[Federal Register Volume 77, Number 210 (Tuesday, October 30, 2012)]
[Notices]
[Pages 65754-65760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26663]
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SOCIAL SECURITY ADMINISTRATION
[Docket No. SSA-2012-0054]
Cost-of-Living Increase and Other Determinations for 2013
AGENCY: Social Security Administration.
ACTION: Notice.
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SUMMARY: Under title II of the Social Security Act (Act), there will be
a 1.7 percent cost-of-living increase in Social Security benefits
effective December 2012. As a result of this increase, the following
items will increase for 2013:
(1) The maximum Federal Supplemental Security Income (SSI) monthly
benefit amounts for 2013 under title XVI of the Act will be $710 for an
eligible individual, $1,066 for an eligible individual with an eligible
spouse, and $356 for an essential person;
(2) The special benefit amount under title VIII of the Act for
certain World War II veterans will be $532.50 for 2013;
(3) The student earned income exclusion under title XVI of the Act
will be $1,730 per month in 2013, but not more than $6,960 for all of
2013;
(4) The dollar fee limit for services performed as a representative
payee will be $39 per month ($76 per month in the case of a beneficiary
who is disabled and has an alcoholism or drug addiction condition that
leaves him or her incapable of managing benefits) in 2013; and
(5) The dollar limit on the administrative cost assessment charged
to attorneys representing claimants will be $88 in 2013.
The national average wage index for 2011 is $42,979.61. This index
affects the following amounts:
(1) The Old-Age, Survivors, and Disability Insurance (OASDI)
contribution and benefit base will be $113,700 for remuneration paid in
2013 and self-employment income earned in taxable years beginning in
2013;
(2) The monthly exempt amounts under the OASDI retirement earnings
test for taxable years ending in calendar year 2013 will be $1,260 for
years prior
[[Page 65755]]
to the year in which a person attains his or her Normal Retirement Age
(NRA; defined later in this Notice) and $3,340 for the year in which a
person attains his or her NRA;
(3) The dollar amounts (``bend points;'' defined later in this
Notice) used in the primary insurance amount (PIA) benefit formula for
workers who become eligible for benefits, or who die before becoming
eligible, in 2013 will be $791 and $4,768;
(4) The bend points used in the formula for computing maximum
family benefits for workers who become eligible for benefits, or who
die before becoming eligible, in 2013 will be $1,011, $1,459, and
$1,903;
(5) The amount of taxable earnings a person must have to be
credited with a quarter of coverage in 2013 will be $1,160;
(6) The ``old-law'' contribution and benefit base under title II of
the Act will be $84,300 for 2013;
(7) The monthly amount deemed to constitute substantial gainful
activity for statutorily blind individuals in 2013 will be $1,740, and
the corresponding amount for non-blind disabled persons will be $1,040;
(8) The earnings threshold establishing a month as a part of a
trial work period will be $750 for 2013; and
(9) Coverage thresholds for 2013 will be $1,800 for domestic
workers and $1,600 for election officials and election workers.
FOR FURTHER INFORMATION CONTACT: Susan C. Kunkel, Office of the Chief
Actuary, Social Security Administration, 6401 Security Boulevard,
Baltimore, MD 21235, (410) 965-3000. Information relating to this
announcement is available on our Internet site at
www.socialsecurity.gov/oact/cola/index.html. For information on
eligibility or claiming benefits, call 1-800-772-1213, or visit our
Internet site, Social Security Online, at www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION: In accordance with the Act, we must publish
within 45 days after the close of the third calendar quarter of 2012
the benefit increase percentage and the revised table of ``special
minimum'' benefits (section 215(i)(2)(D)). Also, we must publish on or
before November 1 the national average wage index for 2011 (section
215(a)(1)(D)), the OASDI fund ratio for 2012 (section
215(i)(2)(C)(ii)), the OASDI contribution and benefit base for 2013
(section 230(a)), the amount of earnings required to be credited with a
quarter of coverage in 2013 (section 213(d)(2)), the monthly exempt
amounts under the Social Security retirement earnings test for 2013
(section 203(f)(8)(A)), the formula for computing a PIA for workers who
first become eligible for benefits or die in 2013 (section
215(a)(1)(D)), and the formula for computing the maximum amount of
benefits payable to the family of a worker who first becomes eligible
for old-age benefits or dies in 2013 (section 203(a)(2)(C)).
