[Title 20 CFR 404]
[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- )]
[From the U.S. Government Publishing Office]
20
EMPLOYEES' BENEFITS
2
1996-04-01
1996-04-01
false
FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
404
PART 404
EMPLOYEES' BENEFITS
SOCIAL SECURITY ADMINISTRATION
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.
[[Page 15]]
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.
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.
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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.
Appendices to Subpart C
Appendix I--Average of the Total Wages for Years After 1950
Appendix II--Benefit Formulas Used with Average Indexed Monthly Earnings
Appendix III--Benefit Table
Appendix IV--Earnings Needed for a Year of Coverage after 1950
Appendix V--Computing the Special Minimum Primary Insurance Amount and
Related Maximum Family Benefits
Appendix VI--Percentage of Automatic Increases in Primary Insurance
Amounts since 1978
Appendix VII--``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.
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 benefit 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.
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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
non-attendance.
404.369 Special rules for entitlement to child's benefits if you are a
full-time student for months before August 1982.
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 or widower who was living in the same household--death
occurs after August 1981.
404.393 Who is entitled to the lump-sum death payment when there is no
widow or widower who was living in the same household--death
occurs before September 1, 1981.
404.394 Who is entitled to the lump-sum death payment when burial
expenses are paid from the deceased's funds.
404.395 Who is not entitled to the lump-sum death payment.
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.
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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.
404.460 Nonpayment of monthly benefits of aliens outside the United
States.
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.
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404.504 Relation to provisions for reductions and increases.
404.505 Relationship to provisions requiring deductions.
404.506 When waiver of adjustment or recovery may be applied.
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 Internal Revenue Service 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.
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 persons 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.
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.
[[Page 20]]
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.
404.765 Evidence of responsibility for or payment of burial expenses.
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 estimate.
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.
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.
[[Page 21]]
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 hearings 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
404.967 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.
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
saleman, 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.
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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.
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.
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.
[[Page 23]]
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 Policemen and firemen.
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.
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.
[[Page 24]]
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.
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 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.
[[Page 25]]
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 evidence of your impairment.
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 physician or psychologist.
404.1519i Other sources for consultative examinations.
404.1519j Objections to the designated physician or psychologist.
404.1519k Purchase of medical examinations, laboratory tests, and other
services.
404.1519m Diagnostic tests or procedures.
404.1519n Informing the examining physician or psychologist 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.
[[Page 26]]
Medical Considerations
404.1525 Listing of Impairments in Appendix 1.
404.1526 Medical equivalence.
404.1527 Evaluating medical opinions about your impairment(s) or
disability.
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.
404.1575 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.
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
[[Page 27]]
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 consultant.
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 standards.
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.
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 governing representatives.
404.1745 What happens to a representative who breaks the rules.
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.
[[Page 28]]
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.
404.1810 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 payment.
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 new representative payee will be selected.
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 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.
[[Page 29]]
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
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.
(q) Subpart Q relates to standards, requirements and procedures for
States making determinations of disability for the Secretary. It also
sets out the Secretary'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]
[[Page 30]]
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) Regulations 2 (20 CFR, 1938 ed., part 402) means the regulations
approved July 20, 1937, as amended from time to time, relating to
Federal old-age benefits under title II of the Social Security Act and
amendments to such title effective prior to January 1, 1940.
(3) Regulations 3 (20 CFR, 1961 ed., part 403) means the regulations
approved May 21, 1940, as amended and supplemented from time to time,
relating to Federal old-age and survivors benefits under title II of the
Social Security Act and amendments to such title effective prior to
January 1, 1951.
(4) Internal Revenue Code of 1939 means the act approved February
10, 1939 (53 Stat. part 1), as amended.
(5) Internal Revenue Code of 1954 means the act approved August 16,
1954 (68A Stat. 1), as amended.
(6) Railroad Retirement Act means the Railroad Retirement Act of
1937 (50 Stat. 307), as amended.
(7) Section means a section of the regulations in part 404 of this
chapter unless the context indicates otherwise.
(b) Secretary; Commissioner; Appeals Council; Administrative Law
Judge defined. (1) Secretary means the Secretary of Health and Human
Services.
