TN 10 (02-11)

RS 00601.020 Rounding of Benefits

A. Policy for nearest dime rounding

1. Nearest dime rounding prior to June 1982

When an individual benefit is not a multiple of $.10, it is rounded to the next higher multiple of $.10. (A money amount of reduction (MAR) is rounded down.)

  • When computing an MBA drop everything after the fourth decimal place and then round up to the next dime. $90.2003 is rounded to $90.30.

  • When computing a MAR drop everything after the first decimal place. $90.2003 is rounded to $90.2.

2. Nearest dime rounding after May 1982

When an individual benefit is not a multiple of $.10, it is rounded to the next lower multiple of $.10 (a MAR is rounded up). In dual entitlement cases, an excess benefit after reduction for age that is less than $0.10 is rounded to $0.00.

  • When computing an MBA drop everything after the first decimal place. $90.2003 is rounded to $90.2.

  • When computing a MAR drop everything after the fourth decimal place and then round up to the next dime. $90.2003 is rounded to $90.30.

3. Downward rounding based on amendment change

Under the statute, the downward rounding applies to calculations and adjustments effective 08/81. Automated systems were not modified to affect calculations until 06/82. Any adjustments or calculations (automated or manual) effective in the period 09/81-05/82 are not subject to this provision, due to an administrative decision to treat all calculations the same way.

4. Applicability of dimes rounding

  • Dimes rounding applies to calculation of the following:

    • Primary Insurance Amount

    • Family Maximum

    • Original Benefit

    • Monthly Benefit Amount

    • Money Amount of Reduction

    • Delayed Retirement Credits

  • Dimes rounding does not apply when calculating shares of a Lump Sum Death Payment (LSDP). See Nearest Cent Rounding in RS 00601.020B for shares of LSDP computation.

  • The amendments did not alter the policy of not rounding intermediate computation steps either up or down.

B. Policy for nearest cent rounding

Certain calculations are rounded to the nearest cent before determining the benefit. These calculations are carried out to 3 decimal places. If the third decimal place is a 4 or less, round down to the lower cent. If the third decimal place is 5 or more, round up to the next higher cent. Thus $23.764 becomes $23.76 and $23.765 becomes $23.77.

Nearest cent rounding applies to the following calculations:

  • Primary Insurance Benefit

  • Yearly indexed earnings

  • Daily WC/PDB rate (See DI 52150.035)

  • Shares of LSDP

C. Policy for truncated rounding

Certain benefit calculations require the result to be in “dollar only” amounts (rather than dollar and cents). Rounding is accomplished by dropping any amount following the decimal point.

Truncated rounding applies to the following calculations:

  • Average Indexed Monthly Earnings

  • Average Monthly Earnings (or Wage)

D. Policy for lower dollar rounding

1. Definition for benefit calculation or adjustment

When a benefit calculation or adjustment is initially effective after 05/82, and the benefit is not a multiple of $1.00, the monthly benefit is rounded to the next lower multiple of $1.00. An adjustment is any action that affects the benefit amount.

2. When to round the final monthly benefit

Consider the following before rounding the final monthly benefit

  • the family maximum;

  • age (including reduction by a fixed money amount or consideration of the Retirement Insurance Benefit (RIB) limitation);

  • WC/PDB offset;

  • Government Pension Offset (GPO);

  • Deduction or suspension on account of work;

  • Reduction for entitlement to more than one monthly benefit (dual or triple entitlement). Each benefit is rounded to the next lower multiple of a dollar.

NOTE: Where the amount of the benefit is a factor of entitlement, compare the benefits before considering the lower dollar provision. For example, when comparing possible RIB and spouse benefits in a dual entitlement case, consider the benefit amounts before dollar rounding.

  • Deduction for supplementary medical insurance (SMI) premium for which the claimant is liable, i.e., State buy-in or payment of the premium from RRB benefit or civil service annuity is not involved.

3. When not to round dollar amounts for benefits or adjustments

Lower dollar rounding does not apply:

  • If the effective date of the adjustment is before 06/82;

  • If the benefit amount after considering reductions and/or deductions is less than $1.00 (the amount is not rounded to $0.00);

NOTE: Before December 2006, when the monthly benefit amount was less than $1.00 SSA held the benefits and paid them manually at the end of each calendar year. See SM 00848.260E for more information on processing the full monthly benefit amount.

Beginning with benefits for December 2006, the system will automatically pay a monthly benefit amount less than $1.00 just as it pays all other benefits as follows:

  • If the benefit amount is less than the applicable SMI premium deduction for that month;

  • To Special Age 72 Payments;

  • To Transitionally Insured Benefits;

  • To shares of a LSDP; and

  • To shares of an underpayment due each qualified survivor.

4. Adjustments applicable after lower dollar rounding

The following deductions or adjustments are made after lower dollar rounding:

  • Recovery of a prior overpayment (including SSI offset) and repayment of excess overpayment refunds;

  • Attorney fee withholding and repayment of excess attorney fees withheld;

  • Garnishment;

  • Deduction for Part D premium;

  • Unpaid maritime tax withholding;

  • Alien taxes;

  • Installment payments;

  • Excess SMI premium arrearages and refunds of excess SMI premiums;

  • Penalty deductions and repayments; and

  • Death underpayments.

5. Monthly Benefit Credited (MBC)

  • For any month before 06/82

    The monthly benefit credited (MBC) is the amount after reductions and deductions, but before the collection of any obligations of the beneficiary (e.g.; SMI premium, a prior overpayment, attorney fee withholding).

  • For 06/82 or later

    The MBC is the amount after reductions, deductions, and lower dollar rounding, but before the collection of any obligations of the beneficiary. The calculation of the MBC for these months differs depending upon SMI entitlement and the party responsible for payment of the SMI entitlement.

No SMI Entitlement

The MBC is equal to the amount after reductions, deductions and lower dollar rounding.

SMI Entitlement - Number holder (NH) or Private Third Party Is Paying Premium

The lower dollar rounding is applied to the benefit after considering reductions, deductions and SMI premium for each month the claimant is liable for the SMI premium. To calculate the MBC, apply reductions and deductions, and subtract the amount of the SMI premium. The remainder is rounded to the next lower dollar. The MBC is equal to this remainder after rounding plus the amount of the SMI premium.

SMI Entitlement - State Buy-In, Railroad Retirement Board (RRB) or Civil Service Payment of SMI Premium

If state buy-in is involved or the premium is deducted from the beneficiary's RRB benefit or civil service annuity, the MBC for each month that the third party is liable is computed as if there were no SMI entitlement. If the beneficiary later becomes responsible for the premium payment (e.g., state buy-in is ended), the MBC for each month of the beneficiary's liability is computed as if the NH or private third party is paying the premium.


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http://policy.ssa.gov/poms.nsf/lnx/0300601020
RS 00601.020 - Rounding of Benefits - 02/09/2011
Batch run: 02/09/2011
Rev:02/09/2011