Reductions Under The SS Act Formula

The Special Guaranty computation is reduced under the regular SS Act formula for other benefits and earnings. Any reduction to an employee or spouse Tier 1 benefit would also apply to their Special Guaranty computation.

Age Reductions

The term Full Retirement Age (FRA), for entitlement based on age, means the age at which you and your spouse can receive a full Special Guaranty benefit (not reduced for early retirement). Since the Special Guaranty is an SS Act calculation, the deeming provisions for 60/30 annuities under the RRA will not apply to this calculation.

Determining Your Full Retirement Age

If you are not entitled based on disability, your employee Special Guaranty benefit will be reduced by 1/180 for each of the first 36 months you are under FRA and 1/240 for each additional month you are under FRA when the Special Guaranty rate begins.

If your spouse is not entitled based on a child-in-care, the spouse Special Guaranty rate is reduced by 1/144 for each of the first 36 months your spouse is under FRA and 1/240 for each additional month your spouse is under FRA when the Special Guaranty rate begins.

Social Security Benefits Or Other Railroad Retirement Benefits

Social security benefits that are payable on your earnings record are deducted from any increase that would have been payable. Similarly, any social security benefits or other railroad retirement benefits that any family members included in the Special Guaranty computation receive on their own or someone else's earnings record, are deducted from their share of any increase payable. In most instances, the receipt of social security benefits or other railroad retirement benefits prevents any Special Guaranty increase from being paid.

Spouse Public Service Pension

Public service pensions (PSP) are retirement benefits spouses receive from any local, state or federal governmental agency, other than SSA and the RRB. These benefits may be paid as either monthly payments or a lump-sum payment. Two-thirds of the amount of this PSP may be deducted from the amount of the spouse increase, preventing the Special Guaranty rate from being paid.

Refer to Booklet RB-30 Spouse/Divorced Spouse Annuity for a more detailed explanation of the PSP reduction. Ask the nearest RRB field office if the PSP reduction would apply to your spouse.

Earnings Of Disability Annuitants

If you are under full retirement age and are receiving a disability annuity, refer to Booklet RB-1D, Employee Disability Benefits, for an explanation of the effect of earnings on a disability benefit.

When disabled children work in any kind of employment, their earnings may affect payment of your Special Guaranty increase. The RRB will determine whether or not the work is Substantial Gainful Employment. This is explained in booklet RB-19A, Child's Disability Benefits. These earnings are to be included on the application AA-19A, Application for Determination of Child Disability.

Definition Of Earnings

When you figure the amount of the annual earnings for each family member, count all earnings from both employment and self-employment for the entire year.

Earnings from employment include all wages, salaries, vacation pay, some kinds of sick pay, commissions, bonuses, fees, tips, and retroactive wage increases. The cash value of any goods or services (such as meals or living quarters) furnished for services performed are also counted as earnings from employment. If the spouse or child is employed by a railroad, include their railroad compensation in their total earnings. Count all amounts before any payroll deductions for taxes, social security, insurance premiums and so on.

Earnings from self-employment mean the person's net income (profit after deduction of allowable business expenses) for the year.

Do not include as earnings any money received for any reason other than work, such as interest from savings, income from investments, gifts, inheritances and pensions or other retirement benefits.

Annual Earnings Exempt Amount

The term Annual Earnings Exempt Amount means the amount of money you or another family member included in the Special Guaranty computation can earn without affecting your Special Guaranty increase. Refer to Form G-77A, "How Work Affects Your Railroad Retirement Annuities," for the current Annual Earnings Exempt Amount.

However, if the family member works outside the United States for more than 45 hours in a month, and does not pay United States social security taxes, you will lose part of your Special Guaranty increase regardless of the amount of money earned.

Monthly Earnings Exempt Amount

Family members are entitled to a Monthly Earnings Exempt Amount, which is 1/12 of their Annual Earnings Exempt Amount. The Monthly Earnings Exempt Amount basically applies only in the first year in which the family member is included in the computation of the Special Guaranty increase and has a non-work month.

Non-Work Month

A non-work month for the Monthly Earnings Exempt Amount is a month in which a family member does not work. It can also be either of the following:

• Work For A Non-Railroad Employer - The family member works but earns less than the Monthly Earnings Exempt Amount; or,
   
• Self-Employment – The family member works in self-employment but does not perform "substantial services." To determine whether a person performed "substantial services" in self-employment, the RRB considers:

1. the amount of time devoted to the business;
2. the type of business operated;
3. the type of service performed; and,
4. how all this compares to the work done before the person applied for the annuity increase.

Reduction For Earnings

Your earnings from any employment outside the railroad industry and the earnings of family members can affect payment of your Special Guaranty increase as follows:

Garnishment For Alimony Or Child Support

A court order can cause the RRB to pay a designated portion of your Special Guaranty increase to another person. Our Bureau of Law handles all alimony and child support matters and makes all decisions related to the appropriateness and acceptability of legal notices of garnishment and the removal of those orders.

Imprisonment Or Confinement Due to A Conviction For A Criminal Offense

The amount of your Special Guaranty increase may be affected if you are, or another family member is, imprisoned or under a sentence of confinement due to a conviction for a criminal offense.

Exception: Benefits may continue to be paid to disabled employees or to disabled children who are actively and satisfactorily participating in a rehabilitation program through which they are expected to engage in substantial gainful activity within a reasonable period after release.

A crime is a criminal offense if it is considered to be a criminal offense under applicable law. Most states define certain crimes as criminal offenses. However, some states and foreign countries do not classify crimes as criminal offenses. If a crime has not been classified as a criminal offense, it is still considered to be a criminal offense if it is a crime punishable by death or imprisonment for more than one year.

To be "imprisoned" or "under a sentence of confinement" means confinement to a jail, prison, or other penal institution or correctional facility. This includes any facility which is under the control and jurisdiction of a penal system, or any facility in which a person may be confined. This also includes hospitals, institutions, and halfway houses, which are used as a place of confinement. Persons under sentence of confinement to any of these facilities are considered confined even though they may go outside the facility to work, attend school, or for some other reason.

NOTE: Prisoners who are released on parole or because their sentence has ended, been suspended, or overturned are no longer considered to be confined or imprisoned.