SSR 70-10: SECTION 209(h). -- WAGES -- CASH REMUNERATION FOR AGRICULTURAL LABOR -- COUPON BOOKS ISSUED BY EMPLOYER

20 CFR 404.1027(i)

SSR 70-10

G performed agricultural services for a company engaged in an

agricultural enterprise and each month received the first $80 of his

remuneration in the form of two coupon books valued by the employer at $40

each. G receives in cash each month only the amount of remuneration which

exceeds $80. He must accept the coupon books, which are valid only for

purchases of goods and commodities from the general store operated by the

employer.

A question has been raised whether the two coupon books given to G by his

employer represent cash remuneration for agricultural labor within the

meaning of section 209(h) of the Social Security Act and section

404.1027(i)), Regulations No. 4 of the Social Security Administration, (20

CFR 404.1027(i)), and thus would be creditable as wages for social

security purposes.

Section 209(h) of the Social Security Act provides, as pertinent here,

that the term "wages" means remuneration paid after 1950 for employment

but does not include remuneration paid in any medium other than cash for

agricultural labor. Section 404.1027 of Regulations No. 4, provides, as

applicable here:

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In this case, G had no choice but to accept the coupon books toward

payment for his services in agricultural labor. The coupon books were

redeemable only for goods and commodities from the general store operated

by G's employer. The books were not redeemable for cash. Therefore the

books, having limited use as media of exchange, lack monetary

characteristics. Instead they represent payment in kind, for the goods

from the employer's store, to the extent of the value of the books

used. [1]

ural labor. The coupon books were

redeemable only for goods and commodities from the general store operated

by G's employer. The books were not redeemable for cash. Therefore the

books, having limited use as media of exchange, lack monetary

characteristics. Instead they represent payment in kind, for the goods

from the employer's store, to the extent of the value of the books

used. [1]

Accordingly, it is held, that the coupon books, given to G by his

employer toward payment for his services in agricultural labor, redeemable

only for goods and commodities in the employer's store, do not constitute

cash remuneration for agricultural labor within the meaning of section

209(h) of the Social Security Act and regulations promulgated thereunder,

and are therefore not creditable as wages for social security purposes.

[1] See in this regard SSR 70-11 , C.B. 1970, p.23 for

discussion of United States Savings Bonds, Series E, as cash remuneration

for agricultural labor.