[Title 20 CFR O] [Code of Federal Regulations (annual edition) - April 1, 1996 Edition] [Title 20 - EMPLOYEES' BENEFITS] [Chapter III - SOCIAL SECURITY ADMINISTRATION] [Part 404 - FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )] [Subpart O - Interrelationship of Old-Age, Survivors and Disability] [From the U.S. Government Publishing Office]20 EMPLOYEES' BENEFITS 2 1996-04-01 1996-04-01 false Interrelationship of Old-Age, Survivors and Disability O Subpart O EMPLOYEES' BENEFITS SOCIAL SECURITY ADMINISTRATION FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- ) Subpart O--Interrelationship of Old-Age, Survivors and Disability Insurance Program With the Railroad Retirement Program Sec. 404.1401 General relationship of Railroad Retirement Act with the old-age, survivors and disability insurance program of the Social Security Act. The Railroad Retirement Act sets up a system of benefits for railroad employees, their dependents and survivors, and has been integrated with the Social Security Act to provide a coordinated system of retirement, survivor, dependent and disability benefits payable on the basis of an individual's work in the railroad industry and in employment and self-employment covered by the Social Security Act. With respect to the coordination between the two programs, the Railroad Retirement Act distinguishes between ``career'' railroad workers and those individuals who may be considered ``casual'' railroad workers. The line of demarcation is generally 10 years of service in the railroad industry, including service prior to 1937. The Railroad Retirement Act transfers to the old-age, survivors and disability insurance system the compensation records of individuals who at the time of retirement, onset of disability or death have less than 10 years of service in the railroad industry and meet certain other requirements. Any compensation paid to such individuals for such service after 1936 becomes wages under the Social Security Act (to the extent they do not exceed the annual wage limitations described in Sec. 404.1027(a)). Whatever benefits are payable to them, their dependents, and their survivors are computed on the basis of the combined compensation and social security covered earnings creditable to the individuals' records. The compensation paid to individuals with 10 or more years of railroad service remain under the Railroad Retirement Act, but in certain circumstances, the compensation of such workers who die may be transferred to the old-age, survivors, and disability insurance program (see Secs. 404.1402(b) and 404.1407). Under certain circumstances (see Sec. 404.1413), certification of benefits payable under the provisions of the Social Security Act will be made to the Railroad Retirement Board. The Railroad Board will certify such benefits to the Secretary of the Treasury. [42 FR 18272, Apr. 6. 1977] Sec. 404.1402 When services in the railroad industry are covered. Services performed by an individual in the railroad industry which would, but for the provisions of this section, be excepted from ``employment'' by reason of Sec. 404.1017 shall be considered to be included under ``employment'' as defined in section 210 of the Act in the following situations: (a) For the purpose of determining entitlement to, or the amount of, any monthly benefits or lump-sum death payment on the basis of the wages and self-employment income of an individual where the years of service in the railroad industry are less than 10; (b) For the purpose of determining entitlement to, or the amount of, any survivor monthly benefit or any lump-sum death payment on the basis of the wages and self-employment income of an individual whose years of service in the railroad industry were 10 or more but a ``current connection'', as defined in section 1(o) of the Railroad Retirement Act of 1974 (45 U.S.C. 228a), with the railroad industry did not exist at the time of death; (in such cases, survivor benefits are not payable under the Railroad Retirement Act); [[Page 306]] (c) For the purpose of determining entitlement to a period of disability (see subpart B of this part) on the basis of the wages and self-employment income of an individual; or (d) For the purpose of applying the provisions of section 203 of the Act concerning deductions from benefits under the retirement test (see subpart E of this part). [42 FR 18273, Apr. 6, 1977] Sec. 404.1403 Definition of ``years of service''. The term ``years of service'' as used in this subpart has the same meaning as assigned to it by section 1(f) of the Railroad Retirement Act. [18 FR 8694, Dec. 