Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698747834911.pdf (Micronesia, Federated States of)
TWELFTH CONGRESS OF THE FEDERATED STATES OF MICRONESIA THIRD REGULAR SESSION, 2002 C.B.

NO.

12-104 A BILL FOR AN ACT To further amend title 53 of the Code of the Federated States of Micronesia, as amended, by amending sections 603, 801, 802 and 803 and by adding a new section 803A and 811 to make changes in the Social Security Act, and for other purposes.

BE IT ENACTED BY THE CONGRESS OF THE FEDERATED STATES OF MICRONESIA: Section 1.
Section 603 of title 53 of the Code of the Federated States of Micronesia is hereby amended to read as follows: "Section 603.

Definitions .

In this chapter, unless the context otherwise requires, the following definitions shall be applicable: (1) 'Application' means the prescribed form or forms provided to individuals by the Social Security Administrator as the exclusive means by which an individual may apply for the payment of any benefit provided for in section 801, 802, 803 or 803A of this act.
([1] 2 ) 'Became disabled' means the first month in which an individual is under a disability [and is both fully and currently insurred].

([2] 3 ) 'Board' means the Federated States of Micronesia Social Security Board provided for by section 701 of this subtitle.

([3] 4 ) 'Child or spouse' means [that] an applicant [is the child or spouse of an individual if] that the court of CB12.104CBL 12-103 C.B.

NO.
NO.

12-104 the State in which [the] an individual was domiciled at the time of his death has or would find [the applicant] to be the individual's child or spouse in determining the devolution of intestate personal property.

'Child' shall include the deceased individual’s biological children and such adopted children whose confirmed petition for adoption by the wage earner has been presented to the Social Security Administration prior to the individual’s death.
([4] 5 ) 'Contributions' means the tax imposed upon income of covered employees and the tax imposed upon employers on account of wages paid to a covered employee.

([5] 6 ) 'Disability' means inability to engage in any substantial gainful employment by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than [twelve] 12 months.
([6] 7 ) 'Earning test' means that an individual who receives a retirement, disability, or survivor benefit and who works in covered or noncovered employment shall have his quarterly benefit reduced by one dollar for each two dollars earned in a quarter, except there shall be no reduction for the first $300 earned in a quarter.

The reduction shall be applied in one of the subsequent two 2 of 16 C.B.

NO.
NO.

12-104 quarters immediately after the quarter in which the earnings were made, or as soon as possible thereafter.
([7] 9 ) 'Employee' means: (a) any officer of a corporation; or (b) any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee; or (c) any self-employed person who has at least one employee for whom he is required to report in a given quarter; or (d) any self-employed person who had more than $10,000 of annual gross revenue in the preceding calendar year.
([8] 10 ) 'Employment' means any service by an employee for an employer incorporated or doing business within the Federated States of Micronesia employing him, irrespective of where such employment is performed, except family employment.

([9] 11 ) 'Family employment' means employment of a worker by a member of the household, a parent or a son or daughter except that the worker may apply to the Board for a determination that such employment is bona fide covered employment subject to this subtitle.
([10] 12 ) 'Insured status' can mean any of the following: (a) 'Currently insured individual' means any 3 of 16 C.B.

NO.

12-104 individual who has had not less than eight quarters of coverage during the [thirteen] 13- quarter period ending with: (i) the quarter in which he died; or (ii) the quarter in which he became entitled to old age insurance benefits; or (iii) the quarter in which he became disabled, whichever first occurs.
(b) 'Fully insured individual' means any individual who has not less than one quarter of coverage for each year beginning after June 30, 1968, or for each year after attaining the age of [twenty-one] 21 , whichever is later, and up to but excluding the year in which he attained retirement age, became disabled, or died, whichever first occurred, except that in no case shall an individual be a fully insured individual unless he has at least [twelve] 12 quarters of coverage.
([11] 13 ) 'Quarter' and 'calendar quarter' mean a period of three calendar months ending on March 31st, June 30th, September 30th, or December 31st.