Cost-of-Living Increases
General
The cost-of-living increase is 1.7 percent for benefits under
titles II and XVI of the Act. Under title II, OASDI benefits will
increase by 1.7 percent for individuals eligible for December 2012
benefits, payable in January 2013. This increase is based on the
authority contained in section 215(i) of the Act.
Pursuant to section 1617 of the Act, Federal SSI payment levels
will also increase by 1.7 percent effective for payments made for the
month of January 2013, but paid on December 31, 2012.
Computation
Section 215(i)(1)(B) of the Act defines a ``computation quarter''
to be a third calendar quarter in which the average Consumer Price
Index (CPI) for Urban Wage Earners and Clerical Workers exceeded the
average CPI in the previous computation quarter. The last cost-of-
living increase, effective for those eligible to receive title II
benefits for December 2011, was based on the CPI increase from the
third quarter of 2008 to the third quarter of 2011. Accordingly, the
last computation quarter is the third quarter of 2011. The law
stipulates that a cost-of-living increase for benefits is determined
based on the percentage increase, if any, in the CPI from the last
computation quarter to the third quarter of the current year.
Therefore, we compute the increase in the CPI from the third quarter of
2011 to the third quarter of 2012.
Section 215(i)(1) of the Act provides that the CPI for a cost-of-
living computation quarter is the arithmetic mean of this index for the
3 months in that quarter. In accordance with 20 CFR 404.275, we round
the arithmetic mean, if necessary, to the nearest 0.001. The CPI for
Urban Wage Earners and Clerical Workers for each month in the quarter
ending September 30, 2011, is: For July 2011, 222.686; for August 2011,
223.326; and for September 2011, 223.688. The arithmetic mean for that
calendar quarter is 223.233. The corresponding CPI for each month in
the quarter ending September 30, 2012, is: For July 2012, 225.568; for
August 2012, 227.056; and for September 2012, 228.184. The arithmetic
mean for this calendar quarter is 226.936. The CPI for the calendar
quarter ending September 30, 2012, exceeds that for the calendar
quarter ending September 30, 2011 by 1.7 percent (rounded to the
nearest 0.1), beginning December 2012. Therefore, a cost-of-living
benefit increase of 1.7 percent is effective for benefits under title
II of the Act.
Section 215(i) also specifies that a benefit increase under title
II, effective for December of any year, will be limited to the increase
in the national average wage index for the prior year if the OASDI fund
ratio for that year is below 20.0 percent. The OASDI fund ratio for a
year is the ratio of the combined assets of the Old-Age and Survivors
Insurance and Disability Insurance Trust Funds at the beginning of that
year to the combined expenditures of these funds during that year. For
2012, the OASDI fund ratio is assets of $2,677,925 million divided by
estimated expenditures of $781,701 million, or 342.6 percent. Because
the 342.6 percent OASDI fund ratio exceeds 20.0 percent, the benefit
increase for December 2012 is not limited.
Program Amounts That Change Based on the Cost-of-Living Increase
The following program amounts change based on the cost-of-living
increase: (1) Title II; (2) title XVI; (3) title VIII; (4) the student
earned income exclusion; (5) the fee for services performed by a
representative payee; and (6) the attorney assessment fee.
Title II Benefit Amounts
In accordance with section 215(i) of the Act, for workers and
family members for whom eligibility for benefits (i.e., the worker's
attainment of age 62, or disability or death before age 62) occurred
before 2013, benefits will increase by 1.7 percent beginning with
benefits for December 2012, which are payable in January 2013. In the
case of first eligibility after 2012, the 1.7 percent increase will not
apply.
For eligibility after 1978, benefits are generally determined using
a benefit formula provided by the Social Security Amendments of 1977
(Pub. L. 95-216), as described later in this notice.
For eligibility before 1979, we determine benefits by means of a
benefit table. The table is available on the Internet at
www.socialsecurity.gov/oact/progdata/tableForm.html or by writing to:
Social Security Administration, Office of Public Inquiries, Windsor
Park Building, 6401 Security Boulevard, Baltimore, MD 21235.
