living with you for at least 30 days 
is in your care unless--
    (a) The child is in active military service;
    (b) The child is 16 years old or older and not disabled;
    (c) The child is 16 years old or older with a mental disability, but 
you do not actively supervise his or her activities and you do not make 
important decisions about his or her needs, either alone or with help 
from your spouse; or
    (d) The child is 16 years old or older with a physical disability, 
but it is not necessary for you to perform personal services for him or 
her. Personal services are services such as dressing, feeding, and 
managing money that the child cannot do alone because of a disability.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983]



Sec. 404.349  When a child living apart from you is ``in your care''.

    (a) In your care. A child living apart from you is in your care if--
    (1) The child lived apart from you for not more than 6 months, or 
the child's current absence from you is not expected to last over 6 
months;
    (2) The child is under 16 years old, you supervise his or her 
activities and make important decisions about his or her needs, and one 
of the following circumstances exist:
    (i) The child is living apart because of school but spends at least 
30 days vacation with you each year unless some event makes having the 
vacation unreasonable; and if you and the child's other parent are 
separated, the school looks to you for decisions about the child's 
welfare;
    (ii) The child is living apart because of your employment but you 
make regular and substantial contributions to his or her support; see 
Sec. 404.366(a) for a definition of contributions for support;
    (iii) The child is living apart because of a physical disability 
that the child has or that you have; or
    (3) The child is 16 years old or older, is mentally disabled, and 
you supervise his or her activities, make important decisions about his 
or her needs, and help in his or her upbringing and development.
    (b) Not in your care. A child living apart from you is not in your 
care if--
    (1) The child is in active military service;
    (2) The child is living with his or her other parent;
    (3) The child is removed from your custody and control by a court 
order;
    (4) The child is 16 years old or older, is mentally competent, and 
either has been living apart from you for 6 months or more or begins 
living apart from you and is expected to be away for more than 6 months;
    (5) You gave your right to have custody and control of the child to 
someone else; or

[[Page 124]]

    (6) You are mentally disabled.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983]

                            Child's Benefits



Sec. 404.350  Who is entitled to child's benefits.

    (a) General. You are entitled to child's benefits on the earnings 
record of an insured person who is entitled to old-age or disability 
benefits or who has died if--
    (1) You are the insured person's child, based upon a relationship 
described in Secs. 404.355 through 404.359;
    (2) You are dependent on the insured, as defined in Secs. 404.360 
through 404.365;
    (3) You apply;
    (4) You are unmarried; and
    (5) You are under age 18; you are 18 years old or older and have a 
disability that began before you became 22 years old; or you are 18 
years or older and qualify for benefits as a full-time student as 
described in Sec. 404.367.
    (b) Entitlement preclusion for certain disabled children. If you are 
a disabled child as referred to in paragraph (a)(5) of this section, and 
your disability was based on a finding that drug addiction or alcoholism 
was a contributing factor material to the determination of disability 
(as described in Sec. 404.1535) and your benefits ended after your 
receipt of 36 months of benefits, you will not be entitled to benefits 
based on disability for any month following such 36 months regardless of 
the number of entitlement periods you have had if, in such following 
months, drug addiction or alcoholism is a contributing factor material 
to the later determination of disability (as described in 
Sec. 404.1535).

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 60 
FR 8146, Feb. 10, 1995; 61 FR 38363, July 24, 1996]



Sec. 404.351  Who may be reentitled to child's benefits.

    If your entitlement to child's benefits has ended, you may be 
reentitled on the same earnings record if you have not married and if 
you apply for reentitlement. Your reentitlement may begin with--
    (a) The first month in which you qualify as a full-time student. 
(See Sec. 404.367.)
    (b) The first month in which you are disabled, if your disability 
began before you became 22 years old; or
    (c) The first month you are under a disability that began before the 
end of the 84th month following the month in which your benefits had 
ended because an earlier disability had ended.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 61 
FR 38363, July 24, 1996]



Sec. 404.352  When child's benefits begin and end.

    (a) When benefits begin. (1) If the insured is deceased, you are 
entitled to child's benefits beginning with the first month covered by 
your application in which you meet all other requirements for 
entitlement.
    (2) If the insured is living, you are entitled to child's benefits 
beginning with the first month covered by your application:
    (i) Throughout which you meet all the other requirements for 
entitlement if your first month of entitlement is September 1981 or 
later; or
    (ii) In which you meet all the other requirements for entitlement if 
your first month of entitlement is before September 1981.
    (b) Your entitlement to benefits ends with the month before the 
month in which one of the following events first occurs:
    (1) You become 18 years old, unless you are disabled or a full-time 
student. If you become 18 years old and you are disabled, your 
entitlement to disability benefits ends with the second month following 
the month in which your disability ends. If your disability ends on or 
after December 1, 1980, your entitlement to disability benefits 
continues, subject to the provisions of paragraphs (c) and (d) of this 
section, until the month before your termination month (Sec. 404.325). 
If you become 18 years old and you qualify as a full-time student who is 
not disabled, your entitlement ends with the last month you are a full-
time student or, if earlier, the month before the month you become age 
19. If you become age 19 in a month in which you have not completed the 
requirements for, or received, a diploma or equivalent certificate from 
an elementary or secondary school, your

[[Page 125]]

entitlement will end with the month in which the quarter or semester in 
which you are enrolled ends if you are required to enroll for each 
quarter or semester. If the school you are attending does not have a 
quarter or semester system which requires reenrollment, your benefits 
will end with the month you complete the course or, if earlier, the 
first day of the third month following the month in which you become 19 
years old.
    (2) You marry. Your benefits will not end, however, if you are age 
18 or older, disabled, and you marry a person entitled to child's 
benefits based on disability or person entitled to old-age, divorced 
wife's, divorced husband's, widow's, widower's, mother's, father's, 
parent's, or disability benefits.
    (3) The insured's entitlement to old-age or disability benefits ends 
for a reason other than death or the attainment of age 65. Exception: 
Your benefits will continue if the insured person was entitled to 
disability benefits based on a finding that drug addiction or alcoholism 
was a contributing factor material to the determination of his or her 
disability (as described in Sec. 404.1535), the insured person's 
benefits ended after 36 months of payment (see Sec. 404.316(e)) or 12 
consecutive months of suspension for noncompliance with treatment (see 
Sec. 404.316(f)), and the insured person remains disabled.
    (4) You die.
    (c) If you are entitled to benefits as a disabled child age 18 or 
over and your disability is based on a finding that drug addiction or 
alcoholism was a contributing factor material to the determination of 
disability (as described in Sec. 404.1535), your benefits also will 
terminate under the following conditions:
    (1) If your benefits have been suspended for a period of 12 
consecutive months for failure to comply with treatment, your benefits 
will terminate with the month following the 12 months unless you are 
otherwise disabled without regard to drug addiction or alcoholism (see 
Sec. 404.470(c)).
    (2) If you have received 36 months of benefits on that basis when 
treatment is available, regardless of the number of entitlement periods 
you may have had, your benefits will terminate with the month following 
such 36-month payment period unless you are otherwise disabled without 
regard to drug addiction or alcoholism.
    (d)(1) Your benefits may be continued after your impairment is no 
longer disabling if--
    (i) Your disability did not end before December 1980, the effective 
date of this provision of the law;
    (ii) You are participating in an appropriate program of vocational 
rehabilitation as described in Sec. 404.316(c)(1)(ii);
    (iii) You began the program before your disability ended; and
    (iv) We have determined that your completion of the program, or your 
continuation in the program for a specified period of time, will 
significantly increase the likelihood that you will not have to return 
to the disability benefit rolls.
    (2) Your benefits generally will be stopped with the month--
    (i) You complete the program;
    (ii) You stop participating in the program for any reason; or
    (iii) We determine that your continuing participation in the program 
will no longer significantly increase the likelihood that you will be 
permanently removed from the disability benefit rolls.


Exception: In no case will your benefits be stopped with a month earlier 
than the second month after the month your disability ends.

    (e) If, after November 1980, you have a disabling impairment 
(Sec. 404.1511), you will be paid benefits for all months in which you 
do not do substantial gainful activity during the reentitlement period 
(Sec. 404.1592a) following the end of your trial work period 
(Sec. 404.1592). If you are unable to do substantial gainful activity in 
the first month following the reentitlement period, we will pay you 
benefits until you are able to do substantial gainful activity. 
(Earnings during your trial work period do not affect the payment of 
your benefits during that period.) You will also be paid benefits for 
the first month after the trial work period in which you do substantial 
gainful activity and the two succeeding months, whether or not you do 
substantial gainful activity during those succeeding months. After those 
three

[[Page 126]]

months, you cannot be paid benefits for any months in which you do 
substantial gainful activity.

[44 FR 34481, June 15, 1979, as amended at 47 FR 31543, July 21, 1982; 
48 FR 21927, May 16, 1983; 49 FR 22271, May 29, 1984; 49 FR 24115, June 
12, 1984; 51 FR 17617, May 14, 1987; 60 FR 8146, Feb. 10, 1995; 61 FR 
38363, July 24, 1996]



Sec. 404.353  Child's benefit amounts.

    (a) General. Your child's monthly benefit is equal to one-half of 
the insured person's primary insurance amount if he or she is alive and 
three-fourths of the primary insurance amount if he or she has died. The 
amount of your monthly benefit may change as explained in Sec. 404.304.
    (b) Entitlement to more than one benefit. If you are entitled to a 
child's benefit on more than one person's earnings record, you will 
ordinarily receive only the benefit payable on the record with the 
highest primary insurance amount. If your benefit before any reduction 
would be larger on an earnings record with a lower primary insurance 
amount and no other person entitled to benefits on any earnings record 
would receive a smaller benefit as a result of your receiving benefits 
on the record with the lower primary insurance amount, you will receive 
benefits on that record. See Sec. 404.407(d) for a further explanation. 
If you are entitled to a child's benefit and to other dependent's or 
survivor's benefits, you can receive only the highest of the benefits.

[44 FR 34481, June 15, 1979; 44 FR 56691, Oct. 2, 1979, as amended at 48 
FR 21928, May 16, 1983; 51 FR 12606, Apr. 14, 1986; 61 FR 38363, July 
24, 1996]



Sec. 404.354  Your relationship to the insured.

    You may be related to the insured person in one of several ways and 
be entitled to benefits as his or her child, i.e., as a natural child, 
legally adopted child, stepchild, grandchild, stepgrandchild, or 
equitably adopted child. For details on how we determine your 
relationship to the insured person, see Secs. 404.355 through 404.359.

[63 FR 57593, Oct. 28, 1998]



Sec. 404.355  Who is the insured's natural child?

    (a) Eligibility as a natural child. You may be eligible for benefits 
as the insured's natural child if any of the following conditions is 
met:
    (1) You could inherit the insured's personal property as his or her 
natural child under State inheritance laws, as described in paragraph 
(b) of this section.
    (2) You are the insured's natural child and the insured and your 
mother or father went through a ceremony which would have resulted in a 
valid marriage between them except for a ``legal impediment'' as 
described in Sec. 404.346(a).
    (3) You are the insured's natural child and your mother or father 
has not married the insured, but the insured has either acknowledged in 
writing that you are his or her child, been decreed by a court to be 
your father or mother, or been ordered by a court to contribute to your 
support because you are his or her child. If the insured is deceased, 
the acknowledgment, court decree, or court order must have been made or 
issued before his or her death. To determine whether the conditions of 
entitlement are met throughout the first month as stated in 
Sec. 404.352(a), the written acknowledgment, court decree, or court 
order will be considered to have occurred on the first day of the month 
in which it actually occurred.
    (4) Your mother or father has not married the insured but you have 
evidence other than the evidence described in paragraph (a)(3) of this 
section to show that the insured is your natural father or mother. 
Additionally, you must have evidence to show that the insured was either 
living with you or contributing to your support at the time you applied 
for benefits. If the insured is not alive at the time of your 
application, you must have evidence to show that the insured was either 
living with you or contributing to your support when he or she died. See 
Sec. 404.366 for an explanation of the terms ``living with'' and 
``contributions for support.''
    (b) Use of State Laws--(1) General. To decide whether you have 
inheritance rights as the natural child of the insured, we use the law 
on inheritance rights that the State courts would use

[[Page 127]]

to decide whether you could inherit a child's share of the insured's 
personal property if the insured were to die without leaving a will. If 
the insured is living, we look to the laws of the State where the 
insured has his or her permanent home when you apply for benefits. If 
the insured is deceased, we look to the laws of the State where the 
insured had his or her permanent home when he or she died. If the 
insured's permanent home is not or was not in one of the 50 States, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, 
or the Northern Mariana Islands, we will look to the laws of the 
District of Columbia. For a definition of permanent home, see 
Sec. 404.303. For a further discussion of the State laws we use to 
determine whether you qualify as the insured's natural child, see 
paragraphs (b)(3) and (b)(4) of this section. If these laws would permit 
you to inherit the insured's personal property as his or her child, we 
will consider you the child of the insured.
    (2) Standards. We will not apply any State inheritance law 
requirement that an action to establish paternity must be taken within a 
specified period of time measured from the worker's death or the child's 
birth, or that an action to establish paternity must have been started 
or completed before the worker's death. If applicable State inheritance 
law requires a court determination of paternity, we will not require 
that you obtain such a determination but will decide your paternity by 
using the standard of proof that the State court would use as the basis 
for a determination of paternity.
    (3) Insured is living. If the insured is living, we apply the law of 
the State where the insured has his or her permanent home when you file 
your application for benefits. We apply the version of State law in 
effect when we make our final decision on your application for benefits. 
If you do not qualify as a child of the insured under that version of 
State law, we look at all versions of State law that were in effect from 
the first month for which you could be entitled to benefits up until the 
time of our final decision and apply the version of State law that is 
most beneficial to you.
    (4) Insured is deceased. If the insured is deceased, we apply the 
law of the State where the insured had his or her permanent home when he 
or she died. We apply the version of State law in effect when we make 
our final decision on your application for benefits. If you do not 
qualify as a child of the insured under that version of State law, we 
will apply the version of State law that was in effect at the time the 
insured died, or any version of State law in effect from the first month 
for which you could be entitled to benefits up until our final decision 
on your application. We will apply whichever version is most beneficial 
to you. We use the following rules to determine the law in effect as of 
the date of death:
    (i) If a State inheritance law enacted after the insured's death 
indicates that the law would be retroactive to the time of death, we 
will apply that law; or
    (ii) If the inheritance law in effect at the time of the insured's 
death was later declared unconstitutional, we will apply the State law 
which superseded the unconstitutional law.

[63 FR 57593, Oct. 28, 1998]



Sec. 404.356  Who is the insured's legally adopted child.

    You may be eligible for benefits as the insured's child if you were 
legally adopted by the insured. If you were legally adopted after the 
insured's death by his or her surviving spouse you may also be 
considered the insured's legally adopted child. We apply the adoption 
laws of the State or foreign country where the adoption took place, not 
the State inheritance laws described in Sec. 404.355, to determine 
whether you are the insured's legally adopted child.

[44 FR 34481, June 15, 1979, as amended at 63 FR 57594, Oct. 28, 1998]



Sec. 404.357  Who is the insured's stepchild.

    You may be eligible for benefits as the insured's stepchild if, 
after your birth, your natural or adopting parent married the insured. 
You also may be eligible as a stepchild if you were conceived prior to 
the marriage of your natural parent to the insured but were

[[Page 128]]

born after the marriage and the insured is not your natural parent. The 
marriage between the insured and your parent must be a valid marriage 
under State law or a marriage which would be valid except for a legal 
impediment described in Sec. 404.346(a). If the insured is alive when 
you apply, you must have been his or her stepchild for at least 1 year 
immediately preceding the day you apply. For purposes of determining 
whether the conditions of entitlement are met throughout the first month 
as stated in Sec. 404.352(a)(2)(i), you will be considered to meet the 
one year duration requirement throughout the month in which the 
anniversary of the marriage occurs. If the insured is not alive when you 
apply, you must have been his or her stepchild for at least 9 months 
immediately preceding the day the insured died. This 9-month requirement 
will not have to be met if the marriage between the insured and your 
parent lasted less than 9 months under the conditions described in 
Sec. 404.335(a)(2).

[48 FR 21928, May 16, 1983, as amended at 64 FR 14608, Mar. 26, 1999]



Sec. 404.358  Who is the insured's grandchild or stepgrandchild.

    (a) Grandchild and stepgrandchild defined. You may be eligible for 
benefits as the insured's grandchild or stepgrandchild if you are the 
natural child, adopted child, or stepchild of a person who is the 
insured's child as defined in Secs. 404.355 through 404.357, or 
Sec. 404.359. Additionally, for you to be eligible as a grandchild or 
stepgrandchild, your natural or adoptive parents must have been either 
deceased or under a disability, as defined in Sec. 404.1501(a), at the 
time your grandparent or stepgrandparent became entitled to old-age or 
disability benefits or died; or if your grandparent or stepgrandparent 
had a period of disability that continued until he or she became 
entitled to benefits or died, at the time the period of disability 
began. If your parent is deceased, for purposes of determining whether 
the conditions of entitlement are met throughout the first month as 
stated in Sec. 404.352(a)(2)(i), your parent will be considered to be 
deceased as of the first day of the month of death.
    (b) Legally adopted grandchild or stepgrandchild. If you are the 
insured's grandchild or stepgrandchild and you are legally adopted by 
the insured or by the insured's surviving spouse after his or her death, 
you are considered an adopted child and the dependency requirements of 
Sec. 404.362 must be met.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21928, May 16, 1983]



Sec. 404.359  Who is the insured's equitably adopted child.

    You may be eligible for benefits as an equitably adopted child if 
the insured had agreed to adopt you as his or her child but the adoption 
did not occur. The agreement to adopt you must be one that would be 
recognized under State law so that you would be able to inherit a 
child's share of the insured's personal property if he or she were to 
die without leaving a will. The agreement must be in whatever form, and 
you must meet whatever requirements for performance under the agreement, 
that State law directs. If you apply for child's benefits after the 
insured's death, the law of the State where the insured had his or her 
permanent home at the time of his or her death will be followed. If you 
apply for child's benefits during the insured's life, the law of the 
State where the insured has his or her permanent home at the time or 
your application will be followed.



Sec. 404.360  When a child is dependent upon the insured person.

    One of the requirements for entitlement to child's benefits is that 
you be dependent upon the insured. The evidence you need to prove your 
dependency is determined by how you are related to the insured. To prove 
your dependency you may be asked to show that at a specific time you 
lived with the insured, that you received contributions for your support 
from the insured, or that the insured provided at least one-half of your 
support. These dependency requirements, and the time at which they must 
be met, are explained in Secs. 404.361 through 404.365. The terms living 
with, contributions for support, and one-half support are defined in 
Sec. 404.366.

[[Page 129]]



Sec. 404.361  When a natural child is dependent.

    (a) Dependency of natural child. If you are the insured's natural 
child, as defined in Sec. 404.355, you are considered dependent upon him 
or her, except as stated in paragraph (b) of this section.
    (b) Dependency of natural child legally adopted by someone other 
than the insured. (1) Except as indicated in paragraph (b)(2) of this 
section, if you are legally adopted by someone other than the insured 
(your natural parent) during the insured's lifetime, you are considered 
dependent upon the insured only if the insured was either living with 
you or contributing to your support at one of the following times:
    (i) When you applied;
    (ii) When the insured died; or
    (iii) If the insured had a period of disability that lasted until he 
or she became entitled to disability or old-age benefits or died, at the 
beginning of the period of disability or at the time he or she became 
entitled to disability or old-age benefits.
    (2) You are considered dependent upon the insured (your natural 
parent) if:
    (i) You were adopted by someone other than the insured after you 
applied for child's benefits; or
    (ii) The insured had a period of disability that lasted until he or 
she became entitled to old-age or disability benefits or died, and you 
are adopted by someone other than the insured after the beginning of 
that period of disability.

[64 FR 14608, Mar. 26, 1999]



Sec. 404.362  When a legally adopted child is dependent.

    (a) General. If you were legally adopted by the insured before he or 
she became entitled to old-age or disability benefits, you are 
considered dependent upon him or her. If you were legally adopted by the 
insured after he or she became entitled to old-age or disability 
benefits and you apply for child's benefits during the life of the 
insured, you must meet the dependency requirements stated in paragraph 
(b) of this section. If you were legally adopted by the insured after he 
or she became entitled to old-age or disability benefits and you apply 
for child's benefits after the death of the insured, you are considered 
dependent upon him or her. If you were adopted after the insured's death 
by his or her surviving spouse, you may be considered dependent upon the 
insured only under the conditions described in paragraph (c) of this 
section.
    (b) Adoption by the insured after he or she became entitled to 
benefits. (1) General. If you are legally adopted by the insured after 
he or she became entitled to benefits and you are not the insured's 
natural child or stepchild, you are considered dependent on the insured 
during his or her lifetime only if--
    (i) You had not attained age 18 when adoption proceedings were 
started, and your adoption was issued by a court of competent 
jurisdiction within the United States; or
    (ii) You had attained age 18 before adoption proceedings were 
started; your adoption was issued by a court of competent jurisdiction 
within the United States; and you were living with or receiving at least 
one-half of your support from the insured for the year immediately 
preceding the month in which your adoption was issued.
    (2) Natural child and stepchild. If you were legally adopted by the 
insured after he or she became entitled to benefits and you are the 
insured's natural child or stepchild, you are considered dependent upon 
the insured.
    (c) Adoption by the insured's surviving spouse--(1) General. If you 
are legally adopted by the insured's surviving spouse after the 
insured's death, you are considered dependent upon the insured as of the 
date of his or her death if--
    (i) You were either living with or receiving at least one-half of 
your support from the insured at the time of his or her death; and,
    (ii) The insured had started adoption proceedings before he or she 
died; or if the insured had not started the adoption proceedings before 
he or she died, his or her surviving spouse began and completed the 
adoption within 2 years of the insured's death.
    (2) Grandchild or stepgrandchild adopted by the insured's surviving 
spouse. If

[[Page 130]]

you are the grandchild or stepgrandchild of the insured and any time 
after the death of the insured you are legally adopted by the insured's 
surviving spouse, you are considered the dependent child of the insured 
as of the date of his or her death if--
    (i) Your adoption took place in the United States;
    (ii) At the time of the insured's death, your natural, adopting or 
stepparent was not living in the insured's household and making regular 
contributions toward your support; and
    (iii) You meet the dependency requirements stated in Sec. 404.364.

[44 FR 34481, June 15, 1979; 44 FR 56691, Oct. 2, 1979, as amended at 56 
FR 24000, May 28, 1991; 57 FR 3938, Feb. 3, 1992]



Sec. 404.363  When a stepchild is dependent.

    If you are the insured's stepchild, as defined in Sec. 404.357, you 
are considered dependent upon him or her if you were either living with 
or receiving at least one-half of your support from him or her at one of 
these times--
    (a) When you applied;
    (b) When the insured died; or
    (c) If the insured had a period of disability that lasted until his 
or her death or entitlement to disability or old-age benefits, at the 
beginning of the period of disability or at the time the insured became 
entitled to benefits.



Sec. 404.364  When a grandchild or stepgrandchild is dependent.

    If you are the insured's grandchild or stepgrandchild, as defined in 
Sec. 404.358(a), you are considered dependent upon the insured if--
    (a) You began living with the insured before you became 18 years 
old; and
    (b) You were living with the insured in the United States and 
receiving at least one-half of your support from him for the year before 
he or she became entitled to old-age or disability benefits or died; or 
if the insured had a period of disability that lasted until he or she 
became entitled to benefits or died, for the year immediately before the 
month in which the period of disability began. If you were born during 
the 1-year period, the insured must have lived with you and provided at 
least one-half of your support for substantially all of the period that 
begins on the date of your birth. The term substantially all is defined 
in Sec. 404.362(b)(1)(iii).



Sec. 404.365  When an equitably adopted child is dependent.

    If you are the insured's equitably adopted child, as defined in 
Sec. 404.359, you are considered dependent upon him or her if you were 
either living with or receiving contributions for your support from the 
insured at the time of his or her death. If your equitable adoption is 
found to have occurred after the insured became entitled to old-age or 
disability benefits, your dependency cannot be established during the 
insured's life. If your equitable adoption is found to have occurred 
before the insured became entitled to old-age or disability benefits, 
you are considered dependent upon him or her if you were either living 
with or receiving contributions for your support from the insured at one 
of these times--
    (a) When you applied; or
    (b) If the insured had a period of disability that lasted until he 
or she became entitled to old-age or disability benefits, at the 
beginning of the period of disability or at the time the insured became 
entitled to benefits.



Sec. 404.366  ``Contributions for support,'' ``one-half support,'' and ``living with'' the insured defined--determining first month of entitlement.

    To be eligible for child's or parent's benefits, and in certain 
Government pension offset cases, you must be dependent upon the insured 
person at a particular time or be assumed dependent upon him or her. 
What it means to be a dependent child is explained in Secs. 404.360 
through 404.365; what it means to be a dependent parent is explained in 
Sec. 404.370(f); and the Government pension offset is explained in 
Sec. 404.408a. Your dependency upon the insured person may be based upon 
whether at a specified time you were receiving contributions for your 
support or one-half of your support from the insured person, or whether 
you were living with him or her. These terms are defined in paragraphs 
(a) through (c) of this section.

[[Page 131]]

    (a) Contributions for support. The insured makes a contribution for 
your support if the following conditions are met:
    (1) The insured gives some of his or her own cash or goods to help 
support you. Support includes food, shelter, routine medical care, and 
other ordinary and customary items needed for your maintenance. The 
value of any goods the insured contributes is the same as the cost of 
the goods when he or she gave them for your support. If the insured 
provides services for you that would otherwise have to be paid for, the 
cash value of his or her services may be considered a contribution for 
your support. An example of this would be work the insured does to 
repair your home. The insured person is making a contribution for your 
support if you receive an allotment, allowance, or benefit based upon 
his or her military pay, veterans' pension or compensation, or social 
security earnings.
    (2) Contributions must be made regularly and must be large enough to 
meet an important part of your ordinary living costs. Ordinary living 
costs are the costs for your food, shelter, routine medical care, and 
similar necessities. If the insured person only provides gifts or 
donations once in a while for special purposes, they will not be 
considered contributions for your support. Although the insured's 
contributions must be made on a regular basis, temporary interruptions 
caused by circumstances beyond the insured person's control, such as 
illness or unemployment, will be disregarded unless during this 
interrruption someone else takes over responsibility for supporting you 
on a permanent basis.
    (b) One-half support. The insured person provides one-half of your 
support if he or she makes regular contributions for your ordinary 
living costs; the amount of these contributions equals or exceeds one-
half of your ordinary living costs; and any income (from sources other 
than the insured person) you have available for support purposes is one-
half or less of your ordinary living costs. We will consider any income 
which is available to you for your support whether or not that income is 
actually used for your ordinary living costs. Ordinary living costs are 
the costs for your food, shelter, routine medical care, and similar 
necessities. A contribution may be in cash, goods, or services. The 
insured is not providing at least one-half of your support unless he or 
she has done so for a reasonable period of time. Ordinarily we consider 
a reasonable period to be the 12-month period immediately preceding the 
time when the one-half support requirement must be met under the rules 
in Secs. 404.362(c)(1) and 404.363 (for child's benefits), in 
Sec. 404.370(f) (for parent's benefits) and in Sec. 404.408a(c) (for 
benefits where the Government pension offset may be applied). A shorter 
period will be considered reasonable under the following circumstances:
    (1) At some point within the 12-month period, the insured either 
begins or stops providing at least one-half of your support on a 
permanent basis and this is a change in the way you had been supported 
up to then. In these circumstances, the time from the change up to the 
end of the 12-month period will be considered a reasonable period, 
unless paragraph (b)(2) of this section applies. The change in your 
source of support must be permanent and not temporary. Changes caused by 
seasonal employment or customary visits to the insured's home are 
considered temporary.
    (2) The insured provided one-half or more of your support for at 
least 3 months of the 12-month period, but was forced to stop or reduce 
contributions because of circumstances beyond his or her control, such 
as illness or unemployment, and no one else took over the responsibility 
for providing at least one-half of your support on a permanent basis. 
Any support you received from a public assistance program is not 
considered as a taking over of responsibility for your support by 
someone else. Under these circumstances, a reasonable period is that 
part of the 12-month period before the insured was forced to reduce or 
stop providing at least one-half of your support.
    (c) ``Living with'' the insured. You are living with the insured if 
you ordinarily live in the same home with the insured and he or she is 
exercising, or has the right to exercise, parental control and authority 
over your activities. You are living with the insured during

[[Page 132]]

temporary separations if you and the insured expect to live together in 
the same place after the separation. Temporary separations may include 
the insured's absence because of active military service or imprisonment 
if he or she still exercises parental control and authority. However, 
you are not considered to be living with the insured if you are in 
active military service or in prison. If living with is used to 
establish dependency for your eligibility to child's benefits and the 
date your application is filed is used for establishing the point for 
determining dependency, you must have been living with the insured 
throughout the month your application is filed in order to be entitled 
to benefits for that month.
    (d) Determining first month of entitlement. In evaluating whether 
dependency is established under paragraph (a), (b), or (c) of this 
section, for purposes of determining whether the conditions of 
entitlement are met throughout the first month as stated in 
Sec. 404.352(a)(2)(i), we will not use the temporary separation or 
temporary interruption rules.

[44 FR 34481, June 15, 1979, as amended at 45 FR 65540, Oct. 3, 1980; 48 
FR 21928, May 16, 1983; 52 FR 26955, July 17, 1987; 64 FR 14608, Mar. 
26, 1999]



Sec. 404.367  When you are a ``full-time elementary or secondary school student''.

    You may be eligible for child's benefits if you are a full-time 
elementary or secondary school student. For the purposes of determining 
whether the conditions of entitlement are met throughout the first month 
as stated in Sec. 404.352(a)(2)(i), if you are entitled as a student on 
the basis of attendance at an elementary or secondary school, you will 
be considered to be in full-time attendance for a month during any part 
of which you are in full-time attendance. You are a full-time elementary 
or secondary school student if you meet all the following conditions:
    (a) You attend a school which provides elementary or secondary 
education as determined under the law of the State or other jurisdiction 
in which it is located. Participation in the following programs also 
meets the requirements of this paragraph:
    (1) You are instructed in elementary or secondary education at home 
in accordance with a home school law of the State or other jurisdiction 
in which you reside; or
    (2) You are in an independent study elementary or secondary 
education program in accordance with the law of the State or other 
jurisdiction in which you reside which is administered by the local 
school or school district/jurisdiction.
    (b) You are in full-time attendance in a day or evening 
noncorrespondence course of at least 13 weeks duration and you are 
carrying a subject load which is considered full-time for day students 
under the institution's standards and practices. If you are in a home 
schooling program as described in paragraph (a)(1) of this section, you 
must be carrying a subject load which is considered full-time for day 
students under standards and practices set by the State or other 
jurisdiction in which you reside;
    (c) To be considered in full-time attendance, your scheduled 
attendance must be at the rate of at least 20 hours per week unless one 
of the exceptions in paragraphs (c) (1) and (2) of this section applies. 
If you are in an independent study program as described in paragraph 
(a)(2) of this section, your number of hours spent in school attendance 
are determined by combining the number of hours of attendance at a 
school facility with the agreed upon number of hours spent in 
independent study. You may still be considered in full-time attendance 
if your scheduled rate of attendance is below 20 hours per week if we 
find that:
    (1) The school attended does not schedule at least 20 hours per week 
and going to that particular school is your only reasonable alternative; 
or
    (2) Your medical condition prevents you from having scheduled 
attendance of at least 20 hours per week. To prove that your medical 
condition prevents you from scheduling 20 hours per week, we may request 
that you provide appropriate medical evidence or a statement from the 
school.
    (d) You are not being paid while attending the school by an employer 
who has requested or required that you attend the school;

[[Page 133]]

    (e) You are in grade 12 or below; and
    (f) You are not subject to the provisions in Sec. 404.468 for 
nonpayment of benefits to certain prisoners and certain other inmates of 
publicly funded institutions.

[48 FR 21928, May 16, 1983, as amended at 48 FR 55452, Dec. 13, 1983; 56 
FR 35999, July 30, 1991; 61 FR 38363, July 24, 1996]



Sec. 404.368  When you are considered a full-time student during a period of nonattendance.

    If you are a full-time student, your eligibility may continue during 
a period of nonattendance (including part-time attendance) if all the 
following conditions are met:
    (a) The period of nonattendance is 4 consecutive months or less;
    (b) You show us that you intend to resume your studies as a full-
time student at the end of the period or at the end of the period you 
are a full-time student; and
    (c) The period of nonattendance is not due to your expulsion or 
suspension from the school.

[48 FR 21929, May 16, 1983]

                            Parent's Benefits



Sec. 404.370  Who is entitled to parent's benefits.

    You may be entitled to parent's benefits on the earnings record of 
someone who has died and was fully insured. You are entitled to these 
benefits if all the following conditions are met:
    (a) You are related to the insured person as his or her parent in 
one of the ways described in Sec. 404.374.
    (b) You are at least 62 years old.
    (c) You have not married since the insured person died.
    (d) You apply.
    (e) You are not entitled to an old-age benefit equal to or larger 
than the parent's benefit amount.
    (f) You were receiving at least one-half of your support from the 
insured at the time he or she died, or at the beginning of any period of 
disability he or she had that continued up to death. See Sec. 404.366(b) 
for a definition of one-half support. If you were receiving one-half of 
your support from the insured at the time of the insured's death, you 
must give us proof of this support within 2 years of the insured's 
death. If you were receiving one-half of your support from the insured 
at the time his or her period of disability began, you must give us 
proof of this support within 2 years of the month in which the insured 
filed his or her application for the period of disability. You must file 
the evidence of support even though you may not be eligible for parent's 
benefits until a later time. There are two exceptions to the 2-year 
filing requirement:
    (1) If there is a good cause for failure to provide proof of support 
within the 2-year period, we will consider the proof you give us as 
though it were provided within the 2-year period. Good cause does not 
exist if you were informed of the need to provide the proof within the 
2-year period and you neglected to do so or did not intend to do so. 
Good cause will be found to exist if you did not provide the proof 
within the time limit due to--
    (i) Circumstances beyond your control, such as extended illness, 
mental or physical incapacity, or a language barrier;
    (ii) Incorrect or incomplete information we furnished you;
    (iii) Your efforts to get proof of the support without realizing 
that you could submit the proof after you gave us some other evidence of 
that support; or
    (iv) Unusual or unavoidable circumstances that show you could not 
reasonably be expected to know of the 2-year time limit.
    (2) The Soldiers' and Sailors' Civil Relief Act of 1940 provides for 
extending the filing time.



Sec. 404.371  When parent's benefits begin and end.

    (a) You are entitled to parent's benefits beginning with the first 
month covered by your application in which you meet all the other 
requirements for entitlement.
    (b) Your entitlement to benefits ends with the month before the 
month in which one of the following events first occurs:
    (1) You become entitled to an old-age benefit equal to or larger 
than the parent's benefit.

[[Page 134]]

    (2) You marry, unless your marriage is to someone entitled to 
wife's, husband's, widow's, widower's, mother's, father's, parent's or 
disabled child's benefits. If you marry a person entitled to these 
benefits, the marriage does not affect your benefits.
    (3) You die.

[44 FR 34481, June 15, 1979, as amended at 49 FR 24116, June 12, 1984]



Sec. 404.373  Parent's benefit amounts.

    Your parent's monthly benefit before any reduction that may be made 
as explained in Sec. 404.304, is figured in one of the following ways:
    (a) One parent entitled. Your parent's monthly benefit is equal to 
82\1/2\ percent of the insured person's primary insurance amount if you 
are the only parent entitled to benefits on his or her earnings record.
    (b) More than one parent entitled. Your parent's monthly benefit is 
equal to 75 percent of the insured person's primary insurance amount if 
there is another parent entitled to benefits on his or her earnings 
record.



Sec. 404.374  Parent's relationship to the insured.

    You may be eligible for benefits as the insured person's parent if--
    (a) You are the mother or father of the insured and would be 
considered his or her parent under the laws of the State where the 
insured had a permanent home when he or she died;
    (b) You are the adoptive parent of the insured and legally adopted 
him or her before the insured person became 16 years old; or
    (c) You are the stepparent of the insured and you married the 
insured's parent or adoptive parent before the insured became 16 years 
old. The marriage must be valid under the laws of the State where the 
insured had his or her permanent home when he or she died. See 
Sec. 404.303 for a definition of permanent home.

                       Special Payments at Age 72



Sec. 404.380  General.

    Some older persons had little or no chance to become fully insured 
for regular social security benefits during their working years. For 
those who became 72 years old several years ago but are not fully 
insured, a special payment may be payable as described in the following 
sections.



Sec. 404.381  Who is entitled to special age 72 payments.

    You are entitled to a special age 72 payment if--
    (a) You have attained the age of 72; and
    (1) You attained such age before 1968; or
    (2) You attained such age after 1967--or, for applications filed 
after November 5, 1990, you attained age 72 after 1967 and before 1972--
and have at least 3 quarters of coverage for each calendar year elapsing 
after 1966 and before the year in which you attained age 72 (see subpart 
B for a description of quarters of coverage);
    (b) You reside in one of the 50 States, the District of Columbia, or 
the Northern Mariana Islands;
    (c) You apply; and
    (d) You are a U.S. citizen or a citizen of the Northern Mariana 
Islands; or you are an alien who was legally admitted for permanent 
residence in the United States and who has resided here continuously for 
5 years. Residence in the United States includes residence in the 
Northern Mariana Islands, Guam, American Samoa, Puerto Rico, and the 
Virgin Islands.

[44 FR 34481, June 15, 1979, as amended at 57 FR 21598, May 21, 1992]



Sec. 404.382  When special age 72 payments begin and end.

    (a) Your entitlement to the special age 72 payment begins with the 
first month covered by your application in which you meet all the other 
requirements for entitlement.
    (b) Your entitlement to this payment ends with the month before the 
month of your death.



Sec. 404.383  Special age 72 payment amounts.

    (a) Payment from May 1983 on. If you are entitled to special age 72 
payments from May 1983 on, you will receive a monthly payment of 
$125.60. If your spouse is also entitled to special age 72 payments, he 
or she will also receive $125.60. This amount, first payable for

[[Page 135]]

June 1982, will be increased when cost-of-living adjustments of Social 
Security benefits occur. This special payment may be reduced, suspended 
or not paid at all as explained in Sec. 404.384.
    (b) Payment prior to May 1983. If a husband or a single individual 
is entitled to special age 72 payments for months prior to May 1983, the 
amount payable was $125.60 for the months since June 1982. The wife 
received an amount approximiately one-half the husband's amount (i.e., 
$63.00 for months in the period June 1982-April 1983).

[49 FR 24116, June 12, 1984]



Sec. 404.384  Reductions, suspensions, and nonpayments of special age 72 payments.

    (a) General. Special age 72 payments may not be paid for any month 
you receive public assistance payments. The payment may be reduced if 
you or your spouse are eligible for a government pension. In some 
instances, the special payment may not be paid while you are outside the 
United States. The rules on when special payments may be suspended, 
reduced, or not paid are provided in paragraphs (b) through (e) of this 
section.
    (b) Suspension of special age 72 payments when you receive certain 
assistance payments. You cannot receive the special payment if 
supplemental security income or aid to families with dependent children 
(AFDC) payments are payable to you, or if your needs are considered in 
setting the amounts of these assistance payments made to someone else. 
However, if these assistance payments are stopped, you may receive the 
special payment beginning with the last month for which the assistance 
payments were paid.
    (c) Reduction of special age 72 payments when you or your spouse are 
eligible for a government pension. Special payments are reduced for any 
regular government pension (or lump-sum payment given instead of a 
pension) that you or your spouse are eligible for at retirement. A 
government pension is any annuity, pension, or retirement pay from the 
Federal Government, a State government or political subdivision, or any 
organization wholly owned by the Federal or State government. Also 
included as a government pension is any social security benefit. The 
term government pension does not include workmen's compensation payments 
or Veterans Administration payments for a service-connected disability 
or death.
    (d) Amount of reduction because of a government pension. If you are 
eligible for a government pension, the amount of the pension will be 
subtracted from your special age 72 payment. If your spouse is eligible 
for a government pension but is not entitled to the special payment, 
your special payment is reduced (after any reduction due to your own 
government pension) by the difference between the pension amount and the 
full special payment amount. If both you and your spouse are entitled to 
the special payment, each spouse's payment is first reduced by the 
amount of his or her own government pension (if any). Then, the wife's 
special payment is reduced by the amount that the husband's government 
pension exceeds the full special payment. The husband's special payment 
is also reduced by the amount that the wife's government pension exceeds 
the full special payment.
    (e) Nonpayment of special age 72 payments when you are not residing 
in the United States. No special payment is due you for any month you 
are not a resident of one of the 50 States, the District of Columbia, or 
the Northern Mariana Islands. Also, payment to you may not be permitted 
under the rules in Sec. 404.463 if you are an alien living outside the 
United States.

[44 FR 34481, June 15, 1979, as amended at 49 FR 24116, June 12, 1984]

                         Lump-Sum Death Payment



Sec. 404.390  General.

    If a person is fully or currently insured when he or she dies, a 
lump-sum death payment of $255 may be paid to the widow or widower of 
the deceased if he or she was living in the same household with the 
deceased at the time of his or her death. If the insured is not survived 
by a widow(er) who meets this

[[Page 136]]

requirement, all or part of the $255 payment may be made to someone else 
as described in Sec. 404.392.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21929, May 16, 1983; 61 
FR 41330, Aug. 8, 1996]



Sec. 404.391  Who is entitled to the lump-sum death payment as a widow or widower who was living in the same household.

    You are entitled to the lump-sum death payment as a widow or widower 
who was living in the same household if--
    (a) You are the widow or widower of the deceased insured individual 
based upon a relationship described in Sec. 404.345 or Sec. 404.346;
    (b) You apply for this payment within two years after the date of 
the insured's death. You need not apply again if, in the month prior to 
the death of the insured, you were entitled to wife's or husband's 
benefits on his or her earnings record; and
    (c) You were living in the same household with the insured at the 
time of his or her death. The term living in the same household is 
defined in Sec. 404.347.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21929, May 16, 1983]



Sec. 404.392  Who is entitled to the lump-sum death payment when there is no widow(er) who was living in the same household.

    (a) General. If the insured individual is not survived by a 
widow(er) who meets the requirements of Sec. 404.391, the lump-sum death 
payment shall be paid as follows:
    (1) To a person who is entitled (or would have been entitled had a 
timely application been filed) to widow's or widower's benefits (as 
described in Sec. 404.335) or mother's or father's benefits (as 
described in Sec. 404.339) on the work record of the deceased worker for 
the month of that worker's death; or
    (2) If no person described in (1) survives, in equal shares to each 
person who is entitled (or would have been entitled had a timely 
application been filed) to child's benefits (as described in 
Sec. 404.350) on the work record of the deceased worker for the month of 
that worker's death.
    (b) Application requirement. A person who meets the requirements of 
paragraph (a)(1) of this section need not apply to receive the lump-sum 
death payment if, for the month prior to the death of the insured, that 
person was entitled to wife's or husband's benefits on the insured's 
earnings record. Otherwise, an application must be filed within 2 years 
of the insured's death.

[48 FR 21929, May 16, 1983; 61 FR 41330, Aug. 8, 1996]



     Subpart E--Deductions; Reductions; and Nonpayments of Benefits

    Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c), 222(b), 
223(e), 224, 225, 702(a)(5) and 1147 of the Social Security Act (42 
U.S.C. 402, 403, 404(a) and (e), 405(a) and (c), 422(b), 423(e), 424a, 
425, 902(a)(5) and 1320b-17).

    Source: 32 FR 19159, Dec. 20, 1967, unless otherwise noted.



Sec. 404.401  Deduction, reduction, and nonpayment of monthly benefits or lump-sum death payments.

    Under certain conditions, the amount of a monthly insurance benefit 
(see Secs. 404.380 through 404.384 of this part for provisions 
concerning special payments at age 72) or the lump-sum death payment as 
calculated under the pertinent provisions of sections 202 and 203 of the 
Act (including reduction for age under section 202(q) of a monthly 
benefit) must be increased or decreased to determine the amount to be 
actually paid to a beneficiary. Increases in the amount of a monthly 
benefit or lump-sum death payment are based upon recomputation and 
recalculations of the primary insurance amount (see subpart C of this 
part). A decrease in the amount of a monthly benefit or lump-sum death 
payment is required in the following instances:
    (a) Reductions. A reduction of a person's monthly benefit is 
required where:
    (1) The total amount of the monthly benefits payable on an earnings 
record exceeds the maximum that may be paid (see Sec. 404.403);
    (2) An application for monthly benefits is effective for a month 
during a retroactive period, and the maximum has already been paid for 
that month

[[Page 137]]

or would be exceeded if such benefit were paid for that month (see 
Sec. 404.406);
    (3) An individual is entitled to old-age or disability insurance 
benefits in addition to any other monthly benefit (see Sec. 404.407);
    (4) An individual under age 65 is concurrently entitled to 
disability insurance benefits and to certain public disability benefits 
(see Sec. 404.408);
    (5) An individual is entitled in a month to a widow's or widower's 
insurance benefit that is reduced under section 202 (e)(4) or (f)(5) of 
the Act and to any other monthly insurance benefit other than an old-age 
insurance benefit (see Sec. 404.407(b)); or
    (6) An individual is entitled in a month to old-age, disability, 
wife's, husband's, widow's, or widower's insurance benefit and reduction 
is required under section 202(q) of the Act (see Sec. 404.410).
    (b) Deductions. A deduction from a monthly benefit or a lump-sum 
death payment may be required because of:
    (1) An individual's earnings or work (see Secs. 404.415 and 
404.417);
    (2) Failure of certain beneficiaries receiving wife's or mother's 
insurance benefits to have a child in her care (see Sec. 404.421);
    (3) The earnings or work of an old-age insurance beneficiary where a 
wife, husband, or child is also entitled to benefits (see Secs. 404.415 
and 404.417);
    (4) Failure to report within the prescribed period either certain 
work outside the United States or not having the care of a child (see 
Sec. 404.451);
    (5) Failure to report within the prescribed period earnings from 
work in employment or self-employment (see Sec. 404.453);
    (6) Refusal to accept rehabilitation services in certain cases (see 
Sec. 404.422); or
    (7) Certain taxes which were neither deducted from the wages of 
maritime employees nor paid to the Federal Government (see 
Sec. 404.457).
    (c) Adjustments. We may adjust your benefits to correct errors in 
payments under title II of the Act. We may also adjust your benefits if 
you received more than the correct amount due under title XVI of the 
Act. For the title II rules on adjustments to your benefits, see subpart 
F of this part. For the rules on adjusting your benefits to recover 
title XVI overpayments, see Sec. 416.572 of this chapter.
    (d) Nonpayments. Nonpayment of monthly benefits may be required 
because:
    (1) The individual is an alien who has been outside the United 
States for more than 6 months (see Sec. 404.460);
    (2) The individual on whose earnings record entitlement is based has 
been deported (see Sec. 404.464);
    (3) The individual is engaged in substantial gainful activity while 
entitled to disability insurance benefits based on ``statutory 
blindness'' (see Sec. 404.467); or
    (4) The individual has not provided satisfactory proof that he or 
she has a Social Security number or has not properly applied for a 
Social Security number (see Sec. 404.469).
    (e) Recalculation. A reduction by recalculation of a benefit amount 
may be prescribed because an individual has been convicted of certain 
offenses (see Sec. 404.465) or because the primary insurance amount is 
recalculated (see subpart C of this part).
    (f) Suspensions. Suspension of monthly benefits may be required 
pursuant to section 203(h)(3) of the Act (the Social Security 
Administration has information indicating that work deductions may 
reasonably be expected for the year), or pursuant to section 225 of the 
Act (the Social Security Administration has information indicating a 
beneficiary is no longer disabled).

[40 FR 30813, July 23, 1975, as amended at 48 FR 37016, Aug. 16, 1983; 
56 FR 41789, Aug. 23, 1991; 65 FR 16813, Mar. 30, 2000; 66 FR 38906, 
July 26, 2001]



Sec. 404.401a  When we do not pay benefits because of a disability beneficiary's work activity.