(2) Commissioner means the Commissioner of Social Security.
(3) 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.
(4) Administrative Law Judge means an Administrative Law Judge in
the Office of Hearings and Appeals of the Social Security
Administration.
(c) Miscellaneous. (1) Certify, when used in connection with the
duty imposed on the Secretary 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, 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
[[Page 31]]
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]
Sec. 404.3 General provisions.
(a) Extent to which Regulations No. 3 (20 CFR, 1961 ed., part 403)
remain in effect. Regulations No. 3 of the Social Security
Administration (20 CFR, 1961 ed., part 403) continue in effect with
respect to old-age and survivors insurance benefits under title II of
the Act for months prior to September 1950 (except with respect to
additional deductions from such benefits under section 203(g) of the Act
in effect prior to the Social Security Act Amendments of 1950); with
respect to lump-sum death payments under title II of the Act where death
occurred after 1939 and before September 1950; and with respect to
determinations as to whether, under title II of the Act, services
performed before 1951 constitute employment and remuneration paid before
1951 constitutes wages. Except as provided in this paragraph or as
specifically incorporated into this part 404 by reference, Regulations
No. 3 of the Social Security Administration (20 CFR, 1961 ed., part 403)
are superseded by the regulations in this part 404.
(b) 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.
(c) 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 Secretary
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 Secretary 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]
Subpart B--Insured Status and Quarters of Coverage
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
[[Page 32]]
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.
(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
[[Page 33]]
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 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 organiations 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
[[Page 34]]
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. V\4\--
Col. I--Date of birth Col. III\2\-- Age in
Men Women Year of Col. IV\3\ year of
death 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
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
[[Page 35]]
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
(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
[[Page 36]]
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 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
[[Page 37]]
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 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
[[Page 38]]
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-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
Secretary 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 Secretary 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.
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
[[Page 39]]
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 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)).
Pt. 404, Subpt. B, App.
Appendix to Subpart B of Part 404--Quarter of Coverage Amounts for
Calendar Years After 1978
This appendix shows the amount determined by the Secretary 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 Secretary 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]
Subpart C--Computing Primary Insurance Amounts
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
[[Page 40]]
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;
(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 or the
Department of Health and Human Services.
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.
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.
[[Page 41]]
(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.
(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
[[Page 42]]
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 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
[[Page 43]]
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 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
[[Page 44]]
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 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.
[[Page 45]]
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.
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
[[Page 46]]
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.
(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
[[Page 47]]
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 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--
[[Page 48]]
------------------------------------------------------------------------
Years of coverage Percent
------------------------------------------------------------------------
29............................................................ 80
28............................................................ 70
27............................................................ 60
26............................................................ 50
------------------------------------------------------------------------
(ii) For benefits payable for months after December 1988--
------------------------------------------------------------------------
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.
[[Page 49]]
(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 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
[[Page 50]]
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--
(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:
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
[[Page 51]]
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 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.
[[Page 52]]
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.
(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:
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.
[[Page 53]]
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;
(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.
[[Page 54]]
(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 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.
[[Page 55]]
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 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
[[Page 56]]
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 and your second entitlement, see the rules in
Sec. 404.252.
Sec. 404.251 Subsequent entitlement to benefits within 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 more than 12 months 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
[[Page 57]]
(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--
(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:
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
[[Page 58]]
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]
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
[[Page 59]]
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 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.)
[[Page 60]]
(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]
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
[[Page 61]]
(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--
(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
[[Page 62]]
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 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.
[[Page 63]]
(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]
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
[[Page 64]]
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 $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.
[[Page 65]]
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.
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.
[[Page 66]]
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 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]
Pt. 404, Subpt. C, App. I
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 of Subpart C of Part 404--Benefit Formulas Used With Average
Indexed Monthly Earnings
Pt. 404, Subpt. C, App. II
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.
