PART 229—SOCIAL SECURITY OVERALL MINIMUM GUARANTEE Authority: 45 U.S.C. 231(f)(b)(5). Source: 58 FR 53397, Oct. 15, 1993, unless otherwise noted. Subpart A—General § 229.1 Introduction. This part explains when an annuity can be increased under the social security overall minimum guarantee, also sometimes referred to as the “special guaranty”, and how the increased amount is determined. Deductions and reductions in the overall minimum rate are explained. § 229.2 Definitions. The following definitions are used in this part: Annuity Average Indexed Monthly Earnings or AIME Contribution and benefit base 1974 Act Railroad formula rate Retirement age § 229.3 Other regulations related to this part. This part is related to a number of other parts of this chapter (listed numerically): Part 216 describes when a person is eligible for an annuity under the Railroad Retirement Act. Part 217 describes how to apply for an annuity or for lump-sum payments. Part 218 sets forth the beginning and ending dates of annuities. Part 219 sets out what evidence is necessary to prove eligibility and the relationships described in this part. Part 220 describes when a person is eligible for a disability annuity under the Railroad Retirement Act or a period of disability under the Social Security Act. Part 222 describes the family relationships which may cause an annuity to be increased under this part. Part 225 explains how Primary Insurance Amounts (PIA's) are computed. § 229.4 Applying for the overall minimum. The Board may require an annuitant to provide information regarding his or her family and regarding his or her earnings from employment and self-employment in order to determine whether the claimant or annuitant qualifies for the overall minimum. (Approved by the Office of Management and Budget under control number 3220-0083) Subpart B—Social Security Overall Minimum Guarantee Defined § 229.10 What the social security overall minimum guarantee is. The social security overall minimum guarantee is the amount of total family benefits which would be paid under the Social Security Act if the employee's railroad service had been covered by that Act. A 100 percent overall minimum benefit may be paid, as described in § 229.11. A 100 percent overall minimum based on age (age O/M) may be payable when the employee is 62 years old. The age O/M is reduced for age for months in which the O/M is payable before the employee attains retirement age. An overall minimum may also be payable before age 62 based on an employee's disability (DIB O/M). The DIB O/M is not reduced for age. § 229.11 100 percent overall minimum. Section 3(f)(3) of the 1974 Act guarantees that the total annuities payable to the employee and spouse, including the vested dual benefits but not including a supplemental annuity, will not be less than 100 percent of the total family benefits payable under the Social Security Act if the employee's railroad service after 1936 were credited as social security earnings. Subpart F describes how the 100 percent overall minimum rate is computed. Subpart C—Eligibility for Increase Under the Overall Minimum § 229.20 When an employee is eligible for an increase under the overall minimum. (a) Overall minimum based on age. (1) The employee is entitled to an age or disability annuity as shown in part 216 of this chapter. (2) The employee is at least 62 years old throughout the whole month. The O/M is reduced for each month it is payable before the month the employee attains retirement age. (3) The employee is fully insured under section 214 or 227 of the Social Security Act based on railroad and social security earnings. (b) Overall minimum based on disability. (1) Is entitled to an age or disability annuity; and (2) Is disabled under § 404.1505 of this title; and (3) Is insured for a disability benefit under § 404.130 of this title based upon combined railroad and social security earnings. (c) Spouse with child in care or spouse retirement age or older. (1) The employee and spouse complete the required statements concerning the family and earnings as provided for in § 229.4 of this part; and (2) The spouse meets the marriage requirements as provided for in part 222 of this chapter; and (3) The spouse has an eligible child in care, or the spouse is retirement age or older. (d) Spouse election. (1) The employee and spouse complete the required statements concerning the family and earnings as provided for in § 229.4 of this part; and (2) The spouse meets the marriage requirements as provided for in part 222 of this chapter; and (3) The spouse is between age 62 and retirement age and does not have a child in care; and (4) The spouse files an election to be included. § 229.21 When a spouse is eligible for an increase under the