    If you are receiving benefits because you are disabled or blind as 
defined in title II of the Social Security Act, we will stop your 
monthly benefits even though you have a disabling impairment 
(Sec. 404.1511), if you engage in substantial gainful activity during 
the reentitlement period (Sec. 404.1592a) following completion of the 
trial work period (Sec. 404.1592). You will, however, be paid benefits 
for the first month after the trial work period in which you do

[[Page 138]]

substantial gainful activity and the two succeeding months, whether or 
not you do substantial gainful activity in those two months. If anyone 
else is receiving monthly benefits based on your earnings record, that 
individual will not be paid benefits for any month for which you cannot 
be paid benefits during the reentitlement period. Earnings from work 
activity during a trial work period will not stop your benefits.

[49 FR 22271, May 29, 1984, as amended at 58 FR 64883, Dec. 10, 1993]



Sec. 404.402  Interrelationship of deductions, reductions, adjustments, and nonpayment of benefits.

    (a) Deductions, reductions, adjustment. Deductions because of 
earnings or work (see Secs. 404.415 and 404.417); failure to have a 
child ``in her care'' (see Sec. 404.421); refusal to accept 
rehabilitation services (see Sec. 404.422); as a penalty for failure to 
timely report noncovered work outside the United States, failure by a 
woman to report that she no longer has a child ``in her care,'' or 
failure to timely report earnings (see Secs. 404.451 and 404.453); 
because of unpaid maritime taxes (see Sec. 404.457); or nonpayments 
because of drug addiction and alcoholism to individuals other than an 
insured individual who are entitled to benefits on the insured 
individual's earnings record are made:
    (1) Before making any reductions because of the maximum (see 
Sec. 404.403),
    (2) Before applying the benefit rounding provisions (see 
Sec. 404.304(f)), and,
    (3) Except for deductions imposed as a penalty (see Secs. 404.451 
and 404.453), before making any adjustment necessary because an error 
has been made in the payment of benefits (see subpart F). However, for 
purposes of charging excess earnings for taxable years beginning after 
December 1960 or ending after June 1961, see paragraph (b) of this 
section and Sec. 404.437 for reductions that apply before such charging.
    (b) Reductions, nonpayments. (1) Reduction because of the maximum 
(see Sec. 404.403) is made:
    (i) Before reduction because of simultaneous entitlement to old-age 
or disability insurance benefits and to other benefits (see 
Sec. 404.407);
    (ii) Before reduction in benefits for age (see Secs. 404.410 through 
404.413);
    (iii) Before adjustment necessary because an error has been made in 
the payment of benefits (see subpart F of this part);
    (iv) Before reduction because of entitlement to certain public 
disability benefits provided under Federal, State, or local laws or 
plans (see Sec. 404.408);
    (v) Before nonpayment of an individual's benefits because he is an 
alien living outside the United States for 6 months (see Sec. 404.460), 
or because of deportation (see Sec. 404.464); and
    (vi) Before the redetermination of the amount of benefit payable to 
an individual who has been convicted of certain offenses (see 
Sec. 404.465).
    (2) Reduction of benefits because of entitlement to certain public 
disability benefits (see Sec. 404.408) is made before deduction:
    (i) Under section 203 of the Act relating to work (see 
Secs. 404.415, 404.417, 404.451, and 404.453) and failure to have care 
of a child (see Secs. 404.421 and 404.451), and
    (ii) Under section 222(b) of the Act on account of refusal to accept 
rehabilitation services (see Sec. 404.422).
    (3) Reduction of the benefit of a spouse who is receiving a 
Government pension (see Sec. 404.408(a)) is made after the withholding 
of payments as listed in paragraph (d)(1) of this section and after 
reduction because of receipt of certain public disability benefits 
(paragraph (b)(2) of this section).
    (c) Alien outside the United States; deportation nonpayment--
deduction. If an individual is subject to nonpayment of a benefit for a 
month under Sec. 404.460 or Sec. 404.464, no deduction is made from his 
benefit for that month under Sec. 404.415, Sec. 404.417, or 
Sec. 404.421, and no deduction is made because of that individual's work 
from the benefit of any person entitled or deemed entitled to benefits 
under Sec. 404.420, on his earnings record, for that month.
    (d) Order of priority--deductions and other withholding provisions. 
Deductions and other withholding provisions are applied in accordance 
with the following order of priority:
    (1) Current nonpayments under Secs. 404.460, 404.464, 404.465, 
404.467, and 404.469;
    (2) Current reductions under Sec. 404.408;

[[Page 139]]

    (3) Current reductions under Sec. 404.408a;
    (4) Current deductions under Secs. 404.417, 404.421, and 404.422;
    (5) Current withholding of benefits under Sec. 404.456;
    (6) Unpaid maritime tax deductions (Sec. 404.457);
    (7) Withholdings to recover overpayments (see subpart F of this 
part);
    (8) Penalty deductions under Secs. 404.451 and 404.453.

[40 FR 30813, July 23, 1975, as amended at 44 FR 29047, May 18, 1979; 48 
FR 37016, Aug. 16, 1983; 48 FR 46148, Oct. 11, 1983; 56 FR 41789, Aug. 
23, 1991; 60 FR 8146, Feb. 10, 1995]



Sec. 404.403  Reduction where total monthly benefits exceed maximum family benefits payable.

    (a) General. (1) The Social Security Act limits the amount of 
monthly benefits that can be paid for any month based on the earnings of 
an insured individual. If the total benefits to which all persons are 
entitled on one earnings record exceed a maximum amount prescribed by 
law, then those benefits must be reduced so that they do not exceed that 
maximum.
    (2) The method of determining the total benefits payable (the family 
maximum) depends on when the insured individual died or became eligible, 
whichever is earlier. For purposes of this section, the year in which 
the insured individual becomes eligible refers generally to the year in 
which the individual attains age 62 or becomes disabled. However, where 
eligibility or death is in 1979 or later, the year of death, attainment 
of age 62, or beginning of current disability does not control if the 
insured individual was entitled to a disability benefit within the 12 
month period preceding current eligibility or death. Instead the year in 
which the individual became eligible for the former disability insurance 
benefit is the year of eligibility.
    (3) The benefits of an individual entitled as a divorced spouse or 
surviving divorced spouse will not be reduced pursuant to this section. 
The benefits of all other individuals entitled on the same record will 
be determined under this section as if no such divorced spouse or 
surviving divorced spouse were entitled to benefits.
    (4) In any case where more than one individual is entitled to 
benefits as the spouse or surviving spouse of a worker for the same 
month, and at least one of those individuals is entitled based on a 
marriage not valid under State law (see Secs. 404.345 and 404.346), the 
benefits of the individual whose entitlement is based on a valid 
marriage under State law will not be reduced pursuant to this section. 
The benefits of all other individuals entitled on the same record 
(unless excluded by paragraph (a)(3) of this section) will be determined 
under this section as if such validly married individual were not 
entitled to benefits.
    (5) When a person entitled on a worker's earnings record is also 
entitled to benefits on another earnings record, we consider only the 
amount of benefits actually due or payable on the worker's record to the 
dually-entitled person when determining how much to reduce total monthly 
benefits payable on the worker's earnings record because of the maximum. 
We do not include, in total benefits payable, any amount not paid 
because of that person's entitlement on another earnings record (see 
Sec. 404.407). The effect of this provision is to permit payment of up 
to the full maximum benefits to other beneficiaries who are not subject 
to a deduction or reduction. (See Sec. 404.402 for other situations 
where we apply deductions or reductions before reducing total benefits 
for the maximum.)

    Example 1: A wage earner, his wife and child are entitled to 
benefits. The wage earner's primary insurance amount is $600.00. His 
maximum is $900.00. Due to the maximum limit, the monthly benefits for 
the wife and child must be reduced to $150.00 each. Their original 
benefit rates are $300.00 each.

Maximum--$900.00
Subtract primary insurance amount--$600.00
Amount available for wife and child--$300.00
Divide by 2--$150.00 each for wife and child

    The wife is also entitled to benefits on her own record of $120.00 
monthly. This reduces her wife's benefit to $30.00. The following table 
illustrates this calculation.

Wife's benefit, reduced for maximum--$150.00
Subtract reduction due to dual entitlement--$120.00
Wife's benefit--$30.00

    In computing the total benefits payable on the record, we disregard 
the $120.00 we cannot pay the wife. This allows us to increase

[[Page 140]]

the amount payable to the child to $270.00. The table below shows the 
steps in our calculation.

Amount available under maximum--$300.00
Subtract amount due wife after reduction due to entitlement to her own 
benefit--$30.00
Child's benefit--$270.00
    Example 2: A wage earner, his wife and 2 children are entitled to 
benefits. The wage earner's primary insurance amount is $1,250.00. His 
maximum is $2,180.00. Due to the maximum limit, the monthly benefits for 
the wife and children must be reduced to $310.00 each. Their original 
rates (50 percent of the worker's benefit) are $625.00 each. The 
following shows the calculation.

Maximum--$2,180.00
Subtract primary insurance amount--$1,250.00
Amount available for wife and children--$930.00
Divide by 3--$310 each for wife and children

    The children are also entitled to benefits on their own records. 
Child one is entitled to $390.00 monthly and child two is entitled to 
$280.00 monthly. This causes a reduction in the benefit to child one to 
0.00 and the benefit to child two to $30.00. Again, the following 
illustrates the calculation.

Benefit payable to child 1 reduced for maximum--$310.00
Subtract reduction due to dual entitlement--$390.00
Benefit payable to child 1--$0.00
Benefit payable to child 2, reduced for maximum--$310.00
Subtract reduction for dual entitlement--$280.00
Benefit payable to child 2--$30.00

    In computing the total benefits payable on the record, we consider 
only the benefits actually paid to the children, or $30. This allows 
payment of an additional amount to the wife, increasing her benefit to 
$625.00. This is how the calculation works.
Amount available under maximum for wife and children--$930.00
Subtract amount due children after reduction due to entitlement to their 
own benefits--$30.00
Amount available for wife--$900.00
Amount payable to wife (original benefit)--$625.00
    Example 3: A wage earner, his wife and 4 children are entitled to 
benefits. The wage earner's primary insurance amount is $1,250.00. His 
maximum is $2,180.00. Due to the maximum limit, the monthly benefits for 
the wife and children must be reduced to $186.00 each. Their original 
rates are $625.00 each. This is how the calculation works.

Maximum--$2,180.00
Subtract primary insurance amount--$1,250.00
Amount available for wife and children--$930.00
Divide by 5--$186.00 each for wife and four children

    Two children are also entitled to benefits on their own records. 
Child one is entitled to $390.00 monthly and child two is entitled to 
$280.00 monthly. This causes a reduction in the benefit to child one to 
$0.00 and the benefit to child two to $0.00. This calculation is as 
follows.

Benefit to child 1, reduced for maximum--$186.00
Subtract reduction due to dual entitlement--$390.00
Benefit payable to child 1--$0.00

Benefit to child 2, reduced for maximum--$186.00
Subtract reduction for dual entitlement--$280.00
Benefit payable to child two--$0.00

    In computing the total benefits payable on the record, we disregard 
the $372.00 we cannot pay the children. This allows payment of an 
additional amount to the wife, and the two remaining children as 
follows:

Amount available under maximum for wife and children--$930.00
Subtract amount due child one and child two after reduction due to 
entitlement to their own benefits--$0.00
Amount available for wife and the other two children--$930.00
Amount payable to the wife and each of the remaining two children--
$310.00
    (b) Eligibility or death before 1979. Where more than one individual 
is entitled to monthly benefits for the same month on the same earnings 
record, a reduction in the total benefits payable for that month may be 
required (except in cases involving a saving clause--see Sec. 404.405) 
if the maximum family benefit is exceeded. The maximum is exceeded if 
the total of the monthly benefits exceeds the amount appearing in column 
V of the applicable table in section 215(a) of the Act on the line on 
which appears in column IV the primary insurance amount of the insured 
individual whose earnings record is the basis for the benefits payable. 
Where the maximum is exceeded, the total benefits for each month after 
1964 are reduced to the amount appearing in column V. However, when any 
of the persons entitled to benefits on the insured individual's earnings 
would, except for the limitation described in

[[Page 141]]

Sec. 404.353(b), be entitled to child's insurance benefits on the basis 
of the earnings record of one or more other insured individuals, the 
total benefits payable may not be reduced to less than the smaller of--
    (1) The sum of the maximum amounts of benefits payable on the basis 
of the earnings records of all such insured individuals, or
    (2) The last figure in column V of the applicable table in (or 
deemed to be in) section 215(a) of the Act. The applicable table refers 
to the table which is effective for the month the benefit is payable.
    (c) Eligible for old-age insurance benefits or dies in 1979. If an 
insured individual becomes eligible for old-age insurance benefits or 
dies in 1979, the monthly maximum is as follows--
    (1) 150 percent of the first $230 of the individual's primary 
insurance amount, plus
    (2) 272 percent of the primary insurance amount over $230 but not 
over $332, plus
    (3) 134 percent of the primary insurance amount over $332 but not 
over $433, plus
    (4) 175 percent of the primary insurance amount over $433.

If the total of this computation is not a multiple of $0.10, it will be 
rounded to the next lower multiple of $0.10.
    (d) Eligible for old-age insurance benefits or dies after 1979. (1) 
If an insured individual becomes eligible for old-age insurance benefits 
or dies after 1979, the monthly maximum is computed as in paragraph (c) 
of this section. However, the dollar amounts shown there will be updated 
each year as average earnings rise. This updating is done by first 
dividing the average of the total wages (see Sec. 404.203(m)) for the 
second year before the individual dies or becomes eligible, by the 
average of the total wages for 1977. The result of that computation is 
then multiplied by each dollar amount in the formula in paragraph (c) of 
this section. Each updated dollar amount will be rounded to the nearer 
dollar; if the amount is an exact multiple of $0.50 (but not of $1), it 
will be rounded to the next higher $1.
    (2) Before November 2 of each calendar year after 1978, the 
Commissioner will publish in the Federal Register the formula and 
updated dollar amounts to be used for determining the monthly maximum 
for the following year.
    (d-1) Entitled to disability insurance benefits after June 1980. If 
you first become eligible for old-age or disability insurance benefits 
after 1978 and first entitled to disability insurance benefits after 
June 1980, we compute the monthly family maximum under a formula which 
is different from that in paragraphs (c) and (d) of this section. The 
computation under the new formula is as follows:
    (1) We take 85 percent of your average indexed monthly earnings and 
compare that figure with your primary insurance amount (see Sec. 404.212 
of this part). We work with the larger of these two amounts.
    (2) We take 150 percent of your primary insurance amount.
    (3) We compare the results of paragraphs (d-1) (1) and (2) of this 
section. The smaller amount is the monthly family maximum. As a result 
of this rule, the entitled spouse and children of some workers will not 
be paid any benefits because the family maximum does not exceed the 
primary insurance amount.
    (e) Person entitled on more than one record during years after 1978 
and before 1984. (1) If any of the persons entitled to monthly benefits 
on the earnings record of an insured individual would, except for the 
limitation described in Sec. 404.353(b), be entitled to child's 
insurance benefits on the earnings record of one or more other insured 
individuals, the total benefits payable may not be reduced to less than 
the smaller of--(i) the sum of the maximum amounts of benefits payable 
on the earnings records of all the insured individuals, or (ii) 1.75 
times the highest primary insurance amount possible for that month based 
on the average indexed monthly earnings equal to one-twelfth of the 
contribution and benefit base determined for that year.
    (2) If benefits are payable on the earnings of more than one 
individual and the primary insurance amount of one of the insured 
individuals was computed under the provisions in effect before 1979 and 
the primary insurance amount of the others was computed

[[Page 142]]

under the provisions in effect after 1978, the maximum monthly benefits 
cannot be more than the amount computed under paragraph (e)(1) of this 
section.
    (f) Person entitled on more than one record for years after 1983. 
(1) If any person for whom paragraphs (c) and (d) would apply is 
entitled to monthly benefits on the earnings record of an insured 
individual would, except for the limitation described in 
Sec. 404.353(b), be entitled to child's insurance benefits on the 
earnings record of one or more other insured individuals, the total 
benefits payable to all persons on the earnings record of any of those 
insured individuals may not be reduced to less than the smaller of:
    (i) The sum of the maximum amounts of benefits payable on the 
earnings records of all the insured individuals, or
    (ii) 1.75 times the highest primary insurance amount possible for 
January 1983, or if later, January of the year that the person becomes 
entitled or reentitled on more than one record.

This highest primary insurance amount possible for that year will be 
based on the average indexed monthly earnings equal to one-twelfth of 
the contribution and benefit base determined for that year. Thereafter, 
the total monthly benefits payable to persons on the earnings record of 
those insured individuals will then be increased only when monthly 
benefits are increased because of cost-of-living adjustments (see 
Sec. 404.270ff).
    (2) If benefits are payable on the earnings of more than one 
individual and the primary insurance amount of one of the insured 
individuals was computed under the provisions in effect before 1979 and 
the primary insurance amount of the other was computed under the 
provisions in effect after 1978, the maximum monthly benefits cannot be 
more than the amount computed under paragraph (f)(1) of this section.
    (g) Person previously entitled to disability insurance benefits. If 
an insured individual who was previously entitled to disability 
insurance benefits becomes entitled to a ``second entitlement'' as 
defined in Sec. 404.250, or dies, after 1995, and the insured 
individual's primary insurance amount is determined under 
Secs. 404.251(a)(1), 404.251(b)(1), or 404.252(b), the monthly maximum 
during the second entitlement is determined under the following rules:
    (1) If the primary insurance amount is determined under 
Secs. 404.251(a)(1) or 404.251(b)(1), the monthly maximum equals the 
maximum in the last month of the insured individual's earlier 
entitlement to disability benefits, increased by any cost-of-living or 
ad hoc increases since then.
    (2) If the primary insurance amount is determined under 
Sec. 404.252(b), the monthly maximum equals the maximum in the last 
month of the insured individual's earlier entitlement to disability 
benefits.
    (3) Notwithstanding paragraphs (g)(1) and (g)(2) of this section, if 
the second entitlement is due to the insured individual's retirement or 
death, and the monthly maximum in the last month of the insured 
individual's earlier entitlement to disability benefits was computed 
under paragraph (d-1) of this section, the monthly maximum is equal to 
the maximum that would have been determined for the last month of such 
earlier entitlement if computed without regard for paragraph (d-1) of 
this section.

[45 FR 1611, Jan. 8, 1980, as amended at 46 FR 25601, May 8, 1981; 48 FR 
46148, Oct. 11, 1983; 51 FR 12606, Apr. 14, 1986; 58 FR 64892, Dec. 10, 
1993; 62 FR 38450, July 18, 1997; 64 FR 17101, Apr. 8, 1999; 64 FR 
57775, Oct. 27, 1999; 65 FR 16813, Mar. 30, 2000]



Sec. 404.404  How reduction for maximum affects insured individual and other persons entitled on his earnings record.

    If a reduction of monthly benefits is required under the provisions 
of Sec. 404.403, the monthly benefit amount of each of the persons 
entitled to a monthly benefits on the same earnings record (with the 
exception of the individual entitled to old-age or disability insurance 
benefits) is proportionately reduced so that the total benefits that can 
be paid in 1 month (including an amount equal to the primary insurance 
amount of the old-age or disability insurance beneficiary, when 
applicable) does not exceed the maximum family benefit (except as 
provided in Sec. 404.405

[[Page 143]]

where various savings clause provisions are described).



Sec. 404.405  Situations where total benefits can exceed maximum because of ``savings clause.''

    The following provisions are savings clauses and describe exceptions 
to the rules concerning the maximum amount payable on an individual's 
earnings record in a month as described in Sec. 404.403. The effect of a 
savings clause is to avoid lowering benefit amounts or to guarantee 
minimum increases to certain persons entitled on the earnings record of 
the insured individual when a statutory change has been made that would 
otherwise disadvantage them. The reduction described in Sec. 404.403 
does not apply in the following instances:
    (a)-(m) [Reserved]
    (n) Months after August 1972. The reduction described in 
Sec. 404.403(a) shall not apply to benefits for months after August 1972 
where two or more persons were entitled to benefits for August 1972 
based upon the filing of an application in August 1972 or earlier and 
the total of such benefits was subject to reduction for the maximum 
under Sec. 404.403 (or would have been subject to such reduction except 
for this paragraph) for January 1971. In such a case, maximum family 
benefits on the insured individual's earnings record for any month after 
August 1972 may not be less than the larger of:
    (1) The maximum family benefits for such month determined under the 
applicable table in section 215(a) of the Act (the applicable table in 
section 215(a) is that table which is effective for the month the 
benefit is payable or in the case of a lump-sum payment, the month the 
individual died); or
    (2) The total obtained by multiplying each benefit for August 1972 
after reduction for the maximum but before deduction or reduction for 
age, by 120 percent and raising each such increased amount, if it is not 
a multiple of 10 cents, to the next higher multiple of 10 cents.
    (o) Months after December 1972. The reduction described in 
Sec. 404.403 shall not apply to benefits for months after December 1972 
in the following cases:
    (1) In the case of a redetermination of widow's or widower's 
benefits, the reduction described in Sec. 404.403 shall not apply if:
    (i) Two or more persons were entitled to benefits for December 1972 
on the earnings records of a deceased individual and at least one such 
person is entitled to benefits as the deceased individual's widow or 
widower for December 1972 and for January 1973; and
    (ii) The total of benefits to which all persons are entitled for 
January 1973 is reduced (or would be reduced if deductions were not 
applicable) for the maximum under Sec. 404.403.

In such case, the benefit of each person referred to in paragraph 
(o)(1)(i) of this section for months after December 1972 shall be no 
less than the amount it would have been if the widow's or widower's 
benefit had not been redetermined under the Social Security Amendments 
of 1972.
    (2) In the case of entitlement to child's benefits based upon 
disability which began between ages 18 and 22 the reduction described in 
Sec. 404.403 shall not apply if:
    (i) One or more persons were entitled to benefits on the insured 
individual's earnings record for December 1972 based upon an application 
filed in that month or earlier; and
    (ii) One or more persons not included in paragraph (o)(2)(i) of this 
section are entitled to child's benefits on that earnings record for 
January 1973 based upon disability which began in the period from ages 
18 to 22; and
    (iii) The total benefits to which all persons are entitled on that 
record for January 1973 is reduced (or would be reduced if deductions 
were not applicable) for the maximum under Sec. 404.403.

In such case, the benefit of each person referred to in paragraph 
(o)(2)(i) of this section for months after December 1972 shall be no 
less than the amount it would have been if the person entitled to 
child's benefits based upon disability in the period from ages 18 to 22 
were not so entitled.
    (3) In the case of entitlement of certain surviving divorced 
mothers, the reduction described in Sec. 404.403 shall not apply if:
    (i) One or more persons were entitled to benefits on the insured 
individual's

[[Page 144]]

earnings record for December 1972 based upon an application filed in 
December 1972 or earlier; and
    (ii) One or more persons not included in paragraph (o)(3)(i) of this 
section are entitled to benefits on that earnings record as a surviving 
divorced mother for a month after December 1972; and
    (iii) The total of benefits to which all persons are entitled on 
that record for any month after December 1972 is reduced (or would be 
reduced if deductions were not applicable) for the maximum under 
Sec. 404.403.

In such case, the benefit of each such person referred to in paragraph 
(o)(3)(i) of this section for months after December 1972 in which any 
person referred to in paragraph (o)(3)(ii) of this section is entitled 
shall be no less than it would have been if the person(s) referred to in 
paragraph (o)(3)(ii) of this section had not become entitled to 
benefits.
    (p) Months after December 1973. The reduction described in 
Sec. 404.403 shall not apply to benefits for months after December 1973 
where two or more persons were entitled to monthly benefits for January 
1971 or earlier based upon applications filed in January 1971 or 
earlier, and the total of such benefits was subject to reduction for the 
maximum under Sec. 404.403 for January 1971 or earlier. In such a case, 
maximum family benefits payable on the insured individual's earnings 
record for any month after January 1971 may not be less than the larger 
of:
    (1) The maximum family benefit for such month shown in the 
applicable table in section 215(a) of the Act (the applicable table in 
section 215(a) of the Act is that table which is effective for the month 
the benefit is payable or in the case of a lump-sum payment, the month 
the individual died); or
    (2) The largest amount which has been determined payable for any 
month for persons entitled to benefits on the insured individual's 
earnings records; or
    (3) In the case of persons entitled to benefits on the insured 
individual's earnings record for the month immediately preceding the 
month of a general benefit or cost-of-living increase after September 
1972, an amount equal to the sum of the benefit amount for each person 
(excluding any part of an old-age insurance benefit increased because of 
delayed retirement under the provisions of Sec. 404.305(a) for the month 
immediately before the month of increase in the primary insurance amount 
(after reduction for the family maximum but before deductions or 
reductions for age) multiplied by the percentage of increase. Any such 
increased amount, if it is not a multiple of $0.10, will be raised to 
the next higher multiple of $0.10 for months before June 1982 and 
reduced to the next lower multiple of $0.10 for months after May 1982.
    (q) Months after May 1978. The family maximum for months after May 
1978 is figured for all beneficiaries just as it would have been if none 
of them had gotten a benefit increase because of the retirement credit 
if:
    (1) One or more persons were entitled (without the reduction 
required by Sec. 404.406) to monthly benefits for May 1978 on the wages 
and self-employment income of a deceased wage earner;
    (2) The benefit for June 1978 of at least one of those persons is 
increased by reason of a delayed retirement credit (see 
Sec. 404.330(b)(4) or Sec. 404.333(b)(4)); and
    (3) The total amount of monthly benefits to which all those persons 
are entitled is reduced because of the maximum or would be so reduced 
except for certain restrictions (see Sec. 404.403 and Sec. 404.402(a)).

[32 FR 19159, Dec. 20, 1967, as amended at 40 FR 30814, July 23, 1975; 
43 FR 8132, Feb. 28, 1978; 43 FR 29277, July 7, 1978; 48 FR 46148, Oct. 
11, 1983]



Sec. 404.406  Reduction for maximum because of retroactive effect of application for monthly benefits.

    Under the provisions described in Sec. 404.403, beginning with the 
month in which a person files an application and becomes entitled to 
benefits on an insured individual's earnings record, the benefit rate of 
other persons entitled on the same earnings record (aside from the 
individual on whose earnings record entitlement is based) are adjusted 
downward, if necessary, so that the maximum benefits payable on one 
earnings record will not be exceeded. An application may also be 
effective (retroactively) for benefits for months before the month of 
filing (see Sec. 404.603).

[[Page 145]]

For any month before the month of filing, however, benefits that have 
been previously certified by the Administration for payment to other 
persons (on the same earnings record) are not changed. Rather, the 
benefit payment of the person filing the application in the later month 
is reduced for each month of the retroactive period to the extent that 
may be necessary, so that no earlier payment to some other person is 
made erroneous. This means that for each month of the retroactive period 
the amount payable to the person filing the later application is the 
difference, if any, between (a) the total amount of benefits actually 
certified for payment to other persons for that month, and (b) the 
maximum amount of benefits payable for that month to all persons, 
including the person filing later.

[32 FR 19159, Dec. 20, 1967, as amended at 64 FR 14608, Mar. 26, 1999]



Sec. 404.407  Reduction because of entitlement to other benefits.

    (a) Entitlement to old-age or disability insurance benefit and other 
monthly benefit. If an individual is entitled to an old-age insurance 
benefit or disability insurance benefit for any month after August 1958 
and to any other monthly benefit payable under the provisions of title 
II of the Act (see subpart D of this part) for the same month, such 
other benefit for the month, after any reduction under section 202(q) of 
the Act because of entitlement to such benefit for months before 
retirement age and any reduction under section 203(a) of the Act, is 
reduced (but not below zero) by an amount equal to such old-age 
insurance benefit (after reduction under section 202(q) of the Act) or 
such disability insurance benefit, as the case may be.
    (b) Entitlement to widow's or widower's benefit and other monthly 
benefit. If an individual is entitled for any month after August 1965 to 
a widow's or widower's insurance benefit under the provisions of section 
202 (e)(4) or (f)(5) of the Act and to any other monthly benefit payable 
under the provisions of title II of the Act (see subpart D) for the same 
month, except an old-age insurance benefit, such other insurance benefit 
for that month, after any reduction under paragraph (a) of this section, 
any reduction for age under section 202(q) of the Act, and any reduction 
under the provisions described in section 203(a) of the Act, shall be 
reduced, but not below zero, by an amount equal to such widow's or 
widower's insurance benefit after any reduction or reductions under 
paragraph (a) of this section or section 203(a) of the Act.
    (c) Entitlement to old-age insurance benefit and disability 
insurance benefit. Any individual who is entitled for any month after 
August 1965 to both an old-age insurance benefit and a disability 
insurance benefit shall be entitled to only the larger of such benefits 
for such month, except that where the individual so elects, he or she 
shall instead be entitled to only the smaller of such benefits for such 
month. Only a person defined in Sec. 404.612 (a), (c), or (d) may make 
the above described election.
    (d) Child's insurance benefits. A child may, for any month, be 
simultaneously entitled to a child's insurance benefit on more than one 
individual's earnings if all the conditions for entitlement described in 
Sec. 404.350 are met with respect to each claim. Where a child is 
simultaneously entitled to child's insurance benefits on more than one 
earnings record, the general rule is that the child will be paid an 
amount which is based on the record having the highest primary insurance 
amount. However, the child will be paid a higher amount which is based 
on the earnings record having a lower primary insurance amount if no 
other beneficiary entitled on any record would receive a lower benefit 
because the child is paid on the record with the lower primary insurance 
amount. (See Sec. 404.353(b).)
    (e) Entitlement to more than one benefit where not all benefits are 
child's insurance benefits and no benefit is an old-age or disability 
insurance benefit. If an individual (other than an individual to whom 
section 202 (e)(4) or (f)(5) of the Act applies) is entitled for any 
month to more than one monthly benefit payable under the provisions of 
this subpart, none of which is an old-age or disability insurance 
benefit and all of which are not child's insurance benefits, only the 
greater of the monthly

[[Page 146]]

benefits to which he would (but for the provisions of this paragraph) 
otherwise be entitled is payable for such month. For months after August 
1965, an individual who is entitled for any month to more than one 
widow's or widower's insurance benefit to which section 202 (e)(4) or 
(f)(5) of the Act applies is entitled to only one such benefit for such 
month, such benefit to be the largest of such benefits.

[32 FR 19159, Dec. 20, 1967, as amended at 51 FR 12606, Apr. 14, 1986; 
54 FR 5603, Feb. 6, 1989]



Sec. 404.408  Reduction of benefits based on disability on account of receipt of certain other disability benefits provided under Federal, State, or local laws 
          or plans.

    (a) When reduction required. Under section 224 of the Act, a 
disability insurance benefit to which an individual is entitled under 
section 223 of the Act for a month (and any monthly benefit for the same 
month payable to others under section 202 on the basis of the same 
earnings record) is reduced (except as provided in paragraph (b) of this 
section) by an amount determined under paragraph (c) of this section if:
    (1) The individual first became entitled to disability insurance 
benefits after 1965 but before September 1981 based on a period of 
disability that began after June 1, 1965, and before March 1981, and
    (i) The individual entitled to the disability insurance benefit is 
also entitled to periodic benefits under a workers' compensation law or 
plan of the United States or a State for that month for a total or 
partial disability (whether or not permanent), and
    (ii) The Commissioner has, in a month before that month, received a 
notice of the entitlement, and
    (iii) The individual has not attained age 62, or
    (2) The individual first became entitled to disability insurance 
benefits after August 1981 based on a disability that began after 
February 1981, and
    (i) The individual entitled to the disability insurance benefit is 
also, for that month, concurrently entitled to a periodic benefit 
(including workers' compensation or any other payments based on a work 
relationship) on account of a total or partial disability (whether or 
not permanent) under a law or plan of the United States, a State, a 
political subdivision, or an instrumentality of two or more of these 
entities, and
    (ii) The individual has not attained age 65.
    (b) When reduction not made. (1) The reduction of a benefit 
otherwise required by paragraph (a)(1) of this section is not made if 
the workers' compensation law or plan under which the periodic benefit 
is payable provides for the reduction of such periodic benefit when 
anyone is entitled to a benefit under title II of the Act on the basis 
of the earnings record of an individual entitled to a disability 
insurance benefit under section 223 of the Act.
    (2) The reduction of a benefit otherwise required by paragraph 
(a)(2) of this section is not to be made if:
    (i) The law or plan under which the periodic public disability 
benefit is payable provides for the reduction of that benefit when 
anyone is entitled to a benefit under title II of the Act on the basis 
of the earnings record of an individual entitled to a disability 
insurance benefit under section 223 of the Act and that law or plan so 
provided on February 18, 1981. (The reduction required by paragraph 
(a)(2) of this section will not be affected by public disability 
reduction provisions not actually in effect on this date or by changes 
made after February 18, 1981, to provisions that were in effect on this 
date providing for the reduction of benefits previously not subject to a 
reduction); or
    (ii) The benefit is a Veterans Administration benefit, a public 
disability benefit (except workers' compensation) payable to a public 
employee based on employment covered under Social Security, a public 
benefit based on need, or a wholly private pension or private insurance 
benefit.
    (c) Amount of reduction--(1) General. The total of benefits payable 
for a month under sections 223 and 202 of the Act to which paragraph (a) 
of this section applies is reduced monthly (but not below zero) by the 
amount by which the sum of the monthly disability insurance benefits 
payable on the disabled individual's earnings

[[Page 147]]

record and the other public disability benefits payable for that month 
exceeds the higher of:
    (i) Eighty percent of his average current earnings, as defined in 
paragraph (c)(3) of this section, or
    (ii) The total of such individual's disability insurance benefit for 
such month and all other benefits payable for such month based on such 
individual's earnings record, prior to reduction under this section.
    (2) Limitation on reduction. In no case may the total of monthly 
benefits payable for a month to the disabled worker and to the persons 
entitled to benefits for such month on his earnings record be less than:
    (i) The total of the benefits payable (after reduction under 
paragraph (a) of this section) to such beneficiaries for the first month 
for which reduction under this section is made, and
    (ii) Any increase in such benefits which is made effective for 
months after the first month for which reduction under this section is 
made.
    (3) Average current earnings defined. (i) Beginning January 1, 1979, 
for purposes of this section, an individual's average current earnings 
is the largest of either paragraph (c)(3)(i) (a), (b) or (c) of this 
section (after reducing the amount to the next lower multiple of $1 when 
the amount is not a multiple of $1):
    (A) The average monthly wage (determined under section 215(b) of the 
Act as in effect prior to January 1979) used for purposes of computing 
the individual's disability insurance benefit under section 223 of the 
Act;
    (B) One-sixtieth of the total of the individual's wages and earnings 
from self-employment, without the limitations under sections 209(a) and 
211(b)(1) of the Act (see paragraph (c)(3)(ii) of this section), for the 
5 consecutive calendar years after 1950 for which the wages and earnings 
from self-employment were highest; or
    (C) One-twelfth of the total of the individual's wages and earnings 
from self-employment, without the limitations under sections 209(a) and 
211(b)(1) of the Act (see paragraph (c)(3)(ii) of this section), for the 
calendar year in which the individual had the highest wages and earnings 
from self-employment during the period consisting of the calendar year 
in which the individual became disabled and the 5 years immediately 
preceding that year. Any amount so computed which is not a multiple of 
$1 is reduced to the next lower multiple of $1.
    (ii) Method of determining calendar year earnings in excess of the 
limitations under sections 209(a) and 211(b)(1) of the Act. For the 
purposes of paragraph (c)(3)(i) of this section, the extent by which the 
wages or earnings from self-employment of an individual exceed the 
maximum amount of earnings creditable under sections 209(a) and 
211(b)(1) of the Act in any calendar year after 1950 and before 1978 
will ordinarily be estimated on the basis of the earnings information 
available in the records of Administration. (See subpart I of this 
part.) If an individual provides satisfactory evidence of his actual 
earnings in any year, the extent, if any, by which his earnings exceed 
the limitations under sections 209(a) and 211(b)(1) of the Act shall be 
determined by the use of such evidence instead of by the use of 
estimates.
    (4) Reentitlement to disability insurance benefits. If an 
individual's entitlement to disability insurance benefits terminates and 
such individual again becomes entitled to disability insurance benefits, 
the amount of the reduction is again computed based on the figures 
specified in this paragraph (c) applicable to the subsequent 
entitlement.
    (5) Computing disability insurance benefits. When reduction is 
required, the total monthly Social Security disability insurance 
benefits payable after reduction can be more easily computed by 
subtracting the monthly amount of the other public disability benefit 
from the higher of paragraph (c)(1) (i) or (ii). This is the method 
employed in the examples used in this section.
    (d) Items not counted for reduction. Amounts paid or incurred, or to 
be incurred, by the individual for medical, legal, or related expenses 
in connection with the claim for public disability payments (see 
Sec. 404.408 (a) and (b)) or the injury or occupational disease on which 
the public disability award or settlement agreement is based, are 
excluded in computing the reduction under paragraph (a) of this section 
to the extent they are consonant with the

[[Page 148]]

applicable Federal, State, or local law or plan and reflect either the 
actual amount of expenses already incurred or a reasonable estimate, 
given the circumstances in the individual's case, of future expenses. 
Any expenses not established by evidence required by the Administration 
or not reflecting a reasonable estimate of the individual's actual 
future expenses will not be excluded. These medical, legal, or related 
expenses may be evidenced by the public disability award, compromise 
agreement, a court order, or by other evidence as the Administration may 
require. This other evidence may consist of:
    (1) A detailed statement by the individual's attorney, physician, or 
the employer's insurance carrier; or
    (2) Bills, receipts, or canceled checks; or
    (3) Other clear and convincing evidence indicating the amount of 
expenses; or
    (4) Any combination of the foregoing evidence from which the amount 
of expenses may be determinable.
    (e) Certification by individual concerning eligibility for public 
disability benefits. Where it appears that an individual may be eligible 
for a public disability benefit which would give rise to a reduction 
under paragraph (a) of this section, the individual may be required, as 
a condition of certification for payment of any benefit under section 
223 of the Act to any individual for any month, and of any benefit under 
section 202 of the Act for any month based on such individual's earnings 
record, to furnish evidence as requested by the Administration and to 
certify as to:
    (1) Whether he or she has filed or intends to file any claim for a 
public disability benefit, and
    (2) If he or she has so filed, whether there has been a decision on 
the claim. The Commissioner may rely, in the absence of evidence to the 
contrary, upon a certification that he or she has not filed and does not 
intend to file such a claim, or that he or she has filed and no decision 
has been made, in certifying any benefit for payment pursuant to section 
205(i) of the Act.
    (f) Verification of eligibility or entitlement to a public 
disability benefit under paragraph (a). Section 224 of the Act requires 
the head of any Federal agency to furnish the Commissioner information 
from the Federal agency's records which is needed to determine the 
reduction amount, if any, or verify other information to carry out the 
provisions of this section. The Commissioner is authorized to enter into 
agreements with States, political subdivisions, and other organizations 
that administer a law or plan of public disability benefits in order to 
obtain information that may be required to carry out the provisions of 
this section.
    (g) Public disability benefit payable on other than a monthly basis. 
Where public disability benefits are paid periodically but not monthly, 
or in a lump sum as a commutation of or a substitute for periodic 
benefits, such as a compromise and release settlement, the reduction 
under this section is made at the time or times and in the amounts that 
the Administration determines will approximate as nearly as practicable 
the reduction required under paragraph (a) of this section.
    (h) Priorities. (1) For an explanation of when a reduction is made 
under this section where other reductions, deductions, etc., are 
involved, see Sec. 404.402.
    (2) Whenever a reduction in the total of benefits for any month 
based on an individual's earnings record is made under paragraph (a) of 
this section, each benefit, except the disability insurance benefit, is 
first proportionately decreased. Any excess reduction over the sum of 
all the benefits, other than the disability insurance benefit, is then 
applied to the disability insurance benefit.

    Example 1: Effective September 1981, Harold is entitled to a monthly 
disability primary insurance amount of $507.90 and a monthly public 
disability benefit of $410.00 from the State. Eighty percent of Harold's 
average current earnings is $800.00. Because this amount ($800.00) is 
higher than Harold's disability insurance benefit ($507.90), we subtract 
Harold's monthly public disability benefit ($410.00) from eighty percent 
of his average current earnings ($800.00). This leaves Harold a reduced 
monthly disability benefit of $390.00.
    Example 2: In September 1981, Tom is entitled to a monthly 
disability primary insurance amount of $559.30. His wife and two 
children are also entitled to monthly benefits of $93.20 each. The total 
family benefit is

[[Page 149]]

$838.90. Tom is also receiving a monthly workers' compensation benefit 
of $500.00 from the State. Eighty percent of Tom's average current 
earnings is $820.10. Because the total family benefit ($838.90) is 
higher than 80 percent of the average current earnings ($820.10), we 
subtract the monthly workers' compensation benefit ($500.00) from the 
total family benefit ($838.90), leaving $338.90 payable. This means the 
monthly benefits to Tom's wife and children are reduced to zero, and 
Tom's monthly disability benefit is reduced to $338.90.

    (i) Effect of changes in family composition. The addition or 
subtraction in the number of beneficiaries in a family may cause the 
family benefit to become, or cease to be, the applicable limit for 
reduction purposes under this section. When the family composition 
changes, the amount of the reduction is recalculated as though the new 
number of beneficiaries were entitled for the first month the reduction 
was imposed. If the applicable limit both before and after the change is 
80 percent of the average current earnings and the limitation on maximum 
family benefits is in effect both before and after the change, the 
amount payable remains the same and is simply redistributed among the 
beneficiaries entitled on the same earnings record.

    Example 1: Frank is receiving $500.00 a month under the provisions 
of a State workers' compensation law. He had a prior period of 
disability which terminated in June 1978. In September 1981, Frank 
applies for a second period of disability and is awarded monthly 
disability insurance benefits with a primary insurance amount of 
$370.20. His child, Doug, qualifies for benefits of $135.10 a month on 
Frank's earnings record. The total family benefits is $505.30 monthly.
    Frank's average monthly wage (as used to compute the primary 
insurance amount) is $400.00; eighty percent of his average current 
earnings (computed by using the 5 consecutive years in which his 
earnings were highest) is $428.80 (80% of $536.00); eighty percent of 
Frank's average current earnings (computed by using the 1 calendar year 
in which his earnings were highest) is $509.60 (80% of $637.00). The 
highest value for 80 percent of average current earnings is therefore 
$509.60 (80%). Since this is higher than the total family benefit 
($505.30), the $509.60 is the applicable limit in determining the amount 
of the reduction (or offset). The amount payable after the reduction is-
-

80% of Frank's average current earnings......................    $509.60
Frank's monthly workers' compensation benefit................    -500.00
                                                              ----------
   Monthly benefit payable to Frank..........................       9.60
 

    No monthly benefits are payable to Doug because the reduction is 
applied to Doug's benefit first. In December 1981, another child, Mike, 
becomes entitled on Frank's earnings record. The monthly benefit to each 
child before reduction is now $109.10, the amount payable when there are 
two beneficiaries in addition to the wage earner. Thus, the total family 
benefit becomes $588.40. Because this is now higher than $509.60 (80% of 
Frank's average current earnings), $588.40 becomes the applicable limit 
in determining the amount of reduction. The amount payable after the 
increase in the total family benefit is--

The new total family benefit.................................    $588.40
Frank's monthly workers' compensation rate...................    -500.00
                                                              ----------
   Monthly benefit payable to Frank..........................      88.40
 


No monthly benefits are payable to either child because the reduction 
(or offset) is applied to the family benefits first.
    Example 2: Jack became entitled to disability insurance benefits in 
December 1973 (12/73), with a primary insurance amount (PIA) of $220.40. 
He was also receiving a workers' compensation benefit. An offset was 
imposed against the disability insurance benefit. By June 1977 (6/77), 
Jack's PIA had increased to $298.00 because of several statutory benefit 
increases. In December 1977 (12/77), his wife, Helen, attained age 65 
and filed for unreduced wife's benefits. (She was not entitled to a 
benefit on her own earnings record.) This benefit was terminated in May 
1978 (5/78), at her death. Helen's benefit was computed back to 12/73 as 
though she were entitled in the first month that offset was imposed 
against Jack. Since there were no other beneficiaries entitled and 
Helen's entire monthly benefit amount is subject to offset, the benefit 
payable to her for 12/77 through April 1978 (4/78), would be $38.80. 
This gives Helen the protected statutory benefit increases since 12/73. 
The table below shows how Helen's benefit was computed beginning with 
the first month offset was imposed.

------------------------------------------------------------------------
                                                     Helen's
                                          Jack's     benefit    Helen's
Month of entitlement/statutory increase     PIA     prior to   statutory
                                                     offset     increase
------------------------------------------------------------------------
December 1973..........................   $220.40     $110.20  .........
March 1974.............................    236.00      118.00      $7.80
June 1974..............................    244.80      122.40      +4.40
June 1975..............................    264.40      132.20      +9.80
June 1976..............................    281.40      140.70      +8.50
June 1977..............................    298.00      149.00      +8.30
                                        --------------------------------
December 1977 through April 1978 \1\...  ........  ..........      38.80
------------------------------------------------------------------------
\1\ Monthly benefit payable to Helen.



[[Page 150]]

    (j) Effect of social security disability insurance benefit 
increases. Any increase in benefits due to a recomputation or a 
statutory increase in benefit rates is not subject to the reduction for 
public disability benefits under paragraph (a) and does not change the 
amount to be deducted from the family benefit. The increase is simply 
added to what amount, if any, is payable. If a new beneficiary becomes 
entitled to monthly benefits on the same earnings record after the 
increase, the amount of the reduction is redistributed among the new 
beneficiaries entitled under section 202 of the Act and deducted from 
their current benefit rate.

    Example: In March 1981, Chuck became entitled to disability 
insurance benefits with a primary insurance amount of $362.40 a month. 
He has a wife and two children who are each entitled to a monthly 
benefit of $60.40. Chuck is receiving monthly disability compensation 
from a worker's compensation plan of $410.00. Eighty percent of his 
average current earnings is $800.00. Because this is higher than the 
total family benefit ($543.60), $800.00 is the applicable limit in 
computing the amount of reduction. The amount of monthly benefits 
payable after the reduction is--

Applicable limit.............................................    $800.00
Chuck's monthly disability compensation......................    -410.00
                                                              ----------
Total amount payable to Chuck and the family after reduction.    $390.00
Amount payable to Chuck......................................    -362.40
                                                              ----------
Total amount payable to the family...........................     $27.60
$9.20 payable to each family member equals...................     $27.60
                                                              ----------
                                                                   3
 

    In June 1981, the disability benefit rates were raised to reflect an 
increase in the cost-of-living. Chuck is now entitled to $403.00 a month 
and each family member is entitled to $67.20 a month (an increase of 
$6.80 to each family member). The monthly amounts payable after the 
cost-of-living increase are now $403.00 to Chuck and $16.00 to each 
family member ($9.20 plus the $6.80 increase).
    In September 1981, another child becomes entitled to benefits based 
on Chuck's earnings record. The monthly amount payable to the family 
(excluding Chuck) must now be divided by 4:

$6.90 payable to each family member equals...................     $27.60
                                                              ----------
                                                                   4
 

    The June 1981 cost-of-living increase is added to determine the 
amount payable. Chuck continues to receive $403.00 monthly. Each family 
member receives a cost-of-living increase of $5.10. Thus, the amount 
payable to each is $12.00 in September 1981 ($6.90 plus the $5.10 
increase). (See Example 2 under (i).)

    (k) Effect of changes in the amount of the public disability 
benefit. Any change in the amount of the public disability benefit 
received will result in a recalculation of the reduction under paragraph 
(a) and, potentially, an adjustment in the amount of such reduction. If 
the reduction is made under paragraph (a)(1) of this section, any 
increased reduction will be imposed effective with the month after the 
month the Commissioner received notice of the increase in the public 
disability benefit (it should be noted that only workers' compensation 
can cause this reduction). Adjustments due to a decrease in the amount 
of the public disability benefit will be effective with the actual date 
the decreased amount was effective. If the reduction is made under 
paragraph (a)(2) of this section, any increase or decrease in the 
reduction will be imposed effective with the actual date of entitlement 
to the new amount of the public disability benefit.