[[Page 67]]
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]
Pt. 404, Subpt. C, App. III
Appendix III of 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 But primary her wages
At But not insurance At not insurance and self-
least-- more amount is-- least-- more amount employment
than-- than-- is-- 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
[[Page 68]]
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
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
[[Page 69]]
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
------------------------------------------------------------------------
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 But primary her wages
At But not insurance At not insurance and self-
least-- more amount is-- least-- more amount employment
than-- than-- is-- 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
[[Page 70]]
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
...... 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
[[Page 71]]
...... 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
...... 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
[[Page 72]]
...... 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
...... 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
[[Page 73]]
...... 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
...... 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
[[Page 74]]
...... 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]
Pt. 404, Subpt. C, App. IV
Appendix IV of 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]
Pt. 404, Subpt. C, App. V
Appendix V of 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
[[Page 75]]
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
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.--Primary III.--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.--Primary III.--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.--Primary III.--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
[[Page 76]]
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.--Primary III.--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.--Primary III.--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
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
[[Page 77]]
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
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]
Pt. 404, Subpt. C, App. VI
Appendix VI of 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]
Pt. 404, Subpt. C, App. VII
Appendix VII of Subpart C of Part 404--``Old-Law'' Contribution and
Benefit Base
Pt. 404, Subpt. C, App. VII
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]
[[Page 78]]
Subpart D--Old-Age, Disability, Dependents' and Survivors' Insurance
Benefits; Period of Disability
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 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
[[Page 79]]
Sec. Sec. 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 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.
[[Page 80]]
(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 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.
[[Page 81]]
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 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
[[Page 82]]
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 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
[[Page 83]]
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 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
[[Page 84]]
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 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 15-month
period following the end of your trial work period, 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]
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
[[Page 85]]
(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
but in no event earlier than the first month after the 15th month
following the end of your trial work period.
Example: You complete your trial work period in December 1980. You
are then working at the substantial gainful activity level and continue
to do so throughout the 15 months following completion of your trial
work period and thereafter. Your termination month will be April 1982,
which is the 16th month--that is, the first month in which you performed
substantial gainful activity after the 15th month following your trial
work period.
Example: You complete your trial work period in December 1980 but
you are not able to work at the substantial gainful activity level until
December 1982. Your termination month will be March 1983--that is, the
third month after the earliest month you perform or are determined able
to perform substantial gainful activity.
[49 FR 22271, May 29, 1984]
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 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;
[[Page 86]]
(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 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 62 years old, the child who was in your care
becomes age 16 (unless disabled) or is otherwise no longer entitled to
child's benefits. (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.)
(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]
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
[[Page 87]]
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;
(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
[[Page 88]]
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 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
[[Page 89]]
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 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.,
[[Page 90]]
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.
(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 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]
[[Page 91]]
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]
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:
[[Page 92]]
(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) The child in your care becomes age 16 and not disabled or is
otherwise no longer entitled to child's benefits. (See paragraph (c) of
this section if you were entitled to mother's or father's benefits for
August 1981.)
(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)(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]
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 your 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
[[Page 93]]
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]
Sec. 404.347 ``Living in the same household'' defined.
You may be eligible for benefits as a wife, husband, widow, or
widower because your relationship to the insured is based upon a deemed
valid marriage, as described in Sec. 404.346, only if you and the
insured were living in the same household 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. 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 it was due to service in the U.S. Armed Forces. An absence
of less than 6 months is also considered temporary if neither you nor
the insured were outside of the United States during this time and the
absence was due to business or employment; or to confinement in a
hospital, nursing home, other medical institution, or a penal
institution. Other absences may be considered temporary if it is shown
that you and the insured could have reasonably expected to live together
in the near future.
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
[[Page 94]]
(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
(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 or Sec. 404.369.
(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]
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 Secs. 404.367 and 404.369)
(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]
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:
[[Page 95]]
(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 became age
19 (age 22 in certain situations described in Sec. 404.369). 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 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.
[[Page 96]]
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 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]
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 Secs. 404.304
and 404.369.
(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]
Sec. 404.354 Your relationship to the insured.
(a) General. You may be related to the insured person in one of
several ways and be entitled to benefits as his or her child--as a
natural child, legally adopted child, stepchild, grandchild,
stepgrandchild, or equitably adopted child.