overall minimum. Normally, only the employee annuity receives the amount of the overall minimum increase. However, a spouse annuity may be increased under the O/M in cases in which the O/M benefit amount exceeds the total amount of the employee and spouse annuity. § 229.22 Beginning date of increase under overall minimum. (a) Employee age O/M. (1) The first day of the first full month throughout which the employee is age 62; or (2) The beginning date of the employee's age or disability annuity; or (3) The first month of the quarter in which the employee becomes insured under section 214 or 227 of the Social Security Act based on railroad and social security earnings; or (4) The month the employee attains retirement age, if a DIB O/M was paid in the previous month. A DIB O/M is changed to an age O/M in the month the employee attains retirement age. (b) Employee DIB O/M. (1) The beginning date of the employee's disability annuity; or (2) The month after the month in which the disability waiting period described in § 404.315(d) of this title ends; or (3) If no disability waiting period is required, the first month in which the employee is disabled and is insured for a disability benefit under § 404.130 of this title. (c) Spouse. (1) The date the increase in the employee's annuity is paid; or (2) The date the spouse is both eligible under the O/M and entitled to a spouse annuity. Subpart D—Family Members Included in Overall Minimum Computation § 229.30 Who can be included in the computation of an annuity under the overall minimum. (a) Spouse. (b) Child. (1) The employee's child as defined in part 222 of this chapter; and (2) Dependent on the employee, as shown in part 222 of this chapter; and (3) Not married; and either (4) Under 18 years old, or 18 years old to 19 years old and a full-time student, as defined in part 216 of this chapter, or 18 years old or older and disabled for any regular employment (see part 220 of this chapter) before attaining age 22. (c) Divorced spouse. § 229.31 When a spouse can be included in the computation of the overall minimum rate. (a) A spouse who is married to the employee when the employee's application is filed can be included in the computation of the overall minimum rate beginning in the later of the month in which: (1) The employee first is eligible for an increase in his or her annuity under the overall minimum, as shown in § 229.22 of this part; or (2) The spouse first becomes eligible to be included under the overall minimum, as shown in § 229.30 of this part. (b) A spouse who marries the employee after the employee application is filed can be included in the overall minimum computation in the month in which he or she becomes eligible, as shown in § 229.30 of this part, if the overall minimum rate is already payable in the previous month. If the railroad formula rate is payable in the month before the spouse becomes eligible, the spouse can be included in the overall minimum computation in the later of the month in which: (1) The employee first is eligible for an increase in his or her annuity rate under the overall minimum, as shown in § 229.22; or (2) The spouse annuity begins. § 229.32 When a child can be included in the computation of the overall minimum rate. A child who meets the requirements of § 229.30(b) of this part can be included in the computation of the overall minimum rate in the month in which: (a) The employee first is eligible for an increase in his or her annuity rate under the overall minimum, as shown in § 229.22 of this part; or (b) In the case of a child born or adopted by the employee after the employee's annuity beginning date, such child can be included only when the overall minimum rate is already payable in the month before the month in which the child is born, or adopted except where: (1) The child is born or adopted prior to the employee's attaining age 62 or becoming eligible for a period of disability (see § 220.36 of this chapter); or (2) The child who is adopted after the employee's annuity beginning date meets the dependency requirements set forth in § 222.53 of this chapter. (c) In the case of a child who has attained age 18 and has become re-entitled as a full-time student or disabled child, as described in § 229.30 of this part, such child can only be included when the overall minimum rate is already payable in the month before the month the child becomes re-entitled. § 229.33 When a divorced spouse can be included in the computation of the overall minimum rate. A divorced spouse annuitant can be included in the computation of the overall minimum rate in the later of the month in which: (1) The employee first is eligible for an increase in his or her annuity rate under the overall minimum, as shown in § 229.22; or (2) The divorced spouse annuity begins. Subpart E—When Entitlement Under the Overall Minimum Ends § 229.40 When an annuity increase under the overall minimum ends. (a) Employee Age O/M. (b) Employee DIB O/M. (1) The month before the month in which the employee dies; or (2) The month before the month the employee attains retirement age (the DIB O/M is changed to an age O/M); or (3) The second month after the month the disability ends, as explained in part 220 of this chapter. (c) Spouse. § 229.41 When a spouse can no longer be included in computing an annuity rate under the overall minimum. A spouse's inclusion in the computation of the overall minimum rate ends the earlier of: (a) The month before the month in which the spouse dies; or (b) The month before the month in which the spouse's marriage to the employee legally terminates; or (c) If the spouse has an eligible child in care, the earlier of the month before the month in which the child leaves the spouse's care, attains age 16 and is not disabled, or, if disabled, recovers from being disabled; or (d) The month before the month the employee dies. § 229.42 When a child can no longer be included in computing an annuity rate under the overall minimum. A child's inclusion in the computation of the overall minimum rate ends the earlier of: (a) The month before the month in which the child dies; or (b) The month before the month in which the child marries; or (c) The month before the month the child becomes 18 years old, unless the child is disabled or a full-time student, as shown in part 216 of this chapter; or (d) The second month after the month the child's disability ends, if the child is 18 years old or older, and not a full-time student; or (e) The month in which a student child's annuity would end, as shown in part 218 of this chapter, if the child is 18 years old or older, a full-time student in an elementary or secondary school, and not disabled; or (f) The month before the month the child becomes entitled to an overall minimum benefit or child's annuity on another earning record, if including the child on the other earnings record would result in higher monthly benefits; or (g) In the case of a stepchild of the employee, the month after the month in which the divorce between the stepparent and the natural parent becomes final. [58 FR 53397, Oct. 15, 1993, as amended at 62 FR 47138, Sept. 8, 1997] § 229.43 When a divorced spouse can no longer be included in computing an annuity under the overall minimum. A divorced spouse's inclusion in the computation of the overall minimum rate ends the earlier of: (a) The month before the month in which the divorced spouse dies; or (b) The month before the month the employee dies; or (c) The month before the month in which the divorced spouse remarries; or (d) The month before the month in which the divorced spouse becomes entitled to a retirement or disability benefit under the Social Security Act based upon a primary insurance amount which is equal to or exceeds the divorced spouse annuity before reduction for age. Subpart F—Computation of the Overall Minimum Rate § 229.45 Employee benefit. The original employee 100 percent overall minimum amount, before adjustment for age, other family members, or other benefits, is the Overall Minimum PIA, as described in part 225 of this chapter. This is the PIA which would be used under the Social Security Act if the employee's railroad service had been covered under that Act instead of the Railroad Retirement Act. The Overall Minimum PIA may be recomputed for additional earnings and adjusted for cost-of-living increases. Delayed retirement credits are added to the Overall Minimum PIA as shown in part 225, subpart D of this chapter. § 229.46 Spouse or divorced spouse benefit. If a spouse or divorced spouse is included in the computation of the overall minimum, a benefit of 50 percent times the Overall Minimum PIA is computed. In the case of a spouse, the benefit may be adjusted for the family maximum, age, or other benefits. In the case of a divorced spouse, the benefit may be adjusted only for age or other benefits. § 229.47 Child's benefit. If a child is included in the computation of the overall minimum, a child's benefit of 50 percent times the Overall Minimum PIA is computed. This amount may be adjusted for the family maximum or other benefits. § 229.48 Family maximum. (a) Family maximum defined. (b) Computation of the family maximum The employee attains retirement age prior to 1979. (i) The sum of the maximum amounts of benefits payable on the basis of the compensation of all such insured individuals, or (ii) The last figure in column V of the applicable table published each year by the Secretary of Health and Human Services. The “applicable” table