[[Page 65756]]
Section 215(i)(2)(D) of the Act requires that, when we determine an
increase in Social Security benefits, we will publish in the Federal
Register a revision of the range of the PIAs and corresponding maximum
family benefits based on the dollar amount and other provisions
described in section 215(a)(1)(C)(i). We refer to these benefits as
special minimum benefits. These benefits are payable to certain
individuals with long periods of relatively low earnings. To qualify
for such benefits, an individual must have at least 11 years of
coverage. To earn a year of coverage for purposes of the special
minimum benefit, a person must earn at least a certain proportion of
the ``old-law'' contribution and benefit base (described later in this
notice). For years before 1991, the proportion is 25 percent; for years
after 1990, it is 15 percent. In accordance with section
215(a)(1)(C)(i), the table below shows the revised range of PIAs and
corresponding maximum family benefit amounts after the 1.7 percent
benefit increase.
Special Minimum PIAs and Maximum Family Benefits Payable for December
2012
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Primary Maximum
Number of years of coverage insurance family
amount benefit
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11.............................................. $38.80 $59.00
12.............................................. 79.10 119.70
13.............................................. 119.50 180.10
14.............................................. 159.60 240.30
15.............................................. 199.50 300.40
16.............................................. 240.00 361.10
17.............................................. 280.20 421.90
18.............................................. 320.50 482.00
19.............................................. 360.70 542.50
20.............................................. 401.10 602.50
21.............................................. 441.40 663.40
22.............................................. 481.40 723.70
23.............................................. 522.30 785.00
24.............................................. 562.50 844.90
25.............................................. 602.50 904.70
26.............................................. 643.40 966.20
27.............................................. 683.20 1,026.40
28.............................................. 723.50 1,086.60
29.............................................. 763.80 1,147.40
30.............................................. 804.00 1,207.10
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Title XVI Benefit Amounts
In accordance with section 1617 of the Act, maximum Federal SSI
benefit amounts for the aged, blind, and disabled will increase by 1.7
percent effective January 2013. For 2012, we derived the monthly
benefit amounts for an eligible individual, an eligible individual with
an eligible spouse, and for an essential person--$698, $1,048, and
$350, respectively--from corresponding yearly unrounded Federal SSI
benefit amounts of $8,386.75, $12,578.71, and $4,202.98. For 2013,
these yearly unrounded amounts increase by 1.7 percent to $8,529.32,
$12,792.55, and $4,274.43, respectively. Each of these resulting
amounts must be rounded, when not a multiple of $12, to the next lower
multiple of $12. Accordingly, the corresponding annual amounts,
effective for 2013, are $8,520, $12,792, and $4,272. Dividing the
yearly amounts by 12 gives the corresponding monthly amounts for 2013--
$710, $1,066, and $356, respectively. In the case of an eligible
individual with an eligible spouse, we equally divide the amount
payable between the two spouses.
Title VIII Benefit Amount
Title VIII of the Act provides for special benefits to certain
World War II veterans residing outside the United States. Section 805
provides that the ``benefit under this title payable to a qualified
individual for any month shall be in an amount equal to 75 percent of
the Federal benefit rate [the maximum amount for an eligible
individual] under title XVI for the month, reduced by the amount of the
qualified individual's benefit income for the month.'' Accordingly, the
monthly benefit for 2013 under this provision is 75 percent of $710, or
$532.50.
Student Earned Income Exclusion
A blind or disabled child who is a student regularly attending
school, college, university, or a course of vocational or technical
training can have limited earnings that are not counted against his or
her SSI benefits. The maximum amount of such income that may be
excluded in 2012 is $1,700 per month, but not more than $6,840 in all
of 2012. These amounts increase based on a formula set forth in
regulation 20 CFR 416.1112.
To compute each of the monthly and yearly maximum amounts for 2013,
we increase the corresponding unrounded amount for 2012 by the latest
cost-of-living increase. If the amount so calculated is not a multiple
of $10, we round it to the nearest multiple of $10. The unrounded
monthly amount for 2012 is $1,696.85. We increase this amount by 1.7
percent to $1,725.70, which we then round to $1,730. Similarly, we
increase the unrounded yearly amount for 2012, $6,840.00, by 1.7
percent to $6,956.28 and round this to $6,960. Accordingly, the maximum
amount of the income exclusion applicable to a student in 2013 is
$1,730 per month but not more than $6,960 in all of 2013.