(b) Use of State laws. To decide your relationship to the insured,
we look to the laws that are in effect in 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 that were in effect at the time
the insured worker died in the State where the insured had his or her
permanent home. 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 will look at the laws of the District of
Columbia. For a definition of permanent home, see Sec. 404.303. The
State laws we use are the ones the courts would use to decide whether
you could inherit a child's share of the insured's personal property if
he or she were to die without leaving a will. If these laws would not
permit you to inherit the insured's personal property as his or her
child, you may still be eligible for child's benefits if you are related
to the insured in one of the other ways described in Secs. 404.355
through 404.359.
[44 FR 34481, June 15, 1979, as amended at 49 FR 21513, May 22, 1984]
Sec. 404.355 Who is the insured's natural child.
You may be eligible for benefits as the insured's natural child if
one of the following conditions is met:
(a) You could inherit the insured's personal property as his or her
natural child under State inheritance laws as described in Sec. 404.354.
[[Page 97]]
(b) 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 described in
Sec. 404.346(a).
(c) 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. In the case where the insured
is deceased, the acknowledgement, court decree, or court order must have
been made before his or her death. For purposes of determining whether
the conditions of entitlement are met throughout the first month as
stated in Sec. 404.352(a), the written acknowledgement, court decree, or
court order will be considered to have occurred on the first day of the
month in which it actually occurred.
(d) Your mother or father has not married the insured but you have
evidence other than the evidence described in paragraph (c) 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. See Sec. 404.366 for an explanation of the terms living
with and contributing to your support. 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.
[44 FR 34481, June 15, 1979, as amended at 45 FR 65540, Oct. 3, 1980; 49
FR 24115, June 12, 1984]
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.
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.
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]
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
[[Page 98]]
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.
Sec. 404.361 When a natural child is dependent.
If you are the insured's natural child, as defined in Sec. 404.355,
you are considered dependent upon him or her. However, if you are
legally adopted by someone else during the insured's lifetime and after
the adoption you apply for child's benefits on the insured's earnings
record, you will be considered dependent upon the insured (your natural
parent) only if he or she was either living with you or contributing to
your support 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 he
or she died or became entitled to disability or old-age benefits, at the
beginning of the period of disability or at the time he or she became
entitled to benefits.
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
[[Page 99]]
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 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
[[Page 100]]
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.
(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 through 404.364 (for child's benefits), in
Sec. 404.370(f) (for parent's
[[Page 101]]
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 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]
Sec. 404.367 When you are a ``full-time elementary or secondary school student''.
Beginning August 1982, 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, respectively, as determined under the law of the State or
other jurisdiction in which it is located;
(b) You are in full-time attendance in a day or evening
noncorrespondence course of at least 13 weeks duration and are carrying
a subject load which is considered full-time for day students under the
institution's standards and practices. Additionally, your scheduled
attendance must be at the rate of at least 20 hours per week unless 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
[[Page 102]]
(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.
(c) You are not being paid while attending the school by an employer
who has requested or required that you attend the school;
(d) You are in grade 12 or below; and
(e) You are not confined in a jail, prison, or other penal
institution or correctional facility for conviction of a felony
committed after October 19, 1980. (See Sec. 404.468, paragraphs (b) and
(c) for the meaning of felony and an explanation of when we consider a
person to be confined in a penal or correctional facility.)
[48 FR 21928, May 16, 1983, as amended at 48 FR 55452, Dec. 13, 1983; 56
FR 35999, July 30, 1991]
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]
Sec. 404.369 Special rules for entitlement to child's benefits if you are a full-time student for months before August 1982.
(a) Full-time student for months before August 1982. You are a full-
time student for purposes of benefits for months before August 1982 if:
(1) You are under age 22;
(2) You are attending an educational institution as defined in
paragraph (b) of this section;
(3) You are enrolled in noncorrespondence courses and carrying a
subject load that is considered full-time for day students under the
practices and standards of the educational institution. If you are
enrolled in a junior college, college, or university, your course of
study must last at least 13 weeks. If you are enrolled in any other
educational institution, your course of study must last at least 13
weeks and your scheduled attendance must be at least 20 hours a week. If
your full-time attendance either begins or ends in a month, you will be
considered a full-time student for that month. You will not be
considered a full time student in the month you graduate if you complete
your course of study and stop carrying a full-time subject load in a
month before the month preceding the month you graduate; and
(4) You are not being paid while attending the educational
institution by an employer who has requested or required that you attend
the school.