refers to the table which is effective for the month the benefit is payable. (2) The employee attains retirement age in 1979. (A) 150 percent of the first $230 of the individual's primary insurance amount, plus (B) 272 percent of the primary insurance amount over $230 but not over $332, plus (C) 134 percent of the primary insurance amount over $332 but not over $433, plus (D) 175 percent of the primary insurance amount over $433. (ii) 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. (3) The employee attains retirement age after 1979. Federal Register (c) Disability family maximum. (d) Reduction for family maximum. (1) The Overall Minimum PIA is subtracted from the family maximum amount. (2) The result from paragraph (d)(1) of this section is divided by the total number of auxiliary beneficiaries (spouse and children). (3) If the amount of each benefit from paragraph (d)(2) of this section is not a multiple of $0.10, it is rounded to the next lower multiple of $0.10. After determining the beneficiary's share (the amount after reduction for other benefits) the amount is rounded to the next lowest multiple of $1.00, if it is not already a multiple of $1.00. (e) Combined family maximum. (1) The sum of the individual family maximums on each earnings record; or (2) 1.75 times the highest primary insurance amount possible in a year using average indexed monthly earnings equal to one-twelfth of the contribution and benefit base for that year. Average indexed monthly earnings and contribution and benefit base are explained in § 229.2 of this part. (f) This section may be illustrated by the following examples: (1) An employee, age 62, applies for an age and service annuity under the Railroad Retirement Act (RRA). His annuity rate is $700. The employee has a son who was disabled for all regular employment prior to his attaining age 18. The RRA does not provide an annuity for a disabled child of a living employee. If the employee had been covered under the Social Security Act he would have received a benefit of $500 (the Overall Minimum PIA) and his child would have received a benefit of $250 (50 percent of $500), which produces a total family benefit of $750. The family maximum is $804.90. Under the O/M guarantee, the employee would receive $750 since it is higher than his annuity rate of $700. Since $750 is less than the family maximum computed for this employee, there is no reduction for the family maximum. (2) It is determined that a disabled employee is entitled to a DIB O/M computed as follows: Overall Minimum PIA $ 600.00 Spouse (50% × 600) 300.00 Child (50% × 600) 300.00 1200.00 However, the employee's family maximum is $900 (150 percent of $600). Consequently, the DIB O/M will be paid as follows: Employee $ 600.00 Spouse 150.00 Child 150.00 900.00 § 229.49 Adjustment of benefits under family maximum for change in family group. (a) Increase in family group. (b) Decrease in family group. (c) Effective date of rate change. § 229.50 Age reduction in employee or spouse benefit. (a) When age reduction applies. (b) Employee age reduction. 1/180 1/180 (c) Spouse age reduction. 1/144 1/144 (d) Age reduction after 1999. 1/240 (e) Reduction period defined. § 229.51 Adjustment of age reduction. (a) General. (b) Employee adjusted age reduction. (1) Months in which the increase under the overall minimum is completely or partially deducted because of the employee's excess earnings; and (2) Months in which the employee is entitled to a DIB O/M as well as a reduced O/M. (c) Spouse adjusted age reduction. (1) Months in which the spouse O/M benefit is completely or partially deducted because of the employee's or spouse's excess earnings: (2) Months after entitlement to a spouse O/M benefit ends for any reason; (3) Months in which a spouse has in her care the employee's child who is under 16 years old or disabled before age 22; (4) Months in which a DIB O/M benefit is not payable because the employee refused rehabilitation service (see § 229.81 of this part). § 229.52 Age reduction when a reduced age O/M is effective before DIB O/M. If an employee received a reduced age O/M before the effective date of a DIB O/M, the PIA amount for the DIB O/M is reduced as if the employee had attained retirement age on the effective date of the DIB O/M. § 229.53 Reduction for social security benefits on employee's wage record. The total annuity rate under the overall minimum is reduced, but not below zero, by the total amount of the social security benefits being paid to all family members on the employee's wage record. § 229.54 Reduction for social security benefit paid to employee on another person's earnings record. The employee PIA amount under the overall minimum, after any age reduction, is reduced, but not below