D attained age 65 in September 1959 and became eligible for old age social security insurance benefits.

He worked for X manufacturing company throughout the year 1960 and received wages of $2,080. At the time, Social Security retirement benefits were subject to work reductions if a beneficiary earned more than $100 per month.

The manufacturing company was closed in the month of July 1960 for vacation. D received $150 of vacation pay for that month.

The question arose as to whether D’s vacation pay was wages for purposes of social security work deductions.

The answer was yes. The phrase “rendered services for wages”, which appears in section 203 of the Social Security Act encompasses the entire employment relationship and does not require actual performance of work.

Held: D’s vacation pay subjected his social security benefits to work deductions.

See Social Security Ruling (SSR) 62-10.

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.