(b) Educational institution defined. An educational institution is a
school (including a technical, trade, or vocational school), junior
college, college, or university that meets any one of the following
conditions:
(1) It is operated or directly supported by the United States, by
any State or local government, or by a political subdivision of any
State or local government;
(2) It is approved by a State agency or subdivision of the State or
accredited by a State or nationally recognized accrediting body. A
nationally recognized accrediting body is one determined to be such by
the U.S. Secretary of Education. A State-recognized accrediting body is
one designated or recognized by a State as the proper authority for
accrediting schools, colleges, or universities. Approval by a State
agency or subdivision includes approval of a school, college, or
university as an educational institution or approval of one or more of
the courses offered by a school, college or university; or
(3) It is a nonaccredited school, college, or university, but its
credits are accepted by at least 3 educational institutions that have
been accedited by
[[Page 103]]
a State or nationally recognized accrediting body.
(c) When benefits can be paid after July 1982 based on attendance at
a school other than an elementary or secondary school. If you meet the
conditions for entitlement to student benefits for months before August
1982 as explained in paragraphs (a) and (b) of this section, but do not
meet the conditions for entitlement beginning in August 1982 (see
Sec. 404.367), your benefits will end with July 1982 unless you meet the
following requirements:
(1) You have attained age 18;
(2) You are not under a disability;
(3) You were entitled to child's benefits (as a child, student or
disabled child) for August 1981; and
(4) You were in full-time attendance as described in paragraph
(a)(3) of this section at a post-secondary school for any month before
May 1982. (A post-secondary school is any school which meets the
definition of an educational institution as defined in paragraph (b) of
this section but is not an elementary or secondary school as defined in
Sec. 404.367(a).)
(d) Limitations on payments for months after July 1982. If you are
entitled to child's benefits based on the requirements of paragraphs (a)
and (c) of this section, your benefit amount (prior to any reduction due
to the family maximum or deduction on account of work) will be subject
to the following limitations:
(1) You will receive no benefits for May through August beginning
with calendar year 1982;
(2) Your benefit for September 1982 through April 1983 will be 75
percent of the benefit to which you were entitled for August 1981;
(3) Your benefit for September 1983 through April 1984 will be 50
percent of the benefit to which you were entitled for August 1981;
(4) Your benefit for September 1984 through April 1985 will be 25
percent of the benefit to which you were entitled for August 1981;
(5) You will receive no benefit for months after April 1985; and
(6) If your student benefits continue beyond July 1982 but later end
for any reason, you may not become reentitled to student benefits.
[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--
[[Page 104]]
(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.
(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 Payment 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
[[Page 105]]
(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 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
[[Page 106]]
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 or widower who meets this requirement, all or part of the
$255 payment may be made to someone else as described in Secs. 404.392
and 404.393.
[44 FR 34481, June 15, 1979, as amended at 48 FR 21929, May 16, 1983]
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 or widower who was living in the same household--death occurs after August 1981.
(a) General. If the insured individual dies after August 1981 and is
not survived by a widow or widower 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]
Sec. 404.393 Who is entitled to the lump-sum death payment when there is no widow or widower who was living in the same household--death occurs before September 1, 1981.
If the insured individual dies before September 1, 1981 and is not
survived by a widow or widower who meets the requirements of
Sec. 404.391, the lump-sum death payment shall be paid as follows:
(a) If all or part of the burial expenses of the deceased incurred
by a funeral home remain unpaid, the funeral home may receive the lump-
sum death
[[Page 107]]
payment to the extent of the unpaid expenses if--
(1) A person who has assumed the responsibility for paying these
expenses applies for the lump-sum death payment within 2 years of the
insured's death, asking that the payment be made to the funeral home; or
(2) At least 90 days have gone by since the death of the insured, no
person has assumed responsibility for paying the burial expenses, and
the funeral home director or other official of the funeral home applies
for the payment.
