SSR 62-7. REDUCTION OF BENEFITS AND AMOUNT OF DEDUCTION WHERE FAMILY MAXIMUM INVOLVED

The worker died in December 1960 at age 51, survived by a widow, W, and

two children under age 18. In January 1961 the widow filed claim for, and

established entitlement to, mother's insurance benefits for herself and

child's insurance benefits for each of the children, effective December

1960. The worker's primary insurance amount, based on his average monthly

wage, is $119. Sections 202(g) and (d) of the Act provide that the amount

of a mother's insurance benefit and (for months after November 1960) the

amount of a child's insurance benefit on the earnings record of a deceased

worker is three-fourths of the worker's primary insurance amount. Under

section 215(g), all benefits which are not a multiple of 10 cents must be

rounded to the next higher multiple of 10 cents. Accordingly, W and each

child would appear to be entitled to a benefit of $89.25 rounded to

$89.30. However, section 203(a) of the Act limits the total amount of

benefits which persons may receive on any worker's earnings record to a

family maximum, the amount of which depends upon the primary insurance

amount. For a primary insurance amount of $119 the family maximum is $254.

Therefore, the original benefit of $89.30 for each beneficiary must be

reduced to $84.67 (one-third of $254) and this amount must be raised to

$84.70. Consequently, W and each child were awarded adjusted monthly

benefits of $84.70 effective December 1960.

mum, the amount of which depends upon the primary insurance

amount. For a primary insurance amount of $119 the family maximum is $254.

Therefore, the original benefit of $89.30 for each beneficiary must be

reduced to $84.67 (one-third of $254) and this amount must be raised to

$84.70. Consequently, W and each child were awarded adjusted monthly

benefits of $84.70 effective December 1960.

In April 1961, W notified the Bureau that she had found employment and

would be earning wages of over $100 per month beginning with April, and

expected her earnings for 1961 to be at least $2,500. Therefore, her

benefit for each such month would be subject to a work deduction. A

determination as to deductions for 1961 will be made after the end of the

year when the exact amount of W's earnings for the year and for each month

after March can be ascertained. Meanwhile, an amount equal to the expected

deduction must be withheld from her benefit for April and each succeeding

month of 1961.

The deduction for April and subsequent months of 1961, on the basis of

W's expected earnings, would, under section 203(b), be equal to the amount

of her benefit of $84.70 for each month. However, under section 203(a),

where the total benefits must be reduced because of the maximum payable to

a family on one earnings record, the reduction is made only after any

necessary deductions have been applied; that is, in determining whether

benefits must be reduced and, if so, how much, only those benefits will be

considered which are payable after deductions have been imposed. This

means that, beginning April, only the benefits of the two children are

considered in determining the effect of the maximum provision in section

203(a). The children's original benefits total $178.60 (2 times $89.30),

and this amount does not exceed the maximum of $254

d and, if so, how much, only those benefits will be

considered which are payable after deductions have been imposed. This

means that, beginning April, only the benefits of the two children are

considered in determining the effect of the maximum provision in section

203(a). The children's original benefits total $178.60 (2 times $89.30),

and this amount does not exceed the maximum of $254. Thus under the

circumstances described above, it might appear that beginning April 1961

each child would receive benefits of $89.30 per month, and their mother,

W, would receive no benefits.

However, section 203(i) 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 living in the same

household. Since W and her two children live in the same household, this

provision is applicable. The total amount which would be payable to those

living in the household is $178.60, the amount that would be payable to

the children during W's employment but for section 203(i). Under section

203(i), the two children would continue to receive $169.40 ($84.70 each)

per month, as before W's employment began, and W would be paid a partial

benefit of $9.20 per month, which is the difference between $178.60 and

$169.40. Thus the amount which will be paid to each child remains $84.70

whether or not W's benefit is subject to deduction.

Accordingly, it is held that W and the two children may each

receive benefits of $84.70 per month for months in which no beneficiary is

subject to a deduction under section 203; and that, for months during

which they are all entitled and living in the same household and W is

subject under section 203 to a deduction of the full amount of her

benefit, the amount paid to the children will not be affected and W will

receive benefit payments of $9.20 per month.