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###### Social Security Administration

          - 20 CFR Part 404 
          - RIN 0960-AE85 

# AGENCY:

Social Security Administration (SSA). 

# ACTION:

Final rules. 

# SUMMARY:

                        The interim final rules published at 64 FR 57774, on October 27, 1999, are adopted as final without change. These rules amend the family maximum provisions under title II of the Social Security Act (the Act). These rules amend how we compute the total monthly benefits payable to a family when one or more of the beneficiaries are entitled to benefits on another earnings record. In certain specific circumstances, this change to our rules will increase the amount of benefits payable to some family members entitled on the record to which the family maximum applies. These final rules adopt nationwide the holding of the U.S. Court of Appeals for the First Circuit in                         *Parisi by Cooney*                         v.                         *Chater.*

# DATES:

These regulations are effective October 27, 1999. 

# FOR FURTHER INFORMATION CONTACT:

Bill Hilton, Social Insurance Specialist, Office of Program Benefits, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 965-2468 or TTY (410) 966-5609. For information on eligibility, claiming benefits or coverage of earnings, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778. 

# SUPPLEMENTARY INFORMATION:

## Background 

                    Section 203(a) of the Act establishes a limit, derived from a worker's primary insurance amount (PIA), on the total monthly benefits to which dependents or survivors may be entitled on the basis of one worker's earnings record (the family maximum). Under our previous regulations, the benefits of each claimant entitled on the worker's earnings record were reduced proportionally so that the total monthly benefits of those entitled on the record in one month did not exceed the family maximum. In calculating total monthly                           ( print page 38425)                        benefits, we included all benefits of the claimants who were entitled on the worker's record without considering whether the benefits were actually due or payable.                 

Our previous regulations were challenged in court by the child of a worker who was disabled. The worker and his dependent child, the plaintiff in this case, began receiving Social Security benefits on the worker's earnings record. The worker's spouse became entitled to retirement benefits (old-age benefits) based on her own earnings record. Under section 202(r) of the Act, she was deemed also to have applied for and become entitled to wife's benefits based on the worker's earnings record. SSA determined that because the monthly retirement benefits that she was entitled to receive on her own exceeded the amount of her monthly wife's benefits on the worker's earnings record, she could only receive payment for the retirement benefits payable on her own earnings record. However, SSA counted the benefits to which she was entitled on the worker's earnings record, but which were not actually paid to her, toward the monthly maximum amount of benefits payable on the worker's earnings record (the family maximum). Because the total monthly amount of the worker's disability benefits, the plaintiff's child's benefits, and the wife's benefits exceeded the monthly family maximum limit, SSA reduced the amount of the plaintiff's and the wife's monthly benefits. 

                    In                     *Parisi By Cooney*                     v.                     *Chater,*                     69 F.3d 614 (1st Cir., 1995), the court held that, when computing a reduction under the family maximum pursuant to section 203(a) of the Act, SSA should not include the monthly benefit that would otherwise be payable to a spouse if payment of that spouse's benefit is precluded (by section 202(k)(3)(A) of the Act), due to the spouse's dual entitlement to a higher benefit on the spouse's own earnings record. To implement the Court's ruling in the First Circuit, we issued an Acquiescence Ruling (AR) on January 13, 1997 (62 FR 1792). Under this ruling (AR 97-1(1)), which applied only to claims for benefits in the First Circuit, SSA considers only the amount of monthly dependent's or survivor's benefits actually due or payable to the dually-entitled person when determining the amount of the benefit reduction because of the family maximum. As a result of the Court's decision, we reassessed our interpretation in our prior regulations and consistent with our rules on acquiescence which were designed to restore national uniformity to our programs, we decided to adopt the court's holdings nationwide.                 

## Explanation of Changes 

We amended § 404.403 of our regulations by adding a new paragraph (a)(5). This new paragraph specifies that, in cases involving benefits subject to reduction for both the family maximum and dual entitlement, we consider only the amount of monthly dependent's or survivor's benefits actually due or payable to the dually-entitled person when we determine how much to reduce total monthly benefits because of the family maximum. We included examples of how we compute benefits payable in such cases. 

These changes are effective for benefits payable for months after September 1999. 

## Comments on Interim Final Rules 

                    On October 27, 1999, we published the interim final rules in the                     **Federal Register**                     at 64 FR 57774 and provided a 60-day period for interested individuals and organizations to comment. We received comments from five individuals and organizations concerning this action. One comment was from the firm that represented the plaintiff in the                     *Parisi by Cooney*                    v.                     *Chater*                     case. They expressed their pleasure that SSA was making this change nationwide. Following are summaries of the comments and our responses to them.                 

*Comment:*                     One commenter said that a person entitled as a husband or wife should still receive full benefits on his or her own record.                 

*Response:*                     When a husband or wife is entitled to benefits as a spouse and to benefits on his or her own earnings record, he or she receives the full benefit on his or her own record. This is in accordance with section 202(k)(3)(A) of the Act and is unaffected by these rules.                 

*Comment:*                     The same commenter believes that when a person can receive a higher benefit as a spouse, the family maximum should apply on the record where the spouse benefit is payable.                 

*Response:*                     When an excess benefit as a spouse is payable on a record, the benefits on that record are subject to the family maximum. While the family maximum will still apply if other family members are entitled, this change will allow more to be paid on that record because only the amount actually paid to the dually entitled person will be considered.                 

*Comment:*                     This commenter also felt children should be paid on the record with the higher benefit and those benefits should be based on the family maximums from both records.                 

*Response:*                     When each parent is entitled on his or her own record, children are paid on the record with the higher benefit amount. Benefits to the children are based on the total of both family maximums. This is in accordance with section 203(a)(3)(A) of the Act.                 

*Comment:*                     This commenter finished by stating that the regulations should be adopted because they will liberalize the family maximum restrictions.                 

*Response:*                     These regulations do liberalize the family maximum provisions and will result in higher benefit amounts to those affected.                

*Comment:*                     Two commenters believe the family maximum should be eliminated because it limits the benefits payable. One felt this is unfair to those with large families. One also believes workers should be allowed to opt out of Social Security coverage.                 

*Response:*                     The family maximum is set forth in the Act itself, and could be eliminated only by legislation. Similarly, legislative changes would be needed to permit workers to opt out of Social Security coverage. Such issues are beyond the scope of both these regulations and our rulemaking authority.                 

*Comment:*                     Another commenter suggested that we include an example of how benefits would be calculated for a surviving spouse who is also entitled on her own record.                 

*Response:*                     These regulations do not change the way benefits are computed for a surviving spouse who is also entitled on her own record. She will still receive her own benefit first, plus any excess over that amount which is payable to her as a surviving spouse.                 

*Comment:*                     The same commenter asked how these regulations affect the spouse of a retired military person because the military Survivor's Benefits program is affected by Social Security Offset.                 

*Response:*                     These regulations do not change how her Social Security benefit is computed. There is no change in how the benefit affects the receipt of a military Survivor's Benefit.                 

For the reasons discussed above, we have not changed the interim final rules based on the public comments. Therefore, the interim final rules are adopted as final without change. 

      ( print page 38426)    
Dated: June 9, 2000.

Kenneth S. Apfel, 

Commissioner of Social Security.

# PART 404-FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950—  ) 

Accordingly, the interim final rules amending 20 CFR Part 404 published at 64 FR 57774 on October 27, 1999, are adopted as final without change. 

[FR Doc. 00-15644 Filed 6-20-00; 8:45 am] 

BILLING CODE 4191-02-U