    Example: In September 1981, based on a disability which began March 
12, 1981, Theresa became entitled to Social Security disability 
insurance benefits with a primary insurance amount of $445.70 a month. 
She had previously been entitled to Social Security disability insurance 
benefits from March 1967 through July 1969. She is receiving a temporary 
total workers' compensation payment of $227.50 a month. Eighty percent 
of her average current earnings is $610.50. The amount of monthly 
disability insurance benefit payable after reduction is--

80 percent of Theresa's average current earnings.............    $610.50
Theresa's monthly workers' compensation payment..............    -227.50
                                                              ----------
  Total amount payable to Theresa after reduction............     383.00
 

    On November 15, 1981, the Commissioner was notified that Theresa's 
workers' compensation rate was increased to $303.30 a month effective 
October 1, 1981. This increase reflected a cost-of-living adjustment 
granted to all workers' compensation recipients in her State. The 
reduction to her monthly disability insurance benefit is recomputed to 
take this increase into account--

80 percent of Theresa's average current earnings.............    $610.50
Theresa's monthly workers' compensation payment beginning        -303.30
 October 1, 1981.............................................
                                                              ----------

[[Page 151]]

 
  Total new amount payable to Theresa beginning October 1981     $307.20
   after recalculation of the reduction......................
 

    Effective January, 1, 1982, Theresa's workers' compensation payment 
is decreased to $280.10 a month when she begins to receive a permanent 
partial payment. The reduction to her monthly disability insurance 
benefit is again recalculated to reflect her decreased workers' 
compensation amount--

80 percent of Theresa's average current earnings.............    $610.50
Theresa's monthly workers' compensation payment beginning        -280.10
 January 1, 1982.............................................
                                                              ----------
  Total new amount payable to Theresa beginning January 1982     $330.40
   after recalculation of the reduction......................
 

    If, in the above example, Theresa had become entitled to disability 
insurance benefits in August 1981, the increased reduction to her 
benefit, due to the October 1, 1981 increase in her workers' 
compensation payment, would have been imposed beginning with December 
1981, the month after the month she notified the Social Security 
Administration of the increase. The later decrease in her workers' 
compensation payment would still affect her disability insurance benefit 
beginning with January 1982.

    (l) Redetermination of benefits--(1) General. In the second calendar 
year after the year in which reduction under this section in the total 
of an individual's benefits under section 223 of the Act and any 
benefits under section 202 of the Act based on his or her wages and 
self-employment income is first required (in a continuous period of 
months), and in each third year thereafter, the amount of those benefits 
which are still subject to reduction under this section are 
redetermined, provided this redetermination does not result in any 
decrease in the total amount of benefits payable under title II of the 
Act on the basis of the workers' wages and self-employment income. The 
redetermined benefit is effective with the January following the year in 
which the redetermination is made.
    (2) Average current earnings. In making the redetermination required 
by paragraph (l)(1) of this section, the individual's average current 
earnings (as defined in paragraph (c)(3) of this section) is deemed to 
be the product of his average current earnings as initially determined 
under paragraph (c)(3) of this section and:
    (i) The ratio of the average of the total wages (as defined in 
Sec. 404.1049) of all persons for whom wages were reported to the 
Secretary of the Treasury or his delegate for the calendar year before 
the year in which the redetermination is made, to the average of the 
total wages of all person reported to the Secretary of the Treasury or 
his delegate for calendar year 1977 or, if later, the calendar year 
before the year in which the reduction was first computed (but not 
counting any reduction made in benefits for a previous period of 
disability); and
    (ii) In any case in which the reduction was first computed before 
1978, the ratio of the average of the taxable wages reported to the 
Commissioner of Social Security for the first calendar quarter of 1977 
to the average of the taxable wages reported to the Commissioner of 
Social Security for the first calendar quarter of the calendar year 
before the year in which the reduction was first computed (but not 
counting any reduction made in benefits for a previous period of 
disability). Any amount determined under the preceding two sentences 
which is not a multiple of $1 is reduced to the next lower multiple of 
$1.
    (3) Effect of redetermination. Where the applicable limit on total 
benefits previously used was 80 percent of the average current earnings, 
a redetermination under this paragraph may cause an increase in the 
amount of benefits payable. Also, where the limit previously used was 
the total family benefit, the redetermination may cause the average 
current earnings to exceed the total family benefit and thus become the 
new applicable limit. If for some other reason (such as a statutory 
increase or recomputation) the benefit has already been increased to a 
level which equals or exceeds the benefit resulting from a 
redetermination under this paragraph, no additional increase is made. A 
redetermination is designed to bring benefits into line with current 
wage levels when no other change in payments has done so.

    Example: In October 1978, Alice became entitled to disability 
insurance benefits with a primary insurance amount of $505.10. Her two 
children were also entitled to monthly benefits of $189.40 each. Alice 
was also entitled to

[[Page 152]]

monthly disability compensation benefits of $667.30 from the State. 
Eighty percent of Alice's average current earnings is $1340.80, and that 
amount is the applicable limit. The amount of monthly benefits payable 
after the reduction is--

Applicable limit...........................................    $1,340.80
Alice's State disability compensation benefit..............      -667.30
                                                            ------------
Total benefits payable to Alice and both children after          $673.50
 reduction.................................................
Alice's disability insurance benefit.......................      -505.10
Payable to the children....................................      $168.40
$84.20 payable to each child after reduction equals........      $168.40
                                                            ------------
                                                                  2
 

    In June 1979 and June 1980, cost-of-living increases in Social 
Security benefits raise Alice's benefit by $50.10 (to $555.20) and 
$79.40 (to $634.60) respectively. The children's benefits (before 
reduction) are each raised by $18.80 (to $208.20) and $29.80 (to 
$238.00). These increases in Social Security benefits are not subject to 
the reduction (i.e., offset).
    In 1980, Alice's average current earnings are redetermined as 
required by law. The offset is recalculated, and if the amount payable 
to the family is higher than the current amount payable to the family, 
that higher amount becomes payable the following January (i.e., January 
1981). The current amount payable to the family after the reduction is 
recalculated--

Alice's 1978 benefit after reduction.........................    $505.10
Alice's cost-of-living increase in June 1979.................     +50.10
Alice's cost-of-living increase in June 1980.................     +79.40
One child's 1978 benefit after reduction.....................     +84.20
That child's cost-of-living increase in June 1979............     +18.70
That child's cost-of-living increase in June 1980............     +29.70
The other child's 1978 benefit after reduction...............     +84.20
The other child's cost-of-living increase in June 1979.......     +18.70
The other child's cost-of-living increase in June 1980.......     +29.70
                                                              ----------
Total amount payable to the family after reduction in January     899.80
 1981........................................................
 

    The amount payable to the family after reduction is then 
recalculated using the redetermined average current earnings--

Average current earnings before redetermination............    $1,676.00
Redetermination ratio effective for January 1981...........       x1.174
                                                            ------------
Redetermined average current earnings......................    $1,967.00
                                                                    x80%
                                                            ------------
80% of the redetermined average current earnings...........    $1,573.60
Alice's State disability compensation benefit..............      -667.30
                                                            ------------
Total benefits payable to the family after offset..........      $906.30
 

    We then compare the total amount currently being paid to the family 
($899.80) to the total amount payable after the redetermination 
($906.30). In this example, the redetermination yields a higher amount 
and, therefore, becomes payable the following January (i.e., January 
1981). Additional computations are required to determine the amount that 
will be paid to each family member--

Total benefits payable to the family using the redetermined      $906.30
 average current earnings....................................
Total cost-of-living increases to both children..............     -96.80
                                                              ----------
Balance payable..............................................     809.50
Alice's current benefit amount before reduction..............    -634.60
                                                              ----------
Payable to the children......................................     174.90
Total cost-of-living increases to both children..............     +96.80
                                                              ----------
Total payable to children after reduction....................     271.70
$135.90 (rounded from $135.85) payable to each child equals..    $271.70
                                                              ----------
                                                                   2
 


[32 FR 19159, Dec. 20, 1967; 33 FR 3060, Feb. 16, 1968, as amended at 37 
FR 3425, Feb. 16, 1972; 48 FR 37017, Aug. 16, 1983; 48 FR 38814, Aug. 
26, 1983; 62 FR 38450, July 18, 1997]



Sec. 404.408a  Reduction where spouse is receiving a Government pension.

    (a) When reduction is required. Unless you meet one of the 
exceptions in paragraph (b) of this section, your monthly Social 
Security benefits as a wife, husband, widow, widower, mother, or father 
will be reduced each month you are receiving a monthly pension from a 
Federal, State, or local government agency (Government pension) for 
which you were employed in work not covered by Social Security on the 
last day of such employment. Your monthly Social Security benefit as a 
spouse will always be reduced because of your Government pension even if 
you afterwards return to work for a government agency and that work is 
covered by Social Security. For purposes of this section, Federal 
Government employees are not considered to be covered by Social Security 
if they are covered for Medicare but are not otherwise covered by Social 
Security. If the government pension is not paid monthly or is paid in a 
lump-sum, we will determine how much the pension would be if it were 
paid monthly and then reduce the monthly Social

[[Page 153]]

Security benefit accordingly. The number of years covered by a lump-sum 
payment, and thus the period when the Social Security benefit will be 
reduced, will generally be clear from the pension plan. If one of the 
alternatives to a lump-sum payment is a life annuity, and the amount of 
the monthly benefit for the life annuity can be determined, the 
reduction will be based on that monthly benefit amount. Where the period 
or the equivalent monthly pension benefit is not clear it may be 
necessary for us to determine the reduction period on an individual 
basis.
    (b) Exceptions. The reduction does not apply:
    (1) If you are receiving a Government pension based on employment 
for an interstate instrumentality.
    (2) If you received or are eligible to receive a Government pension 
for one or more months in the period December 1977 through November 1982 
and you meet the requirements for Social Security benefits that were 
applied in January 1977, even though you don't claim benefits, and you 
don't actually meet the requirements for receiving benefits until a 
later month. The January 1977 requirements are, for a man, a one-half 
support test (see paragraph (c) of this section), and, for a woman 
claiming benefits as a divorced spouse, marriage for at least 20 years 
to the insured worker. You are considered eligible for a Government 
pension for any month in which you meet all the requirements for payment 
except that you are working or have not applied.
    (3) If you were receiving or were eligible (as defined in paragraph 
(b)(2) of this section) to receive a Government pension for one or more 
months before July 1983, and you meet the dependency test of one-half 
support that was applied to claimants for husband's and widower's 
benefits in 1977, even though you don't claim benefits, and you don't 
actually meet the requirements for receiving benefits until a later 
month. If you meet the exception in this paragraph but you do not meet 
the exception in paragraph (b)(2), December 1982 is the earliest month 
for which the reduction will not affect your benefits.
    (4) If you would have been eligible for a pension in a given month 
except for a requirement which delayed eligibility for such pension 
until the month following the month in which all other requirements were 
met, we will consider you to be eligible in that given month for the 
purpose of meeting one of the exceptions in paragraphs (b) (2) and (3) 
of this section. If you meet an exception solely because of this 
provision, your benefits will be unreduced for months after November 
1984 only.
    (5) If, with respect to monthly benefits payable for months after 
December 1994, you are receiving a Government pension based wholly upon 
service as a member of a uniformed service, regardless of whether on 
active or inactive duty and whether covered by social security. However, 
if the earnings on the last day of employment as a military reservist 
were not covered, January 1995 is the earliest month for which the 
reduction will not affect your benefits.
    (c) The one-half support test. For a man to meet the January 1977 
requirement as provided in the exception in paragraph (b)(2) and for a 
man or a woman to meet the exception in paragraph (b)(3) of this 
section, he or she must meet a one-half support test. One-half support 
is defined in Sec. 404.366 of this part. One-half support must be met at 
one of the following times:
    (1) If the insured person had a period of disability which did not 
end before he or she became entitled to old-age or disability insurance 
benefits, or died, you must have been receiving at least one-half 
support from the insured either--
    (i) At the beginning of his or her period of disability;
    (ii) At the time he or she became entitled to old-age or disability 
insurance benefits; or
    (iii) If deceased, at the time of his or her death.
    (2) If the insured did not have a period of disability at the time 
of his or her entitlement or death, you must have been receiving at 
least one-half support from the insured either--
    (i) At the time he or she became entitled to old-age insurance 
benefits; or
    (ii) If deceased, at the time of his or her death.
    (d) Amount and priority of reduction. (1) If you became eligible for 
a Government pension after June 1983, we will reduce (to zero, if 
necessary) your

[[Page 154]]

monthly Social Security benefits as a spouse by two-thirds the amount of 
your monthly pension. If the reduction is not a multiple of 10 cents, we 
will round it to the next higher multiple of 10 cents.
    (2) If you became eligible for a Government pension before July 1983 
and do not meet one of the exceptions in paragraph (b) of this section, 
we will reduce (to zero, if necessary) your monthly Social Security 
benefits as a spouse by the full amount of your pension for months 
before December 1984 and by two-thirds the amount of your monthly 
pension for months after November 1984. If the reduction is not a 
multiple of 10 cents, we will round it to the next higher multiple of 10 
cents.
    (3) Your benefit as a spouse will be reduced, if necessary, for age 
and for simultaneous entitlement to other Social Security benefits 
before it is reduced because you are receiving a Government pension. In 
addition, this reduction follows the order of priority as stated in 
Sec. 404.402(b).
    (4) If the monthly benefit payable to you after the required 
reduction(s) is not a multiple of $1.00, we will reduce it to the next 
lower multiple of $1.00 as required by Sec. 404.304(f).
    (e) When effective. This reduction was put into the Social Security 
Act by the Social Security Amendments of 1977. It only applies to 
applications for benefits filed in or after December 1977 and only to 
benefits for December 1977 and later.

[49 FR 41245, Oct. 22, 1984; 50 FR 20902, May 21, 1985, as amended at 51 
FR 23052, June 25, 1986; 60 FR 56513, Nov. 9, 1995]



Sec. 404.408b  Reduction of retroactive monthly social security benefits where supplemental security income (SSI) payments were received for the same period.

    (a) When reduction is required. We will reduce your retroactive 
social security benefits if--
    (1) You are entitled to monthly social security benefits for a month 
or months before the first month in which those benefits are paid; and
    (2) SSI payments (including federally administered State 
supplementary payments) which were made to you for the same month or 
months would have been reduced or not made if your social security 
benefits had been paid when regularly due instead of retroactively.
    (b) Amount of reduction. Your retroactive monthly social security 
benefits will be reduced by the amount of the SSI payments (including 
federally administered State supplementary payments) that would not have 
been paid to you, if you had received your monthly social security 
benefits when they were regularly due instead of retroactively.
    (c) Benefits subject to reduction. The reduction described in this 
section applies only to monthly social security benefits. Social 
security benefits which we pay to you for any month after you have begun 
receiving recurring monthly social security benefits, and for which you 
did not have to file a new application, are not subject to reduction. 
The lump-sum death payment, which is not a monthly benefit, is not 
subject to reduction.
    (d) Refiguring the amount of the reduction. We will refigure the 
amount of the reduction if there are subsequent changes affecting your 
claim which relate to the reduction period described in paragraph (a) of 
this section. Refiguring is generally required where there is a change 
in your month of entitlement or the amount of your social security 
benefits or SSI payments (including federally administered State 
supplementary payments) for the reduction period.
    (e) Reimbursement of reduced retroactive monthly social security 
benefits. The amount of the reduction will be--
    (1) First used to reimburse the States for the amount of any 
federally administered State supplementary payments that would not have 
been made to you if the monthly social security benefits had been paid 
when regularly due instead of retroactively; and
    (2) The remainder, if any, shall be covered into the general fund of 
the U.S. Treasury for the amount of SSI benefits that would not have 
been paid to you if the monthly social security benefits had been paid 
to you when regularly due instead of retroactively.

[47 FR 4988, Feb. 3, 1982]

[[Page 155]]



Sec. 404.409  [Reserved]



Sec. 404.410  Reduction in benefits for age--general.

    An individual's old-age insurance benefit, wife's or husband's 
benefit or widow's or widower's benefit is reduced if he or she is 
entitled to the benefit for a month before the month he or she reaches 
retirement age. For purposes of this section and Secs. 404.411 through 
404.413, retirement age is age 65; except that for months prior to 
January 1973, retirement age for widows and widowers is age 62. However, 
in the case of an individual entitled to wife's or husband's benefits, 
there is no reduction in benefits for any month he or she has in his or 
her care a child of the insured individual on whose earnings record he 
or she is entitled if the child is entitled to child's insurance 
benefits. Similarly, in the case of an individual entitled to widow's or 
widower's benefits, such benefits will not be reduced below the amount 
an individual entitled to mother's or father's benefits would receive 
for any month he or she has in his or her care a child of the insured 
individual on whose earnings record he or she is entitled if the child 
is entitled to child's benefits. Reductions in benefits are, subject to 
Secs. 404.411 through 404.413, made in the amounts described below:
    (a) In the case of old-age insurance benefits, the individual's 
primary insurance amount is reduced by \5/9\ of 1 percent multiplied by 
the number of months preceding the month in which he or she attains 
retirement age for which he or she is entitled to such benefits;
    (b) In the case of wife's or husband's benefits, the individual's 
benefit amount before any reduction (see Secs. 404.304 and 404.333) is 
reduced first (if necessary) for the family maximum under Sec. 404.403, 
and then further reduced by \25/36\ of 1 percent multiplied by the 
number of months preceding the month in which he or she attains 
retirement age for which he or she is entitled to such benefits (but not 
including any month in which such wife or husband has in his or her care 
a child of the insured individual on whose earnings record he or she is 
entitled if the child is entitled to child's benefits);
    (c)(1) In the case of widow's or widower's benefits, the 
individual's benefit amount (for months after December 1972, the amount 
equal to the insured person's primary insurance amount and for earlier 
months, the amounts described in Secs. 404.304 and 404.338), after any 
reduction for the family maximum under Sec. 404.403, is reduced or 
further reduced by \19/40\ of 1 percent multiplied by the number of 
months in the period beginning with the month of attainment of age 60 
and ending with the month immediately before the month of attainment of 
age 65, for which he or she is entitled to such benefits (but not 
including any month in which such widow or widower has a child of the 
insured individual in his or her care if the child is entitled to 
child's benefits). For months prior to January 1973, the widow's or 
widower's benefit is reduced in the way described in the preceding 
sentence except that the percentage rate is \5/9\ of 1 percent 
multiplied by the number of months from age 60 to 62 instead of \19/40\ 
of 1 percent multiplied by the number of months from age 60 to 65.
    (2) For those widows and widowers receiving benefits based on 
disability and whose entitlement begins prior to their attaining age 60, 
their benefits are--
    (i) For months after December 1983, not subject to any reduction of 
their benefits in addition to that under paragraph (c)(1) of this 
section;
    (ii) For the period January 1, 1973-December 31, 1983, subject to a 
reduction under paragraph (c)(1) of this section and an additional 
reduction formula of \43/240\ of 1 percent multiplied by: (A) The 
benefit before any reduction for age and (B) the number of months of 
entitlement to such benefit in the period beginning with month of 
attainment of age 50 and ending with the month preceding month of 
attainment of age 60; and
    (iii) For months prior to January 1973, subject to the reduction 
formula described in paragraph (c)(2)(ii) of this section with, however, 
the percentage rate set at \43/198\ of 1 percent.
    (d) Benefits reduced under this section may be later adjusted to 
eliminate

[[Page 156]]

reduction for certain months of entitlement prior to retirement age as 
provided in Sec. 404.412. For special provisions on reducing benefits 
for months prior to retirement age involving entitlement to two or more 
benefits and for reducing widow's and widower's benefits on the earnings 
record of a deceased individual previously entitled to old-age insurance 
benefits, see Secs. 404.411 and 404.338, respectively.

[49 FR 24116, June 12, 1984]



Sec. 404.411  Special reduction in benefits for age involving entitlement to two or more benefits.

    (a) General. (1) Except as specifically provided in this section, 
benefits of an individual entitled to more than one benefit will be 
reduced for months of entitlement before retirement age according to the 
provisions of Sec. 404.410. Such age reductions are made before any 
reduction under the provisions of Sec. 404.407.
    (2) If an individual was born after January 1, 1928 and becomes 
disabled after December 31, 1989, his or her disability insurance 
benefits are reduced in accordance with paragraph (b)(1) of this 
section. In other situations involving prior receipt of widow's or 
widower's insurance benefits, disability insurance benefits are reduced 
in accordance with paragraph (b)(2) of this section.
    (3) If an individual was born after January 1, 1928, his or her old-
age insurance benefits are reduced in accordance with Sec. 404.410(a). 
In other situations involving prior receipt of widow's or widower's 
insurance benefits, old-age insurance benefits are reduced in accordance 
with paragraph (c) of this section.
    (b) Reduction in disability insurance benefits after entitlement to 
old-age insurance benefits, widow's or widower's benefits. An 
individual's disability insurance benefits are reduced following 
entitlement to old-age insurance benefits, widow's or widower's 
insurance benefits (or following the month in which all conditions for 
entitlement to widow's or widower's insurance benefits are met except 
that the individual is entitled to an old-age insurance benefit which 
equals or exceeds the primary insurance amount on which the widow's or 
widower's insurance benefit is based) in accordance with the following 
provisions:
    (1) In the case of an individual entitled to disability insurance 
benefits for a month after the month in which he becomes entitled to an 
old-age insurance benefit which is reduced for age under Sec. 404.410, 
the disability insurance benefit is reduced by the amount by which the 
old-age insurance benefit would be reduced under Sec. 404.410 if he 
attained age 65 in the first month of his most recent period of 
entitlement to disability insurance benefits.
    (2) In the case of an individual who is first entitled to disability 
insurance benefits for a month in which or after which he or she attains 
age 62 and for which he or she is first entitled to a widow's or 
widower's insurance benefit (or would be so entitled except for 
entitlement to an equal or higher old-age insurance benefit as explained 
in the material preceding paragraph (b) of this section) before 
retirement age, the disability insurance benefits are reduced by the 
larger of:
    (i) The amount the disability insurance benefit would have been 
reduced under paragraph (b)(1) of this section; or
    (ii) The amount equal to the sum of the amount the widow's or 
widower's benefit would have been reduced under the provisions of 
Sec. 404.410 if retirement age were 62 (instead of 65) plus the amount 
by which the disability insurance benefit would have been reduced under 
paragraph (b)(1) of this section if the benefit were equal to the excess 
of such benefit over the amount of the widow's or widower's benefit 
(without consideration of this paragraph (b)(2)) of this section.
    (3) In the case of an individual who is first entitled to disability 
insurance benefits for a month before the month in which he or she 
attains age 62 and he or she is also entitled to a widow's or widower's 
insurance benefit (or would be so entitled except for entitlement to an 
equal or higher old-age insurance benefit as explained in the material 
preceding paragraph (b) of this section), the disability insurance 
benefit is reduced as if the widow or widower attained retirement age in 
the month immediately preceding the first month

[[Page 157]]

of his or her most recent period of entitlement to disability insurance 
benefits;
    (c) Reduction in old-age insurance benefits after entitlement to 
widow's or widower's insurance benefits. An individual's old-age 
insurance benefit is reduced if, in his or her first month of 
entitlement to that benefit, he or she is also entitled to a widow's or 
widower's insurance benefit to which he or she was first entitled for a 
month before attainment of retirement age or if, before attainment of 
retirement age, he or she met all conditions for entitlement to widow's 
or widower's benefits in or before the first month for which he or she 
was entitled to old-age insurance benefits except that the old-age 
insurance benefit equals or exceeds the primary insurance amount on 
which the widow's or widower's insurance benefit would be based. Under 
these circumstances, the old-age insurance benefit is reduced by the 
larger of the following:
    (1) The amount by which the old-age insurance benefit would be 
reduced under the regular age reduction provisions of Sec. 404.410; or
    (2) An amount equal to the sum of:
    (i) The amount by which the widow's or widower's insurance benefit 
would be reduced under Sec. 404.410 for months prior to age 62; and
    (ii) The amount by which the old-age insurance benefit would be 
reduced under Sec. 404.410 if it were equal to the excess of the 
individual's primary insurance amount over the widow's or widower's 
insurance benefit before any reduction for age (but after any reduction 
for the family maximum under Sec. 404.403).
    (d) Reduction in wife's or husband's insurance benefits when 
entitled to reduced old-age insurance benefits in the same month. A 
wife's or husband's insurance benefit to which a person is first 
entitled in or after the month of attainment of age 62 is reduced if, in 
his or her first month of entitlement to that benefit, he or she is also 
entitled to an old-age insurance benefit (but is not entitled to a 
disability insurance benefit) to which he or she was first entitled for 
a month before attainment of age 65. Under these circumstances, the 
wife's or husband's insurance benefit is reduced by the sum of:
    (1) The amount by which the old-age insurance benefit would be 
reduced under the provisions of Sec. 404.410; and
    (2) The amount by which the wife's or husband's insurance benefit 
would be reduced under the provisions of Sec. 404.410 if it were equal 
to the excess of such benefit (before any reduction for age but after 
reduction for the family maximum under Sec. 404.403) over the 
individual's own primary insurance amount.
    (e) Reduction in wife's, husband's, widow's or widower's insurance 
benefit because of entitlement to disability insurance benefits in the 
same month. A wife's, husband's, widow's, or widower's insurance benefit 
to which a person is first entitled in or after the month of attainment 
of age 62 (or in the case of widow's or widower's insurance benefits, 
age 50) is reduced if, in his or her first month of entitlement to that 
benefit, he or she is also entitled to a disability insurance benefit. 
Under these circumstances, the wife's, husband's, widow's, or widower's 
insurance benefit is reduced by the sum of:
    (1) The amount (if any) by which the disability insurance benefit is 
reduced under paragraph (b)(1) of this section, and
    (2) The amount by which the wife's, husband's, widow's, or widower's 
insurance benefit would be reduced under Sec. 404.410 if it were equal 
to the excess of such benefit (before any reduction for age but after 
reduction for the family maximum under Sec. 404.403) over the disability 
insurance benefit (before any reduction under paragraph (b) of this 
section).

[40 FR 30816, July 23, 1975, as amended at 55 FR 50551, Dec. 7, 1990]



Sec. 404.412  Adjustments in benefit reductions for age.

    (a) General. The following months are not counted for purposes of 
reducing benefits in accordance with Sec. 404.410;
    (1) Months subject to deduction under Sec. 404.415, Sec. 404.417, or 
Sec. 404.422;
    (2) In the case of wife's or husband's insurance benefits, any month 
in which she or he had a child of the insured individual in her or his 
care and for which the child was entitled to child's benefits;

[[Page 158]]

    (3) In the case of wife's or husband's insurance benefits, any month 
for which entitlement to such benefits is precluded because the insured 
person's disability ceased (and, as a result, the insured individual's 
entitlement to disability insurance benefits ended);
    (4) In the case of widow's or widower's insurance benefits, any 
month in which she or he had in her or his care a child of the deceased 
insured individual and for which the child was entitled to child's 
benefits;
    (5) In the case of widow's or widower's insurance benefits, any 
month before attainment of age 62 and any month between age 62 and 
attainment of age 65 for which he or she was not entitled to such 
benefits;
    (6) In the case of old-age insurance benefits, any month for which 
the individual was entitled to disability insurance benefits.
    (b) Adjustment by Social Security Administration. Adjustments in 
benefits to exclude those months of entitlement which are described in 
paragraphs (a) (1) through (6) of this section from consideration in 
determining the amount by which such benefits are reduced are made 
automatically. Each year the Social Security Administration examines 
beneficiary records to identify those instances in which an individual 
has attained age 65 (or age 62 in the case of widow's or widower's 
insurance benefits) and one or more months described in paragraphs (a) 
(1) through (6) of this section occurred prior to such age during the 
period of entitlement to benefits reduced for age. Increases in benefit 
amounts based upon this adjustment are effective with the month of 
attainment of age 65, or in the case of widow's and widower's insurance 
benefits, the month of attainment of age 65 or age 62 (whichever 
applies).

[40 FR 30817, July 23, 1975, as amended at 49 FR 24117, June 12, 1984]



Sec. 404.413  Reduction in benefits for age following an increase in primary insurance amounts.

    (a) General. When an individual's benefits have been reduced for age 
under the provisions of Secs. 404.410 through 404.411, the primary 
insurance amount on which such benefits are based may be subsequently 
increased because of recomputation, a general benefit increase pursuant 
to an amendment of the Act, or increases based upon rises in the cost-
of-living under section 215(i) of the Social Security Act. Where the 
individual's benefits are increased because of an increase in the 
primary insurance amount, such benefits are reduced separately under 
Secs. 404.410 and 404.411. The benefit amount for months before the 
effective date of the increase in the primary insurance amount is 
reduced under Sec. 404.410 (and Sec. 404.411, if applicable) and added 
to the amount of increase in benefit amount which has been reduced for 
months of entitlement to the increase prior to the individual's 
retirement age; the resulting sum will be the total benefit amount to 
which the individual is entitled for the month of such increase and 
months thereafter.
    (b) Subsequent reduction of increases in reduced benefit after 1977 
applies as or original entitlement. When an individual's benefits have 
been reduced for age and the benefit is increased after 1977 due to a 
rise in the primary insurance amount, the amount of the increase to 
which the individual is entitled is proportionately reduced as provided 
in paragraph (c) of this section. When an individual is entitled to more 
than one benefit which is reduced for age, the rules for reducing the 
benefit increases apply to each reduced benefit.
    (c) How reduction is computed--(1) Entitlement to reduced benefits 
after 1977. If an individual becomes entitled after 1977 to a benefit 
reduced for age, and the primary insurance amount on which the reduced 
benefit is based is increased, the amount of the increase payable to the 
individual is reduced by the same percentage as used to reduce the 
benefit in the month of initial entitlement. Where the reduced benefit 
of an individual has been adjusted at age 65 (age 62 and 65 for widows) 
any increase to which the individual becomes entitled thereafter is 
reduced by the adjusted percentage.
    (2) Entitlement to reduced benefits before 1978. An individual who 
became entitled to a benefit reduced for age before 1978, and whose 
benefit may be increased as a result of an increase in the primary 
insurance amount after 1977, shall have the amount of the benefit to 
which he or she is entitled increased by

[[Page 159]]

the same percentage as the increase in the primary insurance amount.

[40 FR 30817, July 23, 1975, as amended at 43 FR 33706, Aug. 1, 1978]



Sec. 404.415  Deductions because of excess earnings; annual earnings test.

    (a) Deductions because of beneficiary's earnings. Under the annual 
earnings test, deductions are made from monthly benefits (except 
disability insurance benefits, child's insurance benefits based on the 
child's disability, or widow's or widower's insurance benefits based on 
the widow's or widower's disability) payable to a beneficiary for each 
month in a taxable year (whether a calendar year or a fiscal year) 
beginning after December 1954 in which the beneficiary is under age 72 
(age 70 after December 1982) and to which excess earnings are charged 
under the provisions described in Sec. 404.434.
    (b) Deductions from husband's, wife's, or child's benefits because 
of excess earnings of the insured individual. Deductions are made from 
the wife's, husband's, or child's insurance benefits payable (or deemed 
payable--see Sec. 404.420) on the insured individual's earnings record 
because of the excess earnings of the insured individual under the 
provisions described in Sec. 404.416. However, beginning with January 
1985, deductions will not be made from the benefits payable to a 
divorced wife or a divorced husband who has been divorced from the 
insured individual for at least 2 years.

[32 FR 19159, Dec. 20, 1967, as amended at 48 FR 4281, Jan. 31, 1983; 51 
FR 11912, Apr. 8, 1986]



Sec. 404.416  Amount of deduction because of excess earnings.

    (a) Deductions because of excess earnings of insured individual. For 
taxable years beginning after 1960, or ending after June 1961, if excess 
earnings (as described in Sec. 404.430) of an insured individual are 
chargeable under the annual earnings test to a month, a deduction is 
made from the total of the benefits payable to him and to all other 
persons entitled (or deemed entitled--see Sec. 404.420) on his earnings 
record for that month. This deduction is an amount equal to that amount 
of the excess earnings so charged. (See Sec. 404.434 concerning the 
manner of charging such excess earnings.) However, beginning with 
January 1985, deductions will not be made from the benefits payable to a 
divorced wife or a divorced husband who has been divorced from the 
insured individual for at least 2 years, and the divorced spouse will be 
considered as not entitled for purposes of computing the amount of 
deductions from other beneficiaries.
    (b) Deductions because of excess earnings of other beneficiary. For 
taxable years beginning after 1960, or ending after June 1961, if 
benefits are payable to a person entitled (or deemed entitled--see 
Sec. 404.420) on the earnings record of the insured individual, and such 
person has excess earnings (as described in Sec. 404.430) charged to a 
month, a deduction is made from his benefits only for that month. This 
deduction is an amount equal to the amount of the excess earnings so 
charged. (See Sec. 404.434 for charging of excess earnings where both 
the insured individual and such person have excess earnings.)

[43 FR 8132, Feb. 28, 1978, as amended at 51 FR 11912, Apr. 8, 1986]



Sec. 404.417  Deductions because of noncovered remunerative activity outside the United States; 45 hour and 7-day work test.

    (a) Deductions because of individual's activity--(1) Prior to May 
1983. For months prior to May 1983, a 7-day work test applies in a month 
before benefit deductions are made for noncovered remunerative activity 
outside the United States. A deduction is made from any monthly benefit 
(except disability insurance benefits, child's insurance benefits based 
on the child's disability, or widow's or widower's insurance benefits 
based on the widow's or widower's disability) payable to an individual 
for each month in a taxable year beginning after December 1954 in which 
the beneficiary, while under age 72 (age 70 after December 1982), 
engages in noncovered remunerative activity (see Sec. 404.418) outside 
the United States on 7 or more different calendar days. The deduction is 
for an amount equal to the benefit payable to the individual for that 
month.
    (2) From May 1983 on. Effective May 1983, a 45-hour work test 
applies before

[[Page 160]]

a benefit deduction is made for the non-covered remunerative activity 
performed outside the United States in a month by the type of 
beneficiary described in paragraph (a)(1) of this section.
    (b) Deductions from benefits because of the earnings or work of an 
insured individual--(1) Prior to September 1984. Where the insured 
individual entitled to old-age benefits works on 7 or more days in a 
month prior to September 1984 while under age 72 (age 70 after December 
1982), a deduction is made for that month from any:
    (i) Wife's, husband's, or child's insurance benefit payable on the 
insured individual's earnings record; and
    (ii) Mother's, father's, or child's insurance benefit based on 
child's disability, which under Sec. 404.420 is deemed payable on the 
insured individual's earnings record because of the beneficiary's 
marriage to the insured individual.
    (2) From September 1984 on. Effective September 1984, a benefit 
deduction is made for a month from the benefits described in paragraph 
(b)(1) of this section only if the insured individual, while under age 
70, has worked in excess of 45 hours in that month.
    (3) Amount of deduction. The amount of the deduction required by 
this paragraph (b) is equal to the wife's, husband's or child's benefit.
    (4) From January 1985 on. Effective January 1985, no deduction will 
be made from the benefits payable to a divorced wife or a divorced 
husband who has been divorced from the insured individual for at least 2 
years.

[49 FR 24117, June 12, 1984, as amended at 51 FR 11912, Apr. 21, 1986; 
52 FR 26145, July 13, 1987]



Sec. 404.418  ``Noncovered remunerative activity outside the United States,'' defined.

    An individual is engaged in noncovered remunerative activity outside 
the United States for purposes of deductions described in Sec. 404.417 
if:
    (a) He performs services outside the United States as an employee 
and the services do not constitute employment as defined in subpart K of 
this part and, for taxable years ending after 1955, the services are not 
performed in the active military or naval service of the United States; 
or
    (b) He carries on a trade or business outside the United States 
(other than the performance of services as an employee) the net income 
or loss of which is not includable in computing his net earnings from 
self-employment (as defined in Sec. 404.1050) for a taxable year and 
would not be excluded from net earnings from self-employment (see 
Sec. 404.1052) if the trade or business were carried on in the United 
States. When used in the preceding sentence with respect to a trade or 
business, the term United States does not include the Commonwealth of 
Puerto Rico, the Virgin Islands and, with respect to taxable years 
beginning after 1960, Guam or American Samoa, in the case of an alien 
who is not a resident of the United States (including the Commonwealth 
of Puerto Rico, the Virgin Islands and, with respect to taxable years 
beginning after 1960, Guam and American Samoa), and the term trade or 
business shall have the same meaning as when used in section 162 of the 
Internal Revenue Code of 1954.



Sec. 404.420  Persons deemed entitled to benefits based on an individual's earnings record.

    For purposes of imposing deductions under the annual earnings test 
(see Sec. 404.415) and the foreign work test (see Sec. 404.417), a 
person who is married to an old-age insurance beneficiary and who is 
entitled to a mother's or father's insurance benefit or a child's 
insurance benefit based on the child's disability (and all these 
benefits are based on the earnings record of some third person) is 
deemed entitled to such benefit based on the earnings record of the old-
age insurance beneficiary to whom he or she is married. This section is 
effective for months in any taxable year of the old-age insurance 
beneficiary that begins after August 1958.

[49 FR 24117, June 12, 1984]



Sec. 404.421  Deductions because beneficiary failed to have a child in his or her care.

    Deductions for failure to have a child in care (as defined in 
subpart D of this part) are made as follows:

[[Page 161]]

    (a) Wife's or husband's insurance benefits. A deduction is made from 
the wife's or husband's insurance benefit to which he or she is entitled 
for any month if he or she is under age 65 and does not have in his or 
her care a child of the insured entitled to a child's insurance benefit. 
However, a deduction is not made for any month in which he or she is age 
62 or over, but under age 65, and there is in effect a certificate of 
election for him or her to receive an actuarially reduced wife's or 
husband's insurance benefit for such month (see subpart D of this part).
    (b) Mother's or father's insurance benefits--(1) Widow or Widower. A 
deduction is made from the mother's or father's insurance benefit to 
which he or she is entitled as the widow or widower (see subpart D of 
this part) of the deceased individual upon whose earnings such benefit 
is based, for any month in which he or she does not have in his or her 
care a child who is entitled to a child's insurance benefit based on the 
earnings of the deceased insured individual.
    (2) Surviving divorced mother or father. A deduction is made from 
the mother's or father's insurance benefit to which he or she is 
entitled as the surviving divorced mother or father (see subpart D of 
this part) of the deceased individual upon whose earnings record such 
benefit is based, for any month in which she or he does not have in care 
a child of the deceased individual who is her or his son, daughter, or 
legally adopted child and who is entitled to a child's insurance benefit 
based on the earnings of the deceased insured individual.
    (c) Amount to be deducted. The amount deducted from the benefit, as 
described in paragraphs (a) and (b) of this section, is equal to the 
amount of the benefit which is otherwise payable for the month in which 
she or he does not have a child in his or her care.
    (d) When child is considered not entitled to benefits. For purposes 
of paragraphs (a) and (b) of this section a person is considered not 
entitled to a child's insurance benefit for any month in which he is age 
18 or over, and:
    (1) Is entitled to a child's insurance benefit based on his own 
disability and a deduction is made from the child's insurance benefit 
because of his refusal of rehabilitation services as described in 
Sec. 404.422(b); or
    (2) Is entitled to a child's insurance benefit because he is a full-
time student at an educational institution. This paragraph applies to 
benefits for months after December 1964.

[32 FR 19159, Dec. 20, 1967, as amended at 49 FR 24117, June 12, 1984]



Sec. 404.422  Deductions because of refusal to accept rehabilitation services.

    (a) Deductions because individual entitled to disability insurance 
benefits refuses rehabilitation services--(1) Disability insurance 
beneficiary. A deduction is made from any benefit payable to a 
disability insurance beneficiary for each month in which he refuses 
without good cause to accept rehabilitation services available to him 
under a State plan approved under the Vocational Rehabilitation Act.
    (2) Other beneficiaries. For each month in which a deduction is made 
from an individual's disability insurance benefit because of his refusal 
to accept rehabilitation services (as described in paragraph (a)(1) of 
this section), a deduction is also made from:
    (i) Any wife's, husband's, or child's insurance benefit payable for 
that month on the earnings record of the individual entitled to 
disability insurance benefits;
    (ii) Benefits payable for that month to the disability insurance 
beneficiary's spouse who is entitled (on the earnings record of a third 
person) to a mother's insurance benefit or to a child's insurance 
benefit based on disability.
    (b) Deductions because individual entitled to a child's insurance 
benefit based on disability refuses rehabilitation services. A deduction 
is made from any benefit payable to an individual who has attained age 
18 and is entitled to a child's insurance benefit based on disability, 
for each month in which he refuses without good cause to accept 
rehabilitation services available to him under a State plan approved 
under the Vocational Rehabilitation Act unless, in that month, he is a 
full-time student at an educational institution.

[[Page 162]]

    (c) Deductions because individual entitled to widow's or widower's 
insurance benefit based on disability refuses rehabilitation services--
(1) Widow's insurance beneficiary. A deduction is made from any benefits 
payable to an individual entitled to a widow's insurance benefit based 
on disability for each month in which she is under age 60 and refuses 
without good cause to accept rehabilitation services available to her 
under a State plan approved under the Vocational Rehabilitation Act.
    (2) Widower's insurance beneficiary. A deduction is made from any 
benefits payable to an individual entitled to a widower's insurance 
benefit based on disability for each month in which he is under age 60 
(age 62 for months prior to January 1973) and refuses without good cause 
to accept rehabilitation services available to him under a State plan 
approved under the Vocational Rehabilitation Act.
    (d) Amount of deduction. The amount deducted from an individual's 
benefit for a month under the provisions of paragraph (a), (b), or (c) 
of this section is an amount equal to the benefit otherwise payable for 
that month.
    (e) Good cause for refusal of rehabilitation services. An individual 
may refuse to accept rehabilitation services (for the purposes of 
paragraph (a), (b), or (c) of this section) if his refusal is based on 
good cause. In determining whether an individual has good cause for 
refusing rehabilitation services, we will take into account any 
physical, mental, educational, or linguistic limitations (including any 
lack of facility with the English language) the individual may have 
which may have caused the individual to refuse such services. We also 
consider other factors that may have caused an individual to refuse such 
services. For example, an individual has good cause for refusing 
rehabilitation services where:
    (1) The individual is a member or adherent of any recognized church 
or religious sect which teaches its members or adherents to rely solely, 
in the treatment and care of any physical or mental impairment, on 
prayer or spiritual means through the application and use of the tenets 
or teachings of such church or sect; and
    (2) His refusal to accept rehabilitation services was due solely to 
his adherence to the teachings or tenets of his church or sect.

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 9429, Apr. 16, 1973; 59 
FR 1633, Jan. 12, 1994]



Sec. 404.423  Manner of making deductions.

    Deductions provided for in Secs. 404.415, 404.417, 404.421, and 
404.422 (as modified in Sec. 404.458) are made by withholding benefits 
(in whole or in part, depending upon the amount to be withheld) for each 
month in which an event causing a deduction occurred. If the amount to 
be deducted is not withheld from the benefits payable in the month in 
which the event causing the deduction occurred, such amount constitutes 
a deduction overpayment and is subject to adjustment or recovery in 
accordance with the provisions of subpart F of this part.



Sec. 404.424  Total amount of deductions where more than one deduction event occurs in a month.

    If more than one of the deduction events specified in Secs. 404.415, 
404.417, and 404.421 occurred in any 1 month, each of which would 
occasion a deduction equal to the benefit for such month, only an amount 
equal to such benefit is deducted.



Sec. 404.425  Total amount of deductions where deduction events occur in more than 1 month.

    If a deduction event described in Secs. 404.415, 404.417, 404.421, 
and 404.422 occurs in more than 1 month, the total amount deducted from 
an individual's benefits is equal to the sum of the deductions for all 
months in which any such event occurred.



Sec. 404.428  Earnings in a taxable year.

    (a) General. (1) In applying the annual earnings test (see 
Sec. 404.415(a)) under this subpart, all of a beneficiary's earnings (as 
defined in Sec. 404.429) for all months of the beneficiary's taxable 
year are used even though the individual may not be entitled to benefits 
during all months of the taxable year. (See, however, Sec. 404.430 for 
the rule

[[Page 163]]

which applies to earnings of a beneficiary who attains age 72 during the 
taxable year (age 70 for months after December 1982)).
    (2) The taxable year of an employee is presumed to be a calendar 
year until it is shown to the satisfaction of the Social Security 
Administration that the individual has a different taxable year. A self-
employed individual's taxable year is a calendar year unless the 
individual has a different taxable year for the purposes of subtitle A 
of the Internal Revenue Code of 1954. In either case, the number of 
months in a taxable year is not affected by--(i) The time a claim for 
social security benefits is filed, (ii) attainment of any particular 
age, (iii) marriage or the termination of marriage, or (iv) adoption. 
For beneficiaries who die on or before November 10, 1988, a taxable year 
ends with the month of the death of the beneficiary. The month of death 
is counted as a month of the deceased beneficiary's taxable year in 
determining whether the beneficiary had excess earnings for the year 
under Sec. 404.430. For beneficiaries who die after November 10, 1988, 
the number of months used in determining whether the beneficiary had 
excess earnings for the year under Sec. 404.430 is 12.
    (b) When derived. Wages as defined in Sec. 404.429(c) are derived 
and includable as earnings for the months and year in which the 
beneficiary rendered the services. Net earnings from self-employment, or 
net losses therefrom, are derived, or incurred, and are includable as 
earnings or losses, in the year for which such earnings or losses are 
reportable for Federal income tax purposes.

[32 FR 19159, Dec. 20, 1967, as amended at 45 FR 48116, July 18, 1980; 
48 FR 4282, Jan. 31, 1983; 55 FR 37461, Sept. 12, 1990]



Sec. 404.429  Earnings; defined.

    (a) General. When the term earnings is used in this subpart other 
than as a part of the phrase net earnings from self-employment, it means 
an individual's earnings for a taxable year after 1954. It includes the 
sum of his wages for services rendered in such year, and his net 
earnings from self-employment for the taxable year, minus any net loss 
from self-employment for the same taxable year.
    (b) Net earnings from self-employment; net loss from self-
employment. An individual's net earnings from self-employment and his 
net loss from self-employment are determined under the provisions in 
subpart K of this part except that:
    1) For the purposes of this section, the provisions in subpart K of 
this part shall not apply that exclude from the definition of trade or 
business the following occupations:
    (i) The performance of the functions of a public office;
    (ii) The performance of a service of a duly ordained, commissioned, 
or licensed minister of a church in the exercise of his ministry or by a 
member of a religious order in the exercise of duties required by the 
order;
    (iii) The performance of service by an individual in the exercise of 
his profession as a Christian Science practitioner;
    (iv) For taxable years ending before 1965, the performance by an 
individual in the exercise of his profession as a doctor of medicine;
    (v) For taxable years ending before 1956, the performance of service 
by an individual in the exercise of his profession as a lawyer, dentist, 
osteopath, veterinarian, chiropractor, naturopath, or optometrist.
    (2) For the sole purpose of the earnings test under this subpart--
    (i) An individual who has attained age 65 on or before the last day 
of his or her taxable year shall have excluded from his or her gross 
earnings from self-employment, royalties attributable to a copyright or 
patent obtained before the taxable year in which he or she attained age 
65 if the copyright or patent is on property created by his or her own 
personal efforts; and
    (ii) An individual entitled to insurance benefits, under title II of 
the Act, other than disability insurance benefits or child's insurance 
benefits payable by reason of being under a disability, shall have 
excluded from gross earnings for any year after 1977 any self-employment 
income received in a year after his or her initial year of entitlement 
that is not attributable to services performed after the first

[[Page 164]]

month he or she became entitled to benefits. As used in this paragraph 
(b)(2)(ii) of this section, services means any significant work activity 
performed by the individual in the operation or management of a trade, 
profession, or business which can be related to the income received. 
Such services will be termed significant services. Where a portion of 
the income received in a year is not related to any significant services 
performed after the month of initial entitlement, only that portion may 
be excluded from gross earnings for deduction purposes. The balance of 
the income counts for deduction purposes. Not counted as significant 
services are--
    (A) Actions taken after the initial month of entitlement to sell a 
crop or product if the crop or product was completely produced or 
created in or before the month of entitlement. This rule does not apply 
to income received by an individual from a trade or business of buying 
and selling products produced or made by others; for example, a grain 
broker.
    (B) Those activities that are related solely to protecting an 
investment in a currently operating business or that are too irregular, 
occasional, or minor to be considered as having a bearing on the income 
received, such as--
    (1) Hiring an agent, manager, or other employee to operate the 
business;
    (2) Signing contracts where the owner's signature is required so 
long as the major contract negotiations were handled by the owner's 
agent, manager, or other employees in running the business for the 
owner;
    (3) Looking over the company's financial records to assess the 
effectiveness of those agents, managers, or employees in running the 
business for the owner;
    (4) Personally contacting an old and valued customer solely for the 
purpose of maintaining good will when such contact has a minimal effect 
on the ongoing operation of the trade or business; or
    (5) Occasionally filling in for an agent, manager, or other employee 
or partner in an emergency.
    (iii) An individual is presumed to have royalties or other self-
employment income countable for purposes of the earnings test until it 
is shown to the satisfaction of the Social Security Administration that 
such income may be excluded under Sec. 404.429(b)(2) (i) or (ii).
    (3) In figuring an individual's net earnings or net loss from self-
employment, all net income or net loss is includable even though (i) the 
individual did not perform personal services in carrying on the trade or 
business, (ii) the net profit was less than $400, (iii) the net profit 
was in excess of the maximum amount creditable to his earnings record, 
or (iv) the net profit was not reportable for social security tax 
purposes.
    (4) An individual's net earnings from self-employment is the excess 
of gross income over the allowable business deductions (allowed under 
the Internal Revenue Code). An individual's net loss from self-
employment is the excess of business deductions (that are allowed under 
the Internal Revenue Code) over gross income. Expenses arising in 
connection with the production of income excluded from gross income 
under Sec. 404.429(b)(2)(ii) cannot be deducted from wages or net 
earnings from self-employment that are not excluded under that section.
    (c) Wages defined. Wages include the gross amount of an individual's 
wages rather than the net amount paid after deductions by the employer 
for items such as taxes and insurance. For purposes of this section, an 
individual's wages are determined under the provisions of subpart K of 
this part, except that, notwithstanding the provisions of subpart K, 
wages also includes:
    (1) Remuneration in excess of the amounts in the annual wage 
limitation table in Sec. 404.1047;
    (2) Cash remuneration of less than $50 paid in a calendar quarter to 
an employee for (i) domestic service in the private home of the 
employer, or (ii) service not in the course of the employer's trade or 
business; and
    (3) Payments for agricultural labor excluded under Sec. 404.1055.
    (4) Remuneration, cash and noncash, for service as a homeworker even 
though the cash remuneration paid the employee is less than $50 in a 
calendar quarter; and

[[Page 165]]

    (5) For taxable years ending after 1955, services performed outside 
the United States in the military or naval service of the United States; 
and
    (6) Remuneration for services excepted from employment performed 
within the United States by an individual as an employee that are for 
that reason not considered wages under subpart K of this part, if the 
remuneration for such services is not includable in computing his net 
earnings from self-employment or net loss from self-employment, as 
defined in paragraph (b) of this section.
    (d) Presumptions concerning wages. For purposes of this section, 
where reports received by the Administration show wages (as defined in 
paragraph (c) of this section) were paid to an individual during a 
taxable year, it is presumed that they were paid to him for services 
rendered in that year until such time as it is shown to the satisfaction 
of the Administration that the wages were paid for services rendered in 
another taxable year. If the reports of wages paid to an individual show 
his wages for a calendar year, the individual's taxable year is presumed 
to be a calendar year for purposes of this section until it is shown to 
the satisfaction of the Administration that his taxable year is not a 
calendar year.