'Quarter of coverage' means a quarter in which the individual has been paid [fifty dollars] $50 or more in wages in employment subject to this subtitle.

([12] 14 ) 'Wages' means remuneration paid subject to the provisions of this subtitle, including the cash value of 4 of 16 C.B.

NO.
NO.

12-104 all remuneration paid in any medium other than cash and remuneration accruing to a self-employed person.

Remuneration accruing to a self-employed person shall be deemed to be twice the amount paid to the highest paid employee reported by the self-employed person in a quarter, [$3,000 maximum per quarter] with a maximum of $3,000 per quarter through December 31, 2001 and a maximum of $5,000 per quarter thereafter .
Remuneration accruing to a self-employed person who has no covered employees shall, for each quarter of a year, be deemed to be 2.5 percent of the gross revenue of the business for the previous calendar year, subject to a $3,000 maximum per quarter through December 31, 2001 and a maximum of $5,000 per quarter thereafter .

Remuneration paid for any service which is more or less than a whole dollar shall, as may be prescribed by regulations, be computed to the nearest dollar.
Wages shall not include: (a) that part of remuneration in excess of $3,000 through December 31, 2001 and in excess of $5,000 thereafter paid in a quarterly reporting period by one employer; (b) any payment on account of sickness or accident disability, or medical or hospitalization expenses made by an employer to or on behalf of an employee; (c) any payment made to or on behalf of an 5 of 16 C.B.

NO.
12-104 employee or to the employee's beneficiary from a trust or annuity; (d) remuneration paid in any medium other than cash to an employee for service not in the course of the employer's trade or business or for domestic service in a private home of an employer; (e) remuneration paid for casual or intermittent labor not performed in the course of the employer's trade or business when such employment does not exceed employment in more than one week in each calendar month of each quarterly reporting period; and (f) remuneration from family employment subject to the provisions of this subtitle."
Section 2.

Section 801 of title 53 of the Code of the 15 Federated States of Micronesia is hereby amended to read as follows: "Section 801.

Scope of coverage; Verification of employment ; Old age benefits .

(1) All employees, wherever employed by an employer incorporated or doing business in the Federated States of Micronesia, shall be covered unless both the employer and the employee are currently subject to any other recognized Social Security System.
The highest administrator of the Social Security System, or his designees, shall cause at least two unannounced employment site checks to be conducted upon every non- 6 of 16 C.B.

NO.
NO.

12-104 government employee who first begins to contribute to the Social Security System after age [forty-five] 45 [years] to ensure that such non-government employee is actually engaged in an employer-employee relationship that will allow him to be covered and eligible for benefits under this subtitle.
The two employment site checks shall not be conducted within 1 month [from] of each other and both shall be conducted within the first [6] six months of the employee's first contribution payment to the Social Security System.

For the purposes of this subtitle, any elected official in any Government unit or body in the Federated States of Micronesia is deemed to be an employee employed by a Federated States of Micronesia employer.
The governmental unit or body to which such person is elected is subject to the provisions in this subtitle relating to the duty and obligations of a Federated States of Micronesia employer.
(2) Every person who: (a) is [a fully insured individual, as defined in this subtitle] fully insured ; (b) has attained age [sixty years] 60 ; and (c) has filed a complete application with the Social Security Administrator for old age insurance shall be entitled to an old age insurance benefit [for each month, beginning with the month for which both paragraphs 7 of 16 C.B.

NO.
NO.

12-104 (a) and (b) of this subsection are satisfied and ending with the month preceding the month in which he dies,] subject to the earnings test as defined in this subtitle.

(3) Old age insurance benefit payments shall be paid for each month commencing with the month in which both paragraphs (2)(a) and (2)(b) of this section are satisfied and shall end with the month preceding the month in which the applicant dies.
(4) Notwithstanding the provisions of subsections (2) and (3) above, retroactive payments shall be limited to the twelve months immediately preceding the month in which the individual entitled to benefits satisfies all requirements of subsection (2) of this section. "

Section 3.

