TN 24 (08-11)

RS 02501.110 Work Deductions and Partial Monthly Benefit

A. Policy for calculating partial monthly payments

1. Payment of partial benefit

Once we receive the closed-year earnings, pay a partial monthly benefit, if due.

2. Number holder (NH) and auxiliaries involved

When a partial benefit is payable to the insured and to one or more auxiliaries entitled or deemed entitled on the earnings record, allocate partial benefit to each beneficiary in proportion to each original monthly benefit amount:

  • before any adjustment for the family maximum;

  • without adjustment for entitlement before full retirement age; and

  • without any reduction arising from an auxiliary's retirement insurance benefit (RIB) or disability insurance benefit (DIB).

3. Prorated share exceeds benefit rates

When a beneficiary's prorated share exceeds the benefit rate before work deduction, reduce the beneficiary's share of the partial benefit so that it does not exceed the regular rate that was payable before the deduction was made. For computations, see Example 3 RS 02501.110C in this section.

B. Procedure for prorating shares

1. Prorated share exceeds benefit rates with two beneficiaries

If the proportionate share exceeds the regular rate and only two beneficiaries are involved, pay the share of the benefit to one of them as if no deduction took place for the month the partial benefit is due, and pay the balance of the partial benefit to the other.

2. Prorated share exceeds benefit rates with three or more beneficiaries involved

If the proportionate share exceeds the benefit rate and three or more beneficiaries are involved and the first apportionment yields an amount for one or more of them in excess of the amount otherwise payable for the month:

  • Reapportion the excess to all other beneficiaries in proportion to their original entitlement rates. If this yields an amount greater than the pre-deduction rate, repeat the process until distribution of all of the partial benefit.

  • Do not reapportion the excess amount if at any point it totals less than $1; the monthly benefit amount includes this last calculation.

  • Do not round any share until the final apportionment or reapportionment is completed.

C. Examples

EXAMPLE 1: Worker (Auxiliary or NH) and no family benefits involved

A beneficiary became entitled to benefits of $562 effective January of the prior year. Based on the estimate, the beneficiary had excess earnings of $2,881. Therefore, the benefits for that year were withheld January through June using the full-month withholding rule. The actual earnings for the prior year were the same as the estimate. It was proper to withhold benefits for January through May. The remaining excess is $71. Therefore, the beneficiary is due $491 for June.

EXAMPLE 2: NH Worker with family benefits involved

NH, wife, and three children are entitled to benefits. The NH's monthly benefit amount is $800 and the auxiliaries are entitled to $101 each.

The excess earnings are $6,624. The total family benefit is $1,204 ($800 plus $101 x 4 = $1,204). No benefits are due for January through May and $600 is due the family for June ($1,204 x 6 = $7,224 minus $6,624 = $600).

Proportionate share calculation:

Allocate two shares to the NH because he is entitled to 100% of the primary insurance amount (PIA) and one share to each auxiliary because each original benefit is equal to 50% of the PIA. Total shares are equal to six (2/6 (NH) plus 1/6 x 4 (aux)).

The NH is entitled to $200 and each auxiliary is entitled to $100 ($600 divided by six = $100 a share).

EXAMPLE 3: Prorated share exceeds the benefit rate

The partial family benefit is $93 payable in June. NH's benefit is $117. Two children are entitled to $19.90 each; the aged wife, who has no child in care, is entitled to a reduced benefit of $16. Total family benefit is $172.80 ($117 plus $16 plus $19.90 x 2 = $172.80). The NH is entitled to two shares (2/5) because his original benefit is equal to 100% of the PIA and the auxiliaries are entitled to one share (1/5) since they each are potentially entitled to 50% of the PIA. Total shares are five.

The first apportionment of the $93 benefit:

NH = $37.20 and each auxiliary = $18.60 ($93 divided by 5 = $18.60 for one share and $37.20 for 2 shares). The aged wife cannot be paid $18.60 because it exceeds her regular rate. Therefore, she can only receive $16 a