The DIRCON was established to prevent erroneous underpayments to beneficiaries. When
the TRE calculation plus $2000 is less than the estimated earnings, the case should
be examined prior to releasing the underpayment.
Get a DEQY for the prior year and the enforcement year. Were multiple employers, or
wages AND self-employment involved in the prior year? If so, check to see that the
same pattern (look at EINs) is present in the enforcement year. If an employer or
self-employment posting seems to be “missing," contact the beneficiary for a report.
Be sure to ask about NSMs if Last Monthly Earnings Test Year (LMETY) is still available.
Also, inquire about special payments and current year estimates.
If review of the MBR shows only one employer in the prior year, the enforcement year
posting is for the same employer and the decline in earnings is not significant, input
the report using the PEWE screen. If the decline is significant, contact the beneficiary
for an explanation and input the report using the PEWE screen.
EXAMPLE 1: 2021 EEO -- TE DIRCON with TRE earnings of $17,584. Work estimate was $23,500. DEQY
shows “AA” (REGULAR FICA WAGES) posted for 2020 of $16,979 (EMPLOYER ALRIGHT TRUCKING CO.),
and SEI posted for 2020, in the amount of $5,027. For 2021, the DEQY shows an "AA"
posting for the same employer in the amount of $17,584 and no SEI posting. SSA contacted
the beneficiary for an explanation of the SEI posting. The beneficiary states that
they had started a craft business making doll clothes and selling them at craft fairs.
However, their health was poor early in the year and they basically gave up the business.
There was no profit to be shown, and they were not claiming a loss or filing an SE
tax return for the year. The beneficiary is continuing to work for ALRIGHT TRUCKING
and expected to earn around $18,000 in 2022.
Input the 2021 earnings of $17,584 as the annual report and the 2022 estimate of $18,000.
EXAMPLE 2: 2021 EEO -- TE DIRCON with TRE earnings of $27,965. The work estimate for 2021 was
$47,000. DEQY shows one employer for 2020 with earnings of $45,734.36. The 2021 posting
for the same employer is for $27,965.00. Although the earnings are probably correct,
since there was only one employer involved, there was a “significant decline in earnings.” Therefore, the reason for the decline should be documented.
When contacted, the beneficiary explains that they converted to part-time in April
of last year. They continue to work part-time and expect to earn around $22,500 in
2022. They continue to earn over the monthly exempt amount.
Input the posted earnings $27,965 as the annual report for 2021. Input the estimated
earnings of $22,500 as the 2022 estimate.
EXAMPLE 3:
2021 EEO -- TE DIRCON with TRE of $34,652.29. The work estimate for 2021 was $39,500.
The DEQY for 2020 shows both wages and SEI posted. The wages were $31,578.28 and the
SEI for 2020 was $7,459.
In 2021 there are again two postings, wages (same employer) and an SEI posting. The
wages are $31,883.29 and the SEI posting is for $2,769.00. It is reasonable to conclude
that all the posted earnings are correct. The beneficiary continues to work for the
same employer and continues to have SEI. Apparently, the business profit was down
in 2021. Input the enforcement earnings of $34,652 using the PEWE screen.