Fee for Services Performed as a Representative Payee
Sections 205(j)(4)(A)(i) and 1631(a)(2)(D)(i) of the Act permit a
qualified organization to collect from a beneficiary a monthly fee for
expenses incurred in providing services performed as such beneficiary's
representative payee. In 2012 the fee is limited to the lesser of: (1)
10 percent of the monthly benefit involved; or (2) $38 per month ($75
per month in any case in which the beneficiary is entitled to
disability benefits and has an alcoholism or drug addiction condition
that makes the individual incapable of managing such benefits). The
dollar fee limits are subject to increase by the cost-of-living
increase, with the resulting amounts rounded to the nearest whole
dollar amount. Accordingly, we increase the current amounts by 1.7
percent to $39 and $76 for 2013.
Attorney Assessment Fee
Under sections 206(d) and 1631(d) of the Act, whenever we pay fees
to an attorney who has represented a claimant, we must impose on the
attorney an assessment to cover administrative costs. Such assessment
is no more than 6.3 percent of the attorney's fee or, if lower, a
dollar amount that is subject to increase by the cost-of-living
increase. We derive the dollar limit for December 2012 by increasing
the unrounded limit for December 2011, $86.87, by 1.7 percent, to
$88.35. We then round $88.35 to the next lower multiple of $1. The
dollar limit effective for December 2012 is, therefore, $88.
National Average Wage Index for 2011
Computation
We determined the national average wage index for calendar year
2011 based on the 2010 national average wage index of $41,673.83,
announced in the Federal Register on October 25, 2011 (76 FR 66111),
along with the percentage increase in average wages from 2010 to 2011,
as measured by annual wage data. We tabulate the annual wage data,
including contributions to deferred compensation plans, as required by
section 209(k) of the Act. The average amounts of wages calculated
directly from these data were $39,959.30 and $41,211.36 for 2010 and
2011, respectively. To determine the national average wage index for
2011 at a level that is consistent with the national average wage
indexing series for 1951 through 1977 (published December 29, 1978, at
43 FR 61016), we multiply the 2010 national average wage index of
$41,673.83 by the percentage increase in
[[Page 65757]]
average wages from 2010 to 2011 (based on SSA-tabulated wage data) as
follows, with the result rounded to the nearest cent.
Amount
Multiplying the national average wage index for 2010 ($41,673.83)
by the ratio of the average wage for 2011 ($41,211.36) to that for 2010
($39,959.30) produces the 2011 index, $42,979.61. The national average
wage index for calendar year 2011 is about 3.13 percent higher than the
2010 index.
Program Amounts That Change Based on the National Average Wage Index
Under various provisions of the Act, the following amounts change
with annual changes in the national average wage index: (1) The OASDI
contribution and benefit base; (2) the exempt amounts under the
retirement earnings test; (3) the dollar amounts, or ``bend points'' in
the PIA; (4) the bend points in the maximum family benefit formula; (5)
the amount of earnings required for a worker to be credited with a
quarter of coverage; (6) the ``old-law'' contribution and benefit base
(as determined under section 230 of the Act as in effect before the
1977 amendments); (7) the substantial gainful activity amount
applicable to statutorily blind individuals; and (8) the coverage
threshold for election officials and election workers. Also, section
3121(x) of the Internal Revenue Code requires that the domestic
employee coverage threshold be based on changes in the national average
wage index.
In addition to the amounts required by statute, two amounts
increase under regulatory requirements--the substantial gainful
activity amount applicable to non-blind disabled persons, and the
monthly earnings threshold that establishes a month as part of a trial
work period for disabled beneficiaries.
OASDI Contribution and Benefit Base
General
The OASDI contribution and benefit base is $113,700 for
remuneration paid in 2013 and self-employment income earned in taxable
years beginning in 2013. The OASDI contribution and benefit base serves
as the maximum annual amount of earnings on which OASDI taxes are paid.
It is also the maximum annual amount of earnings used in determining a
person's OASDI benefits.
