TN 18 (04-11)
GN 02604.130 Calculating Penalty Violations
“Violation,” for penalty purposes, means a beneficiary filed an annual earnings report late, we imposed a penalty, AND did not revoke the penalty.
See GN 02604.160 for revoking a penalty for good cause.
See GN 02604.170 for information on revoking a penalty for administrative tolerances.
A. Procedure for violation periods
1. Annual earnings test (AET)
“Violation period,” for the annual earnings test, means the year or years we applied a violation. Only one violation applies to the entire reporting period.
The reporting period includes only the year(s) a beneficiary files a late report. If a beneficiary files a late report for another year, it is a subsequent violation (unless revoked), see GN 02604.130A.1.b. in this section.
a. First violation
The violation reporting period begins with the beneficiary’s date of entitlement. It ends with the filing date of the first late report or, for enforcement cases, with the automated job stream’s (AJS) run date.
Take the following steps to process the penalties.
Apply the penalty to the most recent year in the violation period.
If you revoke the penalty for the most recent year (i.e., you find good cause or an administrative tolerance applies), apply the penalty to the next preceding year for which a late report is filed.
Repeat this step each time you revoke a penalty.
If you revoke the penalties for all years, there is no violation.
The first violation period then ends with the date of the next late filed annual report.
In this situation, repeat the steps above.
b. Subsequent violations
Apply the penalty to the year of the subsequent late report.
To determine the number of violations, count only those occurring under the annual earnings test.
c. Determining the number of violations
If you revoke a prior violation, determine the number of violations by counting only those remaining. Follow the instructions in GN 02604.120 and reduce the penalty amounts accordingly.
EXAMPLE: If there have been three violations and you revoke the first violation, then the second violation becomes the first violation and the third becomes the second.
NOTE: Consider all of the earnings work years reported before assessing the penalty.
2. Foreign work test/child-in-care
“Violation period,” under the foreign work test/child-in-care provision, refers to the month or months a violation applies. We apply only one violation to each reporting period.
The reporting period does not include months for timely filed earnings reports. If the beneficiary subsequently filed the earnings report late, it is a prior violation (unless revoked).
a. First violation
The penalty attaches to the earliest month in the violation period the report is late.
If you revoke that penalty, attach the penalty to the next succeeding month in the period the report is late. Repeat the step each time there is a revoked penalty.
If you revoke the penalties for all months, there is no violation. The first violation ends the date the beneficiary files the next late report. In this situation, repeat the step above.
b. Prior violations
A subsequent violation period begins the month after the last late filed report. It ends the month of the current late filed report.
To determine the number of violations, count only those that previously occurred under the foreign work test/child-in-care provision.
c. Redetermining the Number of Violations
See GN 02604.130A.1.c. in this section and GN 02604.120B.3.for information on refiguring the penalty amount.