A social security beneficiary, C, resigned his position as president and general manager of family company and became an advisor and chairman of the board of the company.

He became entitled to old age social security insurance benefits in March 1957, but no benefits were payable in the years 1957, 1958, and 1959 became he was still working for the family company and making a substantial salary during those years.

In February, 1961, he filed an annual report with social security in which he reported earnings of $1,200 for the year 1960. This was after he had resigned as president and general manager of the family company. For the year 1960, $1,200 was the most he could make without having work deductions imposed against his social security benefits.

However, the company had also voted him retirement benefits in the amount of $325 per month beginning January 2960. The company did not have a plan or system of pension on account of retirement for either officers or employees.

During 1960, C went to the office daily for 2-3 hours. He continued to supervise one of the company’s accounts and was available to consult his son, who had become president of the company, about the operations of the business.

It was held that, under the circumstances, C’s wages for purposes of determining social security work reductions included both the $100 a month salary and the $325 retirement annuity.

See Social Security Ruling (SSR) 62-9.

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.