Computation
Section 230(b) of the Act provides the formula used to determine
the OASDI contribution and benefit base. Under the formula, the base
for 2013 is the larger of: (1) The 1994 base of $60,600 multiplied by
the ratio of the national average wage index for 2011 to that for 1992;
or (2) the current base ($110,100). If the resulting amount is not a
multiple of $300, it is rounded to the nearest multiple of $300.
Amount
Multiplying the 1994 OASDI contribution and benefit base amount
($60,600) by the ratio of the national average wage index for 2011
($42,979.61 as determined above) to that for 1992 ($22,935.42) produces
the amount of $113,560.79. We round this amount to $113,700. Because
$113,700 exceeds the current base amount of $110,100, the OASDI
contribution and benefit base is $113,700 for 2013.
Retirement Earnings Test Exempt Amounts
General
We withhold Social Security benefits when a beneficiary under the
NRA has earnings in excess of the applicable retirement earnings test
exempt amount. NRA is the age of initial benefit entitlement for which
the benefit, before rounding, is equal to the worker's PIA. The NRA is
age 66 for those born in 1943-54, and it gradually increases reaching
age 67 for those born in 1960 or later. A higher exempt amount applies
in the year in which a person attains his or her NRA, but only with
respect to earnings in months prior to such attainment, and a lower
exempt amount applies at all other ages below NRA. Section 203(f)(8)(B)
of the Act, as amended by section 102 of Public Law 104-121, provides
formulas for determining the monthly exempt amounts. The corresponding
annual exempt amounts are exactly 12 times the monthly amounts.
For beneficiaries attaining NRA in the year, we withhold $1 in
benefits for every $3 of earnings in excess of the annual exempt amount
for months prior to such attainment. For all other beneficiaries under
NRA, we withhold $1 in benefits for every $2 of earnings in excess of
the annual exempt amount.
Computation
Under the formula applicable to beneficiaries who are under NRA and
who will not attain NRA in 2013, the lower monthly exempt amount for
2013 is the larger of: (1) The 1994 monthly exempt amount multiplied by
the ratio of the national average wage index for 2011 to that for 1992;
or (2) the 2012 monthly exempt amount ($1,220). If the resulting amount
is not a multiple of $10, it is rounded to the nearest multiple of $10.
Under the formula applicable to beneficiaries attaining NRA in
2013, the higher monthly exempt amount for 2013 is the larger of: (1)
The 2002 monthly exempt amount multiplied by the ratio of the national
average wage index for 2011 to that for 2000; or (2) the 2012 monthly
exempt amount ($3,240). If the resulting amount is not a multiple of
$10, it is rounded to the nearest multiple of $10.
Lower Exempt Amount
Multiplying the 1994 retirement earnings test monthly exempt amount
of $670 by the ratio of the national average wage index for 2011
($42,979.61) to that for 1992 ($22,935.42) produces the amount of
$1,255.54. We round this to $1,260. Because $1,260 exceeds the
corresponding current exempt amount of $1,220, the lower retirement
earnings test monthly exempt amount is $1,260 for 2013. The
corresponding lower annual exempt amount is $15,120 under the
retirement earnings test.
Higher Exempt Amount
Multiplying the 2002 retirement earnings test monthly exempt amount
of $2,500 by the ratio of the national average wage index for 2011
($42,979.61) to that for 2000 ($32,154.82) produces the amount of
$3,341.61. We round this to $3,340. Because $3,340 exceeds the
corresponding current exempt amount of $3,240, the higher retirement
earnings test monthly exempt amount is $3,340 for 2013. The
corresponding higher annual exempt amount is $40,080 under the
retirement earnings test.
Primary Insurance Amount (PIA) Benefit Formula
General
The Social Security Amendments of 1977 provided a method for
computing benefits that generally applies when a worker first becomes
eligible for benefits after 1978. This method uses the worker's average
indexed monthly earnings (AIME) to compute the PIA. We adjust the
computation formula each year to reflect changes in general wage
levels, as measured by the national average wage index.
We also adjust, or index, a worker's earnings to reflect the change
in the general wage levels that occurred during the worker's years of
employment. Such indexing ensures that a worker's future benefit level
will reflect the general rise in the standard of living that will occur
during his or her working lifetime. To compute the AIME, we first
determine
[[Page 65758]]
the required number of years of earnings. We then select the number of
years with the highest indexed earnings, add the indexed earnings for
those years, and divide the total amount by the total number of months
in those years. We then round the resulting average amount down to the
next lower dollar amount. The result is the AIME.