24, 1953, as amended at 25 FR 5182, June 10, 1960] Sec. 404.1404 Effective date of coverage of railroad services under the act. Coverage under the act of services performed after 1936 by an individual in the railroad industry is effective as follows: (a) The provisions of paragraphs (a) and (b) of Sec. 404.1402 insofar as they relate to survivor monthly benefits are effective for months after December 1946 and insofar as they relate to lump-sum death payments are effective with respect to deaths after 1946; (b) The provisions of paragraph (a) of Sec. 404.1402 insofar as they relate to old-age insurance benefits or monthly benefits of dependents of old-age insurance beneficiaries are effective November 1, 1951; insofar as they relate to disability insurance benefits are effective for months after June 1957; and insofar as they relate to monthly benefits for dependents of disability insurance beneficiaries are effective for months after August 1958; (c) The provisions of paragraph (c) of Sec. 404.1402 are effective for benefits for months after June 1955; and (d) The provisions of paragraph (d) of Sec. 404.1402 are effective November 1, 1951. [25 FR 5182, June 10, 1960] Sec. 404.1405 When the provisions of Sec. 404.1402 do not apply. (a) Awards by the Railroad Retirement Board prior to October 30, 1951. The provisions of Sec. 404.1402(a) shall not apply with respect to the wages and self-employment income of an individual if, prior to October 30, 1951, the Railroad Retirement Board has awarded under the Railroad Retirement Act a retirement annuity to such individual or a survivor annuity with respect to the death of such individual and such retirement or survivor annuity, as the case may be, was payable at the time an application for benefits is filed under the Social Security Act on the basis of the wages and self-employment income of such individual. A pension payable under section 6 of the Railroad Retirement Act of 1937 as in effect prior to the Railroad Retirement Act of 1974, or an annuity paid in a lump sum equal to its commuted value under section 3(i) of the Railroad Retirement Act in effect prior to the Social Security Act of October 30, 1951, is not a ``retirement or survivor annuity'' for the purpose of this paragraph. (b) Individual continues to work in railroad industry after establishing entitlement to benefits under section 202(a). An individual's service in the railroad industry used, pursuant to the provisions of Sec. 404.1402, to establish entitlement to or to determine the amount of, his old-age insurance benefits under section 202(a) shall not be deemed to be in ``employment'' as defined in section 210 of the Act, if he renders service in the railroad industry after the effective date of such benefits and his years of service attributable thereto when added to his years of service prior to such effective date are 10 or more. Such benefits and any benefits payable to the spouse or child of such individual under section 202(b), (c), or (d) of the Act on the basis of his wages and self-employment income shall be terminated with the month preceding the month in which such individual acquires his tenth year of service. If, however, an insured status (see subpart B of this part) exists without the use of compensation, such benefits shall, in lieu of termination, be recalculated without using such compensation and the recalculated benefits shall be payable with the month in which the tenth year of service was acquired. Any monthly benefits paid prior to such month shall not be deemed erroneous [[Page 307]] by reason of the use of such compensation. [18 FR 8694, Dec. 24, 1953, as amended at 25 FR 5182, June 10, 1960; 42 FR 18273, Apr. 6, 1977] Sec. 404.1406 Eligibility to railroad retirement benefits as a bar to payment of social security benefits. Notwithstanding the fact that, pursuant to the preceding provisions of this subpart, services rendered by an individual in the railroad industry are in employment, no lump-sum death payment or survivor monthly benefits shall be paid (except as provided in Sec. 404.1407) under the regulations in this part on the basis of such individual's wages and self-employment income if any person, upon filing application therefor, would be entitled to an annuity under section 2 of the Railroad Retirement Act of 1974 or a lump-sum payment under section 6(b) of such Act with respect to the death of that individual; or for periods prior to 1975, would have been entitled to an annuity under section 5 or a lump-sum payment under section 5(f)(1) of the Railroad Retirement Act of 1937 with respect