Basic (11-81)

# NL 00711.100 Computation Paragraphs

4300. ESTIMATING BENEFIT ACTIONS

The amount of benefits payable on a person's earnings record is generally based on his average monthly earnings in work covered by the Social Security Act. In most cases, benefits are figured on earnings beginning with January 1, 1951. However, if including earnings before that date will give a higher benefit, the average is figured beginning with January 1, 1937.

A table showing some examples of monthly payments is given in the enclosed publication.**

4301. HOW BENEFITS ARE COMPUTED

A person's benefit amount is generally based on his average earnings in work covered by the program. This average is based on the total earnings in all but five lowest earnings years after (a) 1936, (b) 1950 up to the year he (c) is 62, (d) dies . The total earnings used from this period are divided by the number of months in the same period to determine the average monthly earnings. The resulting average monthly figure is converted directly to the person's benefit amount through a table contained in the Social Security Act.

4302. ELIGIBLE AT AGE 62

Based on the birthdate you have given us  (a)  , you will be eligible for retirement benefits in  (b)  , the month you reach age 62. Because of possible changes in the social security law and additional earnings which may be credited to your earnings record, we are unable to give you an accurate figure concerning the monthly benefit for which you may be eligible when you are age 62. The enclosed publication will help you estimate your benefit amount.**

4305. SPECIAL MINIMUM BENEFIT

A special minimum benefit ranging from  \$  to  \$  a month may be payable to people who worked for many years at relatively low earnings in employment covered by the social security program. If a worker has credit for 23 “years of coverage” under the program, his benefits would be  \$  a month under this provision. His benefit will be increased by \$     monthly for each additional year of coverage. The highest payment under this provision is \$     a month, which is payable to workers who has 30 years of coverage. This method of figuring benefits is used only if a higher payment results.

NOTE TO CORRESPONDENT: The 1977 amendments provide that effective January 1979, the dollar amount used to compute the special minimum PIA is increased from \$9 to \$11.50. (See updated table of special minimum PIAs for current information.)

**NOTE TO TYPIST: Enclose SSA publication No. 76-10047 (or current revision).

 To Link to this section - Use this URL: http://policy.ssa.gov/poms.nsf/lnx/0900711100 NL 00711.100 - Computation Paragraphs - 09/16/2003 Batch run: 09/16/2003 Rev:09/16/2003