BASIC (09-08)

DI 52170.035 Estimating Earnings for Years Prior to 1978

A. When to estimate earnings

Estimate earnings to determine the average current earnings (ACE) if:

  • Maximum earnings are posted for any year after 1950 and before 1978, and

  • The disability (DIB) is reduced due to WC/PDB (even if the estimated ACE is based on gift quarters).

1. Rules for estimating earnings

  • The individual must have worked in any quarter for which an estimate is made.

  • The individual is assumed to have not worked in any gift quarter which precedes a posted quarter.

  • Assume the individual worked unless there is indication the worker did not work.

  • Consider a determination of disability evidence that the individual did not work after onset.

2. State and local entities

Over maximum covered earnings for years prior to 1981 can be estimated.

B. How to estimate earnings

Obtain a quarterly breakdown for years prior to 1978 (or 1981 if State and local) only where it appears likely the over maximum amounts could yield the highest ACE.

If the statutory maximum is posted to the earnings record for any given year and a gift quarter is also posted for that year, use the table in DI 52170.050 unless one of the following exceptions exists:

  • There is evidence in file which indicates earnings are from more than one employer.

  • Over-maximum earnings are posted.

  • Both SEI and wages are posted for a single year.

  • Proof of actual earnings is in file.

Obtain a quarterly breakdown to see if estimating further would increase the ACE if the resulting ACE does not postpone offset.

1. Wages – Single employer

Compute the estimated yearly earnings by using the posted wages for each quarter before the maximum is attained and, for the quarter in which the maximum is reached and any succeeding quarters in the year, deem wages to be equal to the highest quarterly posting in that calendar year.

Example:

For a year with a $15,300 limit, posted wages are:

1st quarter

$ 5,200

2nd quarter

5,300

3rd quarter

4,800

4th quarter

0

 Total

$15,300

The maximum was reached in the third quarter. Therefore, wages of $5,300, the highest quarter posting for the year, are deemed in both the third and fourth quarters. The estimated earnings are:

1st quarter

$ 5,200

2nd quarter

5,300

3rd quarter

5,300

4th quarter

5,300

 Total

$21,100

2. Wages - multiple employers

  1. If no one employer reported the maximum, total all wage items for the year.

  2. If one or more employers reported the maximum:

    • Estimate earnings from each employer reporting the maximum if there is no indication that the worker did not work for such employer during the entire year;

    • Add the wage items from the employers reporting less than the maximum.

3. Agricultural wages

  • Add agricultural wages together to obtain the total earnings.

  • Do not estimate agricultural wages.

4. Self-employment Income (SEI)

  • Request the data shown on IRS Schedule SE from OEO, if one of the high 5 years or the high 1 year involves SEI. This would be done via ICOR (EM 2.8). Show in Remarks that you want a cop