to the death of that individual. [42 FR 18273, Apr. 6, 1977] Sec. 404.1407 When railroad retirement benefits do not bar payment of social security benefits. The provisions of Sec. 404.1406 shall not operate if: (a) The survivor is, or upon filing application would be, entitled to a monthly benefit with respect to the death of an insured individual for a month prior to January 1947, if such monthly benefit is greater in amount than the survivor annuity payable to such survivor after 1946 under the Railroad Retirement Act; or (b) The residual lump-sum payment provided by section 6(c) of the Railroad Retirement Act of 1974 (or section 5(f)(2) of the Railroad Retirement Act of 1937 prior to the 1974 Act) with respect to the death of an insured individual is paid by the Railroad Retirement Board pursuant to an irrevocable election filed with the Board by the widow, widower, or parent of such individual to waive all future annuities or benefits based on the combined record of earnings and compensation to which such widow, widower or parent might become entitled, but only to the extent that widow's, widower's or parent's benefits may be payable under the regulations of this part to such widow, widower or parent, as the case may be, solely on the basis of the wages and self-employment income of such deceased individual and without regard to any compensation which may be treated as wages pursuant to Sec. 404.1408. [42 FR 18273, Apr. 6, 1977] Sec. 404.1408 Compensation to be treated as wages. Where, pursuant to the preceding provisions of this subpart, services rendered by an individual in the railroad industry are considered to be in employment as defined in section 210 of the Social Security Act (see subpart K of this part) any compensation (as defined in section 1(h) of the Railroad Retirement Act of 1974 or prior to the 1974 Act, section 1(h) of the Railroad Retirement Act of 1937) received by such individual for such services shall constitute wages provided that the provisions of Sec. 404.1406 do not operate to bar the payment of benefits under title II of the Social Security Act; except that any compensation attributable as having been paid during any month on account of military service creditable under section 1 of the Railroad Retirement Act of 1974 (or section 4 of the Railroad Retirement Act of 1937 prior to the 1974 Act) shall not constitute wages for purposes of title II of the Social Security Act if, based on such military service, wages are deemed to have been paid to such individual during such month under the provisions described in Sec. 404.1308 or Sec. 404.1309. [42 FR 18273, Apr. 6, 1977] Sec. 404.1409 Purposes of using compensation. Compensation which is treated as wages under Sec. 404.1408 shall be used, together with wages (see subpart K of this part) and self- employment income (see subpart K of this part), for purposes of: (a) Determining an individual's insured status for monthly benefits or [[Page 308]] the lump-sum death payment (see subpart B of this part); (b) Computing such individual's primary insurance amount (see subpart C of this part); (c) Determining an individual's entitlement to the establishment of a period of disability (see subpart B of this part for disability insured status requirements); and (d) Applying the deduction provisions of section 203 of the act (see subpart E of this part). [25 FR 5183, June 10, 1960] Sec. 404.1410 Presumption on basis of certified compensation record. (a) Years prior to 1975. Where the Railroad Retirement Board certifies to the Social Security Administration a report of record of compensation, which is treated as wages under Sec. 404.1408, and periods of service which do not identify the months or quarters in which such compensation was paid, the sum of the compensation quarters of coverage (see Sec. 404.1412) will be presumed, in the absence of evidence to the contrary, to represent an equivalent number of quarters of coverage (see Secs. 404.103 and 404.104). No more than four quarters of coverage shall be credited to an individual in a single calendar year. (b) Years after 1974. Compensation paid in a calendar year will, in the absence of evidence to the contrary, be presumed to have been paid in equal proportions with respect to all months in the year in which the employee will have been in railroad service. (For years prior to 1975, see Sec. 404.1412.) (c) Allocation of compensation to months of service. If by means of the presumptions in this section an individual does not have an insured status (see subpart B of this part) on the basis of quarters of coverage