An employee retired in January 1959. He continued to render services to his employer part-time, for which he was paid $100 per month for the entire year. At the end of the year, as was custom for the company, he received a $50 Christmas bonus and a package of cigarettes (the Surgeon General’s warning about cigarette smoking went into effect in 1970). The employee’s W2 wage statement for the year showed $1250 in earnings, which included the $50 holiday bonus.

For that year, the exempt amount for earnings after retirement was $1200. For persons under age 72, for each $80 (or fraction thereof) above $1200, one full month’s worth of benefits was deducted.

The $50 bonus appeared to be remuneration for services rendered. For purposes of the act, the title of the wages was immaterial so long as it was pain in exchange for services rendered.

It was held that claimant’s total earnings for the year were $1250; therefore, one full month’s benefits were withheld. (For 12-month taxable periods after June 30th, 1961, $1 was withheld from benefits for every $2 above the exempt amount).

SeeSocial Security Ruling 60-26

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.