(b) If all the burial expenses of the insured that were incurred by
a funeral home have been paid, and any part of the lump-sum death
payment remains, it may be paid to a person who paid these burial
expenses and who applies for the payment within 2 years of the insured's
death.
(c) If the body of the deceased is not available for burial, but
expenses were incurred in connection with a memorial service or any
other item for which expenses are customarily incurred in connection
with disposing of a deceased's remains, the lump-sum death payment may
be paid to a person who paid the expenses and applies for the payment
within 2 years of the insured's death.
(d) If any part of the lump-sum death payment remains after payments
have been made under paragraphs (a), (b), and (c) of this section, that
part of the payment may be made to a person who applies within 2 years
of the insured's death and who has paid other expenses of a burial in
the following order of priority--
(1) Expenses of opening and closing the grave;
(2) Expenses of providing the burial plot; and
(3) Any remaining expenses in connection with the burial.
[44 FR 34481, June 15, 1979; 44 FR 56691, Oct. 2, 1979. Redesignated and
amended at 48 FR 21929, 21930, May 16, 1983]
Sec. 404.394 Who is entitled to the lump-sum death payment when burial expenses are paid from the deceased's funds.
If funds of a deceased person were used to pay any of the burial
expenses for which payment of the lump-sum can be made under the rules
in Sec. 404.393, the deceased person's estate may be entitled to the
lump-sum death payment. If you apply for the payment on behalf of a
person's estate, you must show you are the legal representative
(administrator or executor) of the estate. If there is no legal
representative and none will be appointed, you must agree to divide the
payment among those who have a right to it under State law, or under
foreign law, that applies where the deceased had his or her permanent
home at death. We may also require that you get written approval to
receive the payment from any of the deceased's closest relatives who are
available. A person's closest relatives follow this order: widower or
widow; children and the children of any deceased children; parents;
brothers and sisters and the children of any deceased brothers and
sisters; and other relatives by blood or adoption.
[44 FR 34481, June 15, 1979. Redesignated and amended at 48 FR 21929,
21930, May 16, 1983]
Sec. 404.395 Who is not entitled to the lump-sum death payment.
The following persons and organizations are not entitled to the
lump-sum payment--
(a) The U.S. Government or a foreign government;
(b) Any person who has received or will receive repayment from any
other source for the burial expenses he or she paid;
(c) Persons and organizations who are required by a contract to pay
the burial expenses except for a tax-exempt, nonprofit home for the sick
or aged that paid for burial of a deceased resident or guest or a tax-
exempt, nonprofit fraternal organization that paid a member's burial
expenses not covered by an express contract;
(d) An employer or organization that paid burial expenses of an
employee or member under a plan, system, or general practice other than
a home for the sick or aged or a fraternal organization mentioned in
paragraph (c) of this section; and
(e) A person or organization that furnished goods or services for
the burial unless the goods or services were furnished by--
[[Page 108]]
(1) A State or a political subdivision of a State;
(2) An organization exempt from income tax under section 501(c)(3)
or (13) of the Internal Revenue Code; or
(3) A funeral director in connection with burial of a close
relative.
[44 FR 34481, June 15, 1979. Redesignated at 48 FR 21929, May 16, 1983]
Subpart E--Deductions; Reductions; and Nonpayments of Benefits
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. 404.377 through 404.380 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 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. Adjustments may be required because an error has
been made in payments to an individual (see subpart F of this part).
(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);
[[Page 109]]
(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]
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
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);
[[Page 110]]
(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;
(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
[[Page 111]]
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.
(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 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
Secretary 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 (as
computed in Sec. 404.212a of this part) and compare that figure with
your primary insurance amount (as computed in Sec. 404.212). We work
with the larger of these two amounts.
(2) We take 150 percent of your primary insurance amount.
[[Page 112]]
(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 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.
[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]
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 where various savings clause provisions are
described).
[[Page 113]]
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 earnings record for December 1972 based upon an application
filed in December 1972 or earlier; and
[[Page 114]]
(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. 404.607). For any month before the month of filing,
however, benefits that have been
[[Page 115]]
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.
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 benefits to which he would (but for the
provisions of this paragraph) otherwise be entitled is payable for such
month.
