TN 25 (09-11)

RS 02501.150 Beneficiary Entitled on Two Earnings Records (E/Rs) Both Beneficiaries with Simultaneous Entitlement and Other Number Holder (NH) Have Excess Earnings

A. Policy for charging excess earnings

1. Full month withholding

When a beneficiary has entitlement to both auxiliary benefits and retirement insurance benefits (RIB), charge the excess earnings against his or her auxiliary benefit to the extent that the auxiliary benefit is not subject to deductions because of the other NH's work. Charge the excess earnings to the RIB without regard to the other NH's excess earnings.

2. Partial month withholding

If a beneficiary has entitlement on her own and her husband's ER and has excess earnings chargeable to a month in which she shares a partial benefit on the husband's ER, charge her excess for the month to the combined amount of her RIB and her share of the partial benefit.

If her excess earnings for the month in question are less than the combined amount, we must apportion the earnings. If two trust funds are involved or there is entitlement with an additional beneficiary (other than the two spouses) on either ER, make the required apportionment under the rules in RS 02501.145.

For purposes of the initial apportionment of the wife's excess to her wife's benefit, consider the amount due to her without any deduction because of her own or her husband's work. Regardless of this apportionment, only charge her excess earnings to the husband's ER up to the amount paid to her after charging his excess earnings. The amount charged to her own ER will be the difference between the total of her excess chargeable to the month and the lesser of:

  • The apportioned amount of the excess charged to the husband's ER on the basis of benefits payable; or

  • An amount equal to her share of the partial benefit on the husband's ER after charging his excess.

B. Example when husband and wife have excess earnings

John had excess earnings of $720 and his wife, Ada, had excess earnings of $150. Ada was also entitled on her own ER.

Original rates on John's ER

A(John)

$240 (2/4)

B(Ada)

$120 (1/4)

C

$120 (1/4)

Total

$480

Benefits on Ada's ER

A(Ada)

$110

Benefits payable on John's ER

A(John)

$240

B(Ada)

$ 10

 

($120-110)

C

$120

Total

$370

Amount of John's excess charged to January benefits

A(John)

$240

B(Ada)

$ 10

C

$120

Total

$370

Partial benefits for February after charging John's remaining excess of $350

A

$10

B

$ 5

C

$ 5

Total

$20

($370 minus 350 = $20 prorated on the basis of 4 shares)

How to charge Ada's excess earnings from January-February