NOTE: Examples 1 and 2 are before FRA applied.
Example 1:
John, a retired author, becomes entitled in March 1986 at age 62. They receive $30,000
per year in royalties from books written and copyrighted in 1984. Their NESE for 1986
is $30,000 and none of it can be excluded because they are 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, they may be paid benefits under the monthly earnings
test since 1986 is their 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 they attain age 65.
Royalties received in 1989 (the year they attain age 65) may be excluded under the
provisions of the copyright law.
Example 2:
Mary, a writer, is not insured on their own record. They become entitled to widow's
benefits at age 65 in September 1988. In 1989, Mary 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.