[32 FR 19159, Dec. 20, 1967, as amended at 41 FR 13912, Apr. 1, 1976; 47 
FR 46690, Oct. 20, 1982; 52 FR 8249, Mar. 17, 1987; 57 FR 59913, Dec. 
17, 1992]



Sec. 404.430  Excess earnings defined for taxable years ending after December 1972; monthly exempt amount defined.

    (a) Method of determining excess earnings for years ending after 
December 1972. For taxable years ending after 1972, an individual's 
excess earnings for a taxable year are 50 percent of his or her earnings 
(as described in Sec. 404.429) for the year which are above the exempt 
amount. For an individual who has attained retirement age, as defined in 
section 216(l) of the Act, excess earnings for a taxable year beginning 
after December 31, 1989, are 33\1/3\ percent of his or her earnings (as 
described in Sec. 404.429) for the year which are above the exempt 
amount. For deaths after November 10, 1988, an individual who dies in 
the taxable year in which he or she would have attained retirement age 
shall have his or her excess earnings computed as if he or she had 
attained retirement age. The exempt amount is obtained by multiplying 
the number of months in the taxable year (except that the number of 
months in the taxable year in which the individual dies shall be 12, if 
death occurs after November 10, 1988) by the following applicable 
monthly exempt amount.
    (1) $175 for taxable years ending after December 1972 and before 
January 1974;
    (2) $200 for taxable years beginning after December 1973 and before 
January 1975; and
    (3) The exempt amount for taxable years ending after December 1974, 
as determined under paragraphs (c) and (d) of this section. However, 
earnings in and after the month an individual attains age 72 will not be 
used to figure excess earnings for retirement test purposes. For the 
employed individual, wages for months prior to the month of attainment 
of age 72 are used to figure the excess earnings for retirement test 
purposes. For the self-employed individual, the pro rata share of the 
net earnings or net loss for the taxable year for the period prior to 
the month of attainment of age 72 is used to figure the excess earnings. 
If the beneficiary was not engaged in self-employment prior to the month 
of attainment of age 72, any subsequent earnings or losses from self-
employment in the taxable year will not be used to figure the excess 
earnings. Where the excess amount figured under the provisions of this 
section is not a multiple of $1, it is reduced to the next lower dollar. 
(All references to age 72 will be age 70 for months after December 
1982.)

    Example 1. The self-employed beneficiary attained age 72 in July 
1979. His net earnings for 1979, his taxable year, were $12,000. The pro 
rata share of the net earnings for the period prior to July is $6,000. 
His excess earnings for 1979 for retirement test purposes are $750. This 
is computed by subtracting $4,500 ($375x12), the exempt amount for 1979, 
from $6,000 and dividing the result by 2.
    Example 2. The beneficiary attained age 72 in July 1979. His taxable 
year was calendar year 1979. His wages for the period prior to July were 
$6,000. From August through December 1979, he worked in self-employment 
and had net earnings in the amount of $2,000.

[[Page 166]]

His net earnings from self-employment are not used to figure his excess 
earnings. Only his wages for the period prior to July 1979 ($6,000) are 
used to figure his excess earnings. As in example 1, his excess earnings 
are $750.
    Example 3. The facts are the same as in example 2, except that the 
beneficiary worked in self-employment throughout all of 1979 and had a 
net loss of $500 from the self-employment activity. The pro rata share 
of the net loss for the period prior to July is $250. His earnings for 
the taxable year to be used in figuring excess earnings are $5,750.
    This is computed by subtracting the $250 net loss from self-
employment from the $6,000 in wages. The excess earnings are $625 
(($5,750 - $4,500) / 2).

    (b) Monthly exempt amount defined. The retirement test monthly 
exempt amount is the amount of wages which a social security beneficiary 
may earn in any month without part of his or her monthly benefit being 
deducted because of excess earnings. For benefits payable for months 
after 1977, the monthly exempt amount applies only in a beneficiary's 
grace year or years. (See Sec. 404.435 (a) and (c)).
    (c) Method of determining monthly exempt amount for taxable years 
ending after December 1974. (1) Except as provided under paragraph (d) 
of this section, for purposes of paragraph (a)(3) of this section, the 
applicable monthly exempt amount effective for an individual's taxable 
year that ends in the calendar year after the calendar year in which an 
automatic cost-of-living increase in old-age, survivors, and disability 
insurance benefits is effective is the larger of--
    (i) The exempt amount in effect for months in the taxable year in 
which the exempt amount determination is being made; or
    (ii) The amount determined by:
    (A) Multiplying the monthly exempt amount effective during the 
taxable year in which the exempt amount determination is being made by 
the ratio of:
    (1) The average amount, per employee, of the taxable wages of all 
employees as reported to the Commissioner for the first calendar quarter 
of the calendar year in which the exempt amount determination is made, 
to
    (2) The average amount, per employee, of the taxable wages of all 
employees as reported to the Commissioner for the first calendar quarter 
of the most recent calendar year in which an increase in the exempt 
amount was enacted or a determination resulting in such an increase was 
made, and
    (B) Rounding the result of such multiplication:
    (1) To the next higher multiple of $10 where such result is a 
multiple of $5 but not of $10, or
    (2) to the nearest multiple of $10 in any other case.
    (2) For purposes of paragraph (c)(1) of this section, reported for 
the first calendar quarter means reported for such first calendar 
quarter and posted to the earnings records by the Commissioner on or 
before the last day of the Social Security Administration's quarterly 
updating operations in September of the same year. Earnings items 
received or posted thereafter are not counted even though they pertain 
to the first quarter.
    (d) Method of determining monthly exempt amount for taxable years 
ending after December 1977 for beneficiaries, age 65 or over. (1) For 
purposes of paragraph (a)(3) of this section, for all months of taxable 
years ending after 1977, the applicable monthly exempt amount for an 
individual who has attained (or, but for the individual's death 
occurring after November 10, 1988, would have attained) retirement age 
as defined in section 216(l) of the Act before the close of the taxable 
year involved is--
    (i) $333.33\1/3\ for each month of any taxable year ending in 1978;
    (ii) $375 for each month of any taxable year ending in 1979;
    (iii) $416.66\2/3\ for each month of any taxable year ending in 
1980; and
    (iv) $458.33\1/3\ for each month of any taxable year ending in 1981;
    (v) $500 for each month of any taxable year ending in 1982;
    (vi) $550 for each month of any taxable year ending in 1983;
    (vii) $580 for each month of any taxable year ending in 1984;
    (viii) $610 for each month of any taxable year ending in 1985;
    (ix) $650 for each month of any taxable year ending in 1986;
    (x) $680 for each month of any taxable year ending in 1987;
    (xi) $700 for each month of any taxable year ending in 1988;

[[Page 167]]

    (xii) $740 for each month of any taxable year ending in 1989; and
    (xiii) $780 for each month of any taxable year ending in 1990.
    (2) Fractional amounts listed in paragraph (d)(1) of this section 
shall be rounded to the next higher whole dollar amount, unless the 
individual shows that doing so results in a different grace year (see 
Sec. 404.435 (a) and (c)).

[40 FR 42865, Sept. 17, 1975; 40 FR 45805, Oct. 3, 1975, as amended at 
45 FR 48117, July 18, 1980; 45 FR 58107, Sept. 2, 1980; 48 FR 4282, Jan. 
31, 1983; 55 FR 37461, Sept. 12, 1990; 62 FR 38450, July 18, 1997]



Sec. 404.434  Excess earnings; method of charging.

    (a) Months charged. For purposes of imposing deductions for taxable 
years after 1960, the excess earnings (as described in Sec. 404.430) of 
an individual are charged to each month beginning with the first month 
the individual is entitled in the taxable year in question and 
continuing, if necessary, to each succeeding month in such taxable year 
until all of the individual's excess earnings have been charged. Excess 
earnings, however, are not charged to any month described in 
Secs. 404.435 and 404.436.
    (b) Amount of excess earnings charged--(1) Insured individual's 
excess earnings. The insured individual's excess earnings are charged on 
the basis of $1 of excess earnings for each $1 of monthly benefits to 
which he and all other persons are entitled (or deemed entitled--see 
Sec. 404.420) for such month on the insured individual's earnings 
record. (See Sec. 404.439 where the excess earnings for a month are less 
than the total benefits payable for that month.)
    (2) Excess earnings of beneficiary other than insured individual. 
The excess earnings of a person other than the insured individual are 
charged on the basis of $1 of excess earnings for each $1 of monthly 
benefits to which he is entitled (see Sec. 404.437) for such month. The 
excess earnings of such person, however, are charged only against his 
own benefits.
    (3) Insured individual and person entitled (or deemed entitled) on 
his earnings record both have excess earnings. If both the insured 
individual and a person entitled (or deemed entitled) on his earnings 
record have excess earnings (as described in Sec. 404.430), the insured 
individual's excess earnings are charged first against the total family 
benefits payable (or deemed payable) on his earnings record, as 
described in paragraph (b)(1) of this section. Next, the excess earnings 
of a person entitled on the insured individual's earnings record are 
charged (as described in paragraph (c)(2) of this section) against his 
own benefits, but only to the extent that his benefits have not already 
been charged with the excess earnings of the insured individual. See 
Sec. 404.441 for an example of this process and the manner in which 
partial monthly benefits are apportioned.

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 17716, July 3, 1973; 43 
FR 8133, Feb. 28, 1978]



Sec. 404.435  Excess earnings; months to which excess earnings cannot be charged.

    (a) Monthly benefits payable for months after 1977. Beginning with 
monthly benefits payable for months after 1977, no matter how much a 
beneficiary earns in a given taxable year, no deduction on account of 
excess earnings will be made in the benefits payable for any month--
    (1) In which he or she was not entitled to a monthly benefit;
    (2) In which he or she was considered not entitled to benefits (due 
to noncovered work outside the United States, no child in care, or 
refusal of rehabilitation, as described in Sec. 404.436);
    (3) In which he or she was age 72 or over (age 70 for months after 
December 1982);
    (4) In which he or she was entitled to payment of disability 
insurance benefit;
    (5) In which he or she was age 18 or over and entitled to a child's 
insurance benefit based on disability;
    (6) In which he or she was entitled to a widow's or widower's 
insurance benefit based on disability; or
    (7) Which was a nonservice month (see paragraph (b) of this section) 
in the beneficiary's grace year (see paragraph (c) of this section).
    (b) Nonservice month defined. A nonservice month is any month in 
which

[[Page 168]]

an individual, while entitled to retirement or survivors benefits--(1) 
does not work in self-employment (see paragraphs (d) and (e) of this 
section); (2) does not perform services for wages greater than the 
monthly exempt amount set for that month (see paragraph (f) of this 
section and Sec. 404.430 (b), (c), and (d)); and (3) does not work in 
noncovered remunerative activity on 7 or more days in a month while 
outside the United States. A nonservice month occurs even if there are 
no excess earnings in the year.
    (c) Grace year defined. (1) A beneficiary's initial grace year is 
the first taxable year after 1977 in which the beneficiary has a 
nonservice month (see paragraph (b) of this section) in or after the 
month in which he or she is entitled to a retirement, auxiliary, or 
survivor's benefit.
    (2) A beneficiary may have another grace year each time his or her 
entitlement to one type of benefit ends and, after a break in 
entitlement of at least one month, he or she becomes entitled to a 
different type of retirement or survivors benefit. The new grace year 
would then be the taxable year in which occurs the first nonservice 
month after the break in entitlement.
    (3) A month will not be counted as a nonservice month for purposes 
of determining whether a given year is a beneficiary's grace year if the 
nonservice month occurred while the beneficiary was entitled to 
disability benefits under section 223 of the Social Security Act or as a 
disabled widow, widower, or child under section 202.
    (4) A beneficiary entitled to child's benefits, to young wife's or 
young husband's benefits (entitled only by reason of having a child in 
his or her care), or to mother's or father's benefits, is entitled to a 
termination grace year in any year(s) the beneficiary's entitlement to 
these types of benefits terminates. This provision does not apply if the 
termination is because of death or if the beneficiary is entitled to a 
Social Security benefit for the month following the month in which the 
entitlement ended. The beneficiary is entitled to a termination grace 
year in addition to any other grace year(s) available to him or her.

    Example 1: Don, age 65, will retire from his regular job in April of 
next year. Although he will have earned $11,000 for January-April of 
that year and plans to work part time, he will not earn over the monthly 
exempt amount after April. Don's taxable year is the calendar year. 
Since next year will be the first year in which he has a nonservice 
month while entitled to benefits, it will be his grace year and he will 
be entitled to the monthly earnings test for that year only. He will 
receive benefits for all months in which he does not earn over the 
monthly exempt amount (May-December) even though his earnings have 
substantially exceeded the annual exempt amount. However, in the years 
that follow, only the annual earnings test will be applied if he has 
earnings that exceed the annual exempt amount, regardless of his monthly 
earnings.
    Example 2: Marion was entitled to mother's insurance benefits from 
1978 because she had a child in her care under age 18. Because she had a 
nonservice month in 1978, 1978 was her initial grace year. Marion's 
child married in May 1980 and entitlement to mother's benefits 
terminated in April 1980. Since Marion's entitlement did not terminate 
by reason of her death and she was not entitled to another type of 
Social Security benefit in the month after her entitlement to mother's 
benefit ended, she is entitled to a termination grace year for 1980, the 
year in which her entitlement to mother's insurance benefits terminated.
    She applied for and became entitled to widow's insurance benefits 
effective February 1981. Because there was a break in entitlement to 
benefits of at least one month before entitlement to another type of 
benefit, 1981 will be a subsequent grace year if Marion has a nonservice 
month in 1981.

    (d) When an individual works in self-employment. An individual works 
in self-employment in any month in which he or she performs substantial 
services (see Sec. 404.446) in the operation of a trade or business (or 
in a combination of trades and businesses if there are more than one) as 
an owner or partner even though there may be no earnings or net earnings 
caused by the individual's services during the month.
    (e) Presumption regarding work in self-employment. An individual is 
presumed to have worked in self-employment in each month of the 
individual's taxable year until it is shown to the satisfaction of the 
Social Security Administration that in a particular month the individual 
did not perform substantial services (see Sec. 404.446(c)) in any trade 
or business (or in a combination of trades

[[Page 169]]

and businesses if there are more than one) from which the net income or 
loss is included in computing the individual's annual earnings (see 
Sec. 404.429).
    (f) Presumption regarding services for wages. An individual is 
presumed to have performed services in any month for wages (as defined 
in Sec. 404.429) of more than the applicable monthly exempt amount set 
for that month until it is shown to the satisfaction of the Social 
Security Administration that the individual did not perform services in 
that month for wages of more than the monthly exempt amount.

[45 FR 48117, July 18, 1980, as amended at 47 FR 46691, Oct. 20, 1982; 
48 FR 4282, Jan. 31, 1983]



Sec. 404.436  Excess earnings; months to which excess earnings cannot be charged because individual is deemed not entitled to benefits.

    Under the annual earnings test, excess earnings (as described in 
Sec. 404.430) are not charged to any month in which an individual is 
deemed not entitled to a benefit. A beneficiary (i.e., the insured 
individual or any person entitled or deemed entitled on the individual's 
earnings record) is deemed not entitled to a benefit for a month if he 
is subject to a deduction for that month because of:
    (a) Engaging in noncovered remunerative activity outside the United 
States (as described in Secs. 404.417 and 404.418); or
    (b) Failure to have a child in her care (in the case of a wife under 
age 65 or a widow or surviving divorced mother under age 62, as 
described in Sec. 404.421); or
    (c) Refusal by a person entitled to a child's insurance benefit 
based on disability to accept rehabilitation services (as described in 
Sec. 404.422). (An insured individual's excess earnings are not charged 
against the benefit of a child entitled (or deemed entitled) on the 
insured individual's earnings record for any month in which the child is 
subject to a deduction for refusing rehabilitation services); or
    (d) Refusal by an individual entitled to a disability insurance 
benefit to accept rehabilitation services as described in Sec. 404.422 
(e.g., a wife's excess earnings may not be charged against her benefits 
for months in which the disability insurance beneficiary on whose 
account she is entitled to wife's benefits incurs a deduction because he 
refuses rehabilitation services; also, a woman's earnings may not be 
charged against the mother's insurance benefit or child's insurance 
benefit she is receiving (on the earnings record of another individual) 
for months in which her husband refuses rehabilitation services while he 
is entitled to a disability insurance benefit).
    (e) Refusal by a person entitled before age 60 to a widow's/or to a 
widower's insurance benefit based on disability (before age 62 in the 
case of a widower's insurance benefit for months before 1973) to accept 
rehabilitation services (as described in Sec. 404.422).

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 9429, Apr. 16, 1973; 38 
FR 17716, July 3, 1973; 43 FR 8133, Feb. 28, 1978]



Sec. 404.437  Excess earnings; benefit rate subject to deductions because of excess earnings.

    For purposes of deductions because of excess earnings (as described 
in Sec. 404.430), the benefit rate against which excess earnings are 
charged is the amount of the benefit (other than a disability insurance 
benefit) to which the person is entitled for the month:
    (a) After reduction for the maximum (see Secs. 404.403 and 404.404). 
The rate as reduced for the maximum as referred to in this paragraph is 
the one applicable to remaining entitled beneficiaries after exclusion 
of beneficiaries deemed not entitled under Sec. 404.436 (due to a 
deduction for engaging in noncovered remunerative activity outside the 
United States, failure to have a child in her care, or refusal to accept 
rehabilitation services);
    (b) After any reduction under section 202(q) of the Act because of 
entitlement to benefits for months before age 65 (this applies only to 
old-age, wife's, widow's, or husband's benefits);
    (c) After any reduction in benefits payable to a person entitled (or 
deemed entitled; see Sec. 404.420) on the earnings record of the insured 
individual because of entitlement on his own earnings record to other 
benefits (see Sec. 404.407); and

[[Page 170]]

    (d) After any reduction of benefits payable to a person entitled or 
deemed entitled on the earnings record of an individual entitled to a 
disability insurance benefit because of such individual's entitlement to 
workmen's compensation for months after 1965 (see Sec. 404.408).

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 17716, July 3, 1973; 43 
FR 8133, Feb. 28, 1978]



Sec. 404.439  Partial monthly benefits; excess earnings of the individual charged against his benefits and the benefits of persons entitled (or deemed entitled) 
          to benefits on his earnings record.

    Deductions are made against the total family benefits where the 
excess earnings (as described in Sec. 404.430) of an individual entitled 
to old-age insurance benefits are charged to a month and require 
deductions in an amount less than the total family benefits payable on 
his earnings record for that month (including the amount of a mother's 
or child's insurance benefit payable to a spouse who is deemed entitled 
on the individual's earnings record--see Sec. 404.420). The difference 
between the total benefits payable and the deductions made under the 
annual earnings test for such month is paid (if otherwise payable under 
title II of the Act) to each person in the proportion that the benefit 
to which each is entitled (before the application of the reductions 
described in Sec. 404.403 for the family maximum, Sec. 404.407 for 
entitlement to more than one type of benefit, and section 202(q) of the 
Act for entitlement to benefits before retirement age) and before the 
application of Sec. 404.304(f) to round to the next lower dollar bears 
to the total of the benefits to which all of them are entitled, except 
that the total amount payable to any such person may not exceed the 
benefits which would have been payable to that person if none of the 
insured individual's excess earnings had been charged to that month.

    Example: A is entitled to an old-age insurance benefit of $165 and 
his wife is entitled to $82.50 before rounding, making a total of 
$247.50. After A's excess earnings have been charged to the appropriate 
months, there remains a partial benefit of $200 payable for October, 
which is apportioned as follows:

------------------------------------------------------------------------
                                                    Fraction
                                      Original         of     Benefit\1\
                                       benefit      original
------------------------------------------------------------------------
A................................         $165           2/3        $133
Wife.............................           82.50        1/3          66
                                  --------------------------------------
  Total..........................          247.50  .........         199
------------------------------------------------------------------------
\1\ After deductions for excess earnings and after rounding per Sec.
  404.304(f).


[38 FR 9429, Apr. 16, 1973, as amended at 38 FR 17717, July 3, 1973; 43 
FR 8133, Feb. 28, 1978; 48 FR 46149, Oct. 11, 1983]



Sec. 404.440  Partial monthly benefits; pro-rated share of partial payment exceeds the benefit before deduction for excess earnings.

    Where, under the apportionment described in Sec. 404.439, a person's 
prorated share of the partial benefit exceeds the benefit rate to which 
he was entitled before excess earnings of the insured individual were 
charged, such person's share of the partial benefit is reduced to the 
amount he would have been paid had there been no deduction for excess 
earnings (see example). The remainder of the partial benefit is then 
paid to other persons eligible to receive benefits in the proportion 
that the benefit of each such other person bears to the total of the 
benefits to which all such other persons are entitled (before reduction 
for the family maximum). Thus, if only two beneficiaries are involved, 
payment is made to one as if no deduction had been imposed; and the 
balance of the partial benefit is paid to the other. If three or more 
beneficiaries are involved, however, reapportionment of the excess of 
the beneficiary's share of the partial benefit over the amount he would 
have been paid without the deduction is made in proportion to his 
original entitlement rate (before reduction for the family maximum). If 
the excess amount involved at any point totals less than $1, it is not 
reapportioned; instead, each beneficiary is paid on the basis of the 
last calculation.

    Example: Family maximum is $150. Insured individual's excess 
earnings charged to the month are $25. The remaining $125 is prorated as 
partial payment.

[[Page 171]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Benefit after
                                                                                             deductions for     Benefit reduced for     Benefit payable
                                                              Original     Fraction of      excess earnings     maximum but without        after both
                                                              benefit     original total       but before      deductions for excess     deductions and
                                                                             benefit         reduction for            earnings          reductions (and
                                                                                             family maximum                                 rounded)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Insured Individual.........................................       $100              \2/5\                 50                   100.00                 75
Wife.......................................................         50              \1/5\                 25                    16.60                 16
Child......................................................         50              \1/5\                 25                    16.60                 16
Child......................................................         50              \1/5\                 25                    16.60                 16
--------------------------------------------------------------------------------------------------------------------------------------------------------

[32 FR 19159, Dec. 20, 1967, as amended at 48 FR 46149, Oct. 11, 1983]



Sec. 404.441  Partial monthly benefits; insured individual and another person entitled (or deemed entitled) on the same earnings record both have excess 
          earnings.

    Where both the insured individual and another person entitled (or 
deemed entitled) on the same earnings record have excess earnings (as 
described in Sec. 404.430), their excess earnings are charged, and their 
partial monthly benefit is apportioned, as follows:

    Example: M and his wife are initially entitled to combined total 
benefits of $264 per month based on M's old-age insurance benefit of 
$176. For the taxable year in question, M's excess earnings were $1,599 
and his wife's excess earnings were $265. Both were under age 65. M had 
wages of more than $340 in all months of the year except February, while 
his wife had wages of more than $340 in all months of the year. After 
M's excess earnings have been charged to the appropriate months (all 
months through July except February), there remains a partial benefit 
payment for August of $249, which is allocated to M and his wife in the 
ratio that the original benefit of each bears to the sum of their 
original benefits: $166 and $83. His wife's excess earnings are charged 
against her full benefit for February ($88), her partial benefit for 
August ($83), her full benefit for September, and from $6 of her October 
benefit, leaving an $82 benefit payable to her for that month.

[48 FR 46149, Oct. 11, 1983]



Sec. 404.446  Definition of ``substantial services'' and ``services.''

    (a) General. In general, the substantial services test will be 
applicable only in a grace year (including a termination grace year) as 
defined in Sec. 404.435(c)(1). It is a test of whether, in view of all 
the services rendered by the individual and the surrounding 
circumstances, the individual reasonably can be considered retired in 
the month in question. In determining whether an individual has or has 
not performed substantial services in any month, the following factors 
are considered:
    (1) The amount of time the individual devoted to all trades and 
businesses;
    (2) The nature of the services rendered by the individual;
    (3) The extent and nature of the activity performed by the 
individual before he allegedly retired as compared with that performed 
thereafter;
    (4) The presence or absence of an adequately qualified paid manager, 
partner, or family member who manages the business;
    (5) The type of business establishment involved;
    (6) The amount of capital invested in the trade or business; and
    (7) The seasonal nature of the trade or business.
    (b) Individual engaged in more than one trade or business. When an 
individual, in any month, performs services in more than one trade or 
business, his services in all trades or businesses are considered 
together in determining whether he performed substantial services in 
self-employment in such month.
    (c) Evidentiary requirements. An individual who alleges that he did 
not render substantial services in any month, or months, shall submit 
detailed information about the operation of the trades or businesses, 
including the individual's activities in connection therewith. When 
requested to do so by the Administration, the individual shall also 
submit such additional statements, information, and other evidence as 
the Administration may consider necessary for a proper determination of 
whether the individual rendered substantial services in self-employment. 
Failure of the individual

[[Page 172]]

to submit the requested statements, information, and other evidence is a 
sufficient basis for a determination that the individual rendered 
substantial services in self-employment during the period in question.

[32 FR 19159, Dec. 20, 1967, as amended at 47 FR 46691, Oct. 20, 1982]



Sec. 404.447  Evaluation of factors involved in substantial services test.

    In determining whether an individual's services are substantial, 
consideration is given to the following factors:
    (a) Amount of time devoted to trades or businesses. Consideration is 
first given to the amount of time the self-employed individual devotes 
to all trades or businesses, the net income or loss of which is 
includable in computing his earnings as defined in Sec. 404.429. For the 
purposes of this paragraph, the time devoted to a trade or business 
includes all the time spent by the individual in any activity, whether 
physical or mental, at the place of business or elsewhere in furtherance 
of such trade or business. This includes the time spent in advising and 
planning the operation of the business, making business contacts, 
attending meetings, and preparing and maintaining the facilities and 
records of the business. All time spent at the place of business which 
cannot reasonably be considered unrelated to business activities is 
considered time devoted to the trade or business. In considering the 
weight to be given to the time devoted to trades or businesses the 
following rules are applied:
    (1) Forty-five hours or less in a month devoted to trade or 
business. Where the individual establishes that the time devoted to his 
trades and businesses during a calendar month was not more than 45 
hours, the individual's services in that month are not considered 
substantial unless other factors (see paragraphs (b), (c), and (d) of 
this section) make such a finding unreasonable. For example, an 
individual who worked only 15 hours in a month might nevertheless be 
found to have rendered substantial services if he was managing a sizable 
business or engaging in a highly skilled occupation. However, the 
services of less than 15 hours rendered in all trades and businesses 
during a calendar month are not substantial.
    (2) More than 45 hours in a month devoted to trades and businesses. 
Where an individual devotes more than 45 hours to all trades and 
businesses during a calendar month, it will be found that the 
individual's services are substantial unless it is established that the 
individual could reasonably be considered retired in the month and, 
therefore, that such services were not, in fact, substantial.
    (b) Nature of services rendered. Consideration is also given to the 
nature of the services rendered by the individual in any case where a 
finding that the individual was retired would be unreasonable if based 
on time alone (see paragraph (a) of this section). The more highly 
skilled and valuable his services in self-employment are, the more 
likely the individual rendering such services could not reasonably be 
considered retired. The performance of services regularly also tends to 
show that the individual has not retired. Services are considered in 
relation to the technical and management needs of the business in which 
they are rendered. Thus, skilled services of a managerial or technical 
nature may be so important to the conduct of a sizable business that 
such services would be substantial even though the time required to 
render the services is considerably less than 45 hours.
    (c) Comparison of services rendered before and after retirement. 
Where consideration of the amount of time devoted to a trade or business 
(see paragraph (a) of this section) and the nature of services rendered 
(see paragraph (b) of this section) is not sufficient to establish 
whether an individual's services were substantial, consideration is 
given to the extent and nature of the services rendered by the 
individual before his retirement, as compared with the services 
performed during the period in question. A significant reduction in the 
amount or importance of services rendered in the business tends to show 
that the individual is retired; absence of such reduction tends to show 
that the individual is not retired.
    (d) Setting in which services performed. Where consideration of the 
factors described in paragraphs (a), (b), and (c) of

[[Page 173]]

this section is not sufficient to establish that an individual's 
services in self-employment were or were not substantial, all other 
factors are considered. The presence or absence of a capable manager, 
the kind and size of the business, the amount of capital invested and 
whether the business is seasonal, as well as any other pertinent 
factors, are considered in determining whether the individual's services 
are such that he can reasonably be considered retired.



Sec. 404.450  Required reports of work outside the United States or failure to have care of a child.

    (a) Beneficiary engaged in noncovered remunerative activity; report 
by beneficiary. Any individual entitled to a benefit which is subject to 
a deduction in that month because of noncovered remunerative activity 
outside the United States (see Sec. 404.417) shall report the occurrence 
of such an event to the Social Security Administration before the 
receipt and acceptance of a benefit for the second month following the 
month in which such event occurred.
    (b) Beneficiary receiving wife's, husband's, mother's or father's 
insurance benefits does not have care of a child; report by beneficiary. 
Any person receiving wife's, husband's, mother's, or father's insurance 
benefits which are subject to a deduction (as described in Sec. 404.421) 
because he or she did not have a child in his or her care shall report 
the occurrence of such an event to the Social Security Administration 
before the receipt and acceptance of a benefit for the second month 
following the month in which the deduction event occurred.
    (c) Report required by person receiving benefits on behalf of 
another. Where a person is receiving benefits on behalf of a beneficiary 
(see subpart U of this part) it is his duty to make the report to the 
Administration required by paragraph (a) or (b) of this section, on 
behalf of the beneficiary.
    (d) Report; content and form. A report required under the provisions 
of this section shall be filed with the Social Security Administration. 
(See Sec. 404.614 of this part for procedures concerning place of filing 
and date of receipt of such a report.) The report should be made on a 
form prescribed by the Administration and in accordance with 
instructions, printed thereon or attached thereto, as prescribed by the 
Administration. Prescribed forms may be obtained at any office of the 
Administration. If the prescribed form is not used, the report should be 
properly identified (e.g., show the name and social security claim 
number of the beneficiary about whom the report is made), describe the 
events being reported, tell when the events occurred, furnish any other 
pertinent data (e.g., who has care of the children), and be properly 
authenticated (e.g., bear the signature and address of the beneficiary 
making the report or the person reporting on his behalf). The report 
should contain all the information needed for a proper determination of 
whether a deduction applies and, if it does, the period for which such 
deductions should be made.

[32 FR 19159, Dec. 20, 1967, as amended at 49 FR 24117, June 12, 1984; 
51 FR 10616, Mar. 28, 1986; 65 FR 16813, Mar. 30, 2000]



Sec. 404.451  Penalty deductions for failure to report within prescribed time limit noncovered remunerative activity outside the United States or not having 
          care of a child.

    (a) Penalty for failure to report. If an individual (or the person 
receiving benefits on his behalf) fails to comply with the reporting 
obligations of Sec. 404.450 within the time specified in Sec. 404.450 
and it is found that good cause for such failure does not exist (see 
Sec. 404.454), a penalty deduction is made from the individual's 
benefits in addition to the deduction described in Sec. 404.417 
(relating to noncovered remunerative activity outside the United States) 
or Sec. 404.421 (relating to failure to have care of a child).
    (b) Determining amount of penalty deduction. The amount of the 
penalty deduction for failure to report noncovered remunerative activity 
outside the United States or not having care of a child within the 
prescribed time is determined as follows:
    (1) First failure to make timely report. The penalty deduction for 
the first failure to make a timely report is an amount equal to the 
individual's benefit or benefits for the first month for

[[Page 174]]

which the deduction event was not reported timely.
    (2) Second failure to make timely report. The penalty deduction for 
the second failure to make a timely report is an amount equal to twice 
the amount of the individual's benefit or benefits for the first month 
for which the deduction event in the second failure period was not 
reported timely.
    (3) Subsequent failures to make timely reports. The penalty 
deduction for the third or subsequent failure to file a timely report is 
an amount equal to three times the amount of the individual's benefit or 
benefits for the first month for which the deduction event in the third 
failure period was not reported timely.
    (c) Determining whether a failure to file a timely report is first, 
second, third, or subsequent failure--(1) Failure period. A failure 
period runs from the date of one delinquent report (but initially 
starting with the date of entitlement to monthly benefits) to the date 
of the next succeeding delinquent report, excluding the date of the 
earlier report and including the date of the later report. The failure 
period includes each month for which succeeding delinquent report, 
excluding a report becomes overdue during a failure period, but it does 
not include any month for which a report is not yet overdue on the 
ending date of such period. If good cause (see Sec. 404.454) is found 
for the entire period, the period is not regarded as a failure period.
    (2) First failure. When no penalty deduction under paragraph (b) of 
this section has previously been imposed against the beneficiary for 
failure to report noncovered remunerative activity outside the United 
States or for failure to report not having care of a child, the earliest 
month in the first failure period for which a report is delinquent and 
for which good cause (see Sec. 404.454) for failure to make the required 
report is not found is considered to be the first failure.
    (3) Second failure. After one penalty deduction under paragraph (b) 
of this section has been imposed against the beneficiary, the first 
month for which a report is delinquent in the second failure period is 
considered to be the second failure.
    (4) Third and subsequent failures. After a second penalty deduction 
under paragraph (b) of this section has been imposed against the 
beneficiary, the first month for which a report is delinquent in the 
third failure period is considered to be the third failure. Subsequent 
failures will be determined in the same manner.

    Example: M became entitled in January 1966 to mother's benefits; 
these benefits are not payable for any month in which the mother does 
not have a child in her care. M accepted benefits for each month from 
January 1966 through June 1967. In July 1967 she reported that she had 
not had a child in her care in January 1967. As she was not eligible for 
a benefit for any month in which she did not have a child in her care, 
M's July 1967 benefit was withheld to recover the overpayment she had 
received for January 1967, and the next payment she received was for 
August 1967. No penalty was imposed for her failure to make a timely 
report of the deduction event that occurred in January 1967 because it 
was determined that good cause existed.
    In March 1968 M reported that she had not had a child in her care in 
September or October 1967; however, she had accepted benefit payments 
for each month from August 1967 through February 1968. Her benefits for 
March and April 1968 were withheld to recover the overpayment for 
September and October 1967. Also, it was determined that good cause was 
not present for M's failure to make a timely report of the deduction 
event that had occurred in September 1967. A penalty equal to her 
benefit for September 1967 was deducted from M's May 1968 payment since 
this was her first failure to report not having a child in her care. 
Payments to her then were continued.
    On November 4, 1968, it was learned that M had not had a child in 
her care in November 1967 or in June, July, or August 1968 although she 
had accepted benefits for June through October 1968. Consequently, M's 
benefits for November 1968 through February 1969 were withheld to 
recover the 4 months' overpayment she received for months in which she 
did not have a child in her care. In addition, it was determined that 
good cause was not present for M's failure to report the deduction 
events, and a penalty was imposed equal to twice the amount of M's 
benefit for the month of June 1968. This was M's second failure to 
report not having a child in her care. No further penalty applied for 
November 1967 because that month was included in M's first-failure 
period.

    (5) Penalty deductions imposed under Sec. 404.453 not considered. A 
failure to

[[Page 175]]

make a timely report of earnings as required by Sec. 404.452 for which a 
penalty deduction is imposed under Sec. 404.453 is not counted as a 
failure to report in determining the first or subsequent failure to 
report noncovered remunerative activity outside the United States or not 
having care of a child.
    (d) Limitation on amount of penalty deduction. Notwithstanding the 
provisions described in paragraph (b) of this section, the amount of the 
penalty deduction imposed for failure to make a timely report of 
noncovered remunerative activity outside the United States or for 
failure to report not having care of a child may not exceed the number 
of months in that failure period for which the individual received and 
accepted a benefit and for which a deduction is imposed by reason of his 
noncovered remunerative activity outside the United States or failure to 
have care of a child. (See Sec. 404.458 for other limitations on the 
amount of the penalty deduction.)

[38 FR 3596, Feb. 8, 1973, as amended at 38 FR 9430, Apr. 16, 1973]



Sec. 404.452  Reports to Social Security Administration of earnings; wages; net earnings from self-employment.

    (a) Conditions under which a report of earnings, wages, and net 
earnings from self-employment is required. An individual who, during a 
taxable year, is entitled to a monthly benefit (except if in each month 
of his taxable year he was entitled only to a disability insurance 
benefit) is required to report to the Social Security Administration the 
total amount of his earnings (as defined in Sec. 404.429) for each such 
taxable year. A report is required when the individual's total earnings 
or wages (as defined in Sec. 404.429) for any taxable year ending after 
1972 exceed the product of $175 multiplied by the number of months in 
his taxable year, except that the report is not required for a taxable 
year if:
    (1) The individual attained the age of 70 in or before the first 
month of entitlement to benefits in the taxable year, or
    (2) The individual's benefit payments were suspended under the 
provisions described in Sec. 404.456 for all months in a taxable year in 
which the individual was entitled to benefits and was under age 70.
    (b) Time within which report must be filed. The report for any 
taxable year beginning after 1954 shall be filed with the Social 
Security Administration on or before the 15th day of the fourth month 
following the close of the taxable year; for example, April 15 when the 
beneficiary's taxable year is a calendar year. (See Sec. 404.3(c) where 
the last day for filing the report falls on a Saturday, Sunday, or legal 
holiday, or any other day all or part of which is declared to be a 
nonwork day for Federal employees by statute or Executive order.) The 
filing of an income tax return or a form W-2 with the Internal Revenue 
Service may serve as the report required to be filed under the 
provisions of this section where the income tax return or form W-2 shows 
the same wages and net earnings from self-employment that must be 
reported to the Administration under this section.
    (c) Report required by person receiving benefits on behalf of 
another. Where a person is receiving benefits on behalf of a beneficiary 
(see subpart U of this part), it is his duty to make the report to the 
Administration required by this section.
    (d) Information to be provided to us. The report should show the 
name and social security claim number of the beneficiary about whom the 
report is made; identify the taxable year for which the report is made; 
show the total amount of wages for which the beneficiary rendered 
services during the taxable year (if applicable), the amount of net 
earnings from self-employment for such year (if applicable); and show 
the name and address of the individual making the report. To overcome 
the presumption that the beneficiary rendered services for wages 
exceeding the allowable amount and rendered substantial services in 
self-employment in each month (see Sec. 404.435), we must also be told 
the specific months in which the beneficiary did not render services in 
employment for wages of more than the allowable amount (as described in 
Sec. 404.435) and did not render substantial services in self-employment 
(as described in Secs. 404.446 and 404.447).

[[Page 176]]

    (e) Requirement to furnish requested information. A beneficiary, or 
the person reporting on his behalf, is required to furnish any other 
information about the beneficiary's earnings and services that the 
Administration requests for the purpose of determining the correct 
amount of benefits payable for a taxable year (see Sec. 404.455).
    (f) Extension of time for filing report--(1) General. 
Notwithstanding the provision described in paragraph (b) of this 
section, the Administration may grant a reasonable extension of time for 
making the report of earnings required under this section if it finds 
that there is valid reason for a delay, but in no case may the period be 
extended more than 4 months for any taxable year.
    (2) Requirements applicable to requests for extensions. Before his 
annual report of earnings is due, a beneficiary may request an extension 
of time for filing his report. The request must meet all of these 
requirements:
    (i) Be in writing, and
    (ii) Be made by the beneficiary, his representative payee, or his 
authorized agent,
    (iii) Be made before the required report is overdue (If an extension 
of time already has been granted, a request for further extension must 
be made before the due date as extended previously),
    (iv) Be made to an office of the Administration,
    (v) Name the beneficiary for whom the annual report must be made and 
furnish his claim number,
    (vi) Identify the year for which an annual report is due and for 
which an extension of time is requested,
    (vii) Explain in the requester's own words the reasons why an 
extension of time is needed, and how much extended time is needed,
    (viii) Show the date the request is made, and
    (ix) Be signed by the requester.
    (3) Valid reason defined. A valid reason is a bona fide need, 
problem, or situation which makes it impossible or difficult for a 
beneficiary (or his representative payee) to meet the annual report due 
date prescribed by law. This may be illness or disability of the one 
required to make the report, absence or travel so far from home that he 
does not have and cannot readily obtain the records needed for making 
his report, inability to obtain evidence required from another source 
when such evidence is necessary in making the report, inability of his 
accountant to compile the data needed for the annual report, or any 
similar situation which has a direct bearing on the individual's ability 
to comply with his reporting obligation within the specified time limit.
    (4) Evidence that extension of time has been granted. In the absence 
of written evidence of a properly approved extension of time for making 
an annual report of earnings, it will be presumed that no extension of 
filing time was granted. In such case it will be necessary for the 
beneficiary to establish whether he otherwise had good cause 
(Sec. 404.454) for filing his annual report after the normal due date.

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 9430, Apr. 16, 1973; 43 
FR 8133, Feb. 28, 1978; 51 FR 10616, Mar. 28, 1986; 60 FR 56513, Nov. 9, 
1995; 62 FR 15610, Apr. 2, 1997]



Sec. 404.453  Penalty deductions for failure to report earnings timely.

    (a) Penalty for failure to report earnings; general. Penalty 
deductions are imposed against an individual's benefits, in addition to 
the deductions required because of his excess earnings (see 
Sec. 404.415), if:
    (1) He fails to make a timely report of his earnings as specified in 
Sec. 404.452 for a taxable year beginning after 1954;
    (2) It is found that good cause for failure to report earnings 
timely (see Sec. 404.454) does not exist;
    (3) A deduction is imposed because of his earnings (see 
Sec. 404.415) for that year; and
    (4) He received and accepted any payment of benefits for that year.
    (b) Determining amount of penalty deduction. The amount of the 
penalty deduction for failure to report earnings for a taxable year 
within the prescribed time is determined as follows:
    (1) First failure to file timely report. The penalty deduction for 
the first failure to file a timely report is an amount equal to the 
individual's benefit or benefits for the last month for which he was 
entitled to such benefit or benefits during the taxable year, except 
that with respect to any deductions imposed

[[Page 177]]

on or after January 2, 1968, if the amount of the deduction imposed for 
the taxable year is less than the benefit or benefits for the last month 
of the taxable year for which he was entitled to a benefit under section 
202 of the Act, the penalty deduction is an amount equal to the amount 
of the deduction imposed but not less than $10.
    (2) Second failure to file timely report. The penalty deduction for 
the second failure to file a timely report is an amount equal to twice 
the amount of the individual's benefit or benefits for the last month 
for which he was entitled to such benefit or benefits during such 
taxable year.
    (3) Subsequent failures to file timely reports. The penalty 
deduction for the third or subsequent failure to file a timely report is 
an amount equal to three times the amount of the individual's benefit or 
benefits for the last month for which he was entitled to such benefit or 
benefits during such taxable year.
    (c) Determining whether a failure to file a timely report is first, 
second, or subsequent failure--(1) No prior failure. Where no penalty 
deduction under this section has previously been imposed against the 
beneficiary for failure to make a timely report of his earnings, all 
taxable years (and this may include 2 or more years) for which a report 
of earnings is overdue as of the date the first delinquent report is 
made are included in the first failure. The latest of such years for 
which good cause for failure to make the required report (see 
Sec. 404.454) is not found is considered the first failure to file a 
timely report.

    Example: X became entitled to benefits in 1964 and had reportable 
earnings for 1964, 1965, and 1966. He did not make his annual reports 
for those years until July 1967. At that time it was found that 1966 was 
the only year for which he has good cause for not making a timely report 
of his earnings. Since all taxable years for which a report is overdue 
as of the date of the first delinquent report are included in the first 
failure period, it was found that his first failure to make a timely 
report was for 1965. The penalty is equal to his December 1965 benefit 
rate. If good cause had also been found for both 1965 and 1964, then X 
would have no prior failure within the meaning of this subsection.

    (2) Second and subsequent failures. After one penalty deduction 
under paragraph (b) of this section has been imposed against an 
individual, each taxable year for which a timely report of earnings is 
not made (and the count commences with reports of earnings which become 
delinquent after the date the first delinquent report described in 
paragraph (c)(1) of this section was made), and for which good cause for 
failure to make the required report is not found, is considered 
separately in determining whether the failure is the second or 
subsequent failure to report timely.

    Example: Y incurred a penalty deduction for not making his 1963 
annual report until July 1964. In August 1966 it was found that he had 
not made a timely report of either his 1964 or 1965 earnings, and good 
cause was not present with respect to either year. The penalty for 1964 
is equal to twice his benefit rate for December 1964. The penalty for 
1965 is equal to three times his benefit rate for December 1965.

    (3) Penalty deduction imposed under Sec. 404.451 not considered. A 
failure to make a report as required by Sec. 404.450, for which a 
penalty deduction is imposed under Sec. 404.451, is not counted as a 
failure to report in determining, under this section, whether a failure 
to report earnings or wages is the first or subsequent failure to 
report.
    (d) Limitation on amount of penalty deduction. Notwithstanding the 
provisions described in paragraph (b) of this section, the amount of the 
penalty deduction imposed for failure to file a timely report of 
earnings for a taxable year may not exceed the number of months in that 
year for which the individual received and accepted a benefit and for 
which deductions are imposed by reason of his earnings for such year. 
(See Sec. 404.458 for other limitations on the amount of the penalty 
deduction.)

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 3597, Feb. 8, 1973; 38 
FR 9431, Apr. 16, 1973]



Sec. 404.454  Good cause for failure to make required reports.