with which he is credited, or a deceased individual's primary insurance amount (see Sec. 404.201) may be affected because he attained age 22 after 1936, the Administration may request the Railroad Retirement Board to furnish a report of the months in which such individual rendered service for compensation which is treated as wages under Sec. 404.1408 if it appears the identification of such months may result in an insured status or if it will affect such primary insurance amount. (d) Effect of self-employment income and maximum earnings. However, if such individual also had self-employment income for a taxable year and the sum of such income and wages (including compensation which is treated as wages under Sec. 404.1408) paid to or received by him during such taxable year equals the following amounts, each calendar quarter any part of which falls in such taxable year, shall be a quarter of coverage: (1) After 1950 and prior to 1955, equals $3,600 of remuneration; (2) After 1954 and prior to 1959, equals $4,200 of remuneration; (3) After 1958 and prior to 1966, equals $4,800 of remuneration; (4) After 1965 and prior to 1968, equals $6,600 of remuneration; (5) After 1967 and beginning prior to 1972, equals $7,800 of remuneration (including a fiscal year which began in 1971 and ended in 1972); (6) Beginning after 1971 and prior to 1973, equals $9,000 of remuneration; (7) Beginning after 1972 and prior to 1974, equals $10,800 of remuneration; (8) Beginning after 1973 and prior to 1975, equals $13,200 of remuneration; (9) Beginning after 1974 and prior to 1976, equals $14,100 of remuneration; (10) Beginning after 1975 and prior to 1977, equals $15,300 of remuneration; or (11) Beginning after 1976, and amount equal to the contribution and benefit base as determined under section 230 of the Social Security Act which is effective for such calendar year. This subsection is an exception to the rule in paragraph (a) of this section concerning a presumption applicable to conversion of railroad compensation into quarters of coverage for years prior to 1975. [42 FR 18273, Apr. 6, 1977] Sec. 404.1412 Compensation quarters of coverage. As used in this subpart, a compensation quarter of coverage is any quarter of coverage computed with respect to compensation paid to an individual for railroad employment after 1936 and prior to 1975 in accordance with the provisions for determining such quarters of coverage as contained in section [[Page 309]] 5(l)(4) of the Railroad Retirement Act of 1937. (For years beginning 1975, see Sec. 404.1410(b)). [42 FR 18274, Apr. 6, 1977] Sec. 404.1413 Certification of payment to Railroad Retirement Board. Certification of benefits shall be made to the Railroad Retirement Board upon final decision of the Secretary of Health, Education, and Welfare that any person is entitled to any payment or payments under title II and that certification shall include the name and address of the person so entitled to receive such payment or payments, the amount of such payment or payments, and the time at which such payment or payments should be made which shall provide for payment on behalf of the Managing Trustee if: (a) The claimant will have completed 10 years of service under the Railroad Retirement Act of 1937, the Railroad Retirement Act of 1974, or any combination of service under such Acts; or (b) The claimant is the wife or husband of an individual who has completed 10 years of service under the Railroad Retirement Act of 1937, the Railroad Retirement Act of 1974, or any combination of service under such Acts; or (c) The claimant is the survivor of an individual who had completed 10 years of service under the Railroad Retirement Act of 1937, the Railroad Retirement Act of 1974, or any combination of service under such Acts, if such survivor is entitled, or could upon application be entitled to an annuity under section 2 of the Railroad Retirement Act of 1974; or (d) The claimant is entitled to benefits under section 202 of the Social Security Act on the basis of the wages and self-employment income of an individual who has 10 years of railroad service (except a survivor of such individual if such individual did not have a current connection, as defined in section 1(o) of the Railroad Retirement Act of 1974 (45 U.S.C. 228a) with the railroad industry at the time of his death). The applicability limitations identified in paragraphs (a) through (d) of this section affects any claimant who first becomes entitled to benefits under title II of the Social Security Act after 1974. (See also Sec. 404.968.) [42 FR 18274, Apr. 6, 1977]