[[Page 116]]
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 Secretary 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 record and the other
public disability benefits payable for that month exceeds the higher of:
[[Page 117]]
(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 applicable Federal, State, or
local law or plan and reflect either the actual amount of expenses
already incurred or
[[Page 118]]
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 Secretary 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 Secretary 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 Secretary 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.
Examples:
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 $838.90. Tom is also receiving a monthly workers'
compensation benefit of $500.00
[[Page 119]]
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.
Examples:
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.
(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
[[Page 120]]
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 Secretary 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 Secretary 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
October 1, 1981............................................. -303.30
----------
Total new amount payable to Theresa beginning October
1981 after recalculation of the reduction................. $307.20
[[Page 121]]
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
January 1, 1982............................................. -280.10
----------
Total new amount payable to Theresa beginning January
1982 after recalculation of the reduction................. $330.40
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
Secretary of Health and Human Services for the first calendar quarter of
1977 to the average of the taxable wages reported to the Secretary of
Health and Human Services 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 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--
[[Page 122]]
Applicable limit............................................. $1,340.80
Alice's State disability compensation benefit................ -667.30
----------
Total benefits payable to Alice and both children after
reduction................................................... $673.50
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
1981........................................................ 899.80
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............. x 1.174
----------
Redetermined average current earnings........................ $1,967.00
x 80%
----------
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
average current earnings.................................... $906.30
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]
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 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
[[Page 123]]
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 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
[[Page 124]]
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]
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,
[[Page 125]]
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 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]
[[Page 126]]
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 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
[[Page 127]]
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;
(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;
[[Page 128]]
(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 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
[[Page 129]]
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 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
[[Page 130]]
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:
(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
[[Page 131]]
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.
(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
[[Page 132]]
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 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
[[Page 133]]
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 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
[[Page 134]]
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
(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-
[[Page 135]]
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 ($375 x 12), 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. 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.
[[Page 136]]
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 Secretary 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 Secretary 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 Secretary 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;
(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
[[Page 137]]
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]
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 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
[[Page 138]]
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 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
[[Page 139]]
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
(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]
[[Page 140]]
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 141]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 to submit the requested statements,
information, and other evidence is a sufficient
[[Page 142]]
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 this section is not
sufficient to establish that an individual's services in
[[Page 143]]
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. 404.608 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]
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 which the
deduction event was not reported timely.
[[Page 144]]
(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 make a timely report of earnings as required by Sec. 404.452
for which a penalty deduction is imposed under Sec. 404.453 is
[[Page 145]]
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 72 in or before the first
month of his entitlement to benefits in his 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 he was entitled to benefits and was under age 72.
(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 with the Internal Revenue Service is not
such a report as is required to be filed under the provisions of this
section even where the income tax return 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) Report to be made on forms prescribed by the Social Security
Administration. A report required under the provisions of this section
shall be filed with the Social Security Administration. (See
Sec. 404.608 for procedures concerning place of filing and date of
receipt of such a report.) The report shall be made on a form prescribed
by the Social Security Administration and in accordance with the
instructions printed on or attached to the form. The prescribed forms
may be obtained from any office of the Social Security Administration.
If the prescribed form is not used, 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
his taxable year, the amount of his net earnings from self-employment
for such year, and the amount of his net loss from self-employment for
such year; and show the name and address of the individual making the
report. To overcome the presumptions that the beneficiary rendered
services for wages exceeding the allowable amount and rendered
substantial services in self-
[[Page 146]]
employment in each month (see Sec. 404.435), the report should also show
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).
(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]
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
[[Page 147]]
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 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]
[[Page 148]]
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 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]
[[Page 149]]
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 (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. 404.957.
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
[[Page 150]]
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
(3) The services, under the provisions described in Sec. 403.803(d)
of this chapter (Regulations No. 3 of the Social Security
Administration), constituted employment for 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.
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. 404.460 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.
[[Page 151]]
(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 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 Secretary, that the discharge or
release was under conditions other
[[Page 152]]
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
Secretary 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 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--
[[Page 153]]
(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 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
[[Page 154]]
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]
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, 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.