    (a) General. The failure of an individual to make a timely report 
under the provisions described in Secs. 404.450 and 404.452 will not 
result in a penalty deduction if the individual establishes to the 
satisfaction of the Administration that his failure to file a timely 
report was due to good cause. Before

[[Page 178]]

making any penalty determination as described in Secs. 404.451 and 
404.453, the individual shall be advised of the penalty and good cause 
provisions and afforded an opportunity to establish good cause for 
failure to report timely. The failure of the individual to submit 
evidence to establish good cause within a specified time may be 
considered a sufficient basis for a finding that good cause does not 
exist (see Sec. 404.705). In determining whether good cause for failure 
to report timely has been established by the individual, consideration 
is given to whether the failure to report within the proper time limit 
was the result of untoward circumstances, misleading action of the 
Social Security Administration, confusion as to the requirements of the 
Act resulting from amendments to the Act or other legislation, or any 
physical, mental, educational, or linguistic limitations (including any 
lack of facility with the English language) the individual may have. For 
example, good cause may be found where failure to file a timely report 
was caused by:
    (1) Serious illness of the individual, or death or serious illness 
in his immediate family;
    (2) Inability of the individual to obtain, within the time required 
to file the report, earnings information from his employer because of 
death or serious illness of the employer or one in the employer's 
immediate family; or unavoidable absence of his employer; or destruction 
by fire or other damage of the employer's business records;
    (3) Destruction by fire, or other damage, of the individual's 
business records;
    (4) Transmittal of the required report within the time required to 
file the report, in good faith to another Government agency even though 
the report does not reach the Administration until after the period for 
reporting has expired;
    (5) Unawareness of the statutory provision that an annual report of 
earnings is required for the taxable year in which the individual 
attained age 72 provided his earnings for such year exceeded the 
applicable amount, e.g., $1,680 for a 12-month taxable year ending after 
December 1967;
    (6) Failure on the part of the Administration to furnish forms in 
sufficient time for an individual to complete and file the report on or 
before the date it was due, provided the individual made a timely 
request to the Administration for the forms;
    (7) Belief that an extension of time for filing income tax returns 
granted by the Internal Revenue Service was also applicable to the 
annual report to be made to the Social Security Administration;
    (8) Reliance upon a written report to the Social Security 
Administration made by, or on behalf of, the beneficiary before the 
close of the taxable year, if such report contained sufficient 
information about the beneficiary's earnings or work, to require 
suspension of his benefits (see Sec. 404.456) and the report was not 
subsequently refuted or rescinded; or
    (9) Failure of the individual to understand reporting 
responsibilities due to his or her physical, mental, educational, or 
linguistic limitation(s).
    (b) Notice of determination. In every case in which it is determined 
that a penalty deduction should be imposed, the individual shall be 
advised of the penalty determination and of his reconsideration rights. 
If it is found that good cause for failure to file a timely report does 
not exist, the notice will include an explanation of the basis for this 
finding; the notice will also explain the right to partial adjustment of 
the overpayment, in accordance with the provisions of Sec. 404.502(c).
    (c) Good cause for subsequent failure. Where circumstances are 
similar and an individual fails on more than one occasion to make a 
timely report, good cause normally will not be found for the second or 
subsequent violation.

[38 FR 3597, Feb. 8, 1973, as amended at 43 FR 8133, Feb. 28, 1978; 59 
FR 1634, Jan. 12, 1994]



Sec. 404.455  Request by Social Security Administration for reports of earnings and estimated earnings; effect of failure to comply with request.

    (a) Request by Social Security Administration for report during 
taxable year; effect of failure to comply. The Social Security 
Administration may, during the course of a taxable year, request a 
beneficiary to estimate his or her earnings

[[Page 179]]

(as defined in Sec. 404.429) for the current taxable year and for the 
next taxable year, and to furnish any other information about his or her 
earnings that the Social Security Administration may specify. If a 
beneficiary fails to comply with a request for an estimate of earnings 
for a taxable year, the beneficiary's failure, in itself, constitutes 
justification under section 203(h) of the Act for a determination that 
it may reasonably be expected that the beneficiary will have deductions 
imposed under the provisions described in Sec. 404.415, due to his or 
her earnings for that taxable year. Furthermore, the failure of the 
beneficiary to comply with a request for an estimate of earnings for a 
taxable year will, in itself, constitute justification for the Social 
Security Administration to use the preceding taxable year's estimate of 
earnings (or, if available, reported earnings) to suspend payment of 
benefits for the current or next taxable year.
    (b) Request by Social Security Administration for report after close 
of taxable year; failure to comply. After the close of his or her 
taxable year, the Social Security Administration may request a 
beneficiary to furnish a report of his or her earnings for the closed 
taxable year and to furnish any other information about his or her 
earnings for that year that the Social Security Administration may 
specify. If he or she fails to comply with this request, this failure 
shall, in itself, constitute justification under section 203(h) of the 
Act for a determination that the beneficiary's benefits are subject to 
deductions as described in Sec. 404.415 for each month in the taxable 
year (or only for the months thereof specified by the Social Security 
Administration).

[56 FR 11373, Mar. 18, 1991]



Sec. 404.456  Current suspension of benefits because an individual works or engages in self-employment.

    (a) Circumstances under which benefit payments may be suspended. If, 
on the basis of information obtained by or submitted to the 
Administration, it is determined that an individual entitled to monthly 
benefits for any taxable year may reasonably be expected to have 
deductions imposed against his benefits (as described in Sec. 404.415) 
by reason of his earnings for such year, the Administration may, before 
the close of the taxable year, suspend all or part, as the 
Administration may specify, of the benefits payable to the individual 
and to all other persons entitled (or deemed entitled--see Sec. 404.420) 
to benefits on the basis of the individual's earnings record.
    (b) Duration of suspension. The suspension described in paragraph 
(a) of this section shall remain in effect with respect to the benefits 
for each month until the Administration has determined whether or not 
any deduction under Sec. 404.415 applies for such month.
    (c) When suspension of benefits becomes final. For taxable years 
beginning after August 1958, if benefit payments were suspended (as 
described in paragraph (a) of this section) for all months of 
entitlement in an individual's taxable year, no benefit payment for any 
month in that year may be made after the expiration of the period of 3 
years, 3 months, and 15 days following the close of the individual's 
taxable year unless, within that period, the individual, or any person 
entitled to benefits based on his earnings record, files with the 
Administration information showing that a benefit for a month is payable 
to the individual. Subject to the limitations of this paragraph, a 
determination about deductions may be reopened under the circumstances 
described in Sec. 404.907.

[32 FR 19159, Dec. 20, 1967, as amended at 65 FR 16813, Mar. 30, 2000]



Sec. 404.457  Deductions where taxes neither deducted from wages of certain maritime employees nor paid.

    (a) When deduction is required. A deduction is required where:
    (1) An individual performed services after September 1941 and before 
the termination of Title I of the First War Powers Act, 1941, on or in 
connection with any vessel as an officer or crew member; and
    (2) The services were performed in the employ of the United States 
and employment was through the War Shipping Administration or, for 
services performed before February 11, 1942, through the United States 
Maritime Commission; and

[[Page 180]]

    (3) The services, under the provisions of Sec. 404.1041 of this 
part, constituted employment for the purposes of title II of the Social 
Security Act; and
    (4) The taxes imposed (by section 1400 of the Internal Revenue Code 
of 1939, as amended) with respect to such services were neither deducted 
from the individual's wages nor paid by the employer.
    (b) Amount of deduction. The deduction required by paragraph (a) of 
this section is an amount equal to 1 percent of the wages with respect 
to which the taxes described in paragraph (a)(4) of this section were 
neither deducted nor paid by the employer.
    (c) How deduction is made. The deduction required by paragraph (a) 
of this section is made by withholding an amount as determined under 
paragraph (b) of this section from any monthly benefit or lump-sum death 
payment based on the earnings record of the individual who performed the 
services described in paragraph (a) of this section.

[32 FR 19159, Dec. 20, 1967, as amended at 65 FR 16813, Mar. 30, 2000]



Sec. 404.458  Limiting deductions where total family benefits payable would not be affected or would be only partly affected.

    Notwithstanding the provisions described in Secs. 404.415, 404.417, 
404.421, 404.422, 404.451, and 404.453 about the amount of the deduction 
to be imposed for a month, no such deduction is imposed for a month when 
the benefits payable for that month to all persons entitled to benefits 
on the same earnings record and living in the same household remain 
equal to the maximum benefits payable to them on that earnings record. 
Where making such deductions and increasing the benefits to others in 
the household (for the month in which the deduction event occurred) 
would give members of the household less than the maximum (as determined 
under Sec. 404.404) payable to them, the amount of deduction imposed is 
reduced to the difference between the maximum amount of benefits payable 
to them and the total amount which would have been paid if the benefits 
of members of the household not subject to deductions were increased for 
that month. The individual subject to the deduction for such month may 
be paid the difference between the deduction so reduced and his benefit 
as adjusted under Sec. 404.403 (without application of Sec. 404.402(a)). 
All other persons in the household are paid, for such month, their 
benefits as adjusted under Sec. 404.403 without application of 
Sec. 404.402(a).

[47 FR 43673, Oct. 4, 1982]



Sec. 404.459  Penalty for false or misleading statements.

    (a) Why would SSA penalize me? You will be subject to a penalty if 
you make, or cause to be made, a statement or representation of a 
material fact for use in determining any initial or continuing right to, 
or the amount of, monthly insurance benefits under title II or benefits 
or payments under title XVI and:
    (1) You know or should know that the statement or representation--
    (i) Is false or misleading; or
    (ii) Omits a material fact; or
    (2) You make the statement with a knowing disregard for the truth.
    (b) What is the penalty? The penalty is nonpayment of benefits under 
title II that we would otherwise pay you and ineligibility for cash 
benefits under title XVI (including State supplementary payments made by 
SSA according to Sec. 416.2005).
    (c) How long will the penalty last? The penalty will last--
    (1) Six consecutive months the first time we penalize you;
    (2) Twelve consecutive months the second time we penalize you; and
    (3) Twenty-four consecutive months the third or subsequent time we 
penalize you.
    (d) Will this penalty affect any of my other government benefits? If 
we penalize you, the penalty will apply only to your eligibility for 
benefits under titles II and XVI (including State supplementary payments 
made by us according to Sec. 416.2005). The penalty will not affect--
    (1) Your eligibility for benefits that you would otherwise be 
eligible for under titles XVIII and XIX but for the imposition of the 
penalty; and
    (2) The eligibility or amount of benefits payable under titles II or 
XVI to another person. For example, another

[[Page 181]]

person (such as your spouse or child) may be entitled to benefits under 
title II based on your earnings record. Benefits would still be payable 
to that person to the extent that you would be receiving such benefits 
but for the imposition of the penalty. As another example, if you are 
receiving title II benefits that are limited under the family maximum 
provision (Sec. 404.403) and we stop your benefits because we impose a 
penalty on you, we will not increase the benefits of other family 
members who are limited by the family maximum provision simply because 
you are not receiving benefits because of the penalty.
    (e) How will SSA make its decision to penalize me? In order to 
impose a penalty on you, we must find that you knowingly (knew or should 
have known or acted with knowing disregard for the truth) made a false 
or misleading statement or omitted a material fact. We will base our 
decision to penalize you on the evidence and the reasonable inferences 
that can be drawn from that evidence, not on speculation or suspicion. 
Our decision to penalize you will be documented with the basis and 
rationale for that decision. In determining whether you knowingly made a 
false or misleading statement or omitted a material fact so as to 
justify imposition of the penalty, we will consider all evidence in the 
record, including any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which you may have had at the time. In determining whether you acted 
knowingly, we will also consider the significance of the false or 
misleading statement or omission in terms of its likely impact on your 
benefits.
    (f) What should I do if I disagree with SSA's initial determination 
to penalize me? If you disagree with our initial determination to impose 
a penalty, you have the right to request reconsideration of the penalty 
decision as explained in Sec. 404.907. We will give you a chance to 
present your case, including the opportunity for a face-to-face 
conference. If you request reconsideration of our initial determination 
to penalize you, you have the choice of a case review, informal 
conference, or formal conference, as described in Sec. 416.1413(a) 
through (c). If you disagree with our reconsidered determination you 
have the right to follow the normal administrative and judicial review 
process by requesting a hearing before an administrative law judge, 
Appeals Council review and Federal court review, as explained in 
Sec. 404.900.
    (g) When will the penalty period begin and end? Subject to the 
additional limitations noted in paragraphs (g)(1) and (g)(2) of this 
section, the penalty period will begin the first day of the month for 
which you would otherwise receive payment of benefits under title II or 
title XVI were it not for imposition of the penalty. Once a sanction 
begins, it will run continuously even if payments are intermittent. If 
more than one penalty has been imposed, but they have not yet run, the 
penalties will not run concurrently.
    (1) If you do not request reconsideration of our initial 
determination to penalize you, the penalty period will begin no earlier 
than the first day of the second month following the month in which the 
time limit for requesting reconsideration ends. The penalty period will 
end on the last day of the final month of the penalty period. For 
example, if the time period for requesting reconsideration ends on 
January 10, a 6-month period of nonpayment begins on March 1 if you 
would otherwise be eligible to receive benefits for that month, and ends 
on August 31.
    (2) If you request reconsideration of our initial determination to 
penalize you and the reconsidered determination does not change our 
original decision to penalize you, the penalty period will begin no 
earlier than the first day of the second month following the month we 
notify you of our reconsidered determination. The penalty period will 
end on the last day of the final month of the penalty period. For 
example, if we notify you of our reconsidered determination on August 
31, 2001, and you are not otherwise eligible for payment of benefits at 
that time, but would again be eligible to receive payment of benefits on 
October 1, 2003, a 6-month period of nonpayment would begin on October 
1, 2003 and end on March 31, 2004.

[65 FR 42285, July 10, 2000]

[[Page 182]]



Sec. 404.460  Nonpayment of monthly benefits of aliens outside the United States.

    (a) Nonpayment of monthly benefits to aliens outside the United 
States more than 6 months. Except as described in paragraph (b) and 
subject to the limitations in paragraph (c) of this section after 
December 1956 no monthly benefit may be paid to any individual who is 
not a citizen or national of the United States, for any month after the 
sixth consecutive calendar month during all of which he is outside the 
United States, and before the first calendar month for all of which he 
is in the United States after such absence. (See Sec. 404.380 regarding 
special payments at age 72.)
    (1) For nonpayment of benefits under this section, it is necessary 
that the beneficiary be an alien and while an alien be outside the 
United States for more than six full consecutive calendar months. In 
determining whether at the time of a beneficiary's initial entitlement 
to benefits he has been outside the United States for a period exceeding 
six full consecutive calendar months, not more than the six calendar 
months immediately preceding the month of initial entitlement may be 
considered. For the purposes of this section, outside the United States 
means outside the territorial boundaries of the 50 States, the District 
of Columbia, Puerto Rico, the Virgin Islands of the United States, Guam, 
and American Samoa.
    (2) Effective with 6-month periods beginning after January 2, 1968, 
after an alien has been outside the United States for any period of 30 
consecutive days, he is deemed to be outside the United States 
continuously until he has returned to the United States and remained in 
the United States for a period of 30 consecutive days.
    (3) Payments which have been discontinued pursuant to the provisions 
of this section will not be resumed until the alien beneficiary has been 
in the United States for a full calendar month. A full calendar month 
includes 24 hours of each day of the calendar month.
    (4) Nonpayment of benefits to an individual under this section does 
not cause nonpayment of benefits to other persons receiving benefits 
based on the individual's earnings record.

    Example: R, an alien, leaves the United States on August 15, 1967, 
and returns on February 1, 1968. He leaves again on February 15, 1968, 
and does not return until May 15, 1968, when he spends 1 day in the 
United States. He has been receiving monthly benefits since July 1967.
    R's first 6-month period of absence begins September 1, 1967. Since 
this period begins before January 2, 1968, his visit (Feb. 1, 1968, to 
Feb. 15, 1968) to the United States for less than 30 consecutive days is 
sufficient to break this 6-month period.
    R's second 6-month period of absence begins March 1, 1968. Since 
this period begins after January 2, 1968, and he was outside the United 
States for 30 consecutive days, he must return and spend 30 consecutive 
days in the United States prior to September 1, 1968, to prevent 
nonpayment of benefits beginning September 1968. If R fails to return to 
the United States for 30 consecutive days prior to September 1, 1968, 
payments will be discontinued and will not be resumed until R spends at 
least 1 full calendar month in the United States.

    (b) When nonpayment provisions do not apply. The provisions 
described in paragraph (a) of this section do not apply, subject to the 
limitations in paragraph (c) of this section, to a benefit for any month 
if:
    (1) The individual was, or upon application would have been, 
entitled to a monthly benefit for December 1956, based upon the same 
earnings record; or
    (2)(i) The individual upon whose earnings the benefit is based, 
before that month, has resided in the United States for a period or 
periods aggregating 10 years or more or has earned not less than 40 
quarters of coverage;
    (ii) Except that, effective with the month of July 1968, the 
provisions of paragraph (b)(2)(i) of this section do not apply if (a) 
the beneficiary is a citizen of a country having a social insurance or 
pension system which meets the conditions described in paragraphs (b)(7) 
(i), (ii), and (iii) of this section but does not meet the condition 
described in paragraph (b)(7)(iv) of this section, or (b) the 
beneficiary is a citizen of a country that has no social insurance or 
pension system of general application if at any time within 5 years 
prior to January 1968 (or the first month after December 1967 in which 
his

[[Page 183]]

benefits are subject to suspension pursuant to paragraph (a) of this 
section) payments to individuals residing in such country were withheld 
by the Treasury Department under the first section of the Act of October 
9, 1940 (31 U.S.C. 123) (see paragraph (c) of this section);
    (iii) For purposes of this subparagraph a period of residence begins 
with the day the insured individual arrives in the United States with 
the intention of establishing at least a temporary home here; it 
continues so long as he maintains an attachment to an abode in the 
United States, accompanied by actual physical presence in the United 
States for a significant part of the period; and ends with the day of 
departure from the United States with the intention to reside elsewhere; 
or
    (3) The individual is outside the United States while in the active 
military or naval service of the United States; or
    (4) The individual on whose earnings the benefit is based died 
before that month and:
    (i) Death occurred while the individual was on active duty or 
inactive duty training as a member of a uniformed service, or
    (ii) Death occurred after the individual was discharged or released 
from a period of active duty or inactive duty training as a member of a 
uniformed service, and the Administrator of Veterans' Affairs 
determines, and certifies to the Commissioner, that the discharge or 
release was under conditions other than dishonorable and that death was 
as a result of a disease or injury incurred or aggravated in line of 
duty while on active duty or inactive duty training; or
    (5) The individual on whose earnings record the benefit is based 
worked in service covered by the Railroad Retirement Act, and such work 
is treated as employment covered by the Social Security Act under the 
provisions described in subpart O of this part; or
    (6) The nonpayment of monthly benefits under the provisions 
described in paragraph (a) of this section would be contrary to a treaty 
obligation of the United States in effect on August 1, 1956 (see 
Sec. 404.463(b)); or
    (7) The individual is a citizen of a foreign country that the 
Commissioner determines has in effect a social insurance or pension 
system (see Sec. 404.463) which meets all of the following conditions:
    (i) Such system pays periodic benefits or the actuarial equivalent 
thereof; and
    (ii) The system is of general application; and
    (iii) Benefits are paid in this system on account of old age, 
retirement, or death; and
    (iv) Individuals who are citizens of the United States but not 
citizens of the foreign country and who qualify for such benefits are 
permitted to receive benefits without restriction or qualification, at 
their full rate, or the actuarial equivalent thereof, while outside of 
the foreign country and without regard to the duration of their absence 
therefrom.
    (c) Nonpayment of monthly benefits to aliens residing in certain 
countries--(1) Benefits for months after June 1968. Notwithstanding the 
provisions of paragraphs (a) and (b) of this section, no monthly benefit 
may be paid for any month after June 1968 to any individual who is not a 
citizen or national of the United States for any month such individual 
resides in a country to which payments to individuals in such country 
are being withheld by the Treasury Department pursuant to the first 
section of the Act of October 9, 1940 (31 U.S.C. 123).
    (2) Benefits for months before July 1968. If any benefits which an 
individual who is not a citizen or national of the United States was 
entitled to receive under title II of the Social Security Act are, on 
June 30, 1968, being withheld by the Treasury Department pursuant to the 
first section of the Act of October 9, 1940 (31 U.S.C. 123), upon 
removal of the restriction such benefits, payable to such individual for 
months after the month in which the determination by the Treasury 
Department that the benefits should be so withheld was made, shall not 
be paid--
    (i) To any person other than such individual, or, if such individual 
dies before such benefits can be paid, to any person other than an 
individual who was entitled for the month in which

[[Page 184]]

the deceased individual died (with the application of section 202(j)(1) 
of the Social Security Act) to a monthly benefit under title II of such 
Act on the basis of the same wages and self-employment income as such 
deceased individual; or
    (ii) In excess of an amount equal to the amount of the last 12 
months' benefits that would have been payable to such individual.
    (3) List of countries under Treasury Department alien payment 
restriction. Pursuant to the provisions of the first section of the Act 
of October 9, 1940 (31 U.S.C. 123) the Treasury Department is currently 
withholding payments to individuals residing in the following countries. 
Further additions to or deletions from the list of countries will be 
published in the Federal Register.

Cuba
Democratic Kampuchea (formerly Cambodia)
North Korea
Vietnam

    (d) Nonpayment of monthly benefits to certain aliens entitled to 
benefits on a worker's earnings record. An individual who after December 
31, 1984 becomes eligible for benefits on the earnings record of a 
worker for the first time, is an alien, has been outside the United 
States for more than 6 consecutive months, and is qualified to receive a 
monthly benefit by reason of the provisions of paragraphs (b)(2), 
(b)(3), (b)(5), or (b)(7) of this section, must also meet a U.S. 
residence requirement described in this section to receive benefits:
    (1) An alien entitled to benefits as a child of a living or deceased 
worker--
    (i) Must have resided in the U.S. for 5 or more years as the child 
of the parent on whose earnings record entitlement is based; or
    (ii) The parent on whose earnings record the child is entitled and 
the other parent, if any, must each have either resided in the United 
States for 5 or more years or died while residing in the U.S.
    (2) An alien who meets the requirements for child's benefits based 
on paragraph (d)(1) of this section above, whose status as a child is 
based on an adoptive relationship with the living or deceased worker, 
must also--
    (i) Have been adopted within the United States by the worker on 
whose earnings record the child's entitlement is based; and
    (ii) Have lived in the United States with, and received one-half 
support from, the worker for a period, beginning prior to the child's 
attainment of age 18, of
    (A) At least one year immediately before the month in which the 
worker became eligible for old-age benefits or disability benefits or 
died (whichever occurred first), or
    (B) If the worker had a period of disability which continued until 
the worker's entitlement to old-age or disability benefits or death, at 
least one year immediately before the month in which that period of 
disability began.
    (3) An alien entitled to benefits as a spouse, surviving spouse, 
divorced spouse, surviving divorced spouse, or surviving divorced mother 
or father must have resided in the United States for 5 or more years 
while in a spousal relationship with the person on whose earnings record 
the entitlement is based. The spousal relationship over the required 
period can be that of wife, husband, widow, widower, divorced wife, 
divorced husband, surviving divorced wife, surviving divorced husband, 
surviving divorced mother, surviving divorced father, or a combination 
of two or more of these categories.
    (4) An alien who is entitled to parent's benefits must have resided 
in the United States for 5 or more years as a parent of the person on 
whose earnings record the entitlement is based.
    (5) Individuals eligible for benefits before January 1, 1985 
(including those eligible for one category of benefits on a particular 
worker's earnings record after December 31, 1984, but also eligible for 
a different category of benefits on the same worker's earnings record 
before January 1, 1985), will not have to meet the residency 
requirement.
    (6) Definitions applicable to paragraph (d) of this section are as 
follows:
    Eligible for benefits means that an individual satisfies the 
criteria described in subpart D of this part for benefits at a 
particular time except that the person need not have applied for those 
benefits at that time.
    Other parent for purposes of paragraph (d)(1)(ii) of this section 
means any other living parent who is of the

[[Page 185]]

opposite sex of the worker and who is the adoptive parent by whom the 
child was adopted before the child attained age 16 and who is or was the 
spouse of the person on whose earnings record the child is entitled; or 
the natural mother or natural father of the child; or the step-parent of 
the child by a marriage, contracted before the child attained age 16, to 
the natural or adopting parent on whose earnings record the child is 
entitled. (Note: Based on this definition, a child may have more than 
one living other parent. However, the child's benefit will be payable 
for a month if in that month he or she has one other parent who had 
resided in the U.S. for at least 5 years.)
    Resided in the United States for satisfying the residency 
requirement means presence in the United States with the intention of 
establishing at least a temporary home. A period of residence begins 
upon arrival in the United States with that intention and continues so 
long as an attachment to an abode in the United States is maintained, 
accompanied by actual physical presence in the United States for a 
significant part of the period, and ending the day of departure from the 
United States with the intention to reside elsewhere. The period need 
not have been continuous and the requirement is satisfied if the periods 
of U.S. residence added together give a total of 5 full years.
    (7) The provisions described in paragraph (d) of this section shall 
not apply if the beneficiary is a citizen or resident of a country with 
which the United States has a totalization agreement in force, except to 
the extent provided by that agreement.

[32 FR 19159, Dec. 20, 1967, as amended at 34 FR 13366, Aug. 19, 1969; 
52 FR 8249, Mar. 17, 1987; 52 FR 26145, July 13, 1987; 60 FR 17445, Apr. 
6, 1995; 62 FR 38450, July 18, 1997]



Sec. 404.461  Nonpayment of lump sum after death of alien outside United States for more than 6 months.

    Where an individual dies outside the United States after January 
1957 and no monthly benefit was or could have been paid to him for the 
month preceding the month in which he died because of the provisions 
described in Sec. 404.460, no lump-sum death payment may be made upon 
the basis of the individual's earnings record.



Sec. 404.462  Nonpayment of hospital and medical insurance benefits of alien outside United States for more than 6 months.

    No payments may be made under part A (hospital insurance benefits) 
of title XVIII for items or services furnished to an individual in any 
month for which the prohibition described in Sec. 404.460 against 
payment of benefits to an individual outside the United States for more 
than six full consecutive calendar months is applicable (or would be if 
he were entitled to any such benefits). Also, no payments may be made 
under part B (supplementary medical insurance benefits) of title XVIII 
for expenses incurred by an individual during any month the individual 
is not paid a monthly benefit by reason of the provisions described in 
Sec. 404.460 or for which no monthly benefit would be paid if he were 
otherwise entitled thereto.



Sec. 404.463  Nonpayment of benefits of aliens outside the United States; ``foreign social insurance system,'' and ``treaty obligation'' exceptions defined.

    (a) Foreign social insurance system exception. The following 
criteria are used to evaluate the social insurance or pension system of 
a foreign country to determine whether the exception described in 
Sec. 404.460(b) to the alien nonpayment provisions applies:
    (1) Social insurance or pension system. A social insurance system 
means a governmental plan which pays benefits as an earned right, on the 
basis either of contributions or work in employment covered under the 
plan, without regard to the financial need of the beneficiary. However, 
a plan of this type may still be regarded as a social insurance system 
though it may provide, in a subordinate fashion, for a supplemental 
payment based on need. A pension system means a governmental plan which 
pays benefits based on residence or age, or a private employer's plan 
for which the government has set up uniform standards for coverage, 
contributions, eligibility, and benefit amounts provided that, in both 
of these types of plans,

[[Page 186]]

the financial need of the beneficiary is not a consideration.
    (2) In effect. The social insurance or pension system of the foreign 
country must be in effect. This means that the foreign social insurance 
or pension system is in full operation with regard to taxes (or 
contributions) and benefits, or is in operation with regard to taxes (or 
contributions), and provision is made for payments to begin immediately 
upon the expiration of the period provided in the law for acquiring 
earliest eligibility. It is not in effect if the law leaves the 
beginning of operation to executive or other administrative action; nor 
is it in effect if the law has been temporarily suspended.
    (3) General application. The term of general application means that 
the social insurance or pension system (or combination of systems) 
covers a substantial portion of the paid labor force in industry and 
commerce, taking into consideration the industrial classification and 
size of the paid labor force and the population of the country, as well 
as occupational, size of employer, and geographical limitations on 
coverage.
    (4) Periodic benefit or actuarial equivalent. The term periodic 
benefit means a benefit payable at stated regular intervals of time such 
as weekly, biweekly, or monthly. Actuarial equivalent of a periodic 
benefit means the commutation of the value of the periodic benefit into 
a lump-sum payment, taking life expectancy and interest into account.
    (5) Benefits payable on account of old age, retirement, or death. 
The requirement that benefits be payable on account of old age, 
retirement, or death, is satisfied if the foreign social insurance plan 
or system includes provision for payment of benefits to aged or retired 
persons and to dependents and survivors of covered workers. The 
requirement is also met where the system pays benefits based only on old 
age or retirement. The requirement is not met where the only benefits 
payable are workmen's compensation payments, cash sickness payments, 
unemployment compensation payments, or maternity insurance benefits.
    (6) System under which U.S. citizens who qualify may receive payment 
while outside the foreign country. The foreign social insurance or 
pension system must permit payments to qualified U.S. citizens while 
outside such foreign country, regardless of the duration of their 
absence therefrom and must make the payments without restriction or 
qualification to these U.S. citizens at full rate, or at the full 
actuarial value. The foreign system is considered to pay benefits at the 
full rate if the U.S. citizen receives the full benefit rate in effect 
for qualified beneficiaries at the time of his award, whether he is then 
inside or outside the paying country; and he continues to receive the 
same benefit amount so long as he remains outside that country, even 
though he may not receive any increases going into effect after his 
award provided that in those other countries in which such increases are 
denied to beneficiaries, they are denied to all beneficiaries including 
nationals of the paying country.
    (7) List of countries which meet the social insurance or pension 
system exception in section 202(t)(2) of the act. The following 
countries have been found to have in effect a social insurance or 
pension system which meets the requirements of section 202(t)(2) of the 
Act. Unless otherwise specified, each country meets such requirements 
effective January 1957. The effect of these findings is that 
beneficiaries who are citizens of such countries and not citizens of the 
United States may be paid benefits regardless of the duration of their 
absence from the United States unless for months beginning after June 
1968 they are residing in a country to which payments to individuals are 
being withheld by the Treasury Department pursuant to the first section 
of the Act of October 9, 1940 (31 U.S.C. 123). Further additions to or 
deletions from the list of countries will be published in the Federal 
Register.

Antigua and Barbuda (effective November 1981)
Argentina (effective July 1968)
Austria (except from January 1958 through June 1961)
Bahamas, Commonwealth of the (effective October 1974)
Barbados (effective July 1968)
Belgium (effective July 1968)
Belize (effective September 1981)
Bolivia
Brazil

[[Page 187]]

Burkina Faso, Republic of (formerly Upper Volta)
Canada (effective January 1966)
Chile
Colombia (effective January 1967)
Costa Rica (effective May 1962)
Cyprus (effective October 1964)
Czechoslovakia (effective July 1968)
Denmark (effective April 1964)
Dominica (effective November 1978)
Dominican Republic (effective November 1984)
Ecuador
El Salvador (effective January 1969)
Finland (effective May 1968)
France (effective June 1968)
Gabon (effective June 1964)
Grenada (effective April 1983)
Guatemala (effective October 1978)
Guyana (effective September 1969)
Iceland (effective December 1980)
Ivory Coast
Jamaica (effective July 1968)
Liechtenstein (effective July 1968)
Luxembourg
Malta (effective September 1964)
Mexico (effective March 1968)
Monaco
Netherlands (effective July 1968)
Nicaragua (effective May 1986)
Norway (effective June 1968)
Panama
Peru (effective February 1969)
Philippines (effective June 1960)
Poland (effective March 1957)
Portugal (effective May 1968)
San Marino (effective January 1965)
Spain (effective May 1966)
St. Christopher and Nevis (effective September 1983)
St. Lucia (effective August 1984)
Sweden (effective July 1966)
Switzerland (effective July 1968)
Trinidad and Tobago (effective July 1975)
Trust Territory of the Pacific Islands (Micronesia) (effective July 
1976)
Turkey
United Kingdom
Western Samoa (effective August 1972)
Yugoslavia
Zaire (effective July 1961) (formerly Congo (Kinshasa))

    (b) The ``treaty obligation'' exception. It is determined that the 
Treaties of Friendship, Commerce, and Navigation now in force between 
the United States and the Federal Republic of Germany, Greece, the 
Republic of Ireland, Israel, Italy, and Japan, respectively, create 
treaty obligations precluding the application of Sec. 404.460(a) to 
citizens of such countries; and that the Treaty of Friendship, Commerce, 
and Navigation now in force between the United States and the Kingdom of 
the Netherlands creates treaty obligations precluding the application of 
Sec. 404.460(a) to citizens of that country with respect to monthly 
survivors benefits only. There is no treaty obligation that would 
preclude the application of Sec. 404.460(a) to citizens of any country 
other than those listed above.

[32 FR 19159, Dec. 20, 1967, as amended at 43 FR 2628, Jan. 18, 1978; 52 
FR 8249, Mar. 17, 1987]



Sec. 404.464  Nonpayment of benefits where individual is deported; prohibition against payment of lump sum based on deported individual's earnings records.

    (a) Old-age or disability insurance benefits. When an individual is 
deported under the provisions of section 241(a) of the Immigration and 
Nationality Act (other than under paragraph (1)(C) or (1)(E) thereof), 
no old-age or disability insurance benefit is payable to the individual 
for any month occurring after the month in which the Commissioner is 
notified by the Attorney General of the United States that the 
individual has been deported and before the month in which the 
individual is thereafter lawfully admitted to the United States for 
permanent residence. An individual is considered lawfully admitted for 
permanent residence as of the month he enters the United States with 
permission to reside here permanently.
    (b) Other monthly benefits. If, under the provisions described in 
paragraph (a) of this section, no old-age or disability insurance 
benefit is payable to an individual for a month, no monthly insurance 
benefit is payable for that month, based upon the individual's earnings 
record, to any other person who is not a citizen of the United States 
and who is outside the United States for any part of that month.
    (c) Lump sum death payment. No lump-sum death payment is payable on 
the basis of the earnings of an individual deported under section 241(a) 
of the Immigration and Nationality Act (other than paragraph (1)(C) or 
(1)(E) thereof) if the individual dies in or after the month in which 
the Commissioner receives notice that he has been deported and before 
the month in

[[Page 188]]

which the individual is thereafter lawfully admitted to the United 
States for permanent residence.

[32 FR 19159, Dec. 20, 1967, as amended at 58 FR 64889, Dec. 10, 1993; 
62 FR 38450, July 18, 1997]



Sec. 404.465  Conviction for subversive activities; effect on monthly benefits and entitlement to hospital insurance benefits.

    (a) Effect of conviction. Where an individual is convicted of any 
offense (committed after August 1, 1956) under chapter 37 (relating to 
espionage and censorship), chapter 105 (relating to sabotage), or 
chapter 115 (relating to treason, sedition, and subversive activities) 
of title 18 U.S.C., or under section 4, 112, or 113 of the Internal 
Security Act of 1950, as amended, the court, in addition to all other 
penalties provided by law, may order that, in determining whether any 
monthly benefit is payable to the individual for the month in which he 
is convicted or for any month thereafter, and in determining whether the 
individual is entitled to hospital insurance benefits under part A of 
title XVIII for any such month, and in determining the amount of the 
benefit for that month, the following are not to be taken into account:
    (1) Any wages paid to such individual, or to any other individual, 
in the calendar quarter in which such conviction occurred or in any 
prior calendar quarter, and
    (2) Any net earnings from self-employment derived by the individual, 
or any other individual, during the taxable year in which the conviction 
occurred or during any prior taxable year.
    (b) Recalculation of benefit. When notified by the Attorney General 
that the additional penalty as described in paragraph (a) of this 
section has been imposed against any individual entitled to benefits 
under section 202 or section 223 of the Act (see subpart D), the 
Administration, for the purposes of determining the individual's 
entitlement to such benefits as of the month in which convicted and the 
amount of the benefit, will exclude the applicable wages and net 
earnings in accordance with the order of the court.
    (c) Effect of pardon. In the event that an individual, with respect 
to whom the additional penalty as described in paragraph (a) of this 
section has been imposed, is granted a pardon of the offense by the 
President of the United States, such penalty is not applied in 
determining such individual's entitlement to benefits, and the amount of 
such benefit, for any month beginning after the date on which the pardon 
is granted.



Sec. 404.466  Conviction for subversive activities; effect on enrollment for supplementary medical insurance benefits.

    An individual may not enroll under part B (supplementary medical 
insurance benefits) of title XVIII if he has been convicted of any 
offense described in Sec. 404.465.



Sec. 404.467  Nonpayment of benefits; individual entitled to disability insurance benefits or childhood disability benefits based on statutory blindness is 
          engaging in substantial gainful activity.

    (a) Disability insurance benefits. An individual who has attained 
age 55 and who meets the definition of disability for disability 
insurance benefits purposes based on statutory blindness, as defined in 
Sec. 404.1581, may be entitled to disability insurance benefits for 
months in which he is engaged in certain types of substantial gainful 
activity. No payment, however, may be made to the individual or to 
beneficiaries entitled to benefits on his earnings record for any month 
in which such individual engages in any type of substantial gainful 
activity.
    (b) Childhood disability benefits. An individual who has attained 
age 55 and who meets the definition of disability prescribed in 
Sec. 404.1583 for childhood disability benefits on the basis of 
statutory blindness may be entitled to childhood disability benefits for 
months in which he engages in certain types of substantial gainful 
activity. However, no payment may be made to such individual for any 
month after December 1972 in which such individual engages in 
substantial gainful activity.

[39 FR 43715, Dec. 18, 1974, as amended at 51 FR 10616, Mar. 28, 1986]

[[Page 189]]



Sec. 404.468  Nonpayment of benefits to prisoners.

    (a) General. No monthly benefits will be paid to any individual for 
any month any part of which the individual is confined in a jail, 
prison, or other penal institution or correctional facility for 
conviction of a felony. This rule applies to disability benefits 
(Sec. 404.315) and child's benefits based on disability (Sec. 404.350) 
effective with benefits payable for months beginning on or after October 
1, 1980. For all other monthly benefits, this rule is effective with 
benefits payable for months beginning on or after May 1, 1983. However, 
it applies only to the prisoner; benefit payments to any other person 
who is entitled on the basis of the prisoner's wages and self-employment 
income are payable as though the prisoner were receiving benefits.
    (b) Felonious offenses. An offense will be considered a felony if--
    (1) It is a felony under applicable law: or
    (2) In a jurisdiction which does not classify any crime as a felony, 
it is an offense punishable by death or imprisonment for a term 
exceeding one year.
    (c) Confinement. In general, a jail, prison, or other penal 
institution or correctional facility is a facility which is under the 
control and jurisdiction of the agency in charge of the penal system or 
in which convicted criminals can be incarcerated. Confinement in such a 
facility continues as long as the individual is under a sentence of 
confinement and has not been released due to parole or pardon. An 
individual is considered confined even though he or she is temporarily 
or intermittently outside of that facility (e.g., on work release, 
attending school, or hospitalized).
    (d) Vocational rehabilitation exception. The nonpayment provision of 
paragraph (a) of this section does not apply if a prisoner who is 
entitled to benefits on the basis of disability is actively and 
satisfactorily participating in a rehabilitation program which has been 
specifically approved for the individual by court of law. In addition, 
the Commissioner must determine that the program is expected to result 
in the individual being able to do substantial gainful activity upon 
release and within a reasonable time. No benefits will be paid to the 
prisoner for any month prior to the approval of the program.

[49 FR 48182, Dec. 11, 1984, as amended at 62 FR 38450, July 18, 1997]



Sec. 404.469  Nonpayment of benefits where individual has not furnished or applied for a Social Security number.

    No monthly benefits will be paid to an entitled individual unless he 
or she either furnishes to the Social Security Administration (SSA) 
satisfactory proof of his or her Social Security number, or, if the 
individual has not been assigned a number, he or she makes a proper 
application for a number (see Sec. 422.103). An individual submits 
satisfactory proof of his or her Social Security number by furnishing to 
SSA the number and sufficient additional information that can be used to 
determine whether that Social Security number or another number has been 
assigned to the individual. Sufficient additional information may 
include the entitled individual's date and place of birth, mother's 
maiden name, and father's name. If the individual does not know his or 
her Social Security number, SSA will use this additional information to 
determine the Social Security number, if any, that it assigned to the 
individual. This rule applies to individuals who become entitled to 
benefits beginning on or after June 1, 1989.

[56 FR 41789, Aug. 23, 1991]



Sec. 404.470  Nonpayment of disability benefits due to noncompliance with rules regarding treatment for drug addiction or alcoholism.

    (a) Suspension of monthly benefits. (1) For an individual entitled 
to benefits based on a disability (Sec. 404.1505) and for whom drug 
addiction or alcoholism is a contributing factor material to the 
determination of disability (as described in Sec. 404.1535), monthly 
benefits will be suspended beginning with the first month after we 
notify the individual in writing that he or she has been determined not 
to be in compliance with the treatment requirements for such individuals 
(Sec. 404.1536).
    (2) This rule applies to all individuals entitled to disability 
benefits

[[Page 190]]

(Sec. 404.315), widow(er)'s benefits (Sec. 404.335), and child's 
benefits based on a disability (Sec. 404.350) effective with benefits 
paid in months beginning on or after March 1, 1995.
    (3) Benefit payments to any other person who is entitled on the 
basis of a disabled wage earner's entitlement to disability benefits are 
payable as though the disabled wage earner were receiving benefits.
    (b) Resumption of monthly benefits. The payment of benefits may be 
resumed only after an individual demonstrates and maintains compliance 
with appropriate treatment requirements for:
    (1) 2 consecutive months for the first determination of 
noncompliance;
    (2) 3 consecutive months for the second determination of 
noncompliance; and
    (3) 6 consecutive months for the third and all subsequent 
determinations of noncompliance.
    (c) Termination of benefits. (1) A suspension of benefit payments 
due to noncompliance with the treatment requirements for 12 consecutive 
months will result in termination of benefits effective with the first 
month following the 12th month of suspension of benefits.
    (2) Benefit payments to any other person who is entitled on the 
basis of a disabled wage earner's entitlement to disability benefits are 
payable as though the disabled wage earner were receiving benefits.

[60 FR 8146, Feb. 10, 1995]



Sec. 404.480  Paying benefits in installments: Drug addiction or alcoholism.

    (a) General. For disabled beneficiaries who receive benefit payments 
through a representative payee because drug addiction or alcoholism is a 
contributing factor material to the determination of disability (as 
described in Sec. 404.1535), certain amounts due the beneficiary for a 
past period will be paid in installments. The amounts subject to payment 
in installments include:
    (1) Benefits due but unpaid which accrued prior to the month payment 
was effectuated;
    (2) Benefits due but unpaid which accrued during a period of 
suspension for which the beneficiary was subsequently determined to have 
been eligible; and
    (3) Any adjustment to benefits which results in an accrual of unpaid 
benefits.
    (b) Installment formula. Except as provided in paragraph (c) of this 
section, the amount of the installment payment in any month is limited 
so that the sum of (1) the amount due for a past period (and payable 
under paragraph (a) of this section) paid in such month and (2) the 
amount of any benefit due for the preceding month under such entitlement 
which is payable in such month, does not exceed two times the amount of 
the beneficiary's benefit payment for the preceding month. In counting 
the amount of the beneficiary's benefit payment for the previous month, 
no reductions or deductions under this title are taken into account.
    (c) Exception to installment limitation. An exception to the 
installment payment limitation in paragraph (b) of this section can be 
granted for the first month in which a beneficiary accrues benefit 
amounts subject to payment in installments if the beneficiary has unpaid 
housing expenses which result in a high risk of homelessness for the 
beneficiary. In that case, the benefit payment may be increased by the 
amount of the unpaid housing expenses so long as that increase does not 
exceed the amount of benefits which accrued during the most recent 
period of nonpayment. We consider a person to be at risk of homelessness 
if continued nonpayment of the outstanding housing expenses is likely to 
result in the person losing his or her place to live or if past 
nonpayment of housing expenses has resulted in the person having no 
appropriate personal place to live. In determining whether this 
exception applies, we will ask for evidence of outstanding housing 
expenses that shows that the person is likely to lose or has already 
lost his or her place to live. For purposes of this section, 
homelessness is the state of not being under the control of any public 
institution and having no appropriate personal place to live. Housing 
expenses include charges

[[Page 191]]

for all items required to maintain shelter (for example, mortgage 
payments, rent, heating fuel, and electricity).
    (d) Payment through a representative payee. If the beneficiary does 
not have a representative payee, payment of amounts subject to 
installments cannot be made until a representative payee is selected.
    (e) Underpaid beneficiary no longer entitled. In the case of a 
beneficiary who is no longer currently entitled to monthly payments, but 
to whom amounts defined in paragraph (a) of this section are still 
owing, we will treat such beneficiary's monthly benefit for the last 
month of entitlement as the beneficiary's benefit for the preceding 
month and continue to make installment payments of such benefits through 
a representative payee.
    (f) Beneficiary currently not receiving Social Security benefits 
because of suspension for noncompliance with treatment. If a beneficiary 
is currently not receiving benefits because his or her benefits have 
been suspended for noncompliance with treatment (as defined in 
Sec. 404.1536), the payment of amounts under paragraph (a) of this 
section will stop until the beneficiary has demonstrated compliance with 
treatment as described in Sec. 404.470 and will again commence with the 
first month the beneficiary begins to receive benefit payments.
    (g) Underpaid beneficiary deceased. Upon the death of a beneficiary, 
any remaining unpaid amounts as defined in paragraph (a) of this section 
will be treated as underpayments in accordance with Sec. 404.503(b).

[60 FR 8146, Feb. 10, 1995]



Subpart F--Overpayments, Underpayments, Waiver of Adjustment or Recovery 
         of Overpayments, and Liability of a Certifying Officer

    Authority: Secs. 204, 205(a), and 702(a)(5) of the Social Security 
Act (42 U.S.C. 404, 405(a), and 902(a)); 31 U.S.C. 3720A.



Sec. 404.501  General applicability of section 204 of the Act.

    (a) In general. Section 204 of the Act provides for adjustment as 
set forth in Secs. 404.502 and 404.503, in cases where an individual has 
received more or less than the correct payment due under title II of the 
Act. As used in this subpart, the term overpayment includes a payment in 
excess of the amount due under title II of the Act, a payment resulting 
from the failure to impose deductions or to suspend or reduce benefits 
under sections 203, 222(b), 224, and 228(c), and (d), and (e) of the Act 
(see subpart E of this part), a payment pursuant to section 205(n) of 
the Act in an amount in excess of the amount to which the individual is 
entitled under section 202 or 223 of the Act, a payment resulting from 
the failure to terminate benefits, and a payment where no amount is 
payable under title II of the Act. The term underpayment as used in this 
subpart refers only to monthly insurance benefits and includes 
nonpayment where some amount of such benefits was payable. An 
underpayment may be in the form of an accrued unpaid benefit amount for 
which no check has been drawn or in the form of an unnegotiated check 
payable to a deceased individual. The provisions for adjustment also 
apply in cases where through error:
    (1) A reduction required under section 202(j)(1), 202(k)(3), 203(a), 
or 205(n) of the Act is not made, or
    (2) An increase or decrease required under section 202(d)(2), or 215 
(f) or (g) of the Act is not made, or
    (3) A deduction required under section 203(b) (as may be modified by 
the provisions of section 203(h)), 203(c), 203(d), 203(i), 222(b), or 
223(a)(1)(D) of the Act or section 907 of the Social Security Amendments 
of 1939 is not made, or
    (4) A suspension required under section 202(n) or 202(t) of the Act 
is not made, or
    (5) A reduction under section 202(q) of the Act is not made, or
    (6) A reduction, increase, deduction, or suspension is made which is 
either more or less than required, or
    (7) A payment in excess of the amount due under title XVIII of the 
Act was made to or on behalf of an individual (see 42 CFR 405.350 
through 405.351) entitled to benefits under title II of the Act, or

[[Page 192]]

    (8) A payment of past due benefits is made to an individual and such 
payment had not been reduced by the amount of attorney's fees payable 
directly to an attorney under section 206 of the Act (see Sec. 404.977).
    (9) A reduction under Sec. 404.408b is made which is either more or 
less than required.
    (b) Payments made on the basis of an erroneous report of death. Any 
monthly benefit or lump sum paid under title II of the Act on the basis 
of an erroneous report by the Department of Defense of the death of an 
individual in the line of duty while such individual was a member of the 
uniformed services (as defined in section 210(m) of the Act) on active 
duty (as defined in section 210(l) of the Act) is deemed a correct 
payment for any month prior to the month such Department notifies the 
Administration that such individual is alive.
    (c) Payments made by direct deposit to a financial institution. When 
a payment in excess of the amount due under title II of the Act is made 
by direct deposit to a financial institution to or on behalf of an 
individual who has died, and the financial institution credits the 
payment to a joint account of the deceased individual and another person 
who was entitled to a monthly benefit on the basis of the same earnings 
record as the deceased individual for the month before the month in 
which the deceased individual died, the amount of the payment in excess 
of the correct amount will be an overpayment to the other person.

