In reviewing all of the social security rulings, which began in 1960, it is interesting to come across some of the historical oddities in the program. It is also interesting to see how the program has evolved over time since its inception.

Social Security Ruling (SSR) 62-64 deals with payments made to farmers under the 1962 Wheat and Feed Grain Programs.

Under the Agricultural Act of 1961, payments were made to farmers in order to divert their lands from the production of wheat and feed grains and to preserve them for conservation uses. Similar to payments made under the federal Soil Bank Act, which served a similar purpose, these payments are considered earnings to the farmer in computing his or her net income from self employment for social security purposes.

If a farmer was a landlord in a landlord/tenant farming operation (I don’t know if these kinds of arrangements exist anymore, at least in the way they used to under the infamous sharecropping system), he could only include these payments in his social security earnings if he materially participated in the productive portion (as distinct from the conservation portion) of the farm enterprise. This makes sense, and is similar to the rule that rental income from passive real estate investments (as opposed to a realtor’s fees, which are earned in the ordinary course of an active business enterprise), are excluded from social security earnings.

The upshot of this ruling is that federal payments made to farmers in order to keep their land out of production for conservation purposes are used to determine eligibility for, and the amount of, social security benefits, whether they be old age, survivors, disability, or other types of benefits. I guess this makes sense in light of the fact that, in the absence of this rule, farmers receiving these payments would lose the opportunity to accrue social security credits by having some of their lands taken out of productive use.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.