Section 802 of title 53 of the Code of the 15 Federated States of Micronesia is hereby further amended to read as 16 follows: "Section 802.

Surviving spouse[ 's ] benefits .


[The surviving spouse of an individual who died fully insured, if such spouse has filed application, shall be entitled to a survivor insurance benefit for each month beginning with the month of death of the fully insured spouse and ending with the month preceding the month in which the surviving spouse dies or remarries; provided, that such benefit shall be subject to the earnings test as defined in this subtitle.]

8 of 16 C.B.

NO.
8 of 16 C.B.

NO.

12-104 (1) Every surviving spouse who: (a) was married to an individual who died fully insured; and (b) files an application; shall be entitled to a surviving spouse insurance benefit, subject to the earnings test as defined in this subtitle.
(2) Surviving spouse benefit payments shall be paid for each month commencing with the month of death of the fully insured spouse and ending with the month preceding the month in which the surviving spouse dies or remarries.

(3) Notwithstanding the provisions of subsections (1) and (2) above, retroactive payments shall be limited to the 24 months immediately preceding the month in which the surviving spouse satisfies all requirements of subsection (1) of this section. "

Section 4.
Section 4.

Section 803 of title 53 of the Code of the 19 Federated States of Micronesia is hereby amended to read as follows: "Section 803.

[ Dependents benefits - Disability benefits ] Surviving child's benefits .
[(1) Every surviving child who is dependent upon an individual entitled to old age benefits or who was dependent upon an individual who died fully insured or currently insured shall be entitled, upon filing 9 of 16 C.B.

NO.
12-104 application, to a child's insurance benefit for each month beginning with the month of death of such individual and ending with the month preceding whichever of the following first occurs: (a) attainment of age eighteen years, except that benefits are payable until the month before the attainment of age twenty-two so long as the beneficiary is a bona fide student, and except that benefits are payable during the disability of a child who was disabled before the attainment of age twenty-two;] (1) Every surviving ch ild who: (a) was dependent upon an individual entitled to old age benefits or who was dependent upon an individual who died fully insured or currently insured; and (b) has filed a complete application with the Social Security Administrator for survivor's insurance; shall be entitled to a child's insurance benefit, subject to the earnings test as defined in this subtitle.
(2) A child's insurance benefit shall be paid for each month beginning with the month of the death of the individual who died fully insured or currently insured and shall end with the month preceding the month which contains the first to occur of the following events: (a) attainment of age twenty-two (22) in the case of a child who is a bona fide student; or 10 of 16 C.B.

NO.
NO.

12-104 (b) ceasing to be disabled after attainment of age eighteen (18) in the case of a child who was disabled before attainment of age twenty-two (22); or (c) attainment of age eighteen (18) in the case of any child not described in preceding paragraphs (a) and (b); or ([b] d ) marriage; or ([c] e ) adoption.
([2] 3 ) A surviving child shall be deemed to have been dependent upon his parent or adopting parent unless [such individual] that parent or adopting parent was not living in the same household with or contributing to the support of such child prior to his death .

The [C] c hild's insurance benefit[s] shall be paid to the individual upon whom the child is currently dependent, except such benefit shall be subject to the earnings test as defined in this subtitle.
[(3) Every individual who is a fully insured individual and is disabled and has been disabled for at least three full calendar months, upon filing an application for disability insurance benefits, shall be entitled to a disability insurance benefit for each month beginning with the first month of the waiting period and ending with the month preceding the month in which he dies or recovers from his disability, subject to the earnings 11 of 16 C.B.

NO.

12-104 test as defined in this subtitle."]


(4) Notwithstanding the provisions of subsections (1) and (2) above, retroactive payments shall be limited to the 12 months immediately preceding the month in which the surviving child satisfies all requirements of subsection (1) of this section. "

Section 5.

Title 53 of the Code of the Federated States of Micronesia, as amended, is hereby further amended by adding a new section 803A to read as follows: " Section 803A.

Disability benefits .