[34 FR 14887, Sept. 27, 1969, as amended at 44 FR 34942, June 18, 1979; 
47 FR 4988, Feb. 3, 1982; 48 FR 46149, Oct. 11, 1983; 55 FR 7313, Mar. 
1, 1990]



Sec. 404.502  Overpayments.

    Upon determination that an overpayment has been made, adjustments 
will be made against monthly benefits and lump sums as follows:
    (a) Individual overpaid is living. (1) If the individual to whom an 
overpayment was made is at the time of a determination of such 
overpayment entitled to a monthly benefit or a lump sum under title II 
of the Act, or at any time thereafter becomes so entitled, no benefit 
for any month and no lump sum is payable to such individual, except as 
provided in paragraphs (c) and (d) of this section, until an amount 
equal to the amount of the overpayment has been withheld or refunded. 
Such adjustments will be made against any monthly benefit or lump sum 
under title II of the Act to which such individual is entitled whether 
payable on the basis of such individual's earnings or the earnings of 
another individual.
    (2) If any other individual is entitled to benefits for any month on 
the basis of the same earnings as the overpaid individual, except as 
adjustment is to be effected pursuant to paragraphs (c) and (d) of this 
section by withholding a part of the monthly benefit of either the 
overpaid individual or any other individual entitled to benefits on the 
basis of the same earnings, no benefit for any month will be paid on 
such earnings to such other individual until an amount equal to the 
amount of the overpayment has been withheld or refunded.
    (b) Individual overpaid dies before adjustment. If an overpaid 
individual dies before adjustment is completed under the provisions of 
paragraph (a) of this section, no lump sum and no subsequent monthly 
benefit will be paid on the basis of earnings which were the basis of 
the overpayment to such deceased individual until full recovery of the 
overpayment has been effected, except as provided in paragraphs (c) and 
(d) of this section or under Sec. 404.515. Such recovery may be effected 
through:
    (1) Payment by the estate of the deceased overpaid individual,
    (2) Withholding of amounts due the estate of such individual under 
title II of the Act,
    (3) Withholding a lump sum or monthly benefits due any other 
individual on the basis of the same earnings which were the basis of the 
overpayment to the deceased overpaid individual, or
    (4) Any combination of the amount above.
    (c) Adjustment by withholding part of a monthly benefit. (1) Where 
it is determined that withholding the full amount each month would 
defeat the purpose of title II, i.e., deprive the person of income 
required for ordinary and necessary living expenses (see Sec. 404.508),

[[Page 193]]

adjustment under paragraphs (a) and (b) of this section may be effected 
by withholding an amount of not less than $10 of the monthly benefit 
payable to an individual.
    (2) Adjustment as provided by this paragraph will not be available 
if the overpayment was caused by the individual's intentional false 
statement or representation, or willful concealment of, or deliberate 
failure to furnish, material information. In such cases, recovery of the 
overpayment will be accomplished as provided in paragraph (a) of this 
section.
    (d) Individual overpaid enrolled under supplementary insurance plan. 
Notwithstanding the provisions of paragraphs (a), (b), and (c) of this 
section, if the individual liable for the overpayment is an enrollee 
under part B of title XVIII of the Act and the overpayment was not 
caused by such individual's intentional false statement or 
representation, or willful concealment of, or deliberate failure to 
furnish, material information, an amount of such individual's monthly 
benefit which is equal to his obligation for supplementary medical 
insurance premiums will be applied toward payment of such premiums, and 
the balance of the monthly benefit will be applied toward recovery of 
the overpayment. Further adjustment with respect to such balance may be 
made if the enrollee so requests and meets the conditions of paragraph 
(c) of this section.

[35 FR 5943, Apr. 10, 1970, as amended at 44 FR 20653, Apr. 6, 1979]



Sec. 404.502a  Notice of right to waiver consideration.

    Whenever an initial determination is made that more than the correct 
amount of payment has been made, and we seek adjustment or recovery of 
the overpayment, the individual from whom we are seeking adjustment or 
recovery is immediately notified. The notice includes:
    (a) The overpayment amount and how and when it occurred;
    (b) A request for full, immediate refund, unless the overpayment can 
be withheld from the next month's benefit;
    (c) The proposed adjustment of benefits if refund is not received 
within 30 days after the date of the notice and adjustment of benefits 
is available;
    (d) An explanation of the availability of a different rate of 
withholding when full withholding is proposed, installment payments when 
refund is requested and adjustment is not currently available, and/or 
cross-program recovery when refund is requested and the individual is 
receiving another type of payment from SSA (language about cross-program 
recovery is not included in notices sent to individuals in jurisdictions 
where this recovery option is not available);
    (e) An explanation of the right to request waiver of adjustment or 
recovery and the automatic scheduling of a file review and pre-
recoupment hearing (commonly referred to as a personal conference) if a 
request for waiver cannot be approved after initial paper review;
    (f) An explanation of the right to request reconsideration of the 
fact and/or amount of the overpayment determination;
    (g) Instructions about the availability of forms for requesting 
reconsideration and waiver;
    (h) An explanation that if the individual does not request waiver or 
reconsideration within 30 days of the date of the overpayment notice, 
adjustment or recovery of the overpayment will begin;
    (i) A statement that an SSA office will help the individual complete 
and submit forms for appeal or waiver requests; and
    (j) A statement that the individual receiving the notice should 
notify SSA promptly if reconsideration, waiver, a lesser rate of 
withholding, repayment by installments or cross-program adjustment is 
wanted.

[61 FR 56131, Oct. 31, 1996]



Sec. 404.503  Underpayments.

    Underpayments will be adjusted as follows:
    (a) Individual underpaid is living. If an individual to whom an 
underpayment is due is living, the amount of such underpayment will be 
paid to such individual either in a single payment (if he is not 
entitled to a monthly benefit or a lump-sum death payment) or by 
increasing one or more monthly benefits

[[Page 194]]

or a lump-sum death payment to which such individual is or becomes 
entitled.
    (b) Individual dies before adjustment of underpayment. If an 
individual to whom an underpayment is due dies before receiving payment 
or negotiating a check or checks representing such payment, such 
underpayment will be distributed to the living person (or persons) in 
the highest order of priority as follows:
    (1) The deceased individual's surviving spouse as defined in section 
216(c), (g), or (h) of the Act who was either:
    (i) Living in the same household (as defined in Sec. 404.347) with 
the deceased individual at the time of such individual's death, or
    (ii) Entitled to a monthly benefit on the basis of the same earnings 
record as was the deceased individual for the month in which such 
individual died.
    (2) The child or children of the deceased individual (as defined in 
section 216 (e) or (h) of the Act) entitled to a monthly benefit on the 
basis of the same earnings record as was the deceased individual for the 
month in which such individual died (if more than one such child, in 
equal shares to each such child).
    (3) The parent or parents of the deceased individual, entitled to a 
monthly benefit on the basis of the same earnings record as was the 
deceased individual for the month in which such individual died (if more 
than one such parent, in equal shares to each such parent). For this 
purpose, the definition of ``parent'' in Sec. 404.374 includes the 
parent(s) of any deceased individual who was entitled to benefits under 
title II of the Act.
    (4) The surviving spouse of the deceased individual (as defined in 
section 216(c), (g), or (h) of the Act) who does not qualify under 
paragraph (b)(1) of this section.
    (5) The child or children of the deceased individual (as defined in 
section 216 (e) or (h) of the Act) who do not qualify under paragraph 
(b)(2) of this section (if more than one such child, in equal shares to 
each such child).
    (6) The parent or parents of the deceased individual, who do not 
qualify under paragraph (b)(3) of this section (if more than one such 
parent, in equal shares to each such parent). For this purpose, the 
definition of ``parent'' in Sec. 404.374 includes the parent(s) of any 
deceased individual who was entitled to benefits under title II of the 
Act.
    (7) The legal representative of the estate of the deceased 
individual as defined in paragraph (d) of this section.
    (c) In the event that a person who is otherwise qualified to receive 
an underpayment under the provisions of paragraph (b) of this section, 
dies before receiving payment or before negotiating the check or checks 
representing such payment, his share of the underpayment will be divided 
among the remaining living person(s) in the same order of priority. In 
the event that there is (are) no other such person(s), the underpayment 
will be paid to the living person(s) in the next lower order of priority 
under paragraph (b) of this section.
    (d) Definition of legal representative. The term legal 
representative, for the purpose of qualifying to receive an 
underpayment, generally means the administrator or executor of the 
estate of the deceased individual. However, it may also include an 
individual, institution or organization acting on behalf of an 
unadministered estate, provided that such person can give the 
Administration good acquittance (as defined in paragraph (e) of this 
section). The following persons may qualify as legal representative for 
the purposes of this subpart, provided they can give the Administration 
good acquittance:
    (1) A person who qualifies under a State's small estate statute,
    (2) A person resident in a foreign country who, under the laws and 
customs of that country, has the right to receive assets of the estate,
    (3) A public administrator, or
    (4) A person who has the authority, under applicable law, to collect 
the assets of the estate of the deceased individual.
    (e) Definition of ``good acquittance.'' A person is considered to 
give the Administration good acquittance when payment to that person 
will release the Administration from further liability for such payment.

[34 FR 14487, Sept. 27, 1969, as amended at 35 FR 14129, Sept. 5, 1970; 
55 FR 7313, Mar. 1, 1990; 60 FR 17445, Apr. 6, 1995]

[[Page 195]]



Sec. 404.504  Relation to provisions for reductions and increases.

    The amount of an overpayment or underpayment is the difference 
between the amount paid to the beneficiary and the amount of the payment 
to which the beneficiary was actually entitled. Such payment, for 
example, would be equal to the difference between the amount of a 
benefit in fact paid to the beneficiary and the amount of such benefit 
as reduced under section 202(j)(1), 202(k)(3), 203(a), or 224(a), or as 
increased under section 202(d)(2), 202(m), or 215 (f) and (g). In 
effecting an adjustment with respect to an overpayment, no amount can be 
considered as having been withheld from a particular benefit which is in 
excess of the amount of such benefit as so decreased.

[34 FR 14888, Sept. 27, 1969]



Sec. 404.505  Relationship to provisions requiring deductions.

    Adjustments required by any of the provisions in this subpart F are 
made in addition to, but after, any deductions required by section 
202(t), 203(b), 203(c), 203(d), and 222(b) of the Act, or section 907 of 
the Social Security Act Amendments of 1939, and before any deductions 
required by section 203(g) or 203(h)(2) of the Act.

[34 FR 14888, Sept. 27, 1969]



Sec. 404.506  When waiver may be applied and how to process the request.

    (a) Section 204(b) of the Act provides that there shall be no 
adjustment or recovery in any case where an overpayment under title II 
has been made to an individual who is without fault if adjustment or 
recovery would either defeat the purpose of title II of the Act, or be 
against equity and good conscience.
    (b) If an individual requests waiver of adjustment or recovery of a 
title II overpayment within 30 days after receiving a notice of 
overpayment that contains the information in Sec. 404.502a, no 
adjustment or recovery action will be taken until after the initial 
waiver determination is made. If the individual requests waiver more 
than 30 days after receiving the notice of overpayment, SSA will stop 
any adjustment or recovery actions until after the initial waiver 
determination is made.
    (c) When waiver is requested, the individual gives SSA information 
to support his/her contention that he/she is without fault in causing 
the overpayment (see Sec. 404.507) and that adjustment or recovery would 
either defeat the purpose of title II of the Act (see Sec. 404.508) or 
be against equity and good conscience (see Sec. 404.509). That 
information, along with supporting documentation, is reviewed to 
determine if waiver can be approved. If waiver cannot be approved after 
this review, the individual is notified in writing and given the dates, 
times and place of the file review and personal conference; the 
procedure for reviewing the claims file prior to the personal 
conference; the procedure for seeking a change in the scheduled dates, 
times, and/or place; and all other information necessary to fully inform 
the individual about the personal conference. The file review is always 
scheduled at least 5 days before the personal conference.
    (d) At the file review, the individual and the individual's 
representative have the right to review the claims file and applicable 
law and regulations with the decisionmaker or another SSA representative 
who is prepared to answer questions. We will provide copies of material 
related to the overpayment and/or waiver from the claims file or 
pertinent sections of the law or regulations that are requested by the 
individual or the individual's representative.
    (e) At the personal conference, the individual is given the 
opportunity to:
    (1) Appear personally, testify, cross-examine any witnesses, and 
make arguments;
    (2) Be represented by an attorney or other representative (see 
Sec. 404.1700), although the individual must be present at the 
conference; and
    (3) Submit documents for consideration by the decisionmaker.
    (f) At the personal conference, the decisionmaker:
    (1) Tells the individual that the decisionmaker was not previously 
involved in the issue under review, that the waiver decision is solely 
the decisionmaker's, and that the waiver decision

[[Page 196]]

is based only on the evidence or information presented or reviewed at 
the conference;
    (2) Ascertains the role and identity of everyone present;
    (3) Indicates whether or not the individual reviewed the claims 
file;
    (4) Explains the provisions of law and regulations applicable to the 
issue;
    (5) Briefly summarizes the evidence already in file which will be 
considered;
    (6) Ascertains from the individual whether the information presented 
is correct and whether he/she fully understands it;
    (7) Allows the individual and the individual's representative, if 
any, to present the individual's case;
    (8) Secures updated financial information and verification, if 
necessary;
    (9) Allows each witness to present information and allows the 
individual and the individual's representative to question each witness;
    (10) Ascertains whether there is any further evidence to be 
presented;
    (11) Reminds the individual of any evidence promised by the 
individual which has not been presented;
    (12) Lets the individual and the individual's representative, if 
any, present any proposed summary or closing statement;
    (13) Explains that a decision will be made and the individual will 
be notified in writing; and
    (14) Explains repayment options and further appeal rights in the 
event the decision is adverse to the individual.
    (g) SSA issues a written decision to the individual (and his/her 
representative, if any) specifying the findings of fact and conclusions 
in support of the decision to approve or deny waiver and advising of the 
individual's right to appeal the decision. If waiver is denied, 
adjustment or recovery of the overpayment begins even if the individual 
appeals.
    (h) If it appears that the waiver cannot be approved, and the 
individual declines a personal conference or fails to appear for a 
second scheduled personal conference, a decision regarding the waiver 
will be made based on the written evidence of record. Reconsideration is 
then the next step in the appeals process (but see Sec. 404.930(a)(7)).

[61 FR 56131, Oct. 31, 1996]



Sec. 404.507  Fault.

    Fault as used in without fault (see Sec. 404.506 and 42 CFR 405.355) 
applies only to the individual. Although the Administration may have 
been at fault in making the overpayment, that fact does not relieve the 
overpaid individual or any other individual from whom the Administration 
seeks to recover the overpayment from liability for repayment if such 
individual is not without fault. In determining whether an individual is 
at fault, the Social Security Administration will consider all pertinent 
circumstances, including the individual's age and intelligence, and any 
physical, mental, educational, or linguistic limitations (including any 
lack of facility with the English language) the individual has. What 
constitutes fault (except for deduction overpayments--see Sec. 404.510) 
on the part of the overpaid individual or on the part of any other 
individual from whom the Administration seeks to recover the overpayment 
depends upon whether the facts show that the incorrect payment to the 
individual or to a provider of services or other person, or an incorrect 
payment made under section 1814(e) of the Act, resulted from:
    (a) An incorrect statement made by the individual which he knew or 
should have known to be incorrect; or
    (b) Failure to furnish information which he knew or should have 
known to be material; or
    (c) With respect to the overpaid individual only, acceptance of a 
payment which he either knew or could have been expected to know was 
incorrect.

[34 FR 14888, Sept. 27, 1969; 34 FR 15646, Oct. 9, 1969, as amended at 
44 FR 34942, June 18, 1979; 59 FR 1634, Jan. 12, 1994]



Sec. 404.508  Defeat the purpose of Title II.

    (a) General. Defeat the purpose of title II, for purposes of this 
subpart, means defeat the purpose of benefits under this title, i.e., to 
deprive a person of income required for ordinary and necessary living 
expenses. This depends upon whether the person has an income or 
financial resources sufficient for

[[Page 197]]

more than ordinary and necessary needs, or is dependent upon all of his 
current benefits for such needs. An individual's ordinary and necessary 
expenses include:
    (1) Fixed living expenses, such as food and clothing, rent, mortgage 
payments, utilities, maintenance, insurance (e.g., life, accident, and 
health insurance including premiums for supplementary medical insurance 
benefits under title XVIII), taxes, installment payments, etc.;
    (2) Medical, hospitalization, and other similar expenses;
    (3) Expenses for the support of others for whom the individual is 
legally responsible; and
    (4) Other miscellaneous expenses which may reasonably be considered 
as part of the individual's standard of living.
    (b) When adjustment or recovery will defeat the purpose of title II. 
Adjustment or recovery will defeat the purposes of title II in (but is 
not limited to) situations where the person from whom recovery is sought 
needs substantially all of his current income (including social security 
monthly benefits) to meet current ordinary and necessary living 
expenses.

[32 FR 18026, Dec. 16, 1967, as amended at 34 FR 14888, Sept. 27, 1969]



Sec. 404.509  Against equity and good conscience; defined.

    (a) Recovery of an overpayment is against equity and good conscience 
(under title II and title XVIII) if an individual--
    (1) Changed his or her position for the worse (Example 1) or 
relinquished a valuable right (Example 2) because of reliance upon a 
notice that a payment would be made or because of the overpayment 
itself; or
    (2) Was living in a separate household from the overpaid person at 
the time of the overpayment and did not receive the overpayment 
(Examples 3 and 4).
    (b) The individual's financial circumstances are not material to a 
finding of against equity and good conscience.

    Example 1. A widow, having been awarded benefits for herself and 
daughter, entered her daughter in private school because the monthly 
benefits made this possible. After the widow and her daughter received 
payments for almost a year, the deceased worker was found to be not 
insured and all payments to the widow and child were incorrect. The 
widow has no other funds with which to pay the daughter's private school 
expenses. Having entered the daughter in private school and thus 
incurred a financial obligation toward which the benefits had been 
applied, she was in a worse position financially than if she and her 
daughter had never been entitled to benefits. In this situation, the 
recovery of the payments would be against equity and good conscience.
    Example 2. After being awarded old-age insurance benefits, an 
individual resigned from employment on the assumption he would receive 
regular monthly benefit payments. It was discovered 3 years later that 
(due to a Social Security Administration error) his award was erroneous 
because he did not have the required insured status. Due to his age, the 
individual was unable to get his job back and could not get any other 
employment. In this situation, recovery of the overpayments would be 
against equity and good conscience because the individual gave up a 
valuable right.
    Example 3. M divorced K and married L. M died a few years later. 
When K files for benefits as a surviving divorced wife, she learns that 
L had been overpaid $3,200 on M's earnings record. Because K and L are 
both entitled to benefits on M's record of earnings and we could not 
recover the overpayment from L, we sought recovery from K. K was living 
in a separate household from L at the time of the overpayment and did 
not receive the overpayment. K requests waiver of recovery of the $3,200 
overpayment from benefits due her as a surviving divorced wife of M. In 
this situation, it would be against equity and good conscience to 
recover the overpayment from K.
    Example 4. G filed for and was awarded benefits. His daughter, T, 
also filed for student benefits on G's earnings record. Since T was an 
independent, full-time student living in another State, she filed for 
benefits on her own behalf. Later, after T received 12 monthly benefits, 
the school reported that T had been a full-time student only 2 months 
and had withdrawn from school. Since T was overpaid 10 monthly benefits, 
she was requested to return the overpayment to SSA. T did not return the 
overpayment and further attempts to collect the overpayment were 
unsuccessful. G was asked to repay the overpayment because he was 
receiving benefits on the same earnings record. G requested waiver. To 
support his waiver request G established that he was not at fault in 
causing the overpayment because he did not know that T was receiving 
benefits. Since G is without fault and, in addition, meets the 
requirements of not living in the same household at the time of the 
overpayment and did

[[Page 198]]

not receive the overpayment, it would be against equity and good 
conscience to recover the overpayment from G.

[53 FR 25483, July 7, 1988]



Sec. 404.510  When an individual is ``without fault'' in a deduction overpayment.

    In determining whether an individual is ``without fault'' with 
respect to a deduction overpayment, the Social Security Administration 
will consider all pertinent circumstances, including the individual's 
age and intelligence, and any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) the individual has. Except as provided in Sec. 404.511 or 
elsewhere in this subpart F, situations in which an individual will be 
considered to be ``without fault'' with respect to a deduction 
overpayment include, but are not limited to, those that are described in 
this section. An individual will be considered ``without fault'' in 
accepting a payment which is incorrect because he/she failed to report 
an event specified in sections 203 (b) and (c) of the Act, or an event 
specified in section 203(d) of the Act as in effect for monthly benefits 
for months after December 1960, or because a deduction is required under 
section 203 (b), (c), (d), or section 222(b) of the Act, or payments 
were not withheld as required by section 202(t) or section 228 of the 
Act, if it is shown that such failure to report or acceptance of the 
overpayment was due to one of the following circumstances:
    (a) Reasonable belief that only his net cash earnings (take-home 
pay) are included in determining the annual earnings limitation or the 
monthly earnings limitation under section 203(f) of the Act.
    (b) Reliance upon erroneous information from an official source 
within the Social Security Administration (or other governmental agency 
which the individual had reasonable cause to believe was connected with 
the administration of benefits under title II of the Act) with respect 
to the interpretation of a pertinent provision of the Social Security 
Act or regulations pertaining thereto. For example, this circumstance 
could occur where the individual is misinformed by such source as to the 
interpretation of a provision in the Act or regulations relating to 
deductions, or relating to the effect of residence of an alien outside 
the United States for more than 6 months.
    (c) The beneficiary's death caused the earnings limit applicable to 
his earnings for purposes of deduction and the charging of excess 
earnings to be reduced below $1,680 for a taxable year ending after 
1967.
    (d) [Reserved]
    (e) Reasonable belief that in determining, for deduction purposes, 
his earnings from employment and/or net earnings from self-employment in 
the taxable year in which he became entitled to benefits, earnings in 
such year prior to such entitlement would be excluded. However, this 
provision does not apply if his earnings in the taxable year, beginning 
with the first month of entitlement, exceeded the earnings limitation 
amount for such year.
    (f) Unawareness that his earnings were in excess of the earnings 
limitation applicable to the imposition of deductions and the charging 
of excess earnings or that he should have reported such excess where 
these earnings were greater than anticipated because of:
    (1) Retroactive increases in pay, including back-pay awards;
    (2) Work at a higher pay rate than realized;
    (3) Failure of the employer of an individual unable to keep accurate 
records to restrict the amount of earnings or the number of hours worked 
in accordance with a previous agreement with such individual;
    (4) The occurrence of five Saturdays (or other work days, e.g., five 
Mondays) in a month and the earnings for the services on the fifth 
Saturday or other work day caused the deductions.
    (g) The continued issuance of benefit checks to him after he sent 
notice to the Administration of the event which caused or should have 
caused the deductions provided that such continued issuance of checks 
led him to believe in good faith that he was entitled to checks 
subsequently received.
    (h) Lack of knowledge that bonuses, vacation pay, or similar 
payments, constitute earnings for purposes of the annual earnings 
limitation.

[[Page 199]]

    (i) [Reserved]
    (j) Reasonable belief that earnings in excess of the earnings 
limitation amount for the taxable year would subject him to deductions 
only for months beginning with the first month in which his earnings 
exceeded the earnings limitation amount. However, this provision is 
applicable only if he reported timely to the Administration during the 
taxable year when his earnings reached the applicable limitation amount 
for such year.
    (k) Lack of knowledge by a wife, husband, or child entitled to 
wife's, husband's, or child's insurance benefits, as the case may be, 
that the individual entitled to old-age insurance benefits on the same 
earnings record has incurred or would incur deductions because of a 
violation of the annual earnings or 7-day foreign work test, whichever 
is applicable, provided the wife, husband, or child is not living with 
such old-age insurance beneficiary and did not know and had no reason to 
know that such beneficiary's earnings activity or the income derived 
therefrom has caused or would cause such deductions.
    (l) Reasonable belief, with respect to earnings activity for months 
after December 1982, that net earnings from self-employment after 
attainment of age 70 (age 72 for months after December 1972 and before 
January 1983) in the taxable year in which such age was attained would 
not cause deductions (see Sec. 404.430(a)) with respect to benefits 
payable for months in that taxable year prior to the attainment of such 
age.
    (m) Reasonable belief by an individual entitled to child's, wife's, 
husband's, widow's, widower's, mother's, or parent's insurance benefits 
that earnings from employment and/or net earnings from self-employment 
after the termination of entitlement (other than termination by reason 
of entitlement to an old-age insurance benefit) in the taxable year in 
which the termination event occurred would not cause deductions with 
respect to benefits payable for months in that taxable year prior to the 
month in which the termination event occurred.
    (n) Failure to understand the deduction provisions of the Act or the 
occurrence of unusual or unavoidable circumstances the nature of which 
clearly shows that the individual was unaware of a violation of such 
deduction provisions.

[27 FR 1162, Feb. 8, 1962, as amended at 28 FR 14492, Dec. 31, 1963; 34 
FR 14888, Sept. 27, 1969; 36 FR 23361, Dec. 9, 1971; 43 FR 31318, July 
21, 1978; 44 FR 20653, Apr. 6, 1979; 59 FR 1634, Jan. 12, 1994; 60 FR 
17445, Apr. 6, 1995]



Sec. 404.510a  When an individual is ``without fault'' in an entitlement overpayment.

    A benefit payment under title II or title XVIII of the Act to or on 
behalf of an individual who fails to meet one or more requirements for 
entitlement to such payment or a benefit payment exceeding the amount to 
which he is entitled, constitutes an entitlement overpayment. Where an 
individual or other person on behalf of an individual accepts such 
overpayment because of reliance on erroneous information from an 
official source within the Social Security Administration (or other 
governmental agency which the individual had reasonable cause to believe 
was connected with the administration of benefits under title II or 
title XVIII of the Act) with respect to the interpretation of a 
pertinent provision of the Social Security Act or regulations pertaining 
thereto, or where an individual or other person on behalf of an 
individual is overpaid as a result of the adjustment upward (under the 
family maximum provision in section 203 of the Act) of the benefits of 
such individual at the time of the proper termination of one or more 
beneficiaries on the same social security record and the subsequent 
reduction of the benefits of such individual caused by the reentitlement 
of the terminated beneficiary(ies) pursuant to a change in a provision 
of the law, such individual, in accepting such overpayment, will be 
deemed to be without fault. For purposes of this section governmental 
agency includes intermediaries and carriers under contract pursuant to 
sections 1816 and 1842 of the Act.

[39 FR 43716, Dec. 18, 1974]

[[Page 200]]



Sec. 404.511  When an individual is at ``fault'' in a deduction overpayment.

    (a) Degree of care. An individual will not be without fault if the 
Administration has evidence in its possession which shows either a lack 
of good faith or failure to exercise a high degree of care in 
determining whether circumstances which may cause deductions from his 
benefits should be brought to the attention of the Administration by an 
immediate report or by return of a benefit check. The high degree of 
care expected of an individual may vary with the complexity of the 
circumstances giving rise to the overpayment and the capacity of the 
particular payee to realize that he is being overpaid. Accordingly, 
variances in the personal circumstances and situations of individual 
payees are to be considered in determining whether the necessary degree 
of care has been exercised by an individual to warrant a finding that he 
was without fault in accepting a deduction overpayment.
    (b) Subsequent deduction overpayments. The Social Security 
Administration generally will not find an individual to be without fault 
where, after having been exonerated for a ``deduction overpayment'' and 
after having been advised of the correct interpretation of the deduction 
provision, the individual incurs another ``deduction overpayment'' under 
the same circumstances as the first overpayment. However, in determining 
whether the individual is without fault, the Social Security 
Administration will consider all of the pertinent circumstances 
surrounding the prior and subsequent ``deduction overpayments,'' 
including any physical, mental, educational, or linguistic limitations 
(including any lack of facility with the English language) which the 
individual may have.

[16 FR 13054, Dec. 28, 1951, as amended at 59 FR 1634, Jan. 12, 1994]



Sec. 404.512  When adjustment or recovery of an overpayment will be waived.

    (a) Adjustment or recovery deemed ``against equity and good 
conscience.'' In the situations described in Secs. 404.510(a), (b), and 
(c), and 404.510a, adjustment or recovery will be waived since it will 
be deemed such adjustment or recovery is against equity and good 
conscience. Adjustment or recovery will also be deemed against equity 
and good conscience in the situation described in Sec. 404.510(e), but 
only as to a month in which the individual's earnings from wages do not 
exceed the total monthly benefits affected for that month.
    (b) Adjustment or recovery considered to defeat the purpose of title 
II or be against equity and good conscience under certain circumstances. 
In the situation described in Sec. 404.510(e) (except in the case of an 
individual whose monthly earnings from wages in employment do not exceed 
the total monthly benefits affected for a particular month), and in the 
situations described in Sec. 404.510 (f) through (n), adjustment or 
recovery shall be waived only where the evidence establishes that 
adjustment or recovery would work a financial hardship (see 
Sec. 404.508) or would otherwise be inequitable (see Sec. 404.509).

[27 FR 1163, Feb. 8, 1962, as amended at 35 FR 6321, Apr. 18, 1970; 36 
FR 23361, Dec. 9, 1971]



Sec. 404.513  Liability of a certifying officer.

    No certifying or disbursing officer shall be held liable for any 
amount certified or paid by him to any individual.
    (a) Where adjustment or recovery of such amount is waived under 
section 204(b) of the Act; or
    (b) Where adjustment under section 204(a) of the Act is not 
completed prior to the death of all individuals against whose benefits 
or lump sums deductions are authorized; or
    (c) Where a claim for recovery of an overpayment is compromised or 
collection or adjustment action is suspended or terminated pursuant to 
the Federal Claims Collection Act of 1966 (31 U.S.C. 951-953) (see 
Sec. 404.515).

[34 FR 14889, Sept. 27, 1969]



Sec. 404.515  Collection and compromise of claims for overpayment.

    (a) General effect of the Federal Claims Collection Act of 1966. 
Claims by the Administration against an individual for recovery of 
overpayments under title II or title XVIII (not including title XVIII 
overpayments for which refund is requested from providers, physicians, 
or other suppliers of services) of the Act,

[[Page 201]]

not exceeding the sum of $20,000, exclusive of interest, may be 
compromised, or collection suspended or terminated where such individual 
or his estate does not have the present or prospective ability to pay 
the full amount of the claim within a reasonable time (see paragraph (c) 
of this section) or the cost of collection is likely to exceed the 
amount of recovery (see paragraph (d) of this section) except as 
provided under paragraph (b) of this section.
    (b) When there will be no compromise, suspension or termination of 
collection of a claim for overpayment--(1) Overpaid individual alive. In 
any case where the overpaid individual is alive, a claim for overpayment 
will not be compromised, nor will there be suspension or termination of 
collection of the claim by the Administration if there is an indication 
of fraud, the filing of a false claim, or misrepresentation on the part 
of such individual or on the part of any other party having an interest 
in the claim.
    (2) Overpaid individual deceased. In any case where the overpaid 
individual is deceased (i) a claim for overpayment in excess of $5,000 
will not be compromised, nor will there be suspension or termination of 
collection of the claim by the Administration if there is an indication 
of fraud; the filing of a false claim, or misrepresentation on the part 
of such deceased individual, and (ii) a claim for overpayment regardless 
of the amount will not be compromised, nor will there be suspension or 
termination of collection of the claim by the Administration if there is 
an indication that any person other than the deceased overpaid 
individual had a part in the fraudulent action which resulted in the 
overpayment.
    (c) Inability to pay claim for recovery of overpayment. In 
determining whether the overpaid individual is unable to pay a claim for 
recovery of an overpayment under title II or title XVIII of the Act, the 
Administration will consider such individual's age, health, present and 
potential income (including inheritance prospects), assets (e.g., real 
property, savings account), possible concealment or improper transfer of 
assets, and assets or income of such individual which may be available 
in enforced collection proceedings. The Administration will also 
consider exemptions available to such individual under the pertinent 
State or Federal law in such proceedings. In the event the overpaid 
individual is deceased, the Administration will consider the available 
assets of the estate, taking into account any liens or superior claims 
against the estate.
    (d) Cost of collection or litigative probabilities. Where the 
probable costs of recovering an overpayment under title II or title 
XVIII of the Act would not justify enforced collection proceedings for 
the full amount of the claim or there is doubt concerning the 
Administration's ability to establish its claim as well as the time 
which it will take to effect such collection, a compromise or settlement 
for less than the full amount will be considered.
    (e) Amount of compromise. The amount to be accepted in compromise of 
a claim for overpayment under title II or title XVIII of the Act shall 
bear a reasonable relationship to the amount which can be recovered by 
enforced collection proceedings giving due consideration to the 
exemptions available to the overpaid individual under State or Federal 
law and the time which such collection will take.
    (f) Payment. Payment of the amount which the Administration has 
agreed to accept as a compromise in full settlement of a claim for 
recovery of an overpayment under title II or title XVIII of the Act must 
be made within the time and in the manner set by the Administration. A 
claim for such recovery of the overpayment shall not be considered 
compromised or settled until the full payment of the compromised amount 
has been made within the time and manner set by the Administration. 
Failure of the overpaid individual or his estate to make such payment as 
provided shall result in reinstatement of the full amount of the 
overpayment less any amounts paid prior to such default.

[34 FR 14889, Sept. 27, 1969; 34 FR 15413, Oct. 3, 1969]

[[Page 202]]



Sec. 404.520  Referral of overpayments to the Department of the Treasury for tax refund offset--General.

    (a) The standards we will apply and the procedures we will follow 
before requesting the Department of the Treasury to offset income tax 
refunds due taxpayers who have an outstanding overpayment are set forth 
in Secs. 404.520 through 404.526. These standards and procedures are 
authorized by 31 U.S.C. 3720A and are implemented through Department of 
the Treasury regulations at 31 CFR 285.2.
    (b) We will use the Department of the Treasury tax refund offset 
procedure to collect overpayments that are certain in amount, past due 
and legally enforceable, and eligible for tax refund offset under 
regulations issued by the Department of the Treasury. We will use these 
procedures to collect overpayments only from individuals who are not 
currently entitled to monthly Social Security benefits under title II of 
the Act. We will refer an overpayment to the Department of the Treasury 
for offset against tax refunds no later than 10 years after our right to 
collect the overpayment first accrued.

[62 FR 64277, Dec. 5, 1997]



Sec. 404.521  Notice to overpaid individual.

    A request for reduction of a Federal income tax refund will be made 
only after we determine that an amount is owed and past due and send the 
overpaid individual written notice. Our notice of intent to collect an 
overpayment through tax refund offset will state:
    (a) The amount of the overpayment;
    (b) That unless, within 60 calendar days from the date of our 
notice, the overpaid individual repays the overpayment, sends evidence 
to us at the address given in our notice that the overpayment is not 
past due or not legally enforceable, or asks us to waive collection of 
the overpayment under section 204(b) of the Act, we intend to seek 
collection of the overpayment by requesting that the Department of the 
Treasury reduce any amounts payable to the overpaid individual as 
refunds of Federal income taxes by an amount equal to the amount of the 
overpayment;
    (c) The conditions under which we will waive recovery of an 
overpayment under section 204(b) of the Act;
    (d) That we will review any evidence presented that the overpayment 
is not past due or not legally enforceable;
    (e) That the overpaid individual has the right to inspect and copy 
our records related to the overpayment as determined by us and will be 
informed as to where and when the inspection and copying can be done 
after we receive notice from the overpaid individual that inspection and 
copying are requested.

[56 FR 52468, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997]



Sec. 404.522  Review within SSA that an overpayment is past due and legally enforceable.

    (a) Notification by overpaid individual. An overpaid individual who 
receives a notice as described in Sec. 404.521 has the right to present 
evidence that all or part of the overpayment is not past due or not 
legally enforceable. To exercise this right, the individual must notify 
us and present evidence regarding the overpayment within 60 calendar 
days from the date of our notice.
    (b) Submission of evidence. The overpaid individual may submit 
evidence showing that all or part of the debt is not past due or not 
legally enforceable as provided in paragraph (a) of this section. 
Failure to submit the notification and evidence within 60 calendar days 
will result in referral of the overpayment to the Department of the 
Treasury, unless the overpaid individual, within this 60-day time 
period, has asked us to waive collection of the overpayment under 
section 204(b) of the Act and we have not yet determined whether we can 
grant the waiver request. If the overpaid individual asks us to waive 
collection of the overpayment, we may ask that evidence to support the 
request be submitted to us.
    (c) Review of the evidence. After a timely submission of evidence by 
the overpaid individual, we will consider all available evidence related 
to the overpayment. If the overpaid individual has not requested a 
waiver we will make findings based on a review of the written record, 
unless we determine that the question of indebtedness

[[Page 203]]

cannot be resolved by a review of the documentary evidence. If the 
overpaid individual has asked us to make a waiver determination and our 
records do not show that after an oral hearing we had previously 
determined that he was at ``fault'' in accepting the overpayment, we 
will not deny the waiver request without first scheduling an oral 
hearing.

[56 FR 52469, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997]



Sec. 404.523  Findings by SSA.

    (a) Following the hearing or a review of the record, we will issue 
written findings which include supporting rationale for the findings. 
Issuance of these findings concerning whether the overpayment or part of 
the overpayment is past due and legally enforceable is the final Agency 
action with respect to the past-due status and enforceability of the 
overpayment. If we make a determination that a waiver request cannot be 
granted, we will issue a written notice of this determination in 
accordance with the regulations in subpart J of this part. Our referral 
of the overpayment to the Department of the Treasury will not be 
suspended under Sec. 404.525 pending any further administrative review 
of the waiver request that the individual may seek.
    (b) Copies of the findings described in paragraph (a) of this 
section will be distributed to the overpaid individual and the overpaid 
individual's attorney or other representative, if any.
    (c) If the findings referred to in paragraph (a) of this section 
affirm that all or part of the overpayment is past due and legally 
enforceable and, if waiver is requested, we determine that the request 
cannot be granted, we will refer the overpayment to the Department of 
the Treasury. No referral will be made to the Department of the Treasury 
if, based on our review of the overpayment, we reverse our prior finding 
that the overpayment is past due and legally enforceable or, upon 
consideration of a waiver request, we determine that waiver of our 
collection of the overpayment is appropriate.

[56 FR 52469, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997]



Sec. 404.524  Review of our records related to the overpayment.

    (a) Notification by the overpaid individual. An overpaid individual 
who intends to inspect or copy our records related to the overpayment as 
determined by us must notify us stating his or her intention to inspect 
or copy.
    (b) Our response. In response to a notification by the overpaid 
individual as described in paragraph (a) of this section, we will notify 
the overpaid individual of the location and time when the overpaid 
individual may inspect or copy our records related to the overpayment. 
We may also, at our discretion, mail copies of the overpayment-related 
records to the overpaid individual.

[56 FR 52469, Oct. 21, 1991]



Sec. 404.525  Suspension of offset.

    If, within 60 days of the date of the notice described in 
Sec. 404.521, the overpaid individual notifies us that he or she is 
exercising a right described in Sec. 404.522(a) and submits evidence 
pursuant to Sec. 404.522(b) or requests a waiver under Sec. 404.506, we 
will suspend any notice to the Department of the Treasury until we have 
issued written findings that affirm that an overpayment is past due and 
legally enforceable and, if applicable, make a determination that a 
waiver request cannot be granted.

[56 FR 52469, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997]



Sec. 404.526  Tax refund insufficient to cover amount of overpayment.

    If a tax refund for a given taxable year is insufficient to recover 
an overpayment completely, the case will remain with the Department of 
the Treasury for offset, assuming that all criteria for offset continue 
to be met.

[62 FR 64278, Dec. 5, 1997]



Sec. 404.527  Additional methods for recovery of title II benefit overpayments.

    (a) General. In addition to the methods specified in Secs. 404.502 
and 404.520, an overpayment under title II of the Act is also subject to 
recovery under the rules in subpart D of part 422, provided:
    (1) The overpayment occurred after the individual has attained age 
18;

[[Page 204]]

    (2) The overpaid individual is no longer entitled to benefits under 
title II of the Act; and
    (3) Pursuant to paragraph (b) of this section, we have determined 
that the overpayment is otherwise unrecoverable under section 204 of the 
Act.
    (b) When an overpayment is considered to be otherwise unrecoverable. 
An overpayment under title II of the Act is considered to be otherwise 
unrecoverable under section 204 of the Act if all of the following 
conditions are met:
    (1) Our billing system sequence has been completed (i.e., we have 
sent the individual an initial notice of the overpayment, a reminder 
notice, and a past-due notice) or collection activity has been suspended 
or terminated in accordance with the Federal Claims Collection Standards 
in 4 CFR 104.2 or 104.3.
    (2) We have not entered into an installment payment arrangement with 
the overpaid individual or, if we have entered into such an arrangement, 
the overpaid individual has failed to make any payment for two 
consecutive months.
    (3) The overpaid individual has not requested waiver pursuant to 
Sec. 404.506 or Sec. 404.522 or, after a review conducted pursuant to 
those sections, we have determined that we will not waive collection of 
the overpayment.
    (4) The overpaid individual has not requested reconsideration of the 
initial overpayment determination pursuant to Secs. 404.907 and 404.909 
or, after a review conducted pursuant to Sec. 404.913, we have affirmed, 
in whole or in part, the initial overpayment determination.
    (5) The overpayment cannot be recovered pursuant to Sec. 404.502 by 
adjustment of benefits payable to any individual other than the overpaid 
individual. For purposes of this paragraph, an overpayment will be 
deemed to be unrecoverable from any individual who was living in a 
separate household from the overpaid person at the time of the 
overpayment and did not receive the overpayment.

[62 FR 64278, Dec. 5, 1997]



            Subpart G--Filing of Applications and Other Forms

    Authority: Secs. 202 (i), (j), (o), (p), and (r), 205(a), 216(i)(2), 
223(b), 228(a), and 702(a)(5) of the Social Security Act (42 U.S.C. 402 
(i), (j), (o), (p), and (r), 405(a), 416(i)(2), 423(b), 428(a), and 
902(a)(5)).

    Source: 44 FR 37209, June 26, 1979, unless otherwise noted.

                           General Provisions



Sec. 404.601  Introduction.

    This subpart contains the Social Security Administration's rules for 
filing a claim for old-age, disability, dependents', and survivors' 
insurance benefits as described in subpart D of part 404. It tells what 
an application is, who may sign it, where and when it must be signed and 
filed, the period of time it is in effect and how it may be withdrawn. 
This subpart also explains when a written statement, request, or notice 
will be considered filed. Since the application form and procedures for 
filing a claim under this subpart are the same as those used to 
establish entitlement to Medicare benefits under 42 CFR part 405, 
persons who wish to become entitled to Medicare benefits should refer to 
the provisions of this subpart. Requirements concerning applications for 
the black lung benefits program are contained in part 410. Requirements 
concerning applications for the supplemental security income program are 
contained in part 416. Part 422 contains the requirements for applying 
for a social security number.



Sec. 404.602  Definitions.

    For the purpose of this subpart--
    Applicant means the person who files an application for benefits for 
himself or herself or for someone else. A person who files for himself 
or herself is both the applicant and the claimant.
    Application refers only to an application on a form described in 
Sec. 404.611.
    Benefits means any old-age, disability, dependents', and survivors' 
insurance benefits described in subpart D, including a period of 
disability.
    Claimant means the person who files an application for benefits for 
himself

[[Page 205]]

or herself or the person for whom an application is filed.
    We, us, or our means the Social Security Administration (SSA).
    You or your means, as appropriate, the person who applies for 
benefits, the person for whom an application is filed, or the person who 
may consider applying for benefits.



Sec. 404.603  You must file an application to receive benefits.

    In addition to meeting other requirements, you must file an 
application to become entitled to benefits. If you believe you may be 
entitled to benefits, you should file an application. Filing an 
application will--
    (a) Permit a formal decision to be made on your entitlement to 
benefits;
    (b) Protect your entitlement to any benefits that may be payable for 
as many as 6 months or 12 months (depending on the type of benefit, as 
explained in Sec. 404.621) before the application was filed; and
    (c) Give you the right to appeal if you are dissatisfied with the 
decision.

[44 FR 37209, June 26, 1979, as amended at 46 FR 47444, Sept. 28, 1981]

                              Applications



Sec. 404.610  What makes an application a claim for benefits.

    To be considered a claim for benefits, an application must generally 
meet all of the following conditions:
    (a) It must be on an application form as described in Sec. 404.611.
    (b) It must be completed and filed with SSA as described in 
Sec. 404.611.
    (c) It must be signed by the claimant or someone described in 
Sec. 404.612. who may sign an application for the claimant.
    (d) The claimant, with the limited exceptions in Sec. 404.615, must 
be alive at the time it is filed.



Sec. 404.611  Filing of application with Social Security Administration.

    (a) General rule. You must apply for benefits on an applications we 
prescribe. See Sec. 404.614 for places where an application for benefits 
may be filed.
    (b) Effect of claims filed with the Railroad Retirement Board. 
Pursuant to section 5(b) of the Railroad Retirement Act of 1974, as 
amended, 45 U.S.C. 231d(b), if you file an application with the Railroad 
Retirement Board on one of its forms for an annuity under section 2 of 
the Railroad Retirement Act of 1974, as amended, 45 U.S.C. 231a, unless 
you specify otherwise, this application also will be an application for 
any benefit to which you may be entitled under title II of the Social 
Security Act.
    (c) Effect of claims filed with the Veterans Administration. An 
application filed with the Veterans Administration on one of its forms 
for survivors' dependency and indemnity compensation (see section 3005 
of title 38 U.S.C.) is also considered an application for social 
security dependents' and survivors' benefits except the lump-sum death 
payment.

[44 FR 37209, June 26, 1979, as amended at 51 FR 41951, Nov. 20, 1986; 
58 FR 60381, Nov. 16, 1993]



Sec. 404.612  Who may sign an application.

    We will determine who may sign an application according to the 
following rules:
    (a) A claimant who is 18 years old or over, mentally competent, and 
physically able to do so, must sign his or her own application. If the 
claim is for child's benefits for a person who is not yet 22 years old, 
the application may be signed by a parent or a person standing in place 
of the parent.
    (b) A claimant who is between 16 and 18 years old may sign his or 
her own application if he or she is mentally competent, has no court 
appointed representative, and is not in the care of any person.
    (c) If the claimant is under age 18, or mentally incompetent, or 
physically unable to sign, the application may be signed by a court 
appointed representative or a person who is responsible for the care of 
the claimant, including a relative. If the claimant is in the care of an 
institution, the manager or principal officer of the institution may 
sign the application.
    (d) If a person who could receive disability benefits or who could 
have a period of disability established dies before filing, an 
application for disability benefits or for a period of disability may be 
signed by a person who would

[[Page 206]]

be qualified to receive any benefits due the deceased.
    (e) If a written statement showing an intent to claim benefits is 
filed with us, but the person for whom the benefits are claimed dies 
before an application is filed, an application may be filed as explained 
in Sec. 404.630(d).
    (f) If a person who could receive benefits on the basis of a 
``deemed'' filing date of an application under Sec. 404.633 (b)(1)(i) or 
(b)(2)(i) dies before an application for the benefits is filed, the 
application may be signed by a person who would be qualified to receive 
any benefits due the deceased person as explained in Sec. 404.633 
(b)(1)(ii) and (b)(2)(ii).
    (g) If it is necessary to protect a claimant from losing benefits 
and there is good cause for the claimant not signing the application, we 
may accept an application signed by some one other than a person 
described in this section.

    Example: Mr. Smith comes to a social security office a few days 
before the end of a month to file an application for old-age benefits 
for his neighbor, Mr. Jones. Mr. Jones, a 63 year old widower, just 
suffered a heart attack and is in the hospital. He asked Mr. Smith to 
file the application for him. We will accept an application signed by 
Mr. Smith since it would not be possible to have Mr. Jones sign and file 
the application until the next calendar month and a loss of one month's 
benefits would result.

[44 FR 37209, June 26, 1979, as amended at 59 FR 44923, Aug. 31, 1994; 
61 FR 41330, Aug. 8, 1996]



Sec. 404.613  Evidence of authority to sign an application for another.

