TN 10 (03-04)

GN 01701.215 Family Maximums – Totalization and Non-Totalization Involved

A. Introduction

In certain cases, both Totalization and non-Totalization benefits may be payable on the same record for the same period of time. This could occur in survivor claims where the number holder is currently insured based on coverage under the U.S. system but is fully insured only when coverage under a foreign system is counted.

B. Policy

When Totalization and non-Totalization benefits are payable on the same record for the same period:

• All Totalization beneficiaries will be subject to a family maximum based on the pro rata primary insurance amount (PIA).

• All non-Totalization beneficiaries will be subject to a family maximum based on the non-Totalization PIA.

• In no case may the total benefit payable to all beneficiaries exceed the non-Totalization maximum.

C. Procedure

If total family benefits would exceed the non-Totalization maximum:

• Determine the percentage (to the nearest tenth of a percent) of the total family benefits for which each person would be eligible if there were no family maximum.

• Multiply the non-Totalization maximum by these percentages to determine the benefit for each person.

D. Example

The worker died in July 1999 currently insured but not fully insured. However, when his coverage under the German system is counted, he is fully insured. He is survived by a 16-year-old child and a 67-year-old widow. The non-Totalization PIA is $255.80 and the Totalization PIA is $197.10. The child, who can be paid on the basis of currently insured status, would normally be entitled to a benefit of $191.80. The widow, who can only be paid on the basis of fully insured status, would normally be entitled to a benefit of $197.10.

The non-Totalization maximum is $383.70. Since the two benefits combined exceed the non-Totalization maximum, they must be reduced.

In this case, the total benefits without regard to a maximum are $388.90 ($191.80 + $197.10). Of that total, the widow is eligible for 50.7% (197.10 ÷ 388.90 = 50.7) and the child is eligible for 49.3% (191.80 ÷ 388.90 = 49.3). Therefore, the widow is entitled to 50.7% of $383.70 or $194.50 and the child is entitled to 49.3% of $383.70 or $189.10.

E. Procedure – systems limitations

Currently, the master beneficiary record (MBR) will not accept two different types of PIAs (e.g., Totalization and non-Totalization) for the same month of entitlement if entitlement exists on both PIAs in the month the claim is processed. Until the system is modified to accommodate both PIAs, the Critical Payment system (see SM 00635.000) must be used to pay benefits. If one of the applicants is no longer entitled at the time the claim is processed, complete the “Determination of Resumption of Award” (SSA-2795-U3) to show a code of “C” in the ARC block in item 5.

If both applicants are entitled in the month the claim is processed, forward the claim to the Office of International Programs, 1104 WHR.