(1) Every person who: (a) is fully insured; (b) is disabled and has been disabled for at least three full calendar months; and (c) has filed a complete application with the Social Security Administrator for disability insurance shall be entitled to a disability insurance benefit, subject to the earnings test as defined in this subtitle.
(2) Disability insurance benefits shall be paid for each month, beginning with the first month of the waiting period and ending with the month preceding the month in which the disabled individual dies or recovers from his disability.

(3) Notwithstanding the provisions of subsections (1) and (2) above, retroactive payments shall not be made for 12 of 16 C.B.

NO.
NO.

12-104 more than the twelve months immediately preceding the month in which the disabled individual satisfies all requirements of subsection (1) of this section. "

Section 6.

Title 53 of the Code of the Federated States of Micronesia, as amended, is hereby further amended by adding a new section 811 to read as follows: " Section 811. International agreements .

(1) Purpose of agreement .
The President is authorized (subject to the succeeding provisions of this section) to enter into agreements establishing totalization arrangements between the social security system established by this title and the social security system of any foreign country, for the purposes of establishing entitlement to and the amount of old-age, survivors, disability, or derivative benefits based on a combination of an individual's periods of coverage under the social security system established by this title and the social security system of such foreign country.
(2) Definitions .

For the purposes of this section: (a) the term 'social security system' means, with respect to a foreign country, a social insurance or pension system which is of general application in the country and under which periodic benefits, or the actuarial equivalent thereof, are paid on account of old age, death, or disability; and 13 of C.B.

NO.
NO.

12-104 (b) the term 'period of coverage' means a period of payment of contributions or a period of earnings based on wages for employment or on self-employment income, or any similar period recognized as equivalent thereto under this title or under the social security system of a country which is a party to an agreement entered into under this section.

(3) Crediting periods of coverage; conditions of payment of benefits .
(a) Any agreement establ ishing a totalization arrangement pursuant to this section shall provide: ( i) that in the case of an individual who has at least 8 quarters of coverage as defined in section 603(11) of this title and periods of coverage under the social security system of a foreign country which is a party to such agreement, that individual’s periods of coverage under the social security system of that foreign country may be combined with periods of coverage under this title and otherwise considered for the purposes of establishing entitlement to and the amount of old-age, survivors, and disability insurance benefits under this title; (ii) that employment or self-employment, or any service which is recognized as equivalent to employment or self-employment under this title or the 14 of 16 C.B.
NO.
12-104 social security system of a foreign country which is a party to such agreement, shall, on or after the effective date of such agreement, result in a period of coverage under the system established under this title or under the system established under the laws of such foreign country, but not under both, and shall further set forth the methods and conditions for determining under which system employment, self-employment, or other service shall result in a period of coverage; and (iii) that where an individual's periods of coverage are combined, the benefit amount payable under this title shall be based on the proportion of such individual's periods of coverage which was completed under this title.
(b) Any such agreement may provide that an individual who is entitled to cash benefits under this title shall, notwithstanding other provisions of title to the contrary, receive such benefits while he resides in a foreign country which is a party to such agreement.

(c) Any such agreement may contain other provisions which are not inconsistent with the other provisions of this title and which the President deems appropriate to carry out the purposes of this section.

(4) Regulations .
(4) Regulations .

The Board shall make rules and regulations and establish such procedures as are 15 of 16 C.B.

NO.

12-104 reasonable and necessary to implement and administer any agreement which has been entered into in accordance with this section.

(5) Reports to Congress .


The Board shall include as part of its annual submission to Congress required by section 703 of this title, a report describing each agreement that was in effect at any time during the previous fiscal year.

The report shall state the estimated number of individuals affected by each agreement and the effect of each agreement on the estimated income and expenditures of the programs established by this chapter. "

Section 7.
Section 7.

This act shall become law upon approval by the 14 President of the Federated States of Micronesia or upon its becoming 15 law without such approval.

16 17 Date: 5/16/02 Introduced by: /s/ Joseph J. Urusemal ____ Joseph J. Urusemal (by request) 16 of 16