Will Grayson III, age 63, became entitled to retirement benefits in March 2005. Will
earned $9,000 in January and February. The AET for 2005 is $12,000 per year for a
person who will not reach full retirement age (FRA) during the year.
Will's employer reported earnings of $21,000 for 2005 on their W-2, which resulted
in an overpayment of benefits for 2005. Development revealed that Will misunderstood
the retirement test and believed an individual could earn the allowable limit ($12,000)
in the months after entitlement began.
To determine if this policy applies, subtract the amount Will earned before the entitlement
to retirement benefits began, from the total earnings for the year:
$21,000
-$9,000
$12,000$
Will earned $12,000 in the months during entitlement to retirement benefits. Since
this amount does not exceed the annual earnings test, we can assume that Will misunderstood
that the SSA annual earnings test also included the annual earnings before an individual
becomes entitled to retirement benefits.
SSA can deem that Will is not at fault for causing this overpayment, based on GN 02250.150. In addition, SSA would find that recovery of this overpayment is against equity
and good conscience, and therefore the overpayment would be waived.