zero, by the amount of any social security benefit being paid to the employee on another person's earnings record. § 229.55 Reduction for spouse social security benefit. A spouse benefit under the overall minimum, after any adjustment for the family maximum and for age, is reduced, but not below zero, by the amount of any social security benefit being paid to the spouse on other than the employee's earnings record. If the social security benefit is equal to or higher than the spouse overall minimum benefit and the family maximum applies, the overall minimum rate is recomputed so that the spouse is not included, if it would result in a higher overall minimum rate. § 229.56 Reduction for child's social security benefit. A child's benefit under the overall minimum, after any adjustment for the family maximum, is reduced, but not below zero, by the amount of any social security benefit being paid to the child on other than the employee's earnings record. If the social security benefit is equal to or higher than the child's overall minimum benefit and the family maximum applies, the overall minimum rate is recomputed so that the child is not included, if it would result in a higher overall minimum rate. § 229.57 Reduction in spouse overall minimum benefit for employee annuity. If an annuitant is entitled to both an employee annuity on his or her own earnings record and a spouse annuity on a different earnings record, the total overall minimum rates on both earnings records must be higher than the total railroad formula rates for the overall minimum to apply. The spouse overall minimum benefit amount, after adjustment for the family maximum and for age, is reduced by the employee-only overall minimum rate on the spouse's own earnings record (the employee benefit adjusted for age and social security benefits) plus the amount of any social security benefit payable to the spouse on other than the empoyee's earnings record. § 229.58 Rounding of overall minimum amounts. The overall minimum amount for each beneficiary which is not a multiple of $0.10 is rounded to the next lower multiple of $0.10. After reducing each beneficiary's share for other benefits, if the result is not a multiple of $1.00 it is rounded to the next lower multiple of $1.00. Subpart G—Reduction for Worker's Compensation or Disability Benefits Under a Federal, State, or Local Law or Plan § 229.65 Initial reduction. (a) When reduction is effective. (b) When reduction is not made. (c) Amount of reduction. (1) The sum of the monthly DIB O/M rate, including benefits for all family members (subject to the family maximum), plus the monthly worker's compensation or public disability benefit; and (2) The higher of 80 percent of the employee's average current earnings before becoming disabled or the monthly DIB O/M rate (before reduction for worker's compensation or public disability benefit). (d) Average current earnings, defined. (1) The average monthly wage (see § 225.2 of this chapter) used to compute the DIB O/M under the Social Security Act rules which were in effect before 1979; or (2) One-sixtieth of the employee's total earnings from employment or self-employment under either the Social Security or Railroad Retirement Acts (including earnings that exceed the maximum used in computing social security benefits) for the 5 consecutive years after 1950 in which the earnings were the highest; or (3) One-twelfth of the employee's total earnings from employment or self-employment under either the Social Security or Railroad Retirement Acts (including earnings that exceed the maximum used in computing social security benefits) for the year of highest earnings in the period from 5 years before through the year in which the employee became disabled. The result is rounded to the next lower multiple of $1.00. § 229.66 Changes in reduction amount. (a) Change in DIB O/M. (b) Change in amount of worker's compensation/public disability benefit. § 229.67 Redetermination of reduction. (a) General. (b) Redetermined average current earnings. (1) The average total wages (including wages that exceed the maximum used in computing social security benefits) of all persons for whom wages were reported to the Secretary of the Treasury for the year before the year or redetermination, divided by the average total wages for 1977 or, if later, the year before the year the reduction was first computed. If the result is not a multiple of $1.00, it is rounded to the next lower multiple of $1.00; or (2) If the reduction was first computed before 1978, the average taxable wages reported to the Secretary of Health and Human Services for the first quarter of 1977, divided by the average taxable wages for the first quarter of the year before the year the reduction was