A widow, W, and her two children received social security benefits based on her deceased husband’s earnings record.
The worker died in December 1960, survived by his wife and two children. In January 1961 W began receiving widow’s social security benefits and her children begin receiving children’s social security benefits based on her deceased husband’s earnings record
The worker’s primary insurance amount (PIA, the amount he would have received if he had retired at full retirement age) was $119 per month. The family maximum amount of benefits based on his earnings record was $254.
The law provided that a mother’s benefit children’s benefits were each equal to three quarters of the worker’s PIA. Under this formula, W and each of her two children was entitled to $89.25 per month (rounded up to $89.30).
However, because of the family maximum, W and her children were entitled to a monthly benefit amount of $84.70 apiece ($254 divides by three and rounded up to the nearest $.10).
W reported to Social Security in April 1961 that she had gone to work at a monthly wage of over $100 per month and expected to earn more than $2,500 for the year. Social Security was required to wait until after the end of the year, when the exact amount of W’s earnings for the year and for every month of the year since April could be calculated. Pending that determination, an amount equal to the expected work deductions was withheld from W’s benefits checks for each month of the year beginning with April.
The work deductions for 1961 as a result of W’s work activity would be equal to the amount of her benefit of $84.70 per monthly. However, where total benefits must be reduced because of the family maximum on one person’s earnings record, the reduction is made only after any necessarily deductions have been applied. In other words, after W’s work deductions have been applied and eliminated her benefit, the children’s benefits would seem to be payable in full, because their combined benefit (2 x 89.30 = $178.60) is less than the family maximum.
However, section 203 (i) of the Act provides that deductions shall be made only to the extent that they reduce the total of benefits which would otherwise be payable on the same earnings record to persons in the same household. W’s children were living in the same household, and their total benefits would have been $178.60 but for application of section 203 (i). Thus, the children’s benefits will remain the same; i.e., $84.70 per month, and W’s benefits after her work reductions will be $9.20 — the difference between $178.60 and $169.40.
To recap, for the months before W’s work activity began, her and the children’s benefits were each $84.70 per month. After W’s work began, the children’s benefits remained at $84.70 per month and W’s benefits were $9.20 per month.
See Social Security Ruling (SSR) 62-7.
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.