    (a) A person who signs an application for someone else will be 
required to provide evidence of his or her authority to sign the 
application for the person claiming benefits under the following rules:
    (1) If the person who signs is a court appointed representative, he 
or she must submit a certificate issued by the court showing authority 
to act for the claimant.
    (2) If the person who signs is not a court appointed representative, 
he or she must submit a statement describing his or her relationship to 
the claimant. The statement must also describe the extent to which the 
person is responsible for the care of the claimant. This latter 
information will not be requested if the application is signed by a 
parent for a child with whom he or she is living.
    (3) If the person who signs is the manager or principal officer of 
an institution which is responsible for the care of the claimant, he or 
she must submit a statement indicating the person's position of 
responsibility at the institution.
    (b) We may, at any time, require additional evidence to establish 
the authority of a person to sign an application for someone else.



Sec. 404.614  When an application or other form is considered filed.

    (a) General rule. Except as otherwise provided in paragraph (b) of 
this section and in Secs. 404.630 through 404.633 which relate to the 
filing date of an application, an application for benefits, or a written 
statement, request, or notice is filed on the day it is received by an 
SSA employee at one of our offices or by an SSA employee who is 
authorized to receive it at a place other than one of our offices.
    (b) Other places and dates of filing. We will also accept as the 
date of filing--
    (1) The date an application for benefits, or a written statement, 
request or notice is received by any office of the U.S. Foreign Service 
or by the Veterans Administration Regional Office in the Philippines;
    (2) The date an application for benefits or a written statement, 
request or notice is mailed to us by the U.S. mail, if using the date we 
receive it would result in the loss or lessening of rights. The date 
shown by a U.S. postmark will be used as the date of mailing. If the 
postmark is unreadable, or there is no postmark, we will consider other 
evidence of when you mailed it to us; or
    (3) The date an application for benefits is filed with the Railroad 
Retirement Board or the Veterans Administration. See Sec. 404.611 (b) 
and (c) for an explanation of when an application for

[[Page 207]]

benefits filed with the Railroad Retirement Board or the Veterans 
Administration is considered an application for social security 
benefits.

[44 FR 37209, June 26, 1979, as amended at 59 FR 44923, Aug. 31, 1994]



Sec. 404.615  Claimant must be alive when an application is filed.

    A claimant must be alive at the time an application is filed. There 
are the following exceptions to this general rule:
    (a) If a disabled person dies before filing an application for 
disability benefits or a period of disability, a person who would be 
qualified to receive any benefits due the deceased may file an 
application. The application must be filed within 3 months after the 
month in which the disabled person died.
    (b) If a written statement showing an intent to claim benefits is 
filed with us, but the person for whom the benefits are claimed dies 
before an application is filed, an application may be filed as explained 
in Sec. 404.630(d).
    (c) If a person who could receive benefits on the basis of a 
``deemed'' filing date of an application under Sec. 404.633 (b)(1)(i) or 
(b)(2)(i) dies before an application for the benefits is filed, the 
application may be signed by a person who would be qualified to receive 
any benefits due the deceased person as explained in Sec. 404.633 
(b)(1)(ii) and (b)(2)(ii).

[44 FR 37209, June 26, 1979, as amended at 59 FR 44923, Aug. 31, 1994; 
61 FR 41330, Aug. 8, 1996]

                 Effective Filing Period of Application



Sec. 404.620  Filing before the first month you meet the requirements for benefits.

    (a) General rule. If you file an application for benefits (except 
special age 72 payments) before the first month you meet all the other 
requirements for entitlement, the application will remain in effect 
until we make a final determination on your application unless there is 
an administrative law judge hearing decision on your application. If 
there is an administrative law judge hearing decision, your application 
will remain in effect until the administrative law judge hearing 
decision is issued.
    (1) If you meet all the requirements for entitlement while your 
application is in effect, we may pay you benefits from the first month 
that you meet all the requirements.
    (2) If you first meet all the requirements for entitlement after the 
period for which your application was in effect, you must file a new 
application for benefits. In this case, we may pay you benefits only 
from the first month that you meet all the requirements based on the new 
application.
    (b) Filing for special age 72 payments. The requirements for 
entitlement to special age 72 payments must be met no later than 3 
months after the month an application is filed.

[44 FR 37209, June 26, 1979, as amended at 52 FR 4003, Feb. 9, 1987]



Sec. 404.621  Filing after the first month you meet the requirements for benefits.

    (a) Filing for disability benefits and for old-age, survivors', or 
dependents' benefits. (1)(i) If you file an application for disability 
benefits, widow's or widower's benefits based on disability, or wife's, 
husband's, or child's benefits based on the earnings record of a person 
entitled to disability benefits, after the first month you could have 
been entitled to them, you may receive benefits for up to 12 months 
immediately before the month in which your application is filed. Your 
benefits may begin with the first month in this 12-month period in which 
you meet all the requirements for entitlement. However, entitlement to 
wife's or husband's benefits under this rule is limited by paragraph 
(a)(1)(iii) of this section.
    (ii) If you file an application for old-age benefits, widow's or 
widower's benefits not based on disability, wife's, husband's, or 
child's benefits based on the earnings record of a person not entitled 
to disability benefits, or mother's, father's, or parent's benefits, 
after the first month you could have been entitled to them, you may 
receive benefits for up to 6 months immediately before the month in 
which your application is filed. Your benefits may begin with the first 
month in this 6-month

[[Page 208]]

period in which you meet all the requirements for entitlement. However, 
entitlement to old-age, wife's, husband's, widow's, or widower's 
benefits under this rule is limited by paragraph (a)(1)(iii) of this 
section.
    (iii) If the effect of the payment of benefits for a month before 
the month you file would be to reduce your benefits because of your age, 
you cannot be entitled to old-age, wife's, husband's, widow's, or 
widower's benefits for any month before the month in which your 
application is filed, unless you meet one of the conditions in paragraph 
(a)(2) of this section. (An explanation of the reduction that occurs 
because of age if you are entitled to these benefits for a month before 
you reach the retirement age of 65, is in Sec. 404.410.) An example 
follows that assumes you do not meet any of the conditions in paragraph 
(a)(2) of this section.

    Example: You become 65 years old in April 1981. If you apply for 
old-age benefits in April, you cannot be entitled to benefits for months 
in the 6-month period before April because the payment of benefits for 
any of these months would result in your benefits being reduced for age. 
If you do not file your application until July 1981, you may be entitled 
to benefits for the months of April, May, and June 1981 because the 
payment of benefits for these months would not result in your benefits 
being reduced for age. You will not, however, receive benefits for the 3 
months before April.

    (2) The limitation in paragraph (a)(1)(iii) of this section on your 
entitlement to old-age, wife's, husband's, widow's, or widower's 
benefits for months before you file an application does not apply if--
    (i) You are a widow, widower, surviving divorced wife, or surviving 
divorced husband who is disabled and could be entitled to retroactive 
benefits for any month before age 60. If you could not be entitled 
before age 60, the limitation will prevent payment of benefits to you 
for past months, but it will not affect the month you become entitled to 
hospital insurance benefits.
    (ii) You are a widow, widower, or surviving divorced spouse of the 
insured person who died in the month before you applied and you were at 
least age 60 in the month of death of the insured person on whose 
earnings record you are claiming benefits. In this case, you can be 
entitled beginning with the month the insured person died if you choose 
and if you file your application on or after July 1, 1983.
    (b) Filing for lump-sum death payment. An application for a lump-sum 
death payment must be filed within 2 years after the death of the person 
on whose earnings record the claim is filed. There are two exceptions to 
the 2-year filing requirement:
    (1) If there is a good cause for failure to file within the 2-year 
period, we will consider your application as though it were filed within 
the 2-year period. Good cause does not exist if you were informed of the 
need to file an application within the 2-year period and you neglected 
to do so or did not desire to make a claim. Good cause will be found to 
exist if you did not file within the time limit due to--
    (i) Circumstances beyond your control, such as extended illness, 
mental or physical incapacity, or a language barrier;
    (ii) Incorrect or incomplete information we furnished you;
    (iii) Your efforts to get evidence to support your claim without 
realizing that you could submit the evidence after filing an 
application; or
    (iv) Unusual or unavoidable circumstances which show that you could 
not reasonably be expected to know of the time limit.
    (2) The Soldiers' and Sailors' Civil Relief Act of 1940 provides for 
extending the filing time.
    (c) Filing for special age 72 payments. An application for special 
age 72 payments is not effective as a claim for benefits for any month 
before you actually file.
    (d) Filing for a period of disability. You must file an application 
for a period of disability while you are disabled or no later than 12 
months after the month in which your period of disability ended. If you 
were unable to apply within the 12-month time period because of a 
physical or mental condition, you may apply not more than 36 months 
after your disability ended. The general rule we use to decide whether 
your failure to file was due to a physical or mental condition is stated 
in subpart D.

[[Page 209]]

    (e) Filing after death of person eligible for disability benefits or 
period of disability. If you file for disability benefits or a period of 
disability for another person who died before filing an application and 
you would qualify under Sec. 404.503(b) to receive any benefits due the 
deceased, you must file an application no later than the end of the 
third month following the month in which the disabled person died.

[44 FR 37209, June 26, 1979, as amended at 46 FR 47444, Sept. 28, 1981; 
51 FR 4482, Feb. 5, 1986; 56 FR 58846, Nov. 22, 1991]



Sec. 404.622  Limiting an application.

    Your application may entitle you to benefits for up to 6 months or 
12 months (depending on the type of benefit, as explained in 
Sec. 404.621) before the month in which it is filed. You may limit the 
number of months of your entitlement in the 6-month or 12-month period. 
You may state this choice any time before a decision is made on your 
claim by indicating, in writing, the month you want your benefits to 
begin. You may change the first month of entitlement in this 6-month or 
12-month period after a decision has been made on your claim under the 
following conditions:
    (a) You file the request in writing.
    (b) If you are filing for the claimant, he or she is alive when the 
request is filed.
    (c) If any other person who is entitled to benefits would lose some 
or all of those benefits because of the change, that person, or the 
person who filed for him or her, consents in writing.
    (d) Any benefit payments that would become improper as a result of 
the change in entitlement month are repaid, or we are satisfied that 
they will be repaid.

[44 FR 37209, June 26, 1979, as amended at 46 FR 47445, Sept. 28, 1981]



Sec. 404.623  Filing by person eligible for old-age and husband's or wife's benefits.

    (a) Presumed filing for husband's or wife's benefits. If you file an 
application for old-age benefits, you are presumed to have filed an 
application for husband's or wife's benefits in the first month of your 
entitlement to old-age benefits, if--
    (1) Your old-age benefits are reduced for age because you choose to 
receive them before you become 65 years old; and
    (2) You are eligible for either a husband's or a wife's benefit for 
the first month of your entitlement to old-age benefits.
    (b) Presumed filing for old-age benefits. (1) If you file an 
application for a husband's or a wife's benefits, you are presumed to 
have filed an application for old-age benefits in the first month of 
your entitlement to husband's or wife's benefits if--
    (i) Your husband's or wife's benefits are reduced for age because 
you choose to receive them before you become 65 years old; and
    (ii) You are eligible for old-age benefits for the first month of 
your entitlement to husband's or wife's benefits.
    (2) The rule in paragraph (b)(1) of this section is not used if you 
are also entitled to disability benefits in the first month of your 
entitlement to husband's or wife's benefits. In this event, you are 
presumed to have filed for old-age benefits only if your disability 
benefits end before you become 65 years old.

                 Filing Date Based on Written Statement



Sec. 404.630  Use of date of written statement as filing date.

    If a written statement, such as a letter, indicating your intent to 
claim benefits either for yourself or for another person is filed with 
us under the rules stated in Sec. 404.614, we will use the filing date 
of the written statement as the filing date of the application, if all 
of the following requirements are met:
    (a) The statement indicates an intent to claim benefits.
    (b) The statement is signed by the claimant, the claimant's spouse, 
or a person described in Sec. 404.612. If you telephone us and advise us 
that you intend to file a claim but cannot file an application before 
the end of the month, we will prepare and sign a written statement if it 
is necessary to prevent the loss of benefits.
    (c) The claimant files an application with us on an application form 
as described in Sec. 404.611, or one is filed for

[[Page 210]]

the claimant by a person described in Sec. 404.612, within 6 months 
after the date of a notice we will send advising of the need to file an 
application. We will send the notice to the claimant. However, if it is 
clear from the information we receive that the claimant is a minor or is 
mentally incompetent, we will send the notice to the person who 
submitted the written statement.
    (d) The claimant is alive when the application is filed; or if the 
claimant has died after the written statement was filed, an application 
is filed--
    (1) By or for a person who would be eligible to receive benefits on 
the deceased's earnings record;
    (2) By a person acting for the deceased's estate; or
    (3) If the statement was filed with a hospital under Sec. 404.632, 
by the hospital if--
    (i) No person described in paragraph (d) (1) or (2) of this section 
can be located; or
    (ii) A person described in paragraphs (d) (1) or (2) of this section 
is located but refuses or fails to file the application unless the 
refusal or failure to file is because it would be harmful to the 
deceased person or the deceased's estate.



Sec. 404.631  Statements filed with the Railroad Retirement Board.

    A written statement filed with the Railroad Retirement Board will be 
considered a written statement filed with us under the rules in 
Sec. 404.630 if--
    (a) The statement indicates an intent to claim any payments under 
the Railroad Retirement Act;
    (b) It bears the signature of the person filing the statement;
    (c) No application is filed with the Railroad Retirement Board on 
one of its forms. If an application has been filed, we will use the date 
of filing of that application as determined by the Railroad Retirement 
Board (see Sec. 404.614(b)(3)); and
    (d) The statement is sent to us by the Railroad Retirement Board.



Sec. 404.632  Statements filed with a hospital.

    A statement (generally a hospital admission form) filed with a 
hospital may serve as a written statement under Sec. 404.630 if the 
requirements of this section are met. The statement will be considered 
filed with us as of the date it was filed with the hospital and will 
serve to protect entitlement to benefits. A statement filed with a 
hospital by you or some other person for you requesting or indicating an 
intent to claim benefits will be considered a written statement filed 
with us and Sec. 404.630 will apply to it if--
    (a) You are a patient in the hospital;
    (b) The hospital provides services covered by hospital insurance 
under the Medicare program;
    (c) An application has not already been filed; and
    (d) The statement is sent to us.

               Deemed Filing Date Based on Misinformation



Sec. 404.633  Deemed filing date in a case of misinformation.

    (a) General. You may have considered applying for monthly benefits 
for yourself or for another person, and you may have contacted us in 
writing, by telephone or in person to inquire about filing an 
application for these benefits. It is possible that in responding to 
your inquiry, we may have given you misinformation about your 
eligibility for such benefits, or the eligibility of the person on whose 
behalf you were considering applying for benefits, which caused you not 
to file an application at that time. If this happened, and later an 
application for such benefits is filed with us, we may establish an 
earlier filing date under this section.

    Example 1: Mrs. Smith, a widow of an insured individual, contacts a 
Social Security office when she reaches age 60 to inquire about applying 
for widow's insurance benefits. She is told by an SSA employee that she 
must be age 62 to be eligible for these benefits. This information, 
which was incorrect, causes Mrs. Smith not to file an application for 
benefits. When Mrs. Smith reaches age 62, she again contacts a Social 
Security office to ask about filing for widow's insurance benefits and 
learns that she could have received the benefits at age 60. She files an 
application for these benefits, provides the information required under 
paragraph (f) of this section to show that an SSA employee provided 
misinformation, and requests a deemed filing date based on the 
misinformation which she received from an SSA employee when she was age 
60.

[[Page 211]]

    Example 2: Ms. Hill, a 22-year-old, is forced to stop work because 
of illness. When she contacts a Social Security office to inquire about 
applying for disability insurance benefits, she is told by an SSA 
employee that she must have 20 quarters of coverage out of the last 40 
calendar quarters to be insured for disability insurance benefits. The 
employee fails to consider the special rules for insured status for 
persons who become disabled before age 31 and, consequently, tells Ms. 
Hill that she is not insured because she only has 16 quarters of 
coverage. The misinformation causes Ms. Hill not to file an application 
for disability insurance benefits. Because of her illness, she is unable 
to return to work. A year later, Ms. Hill reads an article that 
indicates that there are special rules for insured status for young 
workers who become disabled. She again contacts a Social Security office 
to inquire about benefits based on disability and learns that she was 
misinformed earlier about her insured status. She files an application 
for disability insurance benefits, provides the information required 
under paragraph (f) of this section to show that an SSA employee 
provided misinformation, and requests a deemed filing date based on the 
misinformation provided to her earlier.

    (b) Deemed filing date of an application based on misinformation. 
Subject to the requirements and conditions in paragraphs (c) through (g) 
of this section, we may establish a deemed filing date of an application 
for monthly benefits under the following provisions.
    (1)(i) If we determine that you failed to apply for monthly benefits 
for yourself because we gave you misinformation about your eligibility 
for such benefits, we will deem an application for such benefits to have 
been filed with us on the later of--
    (A) The date on which the misinformation was provided to you; or
    (B) The date on which you met all of the requirements for 
entitlement to such benefits, other than the requirement of filing an 
application.
    (ii) Before we may establish a deemed filing date of an application 
for benefits for you under paragraph (b)(1)(i) of this section, you or a 
person described in Sec. 404.612 must file an application for such 
benefits. If you die before an application for the benefits is filed 
with us, we will consider establishing a deemed filing date of an 
application for such benefits only if an application for the benefits is 
filed with us by a person who would be qualified to receive any benefits 
due you.
    (2)(i) If you had authority under Sec. 404.612 to sign an 
application for benefits for another person, and we determine that you 
failed to apply for monthly benefits for that person because we gave you 
misinformation about that person's eligibility for such benefits, we 
will deem an application for such benefits to have been filed with us on 
the later of--
    (A) The date on which the misinformation was provided to you; or
    (B) The date on which the person met all of the requirements for 
entitlement to such benefits, other than the requirement of filing an 
application.
    (ii) Before we may establish a deemed filing date of an application 
for benefits for the person under paragraph (b)(2)(i) of this section, 
you, such person, or another person described in Sec. 404.612 must file 
an application for such benefits. If the person referred to in paragraph 
(b)(2)(i) of this section dies before an application for the benefits is 
filed with us, we will consider establishing a deemed filing date of an 
application for such benefits only if an application for the benefits is 
filed with us by a person who would be qualified to receive any benefits 
due the deceased person.
    (c) Requirements concerning the misinformation. We apply the 
following requirements for purposes of paragraph (b) of this section.
    (1) The misinformation must have been provided to you by one of our 
employees while he or she was acting in his or her official capacity as 
our employee. For purposes of this section, an employee includes an 
officer of SSA.
    (2) Misinformation is information which we consider to be incorrect, 
misleading, or incomplete in view of the facts which you gave to the 
employee, or of which the employee was aware or should have been aware, 
regarding your particular circumstances, or the particular circumstances 
of the person referred to in paragraph (b)(2)(i) of this section. In 
addition, for us to find that the information you received was 
incomplete, the employee must have failed to provide you with the 
appropriate, additional information which he

[[Page 212]]

or she would be required to provide in carrying out his or her official 
duties.
    (3) The misinformation may have been provided to you orally or in 
writing.
    (4) The misinformation must have been provided to you in response to 
a specific request by you to us for information about your eligibility 
for benefits or the eligibility for benefits of the person referred to 
in paragraph (b)(2)(i) of this section for which you were considering 
filing an application.
    (d) Evidence that misinformation was provided. We will consider the 
following evidence in making a determination under paragraph (b) of this 
section.
    (1) Preferred evidence. Preferred evidence is written evidence which 
relates directly to your inquiry about your eligibility for benefits or 
the eligibility of another person and which shows that we gave you 
misinformation which caused you not to file an application. Preferred 
evidence includes, but is not limited to, the following--
    (i) A notice, letter or other document which was issued by us and 
addressed to you; or
    (ii) Our record of your telephone call, letter or in-person contact.
    (2) Other evidence. In the absence of preferred evidence, we will 
consider other evidence, including your statements about the alleged 
misinformation, to determine whether we gave you misinformation which 
caused you not to file an application. We will not find that we gave you 
misinformation, however, based solely on your statements. Other evidence 
which you provide or which we obtain must support your statements. 
Evidence which we will consider includes, but is not limited to, the 
following--
    (i) Your statements about the alleged misinformation, including 
statements about--
    (A) The date and time of the alleged contact(s);
    (B) How the contact was made, e.g., by telephone or in person;
    (C) The reason(s) the contact was made;
    (D) Who gave the misinformation; and
    (E) The questions you asked and the facts you gave us, and the 
questions we asked and the information we gave you, at the time of the 
contact;
    (ii) Statements from others who were present when you were given the 
alleged misinformation, e.g., a neighbor who accompanied you to our 
office;
    (iii) If you can identify the employee or the employee can recall 
your inquiry about benefits--
    (A) Statements from the employee concerning the alleged contact, 
including statements about the questions you asked, the facts you gave, 
the questions the employee asked, and the information provided to you at 
the time of the alleged contact; and
    (B) Our assessment of the likelihood that the employee provided the 
alleged misinformation;
    (iv) An evaluation of the credibility and the validity of your 
allegations in conjunction with other relevant information; and
    (v) Any other information regarding your alleged contact.
    (e) Information which does not constitute satisfactory proof that 
misinformation was given. Certain kinds of information will not be 
considered satisfactory proof that we gave you misinformation which 
caused you not to file an application. Examples of such information 
include--
    (1) General informational pamphlets that we issue to provide basic 
program information;
    (2) The Personal Earnings and Benefit Estimate Statement that is 
based on an individual's reported and projected earnings and is an 
estimate which can be requested at any time;
    (3) General information which we review or prepare but which is 
disseminated by the media, e.g., radio, television, magazines, and 
newspapers; and
    (4) Information provided by other governmental agencies, e.g., the 
Department of Veterans Affairs, the Department of Defense, State 
unemployment agencies, and State and local governments.
    (f) Claim for benefits based on misinformation. You may make a claim 
for benefits based on misinformation at any time. Your claim must 
contain information that will enable us to determine if we did provide 
misinformation to you about your eligibility for benefits, or the 
eligibility of a person on

[[Page 213]]

whose behalf you were considering applying for benefits, which caused 
you not to file an application for the benefits. Specifically, your 
claim must be in writing and it must explain what information was 
provided; how, when and where it was provided and by whom; and why the 
information caused you not to file an application. If you give us this 
information, we will make a determination on such a claim for benefits 
if all of the following conditions are also met.
    (1) An application for the benefits described in paragraph (b)(1)(i) 
or (b)(2)(i) of this section is filed with us by someone described in 
paragraph (b)(1)(ii) or (b)(2)(ii) of this section, as appropriate. The 
application must be filed after the alleged misinformation was provided. 
This application may be--
    (i) An application on which we have made a previous final 
determination or decision awarding the benefits, but only if the 
claimant continues to be entitled to benefits based on that application;
    (ii) An application on which we have made a previous final 
determination or decision denying the benefits, but only if such 
determination or decision is reopened under Sec. 404.988; or
    (iii) A new application on which we have not made a final 
determination or decision.
    (2) The establishment of a deemed filing date of an application for 
benefits based on misinformation could result in the claimant becoming 
entitled to benefits or to additional benefits.
    (3) We have not made a previous final determination or decision to 
which you were a party on a claim for benefits based on alleged 
misinformation involving the same facts and issues. This provision does 
not apply, however, if the final determination or decision may be 
reopened under Sec. 404.988.
    (g) Effective date. This section applies only to misinformation 
which we provided after December 1982. In addition, this section is 
effective only for benefits payable for months after December 1982.

[59 FR 44924, Aug. 31, 1994]

                        Withdrawal of Application



Sec. 404.640  Withdrawal of an application.

    (a) Request for withdrawal filed before a determination is made. An 
application may be withdrawn before we make a determination on it if--
    (1) A written request for withdrawal is filed at a place described 
in Sec. 404.614 by the claimant or a person who may sign an application 
for the claimant under Sec. 404.612; and
    (2) The claimant is alive at the time the request is filed.
    (b) Request for withdrawal filed after a determination is made. An 
application may be withdrawn after we make a determination on it if--
    (1) The conditions in paragraph (a) of this section are met;
    (2) Any other person whose entitlement would be rendered erroneous 
because of the withdrawal consents in writing to it. Written consent for 
the person may be given by someone who could sign an application for him 
or her under Sec. 404.612; and
    (3) All benefits already paid based on the application being 
withdrawn are repaid or we are satisfied that they will be repaid.
    (c) Request for withdrawal filed after the claimant's death. An 
application may be withdrawn after the claimant's death, regardless of 
whether we have made a determination on it, if--
    (1) The claimant's application was for old-age benefits that would 
be reduced because of his or her age;
    (2) The claimant died before we certified his or her benefit 
entitlement to the Treasury Department for payment;
    (3) A written request for withdrawal is filed at a place described 
in Sec. 404.614 by or for the person eligible for widow's or widower's 
benefits based on the claimant's earnings; and
    (4) The conditions in paragraphs (b) (2) and (3) of this section are 
met.
    (d) Effect of withdrawal. If we approve a request to withdraw an 
application, the application will be considered as though it was never 
filed. If we disapprove a request for withdrawal, the application is 
treated as though the request was never filed.

[44 FR 37209, June 26, 1979, as amended at 48 FR 21931, May 16, 1983; 51 
FR 37720, Oct. 24, 1986]

[[Page 214]]



Sec. 404.641  Cancellation of a request to withdraw.

    A request to withdraw an application may be cancelled and the 
application reinstated if--
    (a) A written request for cancellation is filed at a place described 
in Sec. 404.614 by the claimant or someone who may sign an application 
for the claimant under Sec. 404.612;
    (b) The claimant is alive at the time the request for cancellation 
is filed; and
    (c) For a cancellation request received after we have approved the 
withdrawal, the request is filed no later than 60 days after the date of 
the notice of approval.



                           Subpart H--Evidence

    Authority: Secs. 205(a) and 702(a)(5) of the Social Security Act (42 
U.S.C. 405(a) and 902(a)(5)).

    Source: 43 FR 24795, June 7, 1978, unless otherwise noted.

                                 General



Sec. 404.701  Introduction.

    This subpart contains the Social Security Administration's basic 
rules about what evidence is needed when a person claims old-age, 
disability, dependents' and survivors' insurance benefits as described 
in subpart D. In addition, there are special evidence requirements for 
disability benefits. These are contained in subpart P. Evidence of a 
person's earnings under social security is described in subpart I. 
Evidence needed to obtain a social security number card is described in 
part 422. Evidence requirements for the supplemental security income 
program are contained in part 416.



Sec. 404.702  Definitions.

    As used in this subpart:
    Apply means to sign a form or statement that the Social Security 
Administration accepts as an application for benefits under the rules 
set out in subpart G.
    Benefits means any old-age, disability, dependents' and survivors' 
insurance benefits described in subpart D, including a period of 
disability.
    Convincing evidence means one or more pieces of evidence that prove 
you meet a requirement for eligibility. See Sec. 404.708 for the guides 
we use in deciding whether evidence is convincing.
    Eligible means that a person would meet all the requirements for 
entitlement to benefits for a period of time but has not yet applied.
    Entitled means that a person has applied and has proven his or her 
right to benefits for a period of time.
    Evidence means any record, document, or signed statement that helps 
to show whether you are eligible for benefits or whether you are still 
entitled to benefits.
    Insured person means someone who has enough earnings under social 
security to permit the payment of benefits on his or her earnings 
record. He or she is fully insured, transitionally insured, currently 
insured, or insured for disability as defined in subpart B.
    We or Us refers to the Social Security Administration.
    You refers to the person who has applied for benefits, or the person 
for whom someone else has applied.



Sec. 404.703  When evidence is needed.

    When you apply for benefits, we will ask for evidence that you are 
eligible for them. After you become entitled to benefits, we may ask for 
evidence showing whether you continue to be entitled to benefits; or 
evidence showing whether your benefit payments should be reduced or 
stopped. See Sec. 404.401 for a list showing when benefit payments must 
be reduced or stopped.



Sec. 404.704  Your responsibility for giving evidence.

    When evidence is needed to prove your eligibility or your right to 
continue to receive benefit payments, you will be responsible for 
obtaining and giving the evidence to us. We will be glad to advise you 
what is needed and how to get it and we will consider any evidence you 
give us. If your evidence is a foreign-language record or document, we 
can have it translated for you. Evidence given to us will be kept 
confidential and not disclosed to anyone but you except under the rules 
set out in part 401. You should also be

[[Page 215]]

aware that Section 208 of the Social Security Act provides criminal 
penalties for misrepresenting the facts or for making false statements 
to obtain social security benefits for yourself or someone else.



Sec. 404.705  Failure to give requested evidence.

    Generally, you will be asked to give us by a certain date specific 
kinds of evidence or information to prove you are eligible for benefits. 
If we do not receive the evidence or information by that date, we may 
decide you are not eligible for benefits. If you are already receiving 
benefits, you may be asked to give us by a certain date information 
needed to decide whether you continue to be entitled to benefits or 
whether your benefits should be stopped or reduced. If you do not give 
us the requested information by the date given, we may decide that you 
are no longer entitled to benefits or that your benefits should be 
stopped or reduced. You should let us know if you are unable to give us 
the requested evidence within the specified time and explain why there 
will be a delay. If this delay is due to illness, failure to receive 
timely evidence you have asked for from another source, or a similar 
circumstance, you will be given additional time to give us the evidence.



Sec. 404.706  Where to give evidence.

    Evidence should be given to the people at a Social Security 
Administration office. In the Philippines evidence should be given to 
the people at the Veterans Administration Regional Office. Elsewhere 
outside the United States, evidence should be given to the people at a 
United States Foreign Service Office.



Sec. 404.707  Original records or copies as evidence.

    (a) General. To prove your eligibility or continuing entitlement to 
benefits, you may be asked to show us an original document or record. 
These original records or documents will be returned to you after we 
have photocopied them. We will also accept copies of original records 
that are properly certified and some uncertified birth notifications. 
These types of records are described below in this section.
    (b) Certified copies of original records. You may give us copies of 
original records or extracts from records if they are certified as true 
and exact copies by--
    (1) The official custodian of the record;
    (2) A Social Security Administration employee authorized to certify 
copies;
    (3) A Veterans Administration employee if the evidence was given to 
that agency to obtain veteran's benefits;
    (4) A U.S. Consular Officer or employee of the Department of State 
authorized to certify evidence received outside the United States; or
    (5) An employee of a State Agency or State Welfare Office authorized 
to certify copies of original records in the agency's or office's files.
    (c) Uncertified copies of original records. You may give us an 
uncertified photocopy of a birth registration notification as evidence 
where it is the practice of the local birth registrar to issue them in 
this way.



Sec. 404.708  How we decide what is enough evidence.

    When you give us evidence, we examine it to see if it is convincing 
evidence. If it is, no other evidence is needed. In deciding if evidence 
is convincing, we consider whether--
    (a) Information contained in the evidence was given by a person in a 
position to know the facts;
    (b) There was any reason to give false information when the evidence 
was created;
    (c) Information contained in the evidence was given under oath, or 
with witnesses present, or with the knowledge there was a penalty for 
giving false information;
    (d) The evidence was created at the time the event took place or 
shortly thereafter;
    (e) The evidence has been altered or has any erasures on it; and
    (f) Information contained in the evidence agrees with other 
available evidence, including our records.

[[Page 216]]



Sec. 404.709  Preferred evidence and other evidence.

    If you give us the type of evidence we have shown as preferred in 
the following sections of this subpart, we will generally find it is 
convincing evidence. This means that unless we have information in our 
records that raises a doubt about the evidence, other evidence of the 
same fact will not be needed. If preferred evidence is not available, we 
will consider any other evidence you give us. If this other evidence is 
several different records or documents which all show the same 
information, we may decide it is convincing evidence even though it is 
not preferred evidence. If the other evidence is not convincing by 
itself, we will ask for additional evidence. If this additional evidence 
shows the same information, all the evidence considered together may be 
convincing. When we have convincing evidence of the facts that must be 
proven or it is clear that the evidence provided does not prove the 
necessary facts, we will make a formal decision about your benefit 
rights.

                  Evidence of Age, Marriage, and Death



Sec. 404.715  When evidence of age is needed.

    (a) If you apply for benefits, we will ask for evidence of age which 
shows your date of birth unless you are applying for--
    (1) A lump-sum death payment;
    (2) A wife's benefit and you have the insured person's child in your 
care;
    (3) A mother's or father's benefit; or
    (4) A disability benefit (or for a period of disability) and neither 
your eligibility nor benefit amount depends upon your age.
    (b) If you apply for wife's benefits while under age 62 or if you 
apply for a mother's or father's benefit, you will be asked for evidence 
of the date of birth of the insured person's children in your care.
    (c) If you apply for benefits on the earnings record of a deceased 
person, you may be asked for evidence of his or her age if this is 
needed to decide whether he or she was insured at the time of death or 
what benefit amount is payable to you.



Sec. 404.716  Type of evidence of age to be given.

    (a) Preferred evidence. The best evidence of your age, if you can 
obtain it, is either: a birth certificate or hospital birth record 
recorded before age 5; or a religious record which shows your date of 
birth and was recorded before age 5.
    (b) Other evidence of age. If you cannot obtain the preferred 
evidence of your age, you will be asked for other convincing evidence 
that shows your date of birth or age at a certain time such as: an 
original family bible or family record; school records; census records; 
a statement signed by the physician or midwife who was present at your 
birth; insurance policies; a marriage record; a passport; an employment 
record; a delayed birth certificate, your child's birth certificate; or 
an immigration or naturalization record.



Sec. 404.720  Evidence of a person's death.

    (a) When evidence of death is required. If you apply for benefits on 
the record of a deceased person, we will ask for evidence of the date 
and place of his or her death. We may also ask for evidence of another 
person's death if this is needed to prove you are eligible for benefits.
    (b) Preferred evidence of death. The best evidence of a person's 
death is--
    (1) A certified copy or extract from the public record of death, 
coroner's report of death, or verdict of a coroner's jury; or a 
certificate by the custodian of the public record of death;
    (2) A statement of the funeral director, attending physician, intern 
of the institution where death occurred;
    (3) A certified copy of, or extract from an official report or 
finding of death made by an agency or department of the United States; 
or
    (4) If death occurred outside the United States, an official report 
of death by a United States Consul or other employee of the State 
Department; or a copy of the public record of death in the foreign 
country.
    (c) Other evidence of death. If you cannot obtain the preferred 
evidence of a person's death, you will be asked to explain why and to 
give us other convincing evidence such as: the signed statements of two 
or more people with

[[Page 217]]

personal knowledge of the death, giving the place, date, and cause of 
death.



Sec. 404.721  Evidence to presume a person is dead.

    If you cannot prove the person is dead but evidence of death is 
needed, we will presume he or she died at a certain time if you give us 
the following evidence:
    (a) A certified copy of, or extract from, an official report or 
finding by an agency or department of the United States that a missing 
person is presumed to be dead as set out in Federal law (5 U.S.C. 5565). 
Unless we have other evidence showing an actual date of death, we will 
use the date he or she was reported missing as the date of death.
    (b) Signed statements by those in a position to know and other 
records which show that the person has been absent from his or her 
residence and has not been heard from for at least 7 years. If the 
presumption of death is not rebutted pursuant to Sec. 404.722, we will 
use as the person's date of death either the date he or she left home, 
the date ending the 7 year period, or some other date depending upon 
what the evidence shows is the most likely date of death.
    (c) If you are applying for benefits as the insured person's 
grandchild or stepgrandchild but the evidence does not identify a 
parent, we will presume the parent died in the first month in which the 
insured person became entitled to to benefits.

[43 FR 24795, June 7, 1978, as amended at 60 FR 19164, Apr. 17, 1995]



Sec. 404.722  Rebuttal of a presumption of death.

    A presumption of death made based on Sec. 404.721(b) can be rebutted 
by evidence that establishes that the person is still alive or explains 
the individual's absence in a manner consistent with continued life 
rather than death.

    Example 1: Evidence in a claim for surviving child's benefits showed 
that the worker had wages posted to his earnings record in the year 
following the disappearance. It was established that the wages belonged 
to the worker and were for work done after his ``disappearance.'' In 
this situation, the presumption of death is rebutted by evidence (wages 
belonging to the worker) that the person is still alive after the 
disappearance.
    Example 2: Evidence shows that the worker left the family home 
shortly after a woman, whom he had been seeing, also disappeared, and 
that the worker phoned his wife several days after the disappearance to 
state he intended to begin a new life in California. In this situation 
the presumption of death is rebutted because the evidence explains the 
worker's absence in a manner consistent with continued life.

[60 FR 19165, Apr. 17, 1995]



Sec. 404.723  When evidence of marriage is required.

    If you apply for benefits as the insured person's husband or wife, 
widow or widower, divorced wife or divorced husband, we will ask for 
evidence of the marriage and where and when it took place. We may also 
ask for this evidence if you apply for child's benefits or for the lump-
sum death payment as the widow or widower. If you are a widow, widower, 
or divorced wife who remarried after your marriage to the insured person 
ended, we may also ask for evidence of the remarriage. You may be asked 
for evidence of someone else's marriage if this is necessary to prove 
your marriage to the insured person was valid. In deciding whether the 
marriage to the insured person is valid or not, we will follow the law 
of the State where the insured person had his or her permanent home when 
you applied or, if earlier, when he or she died--see Sec. 404.770. What 
evidence we will ask for depends upon whether the insured person's 
marriage was a ceremonial marriage, a common-law marriage, or a marriage 
we will deem to be valid.

[43 FR 24795, June 7, 1978, as amended at 44 FR 34493, June 15, 1979]



Sec. 404.725  Evidence of a valid ceremonial marriage.

    (a) General. A valid ceremonial marriage is one that follows 
procedures set by law in the State or foreign country where it takes 
place. These procedures cover who may perform the marriage ceremony, 
what licenses or witnesses

[[Page 218]]

are needed, and similar rules. A ceremonial marriage can be one that 
follows certain tribal Indian custom, Chinese custom, or similar 
traditional procedures. We will ask for the evidence described in this 
section.
    (b) Preferred evidence. Preferred evidence of a ceremonial marriage 
is--
    (1) If you are applying for wife's or husband's benefits, signed 
statements from you and the insured about when and where the marriage 
took place. If you are applying for the lump-sum death payment as the 
widow or widower, your signed statement about when and where the 
marriage took place; or
    (2) If you are applying for any other benefits or there is evidence 
causing some doubt about whether there was a ceremonial marriage: a copy 
of the public record of marriage or a certified statement as to the 
marriage; a copy of the religious record of marriage or a certified 
statement as to what the record shows; or the original marriage 
certificate.
    (c) Other evidence of a ceremonial marriage. If preferred evidence 
of a ceremonial marriage cannot be obtained, we will ask you to explain 
why and to give us a signed statement of the clergyman or official who 
held the marriage ceremony, or other convincing evidence of the 
marriage.



Sec. 404.726  Evidence of common-law marriage.

    (a) General. A common-law marriage is one considered valid under 
certain State laws even though there was no formal ceremony. It is a 
marriage between two persons free to marry, who consider themselves 
married, live together as man and wife, and, in some States, meet 
certain other requirements. We will ask for the evidence described in 
this section.
    (b) Preferred evidence. Preferred evidence of a common-law marriage 
is--
    (1) If both the husband and wife are alive, their signed statements 
and those of two blood relatives;
    (2) If either the husband or wife is dead, the signed statements of 
the one who is alive and those of two blood relatives of the deceased 
person; or
    (3) If both the husband and wife are dead, the signed statements of 
one blood relative of each;
    Note: All signed statements should show why the signer believes 
there was a marriage between the two persons. If a written statement 
cannot be gotten from a blood relative, one from another person can be 
used instead.
    (c) Other evidence of common-law marriage. If you cannot get 
preferred evidence of a common-law marriage, we will ask you to explain 
why and to give us other convincing evidence of the marriage. We may not 
ask you for statements from a blood relative or other person if we 
believe other evidence presented to us proves the common-law marriage.



Sec. 404.727  Evidence of a deemed valid marriage.

    (a) General. A deemed valid marriage is a ceremonial marriage we 
consider valid even though the correct procedures set by State law were 
not strictly followed or a former marriage had not yet ended. We will 
ask for the evidence described in this section.
    (b) Preferred evidence. Preferred evidence of a deemed valid 
marriage is--
    (1) Evidence of the ceremonial marriage as described in 
Sec. 404.725(b)(2);
    (2) If the insured person is alive, his or her signed statement that 
the other party to the marriage went through the ceremony in good faith 
and his or her reasons for believing the marriage was valid or believing 
the other party thought it was valid;
    (3) The other party's signed statement that he or she went through 
the marriage ceremony in good faith and his or her reasons for believing 
it was valid;
    (4) If needed to remove a reasonable doubt, the signed statements of 
others who might have information about what the other party knew about 
any previous marriage or other facts showing whether he or she went 
through the marriage in good faith; and
    (5) Evidence the parties to the marriage were living in the same 
household when you applied for benefits or, if earlier, when the insured 
person died (see Sec. 404.760).
    (c) Other evidence of a deemed valid marriage. If you cannot obtain 
preferred evidence of a deemed valid marriage, we will ask you to 
explain why and to

[[Page 219]]

give us other convincing evidence of the marriage.



Sec. 404.728  Evidence a marriage has ended.

    (a) When evidence is needed that a marriage has ended. If you apply 
for benefits as the insured person's divorced wife or divorced husband, 
you will be asked for evidence of your divorce. If you are the insured 
person's widow or divorced wife who had remarried but that husband died, 
we will ask you for evidence of his death. We may ask for evidence that 
a previous marriage you or the insured person had was ended before you 
married each other if this is needed to show the latter marriage was 
valid. If you apply for benefits as an unmarried person and you had a 
marriage which was annulled, we will ask for evidence of the annulment. 
We will ask for the evidence described in this section.
    (b) Preferred evidence. Preferred evidence a marriage has ended is--
    (1) A certified copy of the decree of divorce or annulment; or
    (2) Evidence the person you married has died (see Sec. 404.720).
    (c) Other evidence a marriage has ended. If you cannot obtain 
preferred evidence the marriage has ended, we will ask you to explain 
why and to give us other convincing evidence the marriage has ended.

[43 FR 24795, June 7, 1978, as amended at 44 FR 34493, June 15, 1979]

               Evidence for Child's and Parent's Benefits



Sec. 404.730  When evidence of a parent or child relationship is needed.

    If you apply for parent's or child's benefits, we will ask for 
evidence showing your relationship to the insured person. What evidence 
we will ask for depends on whether you are the insured person's natural 
parent or child; or whether you are the stepparent, stepchild, 
grandchild, stepgrandchild, adopting parent or adopted child.



Sec. 404.731  Evidence you are a natural parent or child.

    If you are the natural parent of the insured person, we will ask for 
a copy of his or her public or religious birth record made before age 5. 
If you are the natural child of the insured person, we will ask for a 
copy of your public or religious birth record made before age 5. In 
either case, if this record shows the same last name for the insured and 
the parent or child, we will accept it as convincing evidence of the 
relationship. However, if other evidence raises some doubt about this 
record or if the record cannot be gotten, we will ask for other evidence 
of the relationship. We may also ask for evidence of marriage of the 
insured person or of his or her parent if this is needed to remove any 
reasonable doubt about the relationship. To show you are the child of 
the insured person, you may be asked for evidence you would be able to 
inherit his or her personal property under State law where he or she had 
a permanent home (see Sec. 404.770). In addition, we may ask for the 
insured persons signed statement that you are his or her natural child, 
or for a copy of any court order showing the insured has been declared 
to be your natural parent or any court order requiring the insured to 
contribute to you support because you are his or her son or daughter.



Sec. 404.732  Evidence you are a stepparent or stepchild.

    If you are the stepparent or stepchild of the insured person, we 
will ask for the evidence described in Sec. 404.731 or Sec. 404.733 that 
which shows your natural or adoptive relationship to the insured 
person's husband, wife, widow, or widower. We will also ask for evidence 
of the husband's, wife's, widow's, or widower's marriage to the insured 
person--see Sec. 404.725.



Sec. 404.733  Evidence you are the legally adopting parent or legally adopted child.

    If you are the adopting parent or adopted child, we will ask for the 
following evidence:
    (a) A copy of the birth certificate made following the adoption; or 
if this cannot be gotten, other evidence of the adoption; and, if 
needed, evidence of the date of adoption;
    (b) If the widow or widower adopted the child after the insured 
person died, the evidence described in paragraph (a)

[[Page 220]]

of this section; your written statement whether the insured person was 
living in the same household with the child when he or she died (see 
Sec. 404.760); what support the child was getting from any other person 
or organization; and if the widow or widower had a deemed valid marriage 
with the insured person, evidence of that marriage--see Sec. 404.727;
    (c) If you are the insured's stepchild, grandchild, or 
stepgrandchild as well as his or her adopted child, we may also ask you 
for evidence to show how you were related to the insured before the 
adoption.



Sec. 404.734  Evidence you are an equitably adopted child.

    In many States, the law will treat someone as a child of another if 
he or she agreed to adopt the child, the natural parents or the person 
caring for the child were parties to the agreement, he or she and the 
child then lived together as parent and child, and certain other 
requirements are met. If you are a child who had this kind or 
relationship to the insured person (or to the insured persons's wife, 
widow, or husband), we will ask for evidence of the agreement if it is 
in writing. If it is not in writing or cannot be gotten, other evidence 
may be accepted. Also, the following evidence will be asked for: Written 
statements of your natural parents and the adopting parents and other 
evidence of the child's relationship to the adopting parents.



Sec. 404.735  Evidence you are the grandchild or stepgrandchild.

    If you are the grandchild or stepgrandchild of the insured person, 
we will ask you for the kind of evidence described in Secs. 404.731 
through 404.733 that shows your relationship to your parent and your 
parent's relationship to the insured.



Sec. 404.736  Evidence of a child's dependency.

    (a) When evidence of a child's dependency is needed. If you apply 
for child's benefit's we may ask for evidence you were the insured 
person's dependent at a specific time--usually the time you applied or 
the time the insured died or became disabled. What evidence we ask for 
depends upon how you are related to the insured person.
    (b) Natural or adopted child. If you are the insured person's 
natural or adopted child, we may ask for the following evidence:
    (1) A signed statement by someone who knows the facts that confirms 
this relationship and which shows whether you were legally adopted by 
someone other than the insured. If you were adopted by someone else 
while the insured person was alive, but the adoption was annulled, we 
may ask for a certified copy of the annulment decree or other convincing 
evidence of the annulment.
    (2) A signed statement by someone in a position to know showing when 
and where you lived with the insured and when and why you may have lived 
apart; and showing what contributions the insured made to your support 
and when and how they were made.
    (c) Stepchild. If you are the insured person's stepchild, we will 
ask for the following evidence:
    (1) A signed statement by someone in a position to know--showing 
when and where you lived with the insured and when and why you may have 
lived apart.
    (2) A signed statement by someone in a position to know showing you 
received at least one-half of your support from the insured for the one-
year period ending at one of the times mentioned in paragraph (a) of 
this section; and the income end support you had in this period from any 
other source.
    (d) Grandchild or Stepgrandchild. If you are the insured person's 
grandchild or stepgrandchild, we will ask for evidence described in 
paragraph (c) of this section showing that you were living together with 
the insured and receiving one-half of your support from him or her for 
the year before the insured became entitled to benefits or to a period 
of disability, or died. We will also ask for evidence of your parent's 
death or disability.



Sec. 404.745  Evidence of school attendance for child age 18 or older.

    If you apply for child's benefits as a student age 18 or over, we 
may ask for evidence you are attending school. We may also ask for 
evidence from the

[[Page 221]]

school you attend showing your status at the school. We will ask for the 
following evidence:
    (a) Your signed statement that you are attending school full-time 
and are not being paid by an employer to attend school.
    (b) If you apply before the school year has started and the school 
is not a high school, a letter of acceptance from the school, receipted 
bill, or other evidence showing you have enrolled or been accepted at 
that school.



Sec. 404.750  Evidence of a parent's support.

    If you apply for parent's benefits, we will ask you for evidence to 
show that you received at least one-half of your support from the 
insured person in the one-year period before he or she died or became 
disabled. We may also ask others who know the facts for a signed 
statement about your sources of support. We will ask you for the 
following evidence:
    (a) The parent's signed statement showing his or her income, any 
other sources of support, and the amount from each source over the one-
year period.
    (b) If the statement described in paragraph (a) of this section 
cannot be obtained, other convincing evidence that the parent received 
one-half of his or her support from the insured person.

