Work and earnings can affect the payment of your annuity and must be reported promptly to the RRB in order to avoid potential overpayments and penalties. The following describes the effect of work on your benefit payments.
A. Work in the Railroad Industry
Your annuity cannot be paid for any month that you work in the railroad industry.
B. Work for Your Last Nonrailroad Employer
Your Tier II and supplemental annuity, if any, are subject to deductions for earnings from your last nonrailroad employer. The deduction is $1 for each $2 in earnings not to exceed 50% of these components.
C. Work for any Employer
Note: Section C refers to disability earnings limits. Refer to Form AB-31, How Work Affects Your Disability Annuity, for the current disability earnings limits.
- Earnings of more than the disability earnings limit from Any Work - If you are under "full retirement age", your annuity cannot be paid for any month you do any work and earn over the disability earnings limit*.
- Earnings - Earnings include wages before payroll deductions, commissions, and other payments for work (such as room and board) and net earnings from self-employment.
- Penalties for Late Reports - If your earnings are greater than the disability earnings limit* for a month, and you do not report it to us within two months, you will be penalized.
- The first time that you report late, the penalty is one month's annuity.
- The second time that you report late, the penalty is one month's annuity for each month you earned over the disability earnings limit.
- End-of-the-Year Adjustment - If your annuity was adjusted because you reported earnings over the disability earnings limit*, we will send you a form after the end of the calendar year on which to report your earnings. Annuity payments that have been withheld will be paid if you earned less than the disability earnings maximum*.
- If you earned more than the disability earnings maximum*, you will not be entitled to an annuity for some months; the number depends on how much you earned.
- Penalties for late reports can be applied to end-of-year adjustments if they were not already assessed during the year the excess earnings occurred.
Note: These disability work restrictions cease upon a disabled employee annuitant's attainment of full retirement age, when the annuitant becomes subject to the work and earnings restrictions applicable to employee annuities based on age and service. This transition is effective no earlier than full retirement age even if the annuitant had 30 years of service.
* When determining if you have worked over the disability earnings limit/maximum, you must first deduct any impairment-related work expenses from your earnings. Impairment-related work expenses include special expenses you paid for items or services you needed in order to work (see the definition for Impairment)
D. Substantial Gainful Activity
Substantial gainful activity is (in general) work which results in earnings. (Refer to Form AB-31, How Work Affects Your Disability Annuity). It also refers to work activity involving the performance of significant physical or mental duties, or a combination of both, which are productive in nature. If you work and are receiving an annuity based on total and permanent disability, or if you have a period of disability or early Medicare, you may be subject to a finding of substantial gainful activity.
E. Work May Raise a Question About Your Condition
Until you reach full retirement age, your work and earnings will be evaluated to see if you are able to do "regular work". Also, any work performed after your disability annuity begins may raise a question about "medical recovery" regardless of the amount of your earnings. If this happens, you will be asked for additional information about your medical condition and we may request that you be examined.
In any case, all work and earnings by a disability annuitant must be reported promptly to the RRB in order to avoid potential overpayments and penalties.