TN 23 (04-11)
RS 02501.095 Charging Excess Earnings
A. Definitions for work suspensions and work deductions
1. Work suspensions
Work suspensions are temporary withholdings of current year benefits based on current year work and the amount of estimated earnings. The law allows SSA to withhold benefits based on estimated earnings to prevent future overpayments. We call months withheld based on an estimate suspension months.
2. Work deductions
Work deductions are nonpayment of benefits for the closed year based on the amount of actual earnings for that year. Make final adjustment during the enforcement process. We call the final withholding of benefits deduction months.
B. Policy for charging excess earnings
1. Charging excess earnings
Charge an individual’s excess earnings to each monthly benefit beginning with the first month the individual is entitled in the year in question and continuing until the excess is recovered or until all the benefits have been withheld for the year. Do not charge the excess for one year into the next year.
2. Number holder (NH) is the worker
Withhold the excess earnings of the NH from the total family benefit. Therefore, suspensions or deductions apply to both the NH and the auxiliaries until the excess is charged or if the excess amount is greater than the total family benefit for the year, the entire year. The total family benefit includes all monthly benefits payable to the NH and the auxiliary beneficiaries on the NH's record.
EXCEPTION: The excess earnings of the worker will not cause deductions from the benefits of an entitled divorced spouse if the entitled divorced spouse meets the conditions described in RS 02501.021B.5.b. If the divorced spouse meets those conditions, do not count the divorced spouse's benefit amount when determining the total family benefit.
EXAMPLE: The NH is entitled to a retirement insurance benefit (RIB) of $378. His wife and child are each entitled to an auxiliary benefit of $160. The NH worked and had excess earnings of $2,094. These earnings are charged against the total monthly benefit of $698 ($378 plus (2 x $160)). Therefore, no benefits are payable to the family for January through March (3 x $698 = $2,094).
3. Auxiliary or survivor is the worker
Withhold the excess earnings that result from the auxiliary's own work and earnings from the benefits due that beneficiary. Therefore, suspensions or deductions apply only to the working auxiliary or survivor.
4. Both NH and auxiliary are workers
If both the NH and auxiliary are workers, withhold the excess earnings of the NH from the total family benefit that includes the benefits of the working auxiliary. Therefore, suspensions or deductions apply to the total family until the NH's excess is withheld.
Withhold the working auxiliary's excess earnings from any remaining benefits (if any) due only the working auxiliary.
EXAMPLE: The NH is entitled to a retirement insurance benefit (RIB) of $346, and her husband is entitled to a spouse's benefit of $173. The NH had excess earnings of $2,076. Her husband had excess earnings of $865.
The NH's earnings are charged against the total monthly family benefit of $519 ($346 plus $173) so neither the NH nor her husband receives payments for January through April (4 x $519 = $2,076).
Charge the husband's excess earnings against his own benefit of $173. Since charging his benefits for January through April with the NH's excess, the charging of his own earnings cannot begin until May; therefore, he receives no benefits for May through September.
5. Beneficiary has both wages and net earnings from self-employment (NESE)
The beneficiary must use the same taxable year for both NESE and wages when determining total yearly earnings.
a. Amount of benefits
The amount of benefits we use to charge the excess is the amount after:
any reduction for the maximum (without first making any annual earnings test deduction). This means that we make the reduction before the deduction;
any reduction for entitlement before full retirement age (FRA);
any reduction because of an auxiliary's or survivor's entitlement to a RIB or disability insurance benefit (DIB);
reductions above and after the benefit amount is rounded to a multiple of $.10, as described in RS 00601.020.
b. Months that cannot be charged
Do not charge excess earnings against any month in which the beneficiary was:
not entitled or was deemed not entitled to benefits described in RS 02501.130;
in a grace year and neither worked for wages of more than the monthly exempt amount nor rendered substantial services in self-employment described in RS 02501.030;
entitled to a DIB, childhood disability benefit, or disabled widow(er)'s benefit as described in The Earnings Test (ET) RS 02501.021, and Applying the Monthly Earnings Test RS 02501.030.