Computing the PIA
The PIA is the sum of three separate percentages of portions of the
AIME. In 1979 (the first year the formula was in effect), these
portions were the first $180, the amount between $180 and $1,085, and
the amount over $1,085. We call the dollar amounts in the formula
governing the portions of the AIME the ``bend points'' of the formula.
Therefore, the bend points for 1979 were $180 and $1,085.
To obtain the bend points for 2013, we multiply each of the 1979
bend-point amounts by the ratio of the national average wage index for
2011 to that average for 1977. We then round these results to the
nearest dollar. Multiplying the 1979 amounts of $180 and $1,085 by the
ratio of the national average wage index for 2011 ($42,979.61) to that
for 1977 ($9,779.44) produces the amounts of $791.08 and $4,768.46. We
round these to $791 and $4,768. Accordingly, the portions of the AIME
to be used in 2013 are the first $791, the amount between $791 and
$4,768, and the amount over $4,768.
Consequently, for individuals who first become eligible for old-age
insurance benefits or disability insurance benefits in 2013, or who die
in 2013 before becoming eligible for benefits, their PIA will be the
sum of:
(a) 90 percent of the first $791 of their AIME, plus
(b) 32 percent of their AIME over $791 and through $4,768, plus
(c) 15 percent of their AIME over $4,768
We round this amount to the next lower multiple of $0.10 if it is
not already a multiple of $0.10. This formula and the rounding
adjustment described above are contained in section 215(a) of the Act.
Maximum Benefits Payable to a Family
General
The 1977 amendments continued the long-established policy of
limiting the total monthly benefits that a worker's family may receive
based on his or her PIA. Those amendments also continued the then-
existing relationship between maximum family benefits and PIAs, but
changed the method of computing the maximum amount of benefits that may
be paid to a worker's family. The Social Security Disability Amendments
of 1980 (Pub. L. 96-265) established a formula for computing the
maximum benefits payable to the family of a disabled worker. This
formula applies to the family benefits of workers who first become
entitled to disability insurance benefits after June 30, 1980, and who
first become eligible for these benefits after 1978. For disabled
workers initially entitled to disability benefits before July 1980 or
whose disability began before 1979, we compute the family maximum
payable the same as the old-age and survivor family maximum.
Computing the Old-Age and Survivor Family Maximum
The formula used to compute the family maximum is similar to that
used to compute the PIA. It involves computing the sum of four separate
percentages of portions of the worker's PIA. In 1979, these portions
were the first $230, the amount between $230 and $332, the amount
between $332 and $433, and the amount over $433. We refer to such
dollar amounts in the formula as the bend points of the family-maximum
formula.
To obtain the bend points for 2013, we multiply each of the 1979
bend-point amounts by the ratio of the national average wage index for
2011 to that average for 1977. Then we round this amount to the nearest
dollar. Multiplying the amounts of $230, $332, and $433 by the ratio of
the national average wage index for 2011 ($42,979.61) to that for 1977
($9,779.44) produces the amounts of $1,010.83, $1,459.11, and
$1,902.99. We round these amounts to $1,011, $1,459, and $1,903.
Accordingly, the portions of the PIAs to be used in 2013 are the first
$1,011, the amount between $1,011 and $1,459, the amount between $1,459
and $1,903, and the amount over $1,903.
Consequently, for the family of a worker who becomes age 62 or dies
in 2013 before age 62, we will compute the total amount of benefits
payable to them so that it does not exceed:
(a) 150 percent of the first $1,011 of the worker's PIA, plus
(b) 272 percent of the worker's PIA over $1,011 through $1,459, plus
(c) 134 percent of the worker's PIA over $1,459 through $1,903, plus
(d) 175 percent of the worker's PIA over $1,903
We then round this amount to the next lower multiple of $0.10, if
it is not already a multiple of $0.10. This formula and the rounding
adjustment described above are contained in section 203(a) of the Act.