first computed. If the result is not a multiple of $1.00, it is rounded to the next lower multiple of $1.00. § 229.68 Reduction of DIB O/M. A reduction for entitlement to worker's compensation or a public disability benefit is applied after the DIB O/M is reduced for age and the family maximum. The spouse and child O/M benefits are first reduced proportionately. The employee O/M benefit is decreased by any remaining reduction amount. Subpart H—Miscellaneous Deductions and Reductions § 229.80 Earnings restrictions. The O/M may be reduced due to earnings from employment or self-employment in the same manner as a social security benefit. These restrictions on earnings are found at subpart E of part 404 of this chapter. Earnings can never reduce an employee's benefit below the railroad formula rate less the amount that those benefits would be reduced by earnings. § 229.81 Refusal to accept vocational rehabilitation. The DIB O/M is not payable for any month in which the disabled employee refuses, without good reason, to accept vocational rehabilitation services available under an approved state program. A disabled child's benefit under the O/M is not payable for any month in which the child refuses, without good reason, to accept such vocational rehabilitation services, unless the child is a full-time student. § 229.82 Failure to have child in care. (a) General. (b) Report required. (c) Penalty for failure to report. § 229.83 Deportation. The age DIB O/M is not payable for any month after the month the Board receives notice that the employee has been deported for a reason shown in section 202(h) of the Social Security Act. This restriction no longer applies if the employee is later legally admitted to the United States for permanent residence. § 229.84 Conviction for subversive activities. If a person is convicted of subversive activities (under chapter 37, 105, or 115 of title 18 of the U.S. Code or section 4, 112, or 113 of the Internal Security Act of 1950, as amended), the court may order that earnings in the year of the conviction and previous years are to be disregarded in determining whether the person is entitled to social security benefits. These earnings would also be ignored in determining entitlement to the age or DIB O/M. § 229.85 Substantial gainful activity by blind employee or child. A blind employee or child who is 55 years old or older is entitled to an O/M benefit based on disability while he or she is working in substantial gainful activity that does not require skills or ability used in his or her previous work. However, the DIB O/M or child's O/M benefit is not payable for any month in which the employee or child works in any type of substantial gainful activity which requires skills or abilities comparable to those of any gainful activity in which he or she has previously engaged with some regularity and over a substantial period of time. Subpart I—Payment of Overall Minimum Rate § 229.90 Proportionate shares of overall minimum. When both the employee and the spouse are entitled to annuities and the overall minimum rate is higher than the railroad formula rate, the overall minimum amount must be divided between the employee and spouse. The employee receives two-thirds of the total O/M rate. The spouse receives one-third of the total O/M rate. § 229.91 Payment of the overall minimum for part of a month. (a) Employee annuity payable for part of a month. 1/30 (b) Spouse annuity payable for part of a month Spouse not included in O/M before beginning date of spouse annuity and O/M applies as of the spouse annuity beginning date. 1/30 (i) One-thirtieth of the higher of the railroad formula or the O/M rate, without the spouse included, times the number of days in the month before the spouse annuity begins, plus (ii) One-thirtieth of the employee's share of the O/M rate, with the spouse included, times the number of days in the month beginning with the spouse's annuity beginning date. (2) Spouse included in O/M before beginning date of spouse annuity and the O/M continues to apply. 1/30 (i) One-thirtieth of the O/M rate, with the spouse included, times the number of days in the month before the spouse annuity begins; plus (ii) One-thirtieth of the employee's share of the O/M rate, with the spouse included, times the number of days in the month beginning with the spouse's annuity beginning date. (3) O/M rate applies before beginning date of spouse annuity and the railroad formula applies as of the spouse annuity beginning date. 1/30 (i) One-thirtieth of the O/M times the number of days in the month before the spouse annuity begins; plus (ii) One-thirtieth of the employee's railroad formula rate times the number of days in the month beginning with the spouse's annuity beginning date.