NOTE: Examples 1 and 2 are before FRA applied.
John, a retired author, becomes entitled in March 1986 at age 62. He receives $30,000
per year in royalties from books written and copyrighted in 1984. His NESE for 1986
is $30,000 and none of it can be excluded because he is not age 65. Only those royalties
received in or after the year of attainment of age 65 can be excluded. If John has
nonservice months in 1986, he may be paid benefits under the monthly earnings test
since 1986 is his initial grace year. However, benefits will not be payable for 1987
or 1988 because the monthly earnings test will no longer apply and the $30,000 royalties
received each year cannot be excluded until the year he attains age 65. Royalties
received in 1989 (the year he attains age 65) may be excluded under the provisions
of the copyright law.
Mary, a writer, is not insured on her own record. She becomes entitled to widow's
benefits at age 65 in September 1988. In 1989, she receives royalties of $30,000 from
books written and copyrighted in 1987. The royalties can be excluded.
NOTE: If the books had been copyrighted in 1988, the royalties could not be excluded under
the provisions of the copyright law.