Quarter of Coverage Amount
General
The amount of earnings required for a quarter of coverage in 2013
is $1,160. A quarter of coverage is the basic unit for determining
whether a worker is insured under the Social Security program. For
years before 1978, we generally credited an individual with a quarter
of coverage for each quarter in which wages of $50 or more were paid,
or with 4 quarters of coverage for every taxable year in which $400 or
more of self-employment income was earned. Beginning in 1978, employers
generally report wages on an annual basis instead of a quarterly basis.
With the change to annual reporting, section 352(b) of the Social
Security Amendments of 1977 amended section 213(d) of the Act to
provide that a quarter of coverage would be credited for each $250 of
an individual's total wages and self-employment income for calendar
year 1978, up to a maximum of 4 quarters of coverage for the year.
Computation
Under the prescribed formula, the quarter of coverage amount for
2013 is the larger of (1) the 1978 amount of $250 multiplied by the
ratio of the national average wage index for 2011 to that for 1976; or
(2) the current amount of $1,130. Section 213(d) provides that if the
resulting amount is not a multiple of $10, it is rounded to the nearest
multiple of $10.
Quarter of Coverage Amount
Multiplying the 1978 quarter of coverage amount ($250) by the ratio
of the national average wage index for 2011 ($42,979.61) to that for
1976 ($9,226.48) produces the amount of $1,164.57. We then round this
amount to $1,160. Because $1,160 exceeds the current amount of $1,130,
the quarter of coverage amount is $1,160 for 2013.
''Old-Law'' Contribution and Benefit Base
General
The ``old-law'' contribution and benefit base for 2013 is $84,300.
This base would have been effective under the Act without the enactment
of the 1977 amendments.
The ``old-law'' contribution and benefit base is used by:
(a) the Railroad Retirement program to determine certain tax
liabilities and tier II benefits payable under that program to
supplement the tier I payments that correspond to basic Social Security
benefits,
(b) the Pension Benefit Guaranty Corporation to determine the
maximum
[[Page 65759]]
amount of pension guaranteed under the Employee Retirement Income
Security Act (section 230(d) of the Act),
(c) Social Security to determine a year of coverage in computing
the special minimum benefit, as described earlier, and
(d) Social Security to determine a year of coverage (acquired
whenever earnings equal or exceed 25 percent of the ``old-law'' base
for this purpose only) in computing benefits for persons who are also
eligible to receive pensions based on employment not covered under
section 210 of the Act.
Computation
The ``old-law'' contribution and benefit base is the larger of: (1)
The 1994 ``old-law'' base ($45,000) multiplied by the ratio of the
national average wage index for 2011 to that for 1992; or (2) the
current ``old-law'' base ($81,900). If the resulting amount is not a
multiple of $300, it is rounded to the nearest multiple of $300.
Amount
Multiplying the 1994 ``old-law'' contribution and benefit base
amount ($45,000) by the ratio of the national average wage index for
2011 ($42,979.61) to that for 1992 ($22,935.42) produces the amount of
$84,327.32. We round this amount to $84,300. Because $84,300 exceeds
the current amount of $81,900, the ``old-law'' contribution and benefit
base is $84,300 for 2013.
Substantial Gainful Activity Amounts
General
A finding of disability under titles II and XVI of the Act requires
that a person, except for a title XVI disabled child, be unable to
engage in substantial gainful activity (SGA). A person who is earning
more than a certain monthly amount is ordinarily considered to be
engaging in SGA. The amount of monthly earnings considered as SGA
depends on the nature of a person's disability. Section 223(d)(4)(A) of
the Act specifies a higher SGA amount for statutorily blind individuals
under title II while Federal regulations (20 CFR 404.1574 and 416.974)
specify a lower SGA amount for non-blind individuals.
Computation
The monthly SGA amount for statutorily blind individuals under
title II for 2013 is the larger of: (1) Such amount for 1994 multiplied
by the ratio of the national average wage index for 2011 to that for
1992; or (2) such amount for 2012. The monthly SGA amount for non-blind
disabled individuals for 2013 is the larger of: (1) Such amount for
2000 multiplied by the ratio of the national average wage index for
2011 to that for 1998; or (2) such amount for 2012. In either case, if
the resulting amount is not a multiple of $10, it is rounded to the
nearest multiple of $10.