                       Other Evidence Requirements



Sec. 404.760  Evidence of living in the same household with insured person.

    If you apply for the lump-sum death payment as the insured person's 
widow or widower, or for wife's, husband's, widow's, or widower's 
benefits based upon a deemed valid marriage as described in 
Sec. 404.727, we will ask for evidence you and the insured were living 
together in the same household when he or she died; or if the insured is 
alive, when you applied for benefits. We will ask for the following as 
evidence of this:
    (a) If the insured person is living, his or her signed statement and 
yours showing whether you were living together when you applied for 
benefits.
    (b) If the insured person is dead, your signed statement showing 
whether you were living together when he or she died.
    (c) If you and the insured person were temporarily living apart, a 
signed statement explaining where each was living, how long the 
separation lasted, and why you were separated. If needed to remove any 
reasonable doubts about this, we may ask for the signed statements of 
others in a position to know, or for other convincing evidence you and 
the insured were living together in the same household.



Sec. 404.762  Evidence of having a child in your care.

    If you are under age 65 and apply for wife's benefits based upon 
caring for a child, or for mother's benefits as a widow or divorced 
wife, or for father's benefits as a widower, we will ask for evidence 
that you have the insured person's child in your care. What evidence we 
will ask for depends upon whether the child is living with you or with 
someone else. You will be asked to give the following evidence:
    (a) If the child is living with you, your signed statement showing 
that the child is living with you.
    (b) If the child is living with someone else--
    (1) Your signed statement showing with whom he or she is living and 
why he or she is living with someone else. We will also ask when he or 
she last lived with you and how long this separation will last, and what 
care and contributions you provide for the child;
    (2) The signed statement of the one with whom the child is living 
showing what care you provide and the sources and amounts of support 
received for the child. If the child is in an institution, an official 
there should sign the statement. These statements are preferred 
evidence. If there is a court order or written agreement showing who has 
custody of the child, you may be asked to give us a copy; and
    (3) If you cannot get the preferred evidence described in paragraph 
(b)(2) of this section, we will ask for other convincing evidence that 
the child is in your care.

[[Page 222]]



Sec. 404.770  Evidence of where the insured person had a permanent home.

    (a) When evidence of the insured's permanent home is needed. We may 
ask for evidence of where the insured person's permanent home was at the 
time you applied or, if earlier, the time he or she died if--
    (1) You apply for benefits as the insured's wife, husband, widow, 
widower, parent or child; and
    (2) Your relationship to the insured depends upon the State law that 
would be followed in the place where the insured had his or her 
permanent home when you applied for benefits or when he or she died.
    (b) What evidence is needed. We will ask for the following evidence 
of the insured person's permanent home:
    (1) Your signed statement showing where the insured considered his 
permanent home to be.
    (2) If the statement in paragraph (b)(1) of this section or other 
evidence we have raises a reasonable doubt about where the insured's 
permanent home was, evidence of where he or she paid personal, property, 
or income taxes, or voted; or other convincing evidence of where his or 
her permanent home was.



Sec. 404.780  Evidence of ``good cause'' for exceeding time limits on accepting proof of support or application for a lump-sum death payment.

    (a) When evidence of good cause is needed. We may ask for evidence 
that you had good cause (as defined in Sec. 404.370(f)) for not giving 
us sooner proof of the support you received from the insured as his or 
her parent. We may also ask for evidence that you had good cause (as 
defined in Sec. 404.621(b)) for not applying sooner for the lump-sum 
death payment. You may be asked for evidence of good cause for these 
delays if--
    (1) You are the insured person's parent giving us proof of support 
more than 2 years after he or she died, or became disabled; or
    (2) You are applying for the lump-sum death payment more than 2 
years after the insured died.
    (b) What evidence of good cause is needed. We will ask for the 
following evidence of good cause:
    (1) Your signed statement explaining why you did not give us the 
proof of support or the application for lump-sum death payment within 
the specified 2 year period.
    (2) If the statement in paragraph (b)(1) of the section or other 
evidence raises a reasonable doubt whether there was good cause, other 
convincing evidence of this.

[43 FR 24795, June 7, 1978, as amended at 44 FR 34493, June 15, 1979]



                     Subpart I--Records of Earnings

    Authority: Secs. 205(a), (c)(1), (c)(2)(A), (c)(4), (c)(5), (c)(6), 
and (p), 702(a)(5), and 1143 of the Social Security Act (42 U.S.C. 
405(a), (c)(1), (c)(2)(A), (c)(4), (c)(5), (c)(6), and (p), 902(a)(5), 
and 1320b-13).

    Source: 44 FR 38454, July 2, 1979, unless otherwise noted.

                           General Provisions



Sec. 404.801  Introduction.

    The Social Security Administration (SSA) keeps a record of the 
earnings of all persons who work in employment or self-employment 
covered under social security. We use these earnings records to 
determine entitlement to and the amount of benefits that may be payable 
based on a person's earnings under the retirement, survivors', 
disability and health insurance program. This subpart tells what is 
evidence of earnings, how you can find out what the record of your 
earnings shows, and how and under what circumstances the record of your 
earnings may be changed to correct errors.



Sec. 404.802  Definitions.

    For the purpose of this subpart--
    Earnings means wages and self-employment income earned by a person 
based on work covered by social security. (See subpart K for the rules 
about what constitutes wages and self-employment income for benefit 
purposes.)
    Period means a taxable year when referring to self-employment 
income. When referring to wages it means a calendar quarter if the wages 
were reported or should have been reported

[[Page 223]]

quarterly by your employer or a calendar year if the wages were reported 
or should have been reported annually by your employer.
    Record of earnings, earnings record, or record means SSA's records 
of the amounts of wages paid to you and the amounts of self-employment 
income you received, the periods in which the wages were paid and the 
self-employment income was received, and the quarters of coverage which 
you earned based on these earnings.
    Survivor means your spouse, divorced wife, child, or parent, who 
survives you. Survivor also includes your surviving divorced wife who 
may be entitled to benefits as a surviving divorced mother.
    Tax return means, as appropriate, a tax return of wages or a tax 
return of self-employment income (including information returns and 
other written statements filed with the Commissioner of Internal Revenue 
under chapter 2 or 21 of the Internal Revenue Code of 1954, as amended).
    Time limit means a period of time 3 years, 3 months, and 15 days 
after any year in which you received earnings. The period may be 
extended by the Soldiers and Sailors Relief Act of 1940 because of your 
military service or the military service of certain relatives who 
survive you (50 U.S.C. App. 501 and following sections). Where the time 
limit ends on a Federal nonwork day, we will extend it to the next 
Federal work day.
    Wage report means a statement filed by a State under section 218 of 
the Social Security Act or related regulations. This statement includes 
wage amounts for which a State is billed and wage amounts for which 
credits or refunds are made to a State according to an agreement under 
section 218 of the Act.
    We, us, or our means the Social Security Administration (SSA).
    Year means a calendar year when referring to wages and a taxable 
year when referring to self-employment income.
    You or your means any person for whom we maintain a record of 
earnings.



Sec. 404.803  Conclusiveness of the record of your earnings.

    (a) Generally. For social security purposes, SSA records are 
evidence of the amounts of your earnings and the periods in which they 
were received.
    (b) Before time limit ends. Before the time limit ends for a year, 
SSA records are evidence, but not conclusive evidence, of the amounts 
and periods of your earnings in that year.
    (c) After time limit ends. After the time limit ends for a year--
    (1) If SSA records show an entry of self-employment income or wages 
for an employer for a period in that year, our records are conclusive 
evidence of your self-employment income in that year or the wages paid 
to you by that employer and the periods in which they were received 
unless one of the exceptions in Sec. 404.822 applies;
    (2) If SSA records show no entry of wages for an employer for a 
period in that year, our records are conclusive evidence that no wages 
were paid to you by that employer in that period unless one of the 
exceptions in Sec. 404.822 applies; and
    (3) If SSA records show no entry of self-employment income for that 
year, our records are conclusive evidence that you did not receive self-
employement income in that year unless the exception in 
Sec. 404.822(b)(2) (i) or (iii) applies.

                     Obtaining Earnings Information



Sec. 404.810  How to obtain a statement of earnings and a benefit estimate statement.

    (a) Right to a statement of earnings and a benefit estimate. You or 
your legal representative or, after your death, your survivor or the 
legal representative of your estate may obtain a statement of your 
earnings as shown on our records at the time of the request. If you have 
a social security number and have wages or net earnings from self-
employment, you may also request and receive an earnings statement that 
will include an estimate of the monthly old-age, disability, 
dependents', and survivors' insurance benefits potentially payable on 
your earnings record,

[[Page 224]]

together with a description of the benefits payable under the medicare 
program. You may request these statements by writing, calling, or 
visiting a social security office.
    (b) Contents of request. When you request a statement of your 
earnings, we will ask you to complete a prescribed form, giving us your 
name, social security number, date of birth, and sex. You, your 
authorized representative or, after your death, your survivor or the 
legal representative of your estate will be asked to sign and date the 
form. If you are requesting an estimate of the monthly benefits 
potentially payable on your earnings record, we will also ask you to 
give us the amount of your earnings for the last year, an estimate of 
your earnings for the current year, an estimate of your earnings for 
future years before your planned retirement, and the age at which you 
plan to retire, so that we can give you a more realistic estimate of the 
benefits that may be payable on your record. A request for a statement 
of earnings and a benefit estimate not made on the prescribed form will 
be accepted if the request is in writing, is signed and dated by the 
appropriate individual noted above, and contains all the information 
that is requested on the prescribed form.

[57 FR 54918, Nov. 23, 1992]



Sec. 404.811  The statement of earnings and benefit estimates you requested.

    (a) General. After receiving a request for a statement of earnings 
and the information we need to comply with the request, we will provide 
you or your authorized representative a statement of the earnings we 
have credited to your record at the time of your request. With the 
statement of earnings, we will include estimates of the benefits 
potentially payable on your record, unless you do not have the required 
credits (quarters of coverage) for any kind of benefit(s). (However, see 
paragraph (b)(3) of this section regarding the possibility of our 
estimating up to eight additional credits on your record.) If we do not 
provide a statement of earnings and an estimate of all the benefits 
potentially payable, or any other information you requested, we will 
explain why.
    (b) Contents of statement of earnings and benefit estimates. The 
statement of your earnings and benefit estimates will contain the 
following information:
    (1) Your social security taxed earnings as shown by our records as 
of the date of your request;
    (2) An estimate of the social security and medicare hospital 
insurance taxes paid on your earnings (although we do not maintain such 
tax information);
    (3) The number of credits, i.e., quarters of coverage, not exceeding 
40, you have for both social security and medicare hospital insurance 
purposes, and the number you need to be eligible for social security and 
also for medicare hospital insurance coverage. If you do not already 
have the required credits (quarters of coverage) to be eligible to 
receive social security benefits and medicare hospital insurance 
coverage, we may include up to eight additional estimated credits (four 
per year) based on the earnings you told us you had for last year and 
this year that we have not yet entered on your record;
    (4) A statement as to whether you meet the credits (quarters of 
coverage) requirements, as described in subpart B of this part, for each 
type of social security benefit when we prepare the benefit estimates, 
and also whether you are eligible for medicare hospital insurance 
coverage;
    (5) Estimates of the monthly retirement (old-age), disability, 
dependents' and survivors' insurance benefits potentially payable on 
your record if you meet the credits (quarters of coverage) requirements. 
The benefit estimates we send you will be based partly on your stated 
earnings for last year (if not yet on your record), your estimate of 
your earnings for the current year and for future years before you plan 
to retire, and on the age at which you plan to retire. The estimate will 
include the retirement (old-age) insurance benefits you could receive at 
age 62 (or your current age if you are already over age 62), at full 
retirement age (currently age 65 to 67, depending on your year of birth) 
or at your current age if you are already over full retirement age, and 
at age 70;

[[Page 225]]

    (6) A description of the coverage under the medicare program;
    (7) A reminder of your right to request a correction of your 
earnings record; and
    (8) A remark that an annually updated statement is available on 
request.

[61 FR 18076, Apr. 24, 1996]



Sec. 404.812  Statement of earnings and benefit estimates sent without request.

    (a) Who will be sent a statement. Unless one of the conditions in 
paragraph (b) of this section applies to you, we will send you, without 
request, a statement of earnings and benefit estimates if:
    (1) You have a social security account number;
    (2) You have wages or net earnings from self-employment on your 
social security record;
    (3) You have attained age 25 or older, as explained in paragraph 
(c)(3) of this section; and
    (4) We can determine your current mailing address.
    (b) Who will not be sent a statement. We will not send you an 
unrequested statement if any of the following conditions apply:
    (1) You do not meet one or more of the conditions of paragraph (a) 
of this section;
    (2) Our records contain a notation of your death;
    (3) You are entitled to benefits under title II of the Act;
    (4) We have already sent you a statement, based on your request, in 
the fiscal year we selected you to receive an unrequested statement;
    (5) We cannot obtain your address (see paragraph (c)(2) of this 
section); or
    (6) We are correcting your social security earnings record when we 
select you to receive a statement of earnings and benefit estimates.
    (c) The selection and mailing process. Subject to the provisions of 
paragraphs (a) and (b) of this section, we will use the following 
process for sending statements without requests:
    (1) Selection. We will use our records of assigned social security 
account numbers to identify individuals to whom we will send statements.
    (2) Addresses. If you are living in one of the 50 States or the 
District of Columbia, our current procedure is to get your address from 
individual taxpayer files of the Internal Revenue Service, as authorized 
by section 6103(m)(7) of the Internal Revenue Code (26 U.S.C. 
6103(m)(7)). If you live in Puerto Rico, the Virgin Islands, or Guam, we 
will get your address from the taxpayer records of the place in which 
you live.
    (3) Age. If you have attained age 60 on or before September 30, 
1995, we will send you a statement by that date. If you attain age 60 on 
or after October 1, 1995 but no later than September 30, 1999, we will 
send you a statement in the fiscal year in which you attain age 60, or 
in an earlier year as resources allow. Also, we will inform you that an 
annually updated statement is available on request. Beginning October 1, 
1999, we will send you a statement each year in which you are age 25 or 
older.
    (4) Ineligible. If we do not send you a statement because one or 
more conditions in paragraph (b) of this section apply when you are 
selected, we will send a statement in the first appropriate fiscal year 
thereafter in which you do qualify.
    (5) Undeliverable. If the statement we send you is returned by the 
Post Office as undeliverable, we will not remail it.
    (d) Contents of statement of earnings and benefit estimates. To 
prepare your statement and estimate your benefits, we will use the 
earnings in our records. If there are earnings recorded for you in 
either of the two years before the year in which you are selected to get 
a statement, we will use the later of these earnings as your earnings 
for the current year and future years when we estimate your benefits. In 
addition, if you do not already have the required credits (quarters of 
coverage) to be eligible to receive benefits, we will use that last 
recorded earnings amount to estimate up to eight additional credits 
(four per year) for last year and the current year if they are not yet 
entered on your record. If there are no earnings entered on your record 
in either of the two years preceding the year of selection, we will not 
estimate current and future earnings or additional credits

[[Page 226]]

for you. Your earnings and benefit estimates statement will contain the 
following information:
    (1) Your social security taxed earnings as shown by our records as 
of the date we select you to receive a statement;
    (2) An estimate of the social security and medicare hospital 
insurance taxes paid on your earnings (although we do not maintain such 
tax information);
    (3) The number of credits, i.e., quarters of coverage, not exceeding 
40 (as described in paragraph (d) of this section), that you have for 
both social security and medicare hospital insurance purposes, and the 
number you need to be eligible for social security benefits and also for 
medicare hospital insurance coverage;
    (4) A statement as to whether you meet the credit (quarters of 
coverage) requirements, as described in subpart B of this part, for each 
type of social security benefit when we prepare the benefit estimates, 
and also whether you are eligible for medicare hospital insurance 
coverage;
    (5) Estimates of the monthly retirement (old-age), disability, 
dependents' and survivors' insurance benefits potentially payable on 
your record if you meet the credits (quarters of coverage) requirements. 
If you are age 50 or older, the estimates will include the retirement 
(old-age) insurance benefits you could receive at age 62 (or your 
current age if you are already over age 62), at full retirement age 
(currently age 65 to 67, depending on your year of birth) or at your 
current age if you are already over full retirement age, and at age 70. 
If you are under age 50, instead of estimates, we may provide a general 
description of the benefits (including auxiliary benefits) that are 
available upon retirement;
    (6) A description of the coverage provided under the medicare 
program;
    (7) A reminder of your right to request a correction of your 
earnings record; and
    (8) A remark that an annually updated statement is available on 
request.

[61 FR 18077, Apr. 24, 1996]

                     Correcting the Earnings Record



Sec. 404.820  Filing a request for correction of the record of your earnings.

    (a) When to file a request for correction. You or your survivor must 
file a request for correction of the record of your earnings within the 
time limit for the year being questioned unless one of the exceptions in 
Sec. 404.822 applies.
    (b) Contents of a request. (1) A request for correction of an 
earnings record must be in writing and must state that the record is 
incorrect.
    (2) A request must be signed by you or your survivor or by a person 
who may sign an application for benefits for you or for your survivor as 
described in Sec. 404.612.
    (3) A request should state the period being questioned.
    (4) A request should describe, or have attached to it, any available 
evidence which shows that the record of earnings is incorrect.
    (c) Where to file a request. A request may be filed with an SSA 
employee at one of our offices or with an SSA employee who is authorized 
to receive a request at a place other than one of our offices. A request 
may be filed with the Veterans Administration Regional Office in the 
Philippines or with any U.S. Foreign Service Office.
    (d) When a request is considered filed. A request is considered 
filed on the day it is received by any of our offices, by an authorized 
SSA employee, by the Veterans Administration Regional Office in the 
Philippines, or by any U.S. Foreign Service Office. If using the date we 
receive a mailed request disadvantages the requester, we will use the 
date the request was mailed to us as shown by a U.S. postmark. If the 
postmark is unreadable or there is no postmark, we will consider other 
evidence of the date when the request was mailed.
    (e) Withdrawal of a request for correction. A request for correction 
of SSA records of your earnings may be withdrawn as described in 
Sec. 404.640.
    (f) Cancellation of a request to withdraw. A request to withdraw a 
request for correction of SSA records of your earnings may be cancelled 
as described in Sec. 404.641.

[[Page 227]]

    (g) Determinations on requests. When we receive a request described 
in this section, we will make a determination to grant or deny the 
request. If we deny the request, this determination may be appealed 
under the provisions of subpart J of this part.



Sec. 404.821  Correction of the record of your earnings before the time limit ends.

    Before the time limit ends for any year, we will correct the record 
of your earnings for that year for any reason if satisfactory evidence 
shows SSA records are incorrect. We may correct the record as the result 
of a request filed under Sec. 404.820 or we may correct it on our own.



Sec. 404.822  Correction of the record of your earnings after the time limit ends.

    (a) Generally. After the time limit for any year ends, we may 
correct the record of your earnings for that year if satisfactory 
evidence shows SSA records are incorrect and any of the circumstances in 
paragraphs (b) through (e) of this section applies.
    (b) Correcting SSA records to agree with tax returns. We will 
correct SSA records to agree with a tax return of wages or self-
employment income to the extent that the amount of earnings shown in the 
return is correct.
    (1) Tax returns of wages. We may correct the earnings record to 
agree with a tax return of wages or with a wage report of a State.
    (2) Tax returns of self-employment income--(i) Return filed before 
the time limit ended. We may correct the earnings record to agree with a 
tax return of self-employment income filed before the end of the time 
limit.
    (ii) Return filed after time limit ended. We may remove or reduce, 
but not increase, the amount of self-employment income entered on the 
earnings record to agree with a tax return of self-employment income 
filed after the time limit ends.
    (iii) Self-employment income entered in place of erroneously entered 
wages. We may enter self-employment income for any year up to an amount 
erroneously entered in SSA records as wages but which was later removed 
from the records. However, we may enter self-employment income under 
this paragraph only if--
    (A) An amended tax return is filed before the time limit ends for 
the year in which the erroneously entered wages were removed; or
    (B) Net earnings from self-employment, which are not already entered 
in the record of your earnings, were included in a tax return filed 
before the end of the time limit for the year in which the erroneously 
entered wages were removed.
    (c) Written request for correction or application for benefits filed 
before the time limit ends--(1) Written request for correction. We may 
correct an earnings record if you or your survivor files a request for 
correction before the time limit for that year ends. The request must 
state that the earnings record for that year is incorrect. However, we 
may not correct the record under this paragraph after our determination 
on the request becomes final.
    (2) Application for benefits. We may correct an earnings record if 
an application is filed for monthly benefits or for a lump-sum death 
payment before the time limit for that year ends. However, we may not 
correct the record under this paragraph after our determination on the 
application becomes final.
    (3) See subpart J for the rules on the finality of determinations.
    (d) Transfer of wages to or from the Railroad Retirement Board--(1) 
Wages erroneously reported. We may transfer to or from the records of 
the Railroad Retirement Board earnings which were erroneously reported 
to us or to the Railroad Retirement Board.
    (2) Earnings certified by Railroad Retirement Board. We may enter 
earnings for railroad work under subpart O if the earnings are certified 
by the Railroad Retirement Board.
    (e) Other circumstances permitting correction--(1) Investigation 
started before time limit ends. We may correct an earnings record if the 
correction is made as the result of an investigation started before, but 
completed after the time limit ends. An investigation is started when we 
take an affirmative step leading to a decision on a question about

[[Page 228]]

the earnings record, for example, an investigation is started when one 
SSA unit asks another unit to obtain additional information or evidence. 
We will remove or reduce earnings on the record under this paragraph 
only if we carried out the investigation as promptly as circumstances 
permitted.
    (2) Error apparent on face of records. We may correct an earnings 
record to correct errors, such as mechanical or clerical errors, which 
can be identified and corrected without going beyond any of the 
pertinent SSA records.
    (3) Fraud. We may change any entry which was entered on the earnings 
record as the result of fraud.
    (4) Entries for wrong person or period. We may correct errors in SSA 
records resulting from earnings being entered for the wrong person or 
period.
    (5) Less than correct wages on SSA records. We may enter wages paid 
to you by an employer for a period if no part of those wages or less 
than the correct amount of those wages is entered on SSA records.
    (6) Wage payments under a statute. We may enter and allocate wages 
awarded to you for a period as the result of a determination or 
agreement approved by a court or administrative agency that enforces 
Federal or State statutes protecting your right to employment or wages.

[44 FR 38454, July 2, 1979, as amended at 57 FR 21600, May 21, 1992]



Sec. 404.823  Correction of the record of your earnings for work in the employ of the United States.

    We may correct the record of your earnings to remove, reduce, or 
enter earnings for work in the employ of the United States only if--
    (a) Correction is permitted under Sec. 404.821 or Sec. 404.822; and
    (b) Any necessary determinations concerning the amount of 
remuneration paid for your work and the periods for which such 
remuneration was paid have been made as shown by--
    (1) A tax return filed under section 3122 of the Internal Revenue 
Code (26 U.S.C. 3122); or
    (2) A certification by the head of the Federal agency or 
instrumentality of which you have been an employee or his or her agent. 
A Federal instrumentality for these purposes includes a nonappropriated 
fund activity of the armed forces or Coast Guard.

[44 FR 38454, July 2, 1979, as amended at 55 FR 24891, June 19, 1990]

         Notice of Removal or Reduction of an Entry of Earnings



Sec. 404.830  Notice of removal or reduction of your wages.

    If we remove or reduce an amount of wages entered on the record of 
your earnings, we will notify you of this correction if we previously 
notified you of the amount of your wages for the period involved. We 
will notify your survivor if we previously notified you or your survivor 
of the amount of your earnings for the period involved.



Sec. 404.831  Notice of removal or reduction of your self-employment income.

    If we remove or reduce an amount of self-employment income entered 
on the record of your earnings, we will notify you of this correction. 
We will notify your survivor if we previously notified you or your 
survivor of the amount of your earnings for the period involved.



Subpart J--Determinations, Administrative Review Process, and Reopening 
                     of Determinations and Decisions

    Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 221, 
225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 404(f), 
405(a), (b), (d)-(h), and (j), 421, 425, and 902(a)(5)); 31 U.S.C. 
3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); secs. 
5, 6(c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 421 note).

    Source: 45 FR 52081, Aug. 5, 1980, unless otherwise noted.

          Introduction, Definitions, and Initial Determinations



Sec. 404.900  Introduction.

    (a) Explanation of the administrative review process. This subpart 
explains the procedures we follow in determining your rights under title 
II of the Social Security Act. The regulations describe the process of 
administrative

[[Page 229]]

review and explain your right to judicial review after you have taken 
all the necessary administrative steps. These procedures apply also to 
persons claiming certain benefits under title XVIII of the Act 
(Medicare); see 42 CFR 405.701(c). The administrative review process 
consists of several steps, which usually must be requested within 
certain time periods and in the following order:
    (1) Initial determination. This is a determination we make about 
your entitlement or your continuing entitlement to benefits or about any 
other matter, as discussed in Sec. 404.902, that gives you a right to 
further review.
    (2) Reconsideration. If you are dissatisfied with an initial 
determination, you may ask us to reconsider it.
    (3) Hearing before an administrative law judge. If you are 
dissatisfied with the reconsideration determination, you may request a 
hearing before an administrative law judge.
    (4) Appeals Council review. If you are dissatisfied with the 
decision of the administrative law judge, you may request that the 
Appeals Council review the decision.
    (5) Federal court review. When you have completed the steps of the 
administrative review process listed in paragraphs (a)(1) through (a)(4) 
of this section, we will have made our final decision. If you are 
dissatisfied with our final decision, you may request judicial review by 
filing an action in a Federal district court.
    (6) Expedited appeals process. At some time after your initial 
determination has been reviewed, if you have no dispute with our 
findings of fact and our application and interpretation of the 
controlling laws, but you believe that a part of the law is 
unconstitutional, you may use the expedited appeals process. This 
process permits you to go directly to a Federal district court so that 
the constitutional issue may be resolved.
    (b) Nature of the administrative review process. In making a 
determination or decision in your case, we conduct the administrative 
review process in an informal, nonadversary manner. In each step of the 
review process, you may present any information you feel is helpful to 
your case. Subject to the limitations on Appeals Council consideration 
of additional evidence (see Secs. 404.970(b) and 404.976(b)), we will 
consider at each step of the review process any information you present 
as well as all the information in our records. You may present the 
information yourself or have someone represent you, including an 
attorney. If you are dissatisfied with our decision in the review 
process, but do not take the next step within the stated time period, 
you will lose your right to further administrative review and your right 
to judicial review, unless you can show us that there was good cause for 
your failure to make a timely request for review.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 300, Jan 3, 1986; 51 FR 
8808, Mar. 14, 1986; 52 FR 4004, Feb. 9, 1987]



Sec. 404.901  Definitions.

    As used in this subpart:
    Date you receive notice means 5 days after the date on the notice, 
unless you show us that you did not receive it within the 5-day period.
    Decision means the decision made by an administrative law judge or 
the Appeals Council.
    Determination means the initial determination or the reconsidered 
determination.
    Remand means to return a case for further review.
    Vacate means to set aside a previous action.
    Waive means to give up a right knowingly and voluntarily.
    We, us, or our refers to the Social Security Administration.
    You or your refers to any person claiming a right under the old age, 
disability, dependents' or survivors' benefits program.



Sec. 404.902  Administrative actions that are initial determinations.

    Initial determinations are the determinations we make that are 
subject to administrative and judicial review. The initial determination 
will state the important facts and give the reasons for our conclusions. 
In the old age, survivors' and disability insurance programs, initial 
determinations include, but are not limited to, determinations about--
    (a) Your entitlement or your continuing entitlement to benefits;

[[Page 230]]

    (b) Your reentitlement to benefits;
    (c) The amount of your benefit;
    (d) A recomputation of your benefit;
    (e) A reduction in your disability benefits because you also receive 
benefits under a workmen's compensation law;
    (f) A deduction from your benefits on account of work;
    (g) A deduction from your disability benefits because you refuse to 
accept rehabilitation services;
    (h) Termination of your benefits;
    (i) Penalty deductions imposed because you failed to report certain 
events;
    (j) Any overpayment or underpayment of your benefits;
    (k) Whether an overpayment of benefits must be repaid to us;
    (l) How an underpayment of benefits due a deceased person will be 
paid;
    (m) The establishment or termination of a period of disability;
    (n) A revision of your earnings record;
    (o) Whether the payment of your benefits will be made, on your 
behalf, to a representative payee, unless you are under age 18, legally 
incompetent, or you are disabled and drug addiction or alcoholism is a 
contributing factor material to the determination of disability (as 
described in Sec. 404.1535);
    (p) Your drug addiction or alcoholism;
    (q) Who will act as your payee if we determine that representative 
payment will be made;
    (r) An offset of your benefits under Sec. 404.408b because you 
previously received supplemental security income payments for the same 
period;
    (s) Whether your completion of or continuation for a specified 
period of time in an appropriate vocational rehabilitation program will 
significantly increase the likelihood that you will not have to return 
to the disability benefit rolls and thus, whether your benefits may be 
continued even though you are not disabled;
    (t) Nonpayment of your benefits under Sec. 404.468 because of your 
confinement in a jail, prison, or other penal institution or 
correctional facility for conviction of a felony;
    (u) Whether or not you have a disabling impairment(s) as defined in 
Sec. 404.1511;
    (v) Nonpayment of your benefits under Sec. 404.469 because you have 
not furnished us satisfactory proof of your Social Security number, or, 
if a Social Security number has not been assigned to you, you have not 
filed a proper application for one; and
    (w) A claim for benefits under Sec. 404.633 based on alleged 
misinformation.

[45 FR 52081, Aug. 5, 1980, as amended at 47 FR 4988, Feb. 3, 1982; 47 
FR 31543, July 21, 1982; 49 FR 22272, May 29, 1984; 50 FR 20902, May 21, 
1985; 56 FR 41790, Aug. 23, 1991; 59 FR 44925, Aug. 31, 1994; 60 FR 
8147, Feb. 10, 1995]



Sec. 404.903  Administrative actions that are not initial determinations.

    Administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative review 
process provided by this subpart, and they are not subject to judicial 
review. These actions include, but are not limited to, an action--
    (a) Suspending benefits pending an investigation and determination 
of any factual issue relating to a deduction on account of work;
    (b) Suspending benefits pending an investigation to determine if 
your disability has ceased;
    (c) Denying a request to be made a representative payee;
    (d) Certifying two or more family members for joint payment of 
benefits;
    (e) Withholding less than the full amount of your monthly benefit to 
recover an overpayment;
    (f) Determining the fee that may be charged or received by a person 
who has represented you in connection with a proceeding before us;
    (g) Disqualifying or suspending a person from acting as your 
representative in a proceeding before us (See Sec. 404.1745);
    (h) Compromising, suspending or terminating collection of an 
overpayment under the Federal Claims Collection Act;
    (i) Extending or not extending the time to file a report of 
earnings;

[[Page 231]]

    (j) Denying your request to extend the time period for requesting 
review of a determination or a decision;
    (k) Denying your request to use the expedited appeals process;
    (l) Denying your request to reopen a determination or a decision;
    (m) Withholding temporarily benefits based on a wage earner's 
estimate of earnings to avoid creating an overpayment;
    (n) Determining whether (and the amount of) travel expenses incurred 
are reimbursable in connection with proceedings before us;
    (o) Denying your request to readjudicate your claim and apply an 
Acquiescence Ruling;
    (p) Findings on whether we can collect an overpayment by using the 
Federal income tax refund offset procedure (see Sec. 404.523);
    (q) Determining whether an organization may collect a fee from you 
for expenses it incurred in serving as your representative payee (see 
Sec. 404.2040a);
    (r) Declining under Sec. 404.633(f) to make a determination on a 
claim for benefits based on alleged misinformation because one or more 
of the conditions specified in Sec. 404.633(f) are not met;
    (s) The assignment of a monthly payment day (see Sec. 404.1807);
    (t) Determining whether we will refer information about your 
overpayment to a consumer reporting agency (see Secs. 404.527 and 
422.305 of this chapter); and
    (u) Determining whether we will refer your overpayment to the 
Department of the Treasury for collection by offset against Federal 
payments due you (see Secs. 404.527 and 422.310 of this chapter).

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 8808, Mar. 14, 1986; 55 
FR 1018, Jan. 11, 1990; 56 FR 52469, Oct. 21, 1991; 57 FR 23057, June 1, 
1992; 59 FR 44925, Aug. 31, 1994; 62 FR 6120, Feb. 11, 1997; 62 FR 
64278, Dec. 5, 1997]



Sec. 404.904  Notice of the initial determination.

    We shall mail a written notice of the initial determination to you 
at your last known address. The reasons for the initial determination 
and the effect of the initial determination will be stated in the 
notice. The notice also informs you of the right to a reconsideration. 
We will not mail a notice if the beneficiary's entitlement to benefits 
has ended because of his or her death.

[51 FR 300, Jan. 3, 1986]



Sec. 404.905  Effect of an initial determination.

    An initial determination is binding unless you request a 
reconsideration within the stated time period, or we revise the initial 
determination.

[51 FR 300, Jan. 3, 1986]



Sec. 404.906  Testing modifications to the disability determination procedures.

    (a) Applicability and scope. Notwithstanding any other provision in 
this part or part 422 of this chapter, we are establishing the 
procedures set out in this section to test modifications to our 
disability determination process. These modifications will enable us to 
test, either individually or in one or more combinations, the effect of: 
having disability claim managers assume primary responsibility for 
processing an application for disability benefits; providing persons who 
have applied for benefits based on disability with the opportunity for 
an interview with a decisionmaker when the decisionmaker finds that the 
evidence in the file is insufficient to make a fully favorable 
determination or requires an initial determination denying the claim; 
having a single decisionmaker make the initial determination with 
assistance from medical consultants, where appropriate; and eliminating 
the reconsideration step in the administrative review process and having 
a claimant who is dissatisfied with the initial determination request a 
hearing before an administrative law judge. The model procedures we test 
will be designed to provide us with information regarding the effect of 
these procedural modifications and enable us to decide whether and to 
what degree the disability determination process would be improved if 
they were implemented on a national level.
    (b) Procedures for cases included in the tests. Prior to commencing 
each test or group of tests in selected site(s), we will publish a 
notice in the Federal

[[Page 232]]

Register. The notice will describe which model or combinations of models 
we intend to test, where the specific test site(s) will be, and the 
duration of the test(s). The individuals who participate in the test(s) 
will be randomly assigned to a test group in each site where the tests 
are conducted. Paragraphs (b) (1) through (4) of this section lists 
descriptions of each model.
    (1) In the disability claim manager model, when you file an 
application for benefits based on disability, a disability claim manager 
will assume primary responsibility for the processing of your claim. The 
disability claim manager will be the focal point for your contacts with 
us during the claims intake process and until an initial determination 
on your claim is made. The disability claim manager will explain the 
disability programs to you, including the definition of disability and 
how we determine whether you meet all the requirements for benefits 
based on disability. The disability claim manager will explain what you 
will be asked to do throughout the claims process and how you can obtain 
information or assistance through him or her. The disability claim 
manager will also provide you with information regarding your right to 
representation, and he or she will provide you with appropriate referral 
sources for representation. The disability claim manager may be either a 
State agency employee or a Federal employee. In some instances, the 
disability claim manager may be assisted by other individuals.
    (2) In the single decisionmaker model, the decisionmaker will make 
the disability determination and may also determine whether the other 
conditions for entitlement to benefits based on disability are met. The 
decisionmaker will make the disability determination after any 
appropriate consultation with a medical or psychological consultant. The 
medical or psychological consultant will not be required to sign the 
disability determination forms we use to have the State agency certify 
the determination of disability to us (see Sec. 404.1615). However, 
before an initial determination is made that a claimant is not disabled 
in any case where there is evidence which indicates the existence of a 
mental impairment, the decisionmaker will make every reasonable effort 
to ensure that a qualified psychiatrist or psychologist has completed 
the medical portion of the case review and any applicable residual 
functional capacity assessment pursuant to our existing procedures (see 
Sec. 404.1617). In some instances the decisionmaker may be the 
disability claim manager described in paragraph (b)(1) of this section. 
When the decisionmaker is a State agency employee, a team of individuals 
that includes a Federal employee will determine whether the other 
conditions for entitlement to benefits are met.
    (3) In the predecision interview model, if the decisionmaker(s) 
finds that the evidence in your file is insufficient to make a fully 
favorable determination or requires an initial determination denying 
your claim, a predecision notice will be mailed to you. The notice will 
tell you that, before the decisionmaker(s) makes an initial 
determination about whether you are disabled, you may request a 
predecision interview with the decisionmaker(s). The notice will also 
tell you that you may submit additional evidence. You must request a 
predecision interview within 10 days after the date you receive the 
predecision notice. You must also submit any additional evidence within 
10 days after you receive the predecision notice. If you request a 
predecision interview, the decisionmaker(s) will conduct the predecision 
interview in person, by videoconference, or by telephone as the 
decisionmaker(s) determines is appropriate under the circumstances. If 
you make a late request for a predecision interview, or submit 
additional evidence late, but show in writing that you had good cause 
under the standards in Sec. 404.911 for missing the deadline, the 
decisionmaker(s) will extend the deadline. If you do not request the 
predecision interview, or if you do not appear for a scheduled 
predecision interview and do not submit additional evidence, or if you 
do not respond to our attempts to communicate with you, the 
decisionmaker(s) will make an initial determination based upon the 
evidence in your file. If you identify additional evidence during the 
predecision interview, which was

[[Page 233]]

previously not available, the decisionmaker(s) will advise you to submit 
the evidence. If you are unable to do so, the decisionmaker(s) may 
assist you in obtaining it. The decisionmaker(s) also will advise you of 
the specific timeframes you have for submitting any additional evidence 
identified during the predecision interview. If you have no treating 
source(s) (see Sec. 404.1502), or your treating source(s) is unable or 
unwilling to provide the necessary evidence, or there is a conflict in 
the evidence that cannot be resolved through evidence from your treating 
source(s), the decisionmaker(s) may arrange a consultative examination 
or resolve conflicts according to existing procedures (see 
Sec. 404.1519a). If you attend the predecision interview, or do not 
attend the predecision interview but you submit additional evidence, the 
decisionmaker(s) will make an initial determination based on the 
evidence in your file, including the additional evidence you submit or 
the evidence obtained as a result of the predecision notice or 
interview, or both.
    (4) In the reconsideration elimination model, we will modify the 
disability determination process by eliminating the reconsideration step 
of the administrative review process. If you receive an initial 
determination on your claim for benefits based on disability, and you 
are dissatisfied with the determination, we will notify you that you may 
request a hearing before an administrative law judge. If you request a 
hearing before an administrative law judge, we will apply our usual 
procedures contained in subpart J of this part.

[60 FR 20026, Apr. 24, 1995]

                             Reconsideration



Sec. 404.907  Reconsideration--general.

    If you are dissatisfied with the initial determination, 
reconsideration is the first step in the administrative review process 
that we provide, except that we provide the opportunity for a hearing 
before an administrative law judge as the first step for those 
situations described in Secs. 404.930 (a)(6) and (a)(7), where you 
appeal an initial determination denying your request for waiver of 
adjustment or recovery of an overpayment (see Sec. 404.506). If you are 
dissatisfied with our reconsidered determination, you may request a 
hearing before an administrative law judge.

[61 FR 56132, Oct. 31, 1996]



Sec. 404.908  Parties to a reconsideration.

    (a) Who may request a reconsideration. If you are dissatisfied with 
the initial determination, you may request that we reconsider it. In 
addition, a person who shows in writing that his or her rights may be 
adversely affected by the initial determination may request a 
reconsideration.
    (b) Who are parties to a reconsideration. After a request for the 
reconsideration, you and any person who shows in writing that his or her 
rights are adversely affected by the initial determination will be 
parties to the reconsideration.



Sec. 404.909  How to request reconsideration.

    (a) We shall reconsider an initial determination if you or any other 
party to the reconsideration files a written request--
    (1) Within 60 days after the date you receive notice of the initial 
determination (or within the extended time period if we extend the time 
as provided in paragraph (b) of this section);
    (2) At one of our offices, the Veterans Administration Regional 
Office in the Philippines, or an office of the Railroad Retirement Board 
if you have 10 or more years of service in the railroad industry.
    (b) Extension of time to request a reconsideration. If you want a 
reconsideration of the initial determination but do not request one in 
time, you may ask us for more time to request a reconsideration. Your 
request for an extension of time must be in writing and must give the 
reasons why the request for reconsideration was not filed within the 
stated time period. If you show us that you had good cause for missing 
the deadline, we will extend the time period. To determine whether good 
cause exists, we use the standards explained in Sec. 404.911.

[[Page 234]]



Sec. 404.911  Good cause for missing the deadline to request review.

    (a) In determining whether you have shown that you had good cause 
for missing a deadline to request review we consider--
    (1) What circumstances kept you from making the request on time;
    (2) Whether our action misled you;
    (3) Whether you did not understand the requirements of the Act 
resulting from amendments to the Act, other legislation, or court 
decisions; and
    (4) Whether you had any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which prevented you from filing a timely request or from understanding 
or knowing about the need to file a timely request for review.
    (b) Examples of circumstances where good cause may exist include, 
but are not limited to, the following situations:
    (1) You were seriously ill and were prevented from contacting us in 
person, in writing, or through a friend, relative, or other person.
    (2) There was a death or serious illness in your immediate family.
    (3) Important records were destroyed or damaged by fire or other 
accidental cause.
    (4) You were trying very hard to find necessary information to 
support your claim but did not find the information within the stated 
time periods.
    (5) You asked us for additional information explaining our action 
within the time limit, and within 60 days of receiving the explanation 
you requested reconsideration or a hearing, or within 30 days of 
receiving the explanation you requested Appeal Council review or filed a 
civil suit.
    (6) We gave you incorrect or incomplete information about when and 
how to request administrative review or to file a civil suit.
    (7) You did not receive notice of the determination or decision.
    (8) You sent the request to another Government agency in good faith 
within the time limit and the request did not reach us until after the 
time period had expired.
    (9) Unusual or unavoidable circumstances exist, including the 
circumstances described in paragraph (a)(4) of this section, which show 
that you could not have known of the need to file timely, or which 
prevented you from filing timely.

[45 FR 52081, Aug. 5, 1980, as amended at 59 FR 1634, Jan. 12, 1994]



Sec. 404.913  Reconsideration procedures.

    (a) Case review. With the exception of the type of case described in 
paragraph (b) of this section, the reconsideration process consists of a 
case review. Under a case review procedure, we will give you and the 
other parties to the reconsideration an opportunity to present 
additional evidence to us. The official who reviews your case will then 
make a reconsidered determination based on all of this evidence.
    (b) Disability hearing. If you have been receiving benefits based on 
disability and you request reconsideration of an initial or revised 
determination that, based on medical factors, you are not now disabled, 
we will give you and the other parties to the reconsideration an 
opportunity for a disability hearing. (See Secs. 404.914 through 
404.918.)

[51 FR 300, Jan. 3, 1986]



Sec. 404.914  Disability hearing--general.

    (a) Availability. We will provide you with an opportunity for a 
disability hearing if:
    (1) You have been receiving benefits based on a medical impairment 
that renders you disabled;
    (2) We have made an initial or revised determination based on 
medical factors that you are not now disabled because your impairment:
    (i) Has ceased;
    (ii) Did not exist; or
    (iii) Is no longer disabling; and
    (3) You make a timely request for reconsideration of the initial or 
revised determination.
    (b) Scope. The disability hearing will address only the initial or 
revised determination, based on medical factors, that you are not now 
disabled. Any other issues which arise in connection with your request 
for reconsideration will be reviewed in accordance with the 
reconsideration procedures described in Sec. 404.913(a).

[[Page 235]]

    (c) Time and place--(1) General. Either the State agency or the 
Director of the Office of Disability Hearings or his or her delegate, as 
appropriate, will set the time and place of your disability hearing. We 
will send you a notice of the time and place of your disability hearing 
at least 20 days before the date of the hearing. You may be expected to 
travel to your disability hearing. (See Secs. 404.999a-404.999d 
regarding reimbursement for travel expenses.)
    (2) Change of time or place. If you are unable to travel or have 
some other reason why you cannot attend your disability hearing at the 
scheduled time or place, you should request at the earliest possible 
date that the time or place of your hearing be changed. We will change 
the time or place if there is good cause for doing so under the 
standards in Sec. 404.936 (c) and (d).
    (d) Combined issues. If a disability hearing is available to you 
under paragraph (a) of this section, and you file a new application for 
benefits while your request for reconsideration is still pending, we may 
combine the issues on both claims for the purpose of the disability 
hearing and issue a combined initial/reconsidered determination which is 
binding with respect to the common issues on both claims.
    (e) Definition. For purposes of the provisions regarding disability 
hearings (Secs. 404.914 through 404.918) we, us or our means the Social 
Security Administration or the State agency.

[51 FR 300, Jan. 3, 1986, as amended at 51 FR 8808, Mar. 14, 1986]



Sec. 404.915  Disability hearing--disability hearing officers.

    (a) General. Your disability hearing will be conducted by a 
disability hearing officer who was not involved in making the 
determination you are appealing. The disability hearing officer will be 
an experienced disability examiner, regardless of whether he or she is 
appointed by a State agency or by the Director of the Office of 
Disability Hearings or his or her delegate, as described in paragraphs 
(b) and (c) below.
    (b) State agency hearing officers--(1) Appointment of State agency 
hearing officers. If a State agency made the initial or revised 
determination that you are appealing, the disability hearing officer who 
conducts your disability hearing may be appointed by a State agency. If 
the disability hearing officer is appointed by a State agency, that 
individual will be employed by an adjudicatory unit of the State agency 
other than the adjudicatory unit which made the determination you are 
appealing.
    (2) State agency defined. For purposes of this subpart, State agency 
means the adjudicatory component in the State which issues disability 
determinations.
    (c) Federal hearing officers. The disability hearing officer who 
conducts your disability hearing will be appointed by the Director of 
the Office of Disability Hearings or his or her delegate if:
    (1) A component of our office other than a State agency made the 
determination you are appealing; or
    (2) The State agency does not appoint a disability hearing officer 
to conduct your disability hearing under paragraph (b) of this section.

[51 FR 301, Jan. 3, 1986]



Sec. 404.916  Disability hearing--procedures.

    (a) General. The disability hearing will enable you to introduce 
evidence and present your views to a disability hearing officer if you 
are dissatisfied with an initial or revised initial determination, based 
on medical factors, that you are not now disabled as described in 
Sec. 404.914(a)(2).
    (b) Your procedural rights. We will advise you that you have the 
following procedural rights in connection with the disability hearing 
process:
    (1) You may request that we assist you in obtaining pertinent 
evidence for your disability hearing and, if necessary, that we issue a 
subpoena to compel the production of certain evidence or testimony. We 
will follow subpoena procedures similar to those described in 
Sec. 404.950(d) for the administrative law judge hearing process;
    (2) You may have a representative at the hearing appointed under 
subpart R of this part, or you may represent yourself;
    (3) You or your representative may review the evidence in your case 
file, either on the date of your hearing or at an earlier time at your 
request, and present additional evidence;

[[Page 236]]

    (4) You may present witnesses and question any witnesses at the 
hearing;
    (5) You may waive your right to appear at the hearing. If you do not 
appear at the hearing, the disability hearing officer will prepare and 
issue a written reconsidered determination based on the information in 
your case file.
    (c) Case preparation. After you request reconsideration, your case 
file will be reviewed and prepared for the hearing. This review will be 
conducted in the component of our office (including a State agency) that 
made the initial or revised determination, by personnel who were not 
involved in making the initial or revised determination. Any new 
evidence you submit in connection with your request for reconsideration 
will be included in this review. If necessary, further development of 
the evidence, including arrrangements for medical examinations, will be 
undertaken by this component. After the case file is prepared for the 
hearing, it will be forwarded by this component to the disability 
hearing officer for a hearing. If necessary, the case file may be sent 
back to this component at any time prior to the issuance of the 
reconsidered determination for additional development. Under paragraph 
(d) of this section, this component has the authority to issue a 
favorable reconsidered determination at any time in its development 
process.
    (d) Favorable reconsideration determination without a hearing. If 
all the evidence in your case file supports a finding that you are now 
disabled, either the component that prepares your case for hearing under 
paragraph (c) or the disability hearing officer will issue a written 
favorable reconsideration determination, even if a disability hearing 
has not yet been held.
    (e) Opportunity to submit additional evidence after the hearing. At 
your request, the disability hearing officer may allow up to 15 days 
after your disability h