[Federal Register Volume 65, Number 120 (Wednesday, June 21, 2000)]
[Rules and Regulations]
[Pages 38424-38426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15644]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 404

RIN 0960-AE85


Reduction of Title II Benefits Under the Family Maximum 
Provisions in Cases of Dual Entitlement

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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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

[[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 Sec. 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.


[[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