The following examples show the results of processing under both the old rule and
the new rule. Refer to RS 00615.768D.1. and RS 00615.768D.2 to determine which rule applies.
EXAMPLE 1. Dually Entitled Beneficiary Reduced to Zero
The PIA is $400.00 and the maximum is $650.00 for a numberholder, spouse and two children.
After reduction for the maximum the rates would be $400.00 for A and $83.30 each for
B, C2 and C1. B is also entitled on her own record. Her PIA is $100.00 which is unreduced
because she is age 66. A CFM does not apply because the children are not entitled
on B's record. B's benefit does not terminate because her own PIA is less than 1/2
the PIA on that record. She is therefore technically entitled as a B and her rate
is reduced to $0.00. Under the old procedure, the children would have continued to
receive $83.30 each. Under the new procedure the children will now receive more because
of B's reduced rate. When we disregard B's entitlement, C2 and C1 are each due $125.00.
NOTE: It might appear that we could just redistribute B's $83.30, however, because
of rounding each child would then be due $124.90 and lose $0.10. Instead we must redistribute
the maximum to the two children. Each is then due $125.00.
EXAMPLE 2. Dually Entitled Beneficiary with a Partial
The PIA is $600 and the maximum is $900 for HA, HC2 and HC1. The rates payable are
$600 for HA and $150 each for HC2 and HC1. HC2 becomes entitled to his own PIA of
$120. His rate as HC2 is then reduced to $30 ($150 - $120). When reducing benefits
for the maximum, the PIA and the partial payable to HC2 must be subtracted.
- 30 Partial Payable to HC2
The rate payable to HC1 is then $270. We are therefore paying the full maximum of
$900 by paying $600 to HA, $270 to HC1 and $30 to HC2. HC2 also receives his own PIA
of $120 so the family receives a total of $1,020.
Under the old rule HC2 would be reduced to $30 while HC1 continued to receive $150
with a total payable of only $780. With HC2's own PIA of $120 the family received
EXAMPLE 3. Dually Entitled Beneficiary with Zero Payable
and a Combined Family Maximum
The PIA is $400.00 and the maximum is $650.00 for a numberholder, spouse and three
children. The rates are $400.00 for A and $62.50 each for B, C3, C2 and C1. B and
the children become entitled on her record. Her PIA is $160.00 and is unreduced. Her
maximum is $280.00. The rates on the first record are changed because of the new combined
family maximum of $930.00 making the rates $400.00 for A and $132.50 each for B, C3,
C2 and C1. Because her own benefit is $160.00, the B benefit is reduced to zero. (It
does not terminate because her own PIA is less than 1/2 the PIA on that record.) The
rates payable would be $400.00 to A and $132.50 each to C3, C2 and C1 on the first
record plus $160.00 to B on her own record, for a total of $957.50.
Under the new rule we disregard B's entitlement and each child is due $176.60.
530.00 530.00 divided among 3 children equals 176.60 each.
The rates payable are then $400.00 to A and $176.60 each to C3, C2 and C1 on the first
record plus $160.00 to B on her own record, for a total of $1,089.80.
EXAMPLE 4. Dually Entitled Beneficiary with Partial
Payable and a Combined Family Maximum
The PIA is $400 and the maximum is $650 for a numberholder, spouse and one child.
The rates are $400 for A and $125 each for B and C1. B and C1 become entitled on her
record. Her PIA is $160 and the maximum is $280. Because she is age 66, she is entitled
to an unreduced benefit of $160. When the maximums are combined, both B and C1 are
entitled to their original benefit of $200. B's benefit is reduced to $40 because
of her own PIA. C1 receives the full $200. The total payable on the first record is
$640 ($400 to A, $40 to B and $200 to C1) plus B's own PIA of $160 for a total of
Under the new rule, when we disregard B's entitlement, C1 is increased to $200.00
even without a CFM. However combining the maximums allows B's rate to increase to
$40 just as it did under the old rule. The CFM applies because the family receives
more with the CFM.
NOTE: In this case these are the same rates that would have been paid using the old method.