SGA Amount for Statutorily Blind Individuals
Multiplying the 1994 monthly SGA amount for statutorily blind
individuals ($930) by the ratio of the national average wage index for
2011 ($42,979.61) to that for 1992 ($22,935.42) produces the amount of
$1,742.76. We then round this amount to $1,740. Because $1,740 exceeds
the current amount of $1,690, the monthly SGA amount for statutorily
blind individuals is $1,740 for 2013.
SGA Amount for Non-Blind Disabled Individuals
Multiplying the 2000 monthly SGA amount for non-blind individuals
($700) by the ratio of the national average wage index for 2011
($42,979.61) to that for 1998 ($28,861.44) produces the amount of
$1,042.42. We then round this amount to $1,040. Because $1,040 exceeds
the current amount of $1,010, the monthly SGA amount for non-blind
disabled individuals is $1,040 for 2013.
Trial Work Period Earnings Threshold
General
During a trial work period of 9 months in a rolling 60-month
period, a beneficiary receiving Social Security disability benefits may
test his or her ability to work and still receive monthly benefit
payments. To be considered a trial work period month, earnings must be
over a certain level. In 2013, any month in which earnings exceed $750
is considered a month of services for an individual's trial work
period.
Computation
The method used to determine the new amount is set forth in our
regulations at 20 CFR 404.1592(b). Monthly earnings in 2013, used to
determine whether a month is part of a trial work period, is such
amount for 2001 ($530) multiplied by the ratio of the national average
wage index for 2011 to that for 1999 or, if larger, such amount for
2012. If the amount so calculated is not a multiple of $10, we round it
to the nearest multiple of $10.
Amount
Multiplying the 2001 monthly earnings threshold ($530) by the ratio
of the national average wage index for 2011 ($42,979.61) to that for
1999 ($30,469.84) produces the amount of $747.60. We then round this
amount to $750. Because $750 exceeds the current amount of $720, the
monthly earnings threshold is $750 for 2013.
Domestic Employee Coverage Threshold
General
The minimum amount a domestic worker must earn so that such
earnings are covered under Social Security or Medicare is the domestic
employee coverage threshold. For 2013, this threshold is $1,800.
Section 3121(x) of the Internal Revenue Code provides the formula for
increasing the threshold.
Computation
Under the formula, the domestic employee coverage threshold amount
for 2013 is equal to the 1995 amount of $1,000 multiplied by the ratio
of the national average wage index for 2011 to that for 1993. If the
resulting amount is not a multiple of $100, it is rounded to the next
lower multiple of $100.
Domestic Employee Coverage Threshold Amount
Multiplying the 1995 domestic employee coverage threshold amount
($1,000) by the ratio of the national average wage index for 2011
($42,979.61) to that for 1993 ($23,132.67) produces the amount of
$1,857.96. We then round this amount to $1,800. Accordingly, the
domestic employee coverage threshold amount is $1,800 for 2013.
Election Official and Election Worker Coverage Threshold
General
The minimum amount an election official and election worker must
earn so that such earnings are covered under Social Security or
Medicare is the election official and election worker coverage
threshold. For 2013, this threshold is $1,600. Section 218(c)(8)(B) of
the Act provides the formula for increasing the threshold.
Computation
Under the formula, the election official and election worker
coverage threshold amount for 2013 is equal to the 1999 amount of
$1,000 multiplied by the ratio of the national average wage index for
2011 to that for 1997. If the amount so determined is not a multiple of
$100, it is rounded to the nearest multiple of $100.
Election Worker Coverage Threshold Amount
Multiplying the 1999 election worker coverage threshold amount
($1,000) by
[[Page 65760]]
the ratio of the national average wage index for 2011 ($42,979.61) to
that for 1997 ($27,426.00) produces the amount of $1,567.11. We then
round this amount to $1,600. Accordingly, the election worker coverage
threshold amount is $1,600 for 2013.
(Catalog of Federal Domestic Assistance: Program Nos. 96.001 Social
Security-Disability Insurance; 96.002 Social Security-Retirement
Insurance; 96.004 Social Security-Survivors Insurance; 96.006
Supplemental Security Income)
Dated: October 23, 2012.
Michael J. Astrue,
Commissioner of Social Security.
[FR Doc. 2012-26663 Filed 10-29-12; 8:45 am]
BILLING CODE 4191-02-P