[[Page 155]]
(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
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)
[[Page 156]]
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 Secretary 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 Secretary receives notice that he has been deported and before the
month in 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]
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
[[Page 157]]
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]
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
[[Page 158]]
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 Secretary 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]
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 (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]
[[Page 159]]
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 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]
[[Page 160]]
Subpart F--Overpayments, Underpayments, Waiver of Adjustment or Recovery
of Overpayments, and Liability of a Certifying Officer
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
(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]
[[Page 161]]
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),
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]
[[Page 162]]
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, notice of the provisions of sections
204(b) and 1870(c) of the Act regarding waiver of adjustment or recovery
shall be sent to the overpaid individual and to any other individual
against whom adjustment or recovery of the overpayment is to be effected
(see Sec. 404.506).
[37 FR 10554, May 25, 1972]
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 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
[[Page 163]]
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]
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 of adjustment or recovery may be applied.
Sections 204(b) and 1870(c) of the Act provide that there shall be
no adjustment or recovery in any case where an incorrect payment under
title II (old-age, dependent's, survivor's and disability insurance
benefits) or under title XVIII (hospital and supplementary medical
insurance benefits) has been made (including a payment under section
1814(e) of the Act) with respect to an individual:
(a) Who is without fault, and
(b) Adjustment or recovery would either:
(1) Defeat the purpose of title II of the Act, or
(2) Be against equity and good conscience.
[32 FR 18026, Dec. 16, 1967]
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:
[[Page 164]]
(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 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
[[Page 165]]
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 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;
[[Page 166]]
(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.
(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
[[Page 167]]
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]
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
[[Page 168]]
(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, 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
[[Page 169]]
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]
Sec. 404.520 Referral of overpayments to the Internal Revenue Service for tax refund offset--General.
(a) The standards we will apply and the procedures we will follow
before requesting the Internal Revenue Service (IRS) 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 the Deficit Reduction Act of 1984 (31 U.S.C. 3720A),
as amended by section 5129 of the Omnibus Budget Reconciliation Act of
1990, and as implemented through Department of the Treasury regulations
at 26 CFR 301.6402-6T and Department of Health and Human Services
regulations at 45 CFR Part 31.
(b) We will use the IRS 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 Secretary 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 Secretary of the Treasury for offset
against tax refunds no sooner than 3 months after our right to collect
the overpayment first accrued and no later than 10 years after our right
to collect the overpayment first accrued.
[56 FR 52468, Oct. 21, 1991]
Sec. 404.521 Notice to overpaid individual.
A request for reduction of an IRS tax refund will be made only after
we determine that an amount is owed and past due and provide the
overpaid individual with 60 calendar days written notice. Our notice of
intent to collect an overpayment through IRS 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 IRS 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]
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
[[Page 170]]
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 IRS,
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 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]
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 IRS 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 IRS. No referral
will be made to the IRS 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]
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 IRS 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]
[[Page 171]]
Sec. 404.526 Tax refund insufficient to cover amount of overpayment.
If a tax refund is insufficient to recover an overpayment in a given
year, we will recertify the remainder of the overpayment to the IRS in
the following year, assuming that all criteria for certification are met
at that time.
[56 FR 52469, Oct. 21, 1991]
Subpart G--Filing of Applications and Other Forms
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 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.
[[Page 172]]
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 be qualified to receive any benefits due
the deceased.
(e) If a person who paid burial expenses for which a lump-sum death
payment may be made dies before filing an application for the payment,
the application may be signed by a person who could receive the payment
for the deceased's estate.
(f) 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).
(g) 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).
(h) 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]
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
[[Page 173]]
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 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 person who paid burial expenses for which a lump-sum death
payment may be made dies before filing an application for the payment,
the application may be signed by a person who could receive the payment
for the deceased's estate.
(c) 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).
(d) 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]
[[Page 174]]
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 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--
[[Page 175]]
(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.
(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
[[Page 176]]
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 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;
[[Page 177]]
(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.
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
[[Page 178]]
(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 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--
[[Page 179]]
(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 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
[[Page 180]]
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]
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
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
[[Page 181]]
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 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
[[Page 182]]
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.