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230.5 When An Insured Status Is Required Under The RRA

This section gives the different kinds of insured status that are required for eligibility for 

various benefits under the 1974 Railroad Retirement (RRA). Definitions of the different 

kinds of insured status are given in subsequent sections of this article. 

230.5.1 Life Cases

A. Overall minimum guaranty - The employee must be fully insured under the Social 

Security Act (SSA) rules (see FOM-I-230.25), based on combined railroad and 

social security earnings, to qualify for the age and service overall minimum (O/M) 

guaranty.

The employee must be totally disabled and have a disability (DIB) insured status 

under SSA rules (see FOM-I-230.30), based on combined railroad and social 

security earnings, to qualify for the DIB O/M.

B. Vested dual benefit - The employee must be permanently insured under the RRA 

to qualify for payment of a vested dual benefit (VDB) based on his own wage 

record. Before the 1981 RRA amendments, a spouse who was permanently 

insured based on her own earnings record could qualify for a VDB. See FOM-I230.50 and 230.55. 

C. Work deductions - The employee or spouse must have a work deduction insured 

status under the RRA before work deductions may be applied. See FOM-I230.65. 

D. Hospital insurance - The employee, spouse, or disabled child must have a health 

insurance insured status to qualify for hospital insurance (HI) coverage, among 

the other requirements given in FOM-I-8.

E. No insured status required - An insured status is not required for payment of the 

employee or spouse tier I or tier II or the supplemental annuity.

230.5.2 Death Cases

A. RRB survivor jurisdiction - The employee must have 120 months of railroad 

service or at least 60 months of railroad service after 1995, and a current 

connection with the railroad industry at the time of death to be completely insured 

under the RRA for the payment of survivor benefits. See FOM-I-230.15.

B. Vested dual benefit - Before enactment of the 1981 RRA amendments, if a 

widow or dependent widower was permanently insured under the RRA, she or he 

could qualify for payment of a vested dual benefit. See FOM-I-230.60. 

C. Work deductions - A work deduction insured status is not required in survivor 

cases. Work deductions are applied to the annuity of a survivor annuitant (except 
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for a disabled widow(er) under age 60 or a disabled child) who earns over the 

annual exempt amount.

D. Hospital insurance - The aged or disabled widow(er) or disabled child must have 

a health insurance insured status to qualify for HI coverage, among the other 

requirements given in FOM-I-8.

230.10 When An Insured Status Is Required Under The SS Act

230.10.1 Life Cases

The wage earner must be fully insured under the SSA (see FOM-I-230.25) to qualify for 

a retirement insurance benefit (RIB). The wage earner must be totally disabled and 

have a disability insured status under the SSA to qualify for a disability insurance benefit 

(DIB). In life cases, the Social Security Administration generally bases the insured 

status determination on wages only. Railroad compensation is used only if the wage 

earner has less than 120 months of railroad service.

If the wage earner is fully insured for an RIB or DIB, the spouse and/or children are 

insured for auxiliary SS benefits.

230.10.2 Death Cases

The wage earner must be fully insured under the SSA for payment of a widow(er)'s, 

parents’ or child's SS benefit. The widow of a transitionally insured wage earner (see 

FOM-I-230.40) may qualify for survivor SS benefits beginning September 1965. A 

currently insured status (see FOM-I-230.35) is used as an alternative to a fully insured 

status for payment of a child's, mother's, or father's SS benefit, or the lump-sum death 

benefit.

When the Social Security Administration has jurisdiction for the payment of survivor 

benefits (the employee is not completely insured under the RRA), the insured status 

determination is based on combined SS wage and RR compensation quarters of 

coverage (QC).

230.15 Completely Insured Status Under The 1974 RRA

The employee is completely insured for the payment of survivor benefits under the 1974 

RRA, if at death he meets the following requirements.

230.15.1 Years of Railroad Service

The employee must have completed either

• at least 10 years (120 months) of creditable RR service performed at any time; or

• 60-119 months of railroad service of which at least 60 were performed after 1995.
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NOTE: Under this provision, the tier 1 portion of a survivor annuity is payable only if the 

employee had a Social Security insured status based on combined RR and SS 

earnings. SS insured status is covered in FOM 230.25 and FOM 230.35.

Military service (M/S), creditable as compensation under the RRA, may be added to 

meet the service requirement.

Under the 1937 RRA, an employee was deemed to have 120 months of railroad service 

if:

A. He was receiving a pension (had an 'H' prefix in the claim number); or

B. He had at least 114 months and was awarded an annuity which began to accrue 

before 1948; or

C. A survivor insurance annuity was awarded before 11-1-51 based on 10 years of 

service. 

These deeming provisions did not apply for entitlement under the 1974 RRA. However, 

the 1981 RRA amendments added the provision that the 10-year requirement may be 

met in survivor cases if the employee received a pension under the 1937 RRA, or if he 

had at least 114 months of railroad service and was awarded an annuity which began to 

accrue before 1948. This provision is effective October 1, 1981.

230.15.2 Current Connection

A current connection (C/C) with the railroad industry is a requirement for a completely 

insured status. See FOM-I-225.

NOTE: An insured status based on quarters of coverage, which was required for a 

completely insured status under the 1937 RRA, is not needed under the 1974 RRA.

230.20 Partially Insured Status Under The 1937 RRA

The survivors of an employee who was partially insured under the 1937 RRA could 

qualify for the lump-sum death payment, a widow's current insurance annuity and a 

child's insurance annuity only. An employee was partially insured under the 1937 RRA 

at the time of attaining retirement age or at death if he had 120 months of creditable RR 

service, a current connection and either of the following:

A. A minimum of six QCs counting from the beginning of the third calendar year 

before the year in which the employee retired or died and ending with the quarter

of his retirement or death; or

B. Sufficient QCs to be currently insured under the SSA (see FOM-I- 230.55) if his 

RR service after 1936 had been employment covered by the SSA. (This applies 

under the same conditions as for a completely insured status.)
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NOTE: If an employee had a partially insured status at the time a retirement 

annuity began to accrue, he does not lose this status in the interval between 

retirement and death, regardless of his employment status during that period.

The benefit amounts payable based on the partially insured status are the same 

as the benefits payable based on a completely insured status.

230.25 Fully Insured Status Under The SSA

230.25.1 One-For-Four-Rule

The wage earner is fully insured under the SSA if he has a minimum of six QCs and has 

at least one QC for each year elapsing after 1950 or after the year he attained age 21 

(whichever is later), up to the earlier of:

A. The year of attainment of retirement age; or

B. The year of disability onset; or

C. The year of death.

Retirement age under the SSA is age 62. Before 1-1-73, retirement age for men was 

age 65; this applies for men born before 1-2-11, who attained age 62 in 1972 or earlier. 

Men who attained age 62 in 1973 and 1974 (born 1-2-11 through 1-1-13) are deemed to 

have attained retirement age (age 65) in 1975. Therefore, those men require the same 

number of QCs for an insured status as men born 1-2-10 through 1-1-11, and 1-2-13 

through 1-1-14 (actually attained age 62 in 1975).

The necessary QCs may be acquired at any time. When a wage earner has acquired 40 

QCs, he is fully insured for life.

A World War II veteran may be deemed to be fully insured if the regular requirements 

are not met. The veteran must have been discharged or released from active service 

under conditions other than dishonorable no later than 7-26-51, and he must have died 

within 3 years after his separation from active service. Refer such a case to BRB (the 

Bureau of Retirement Benefits) for an insured status determination.

Special requirements apply for a disability insured status (see FOM-I-230.30).

230.25.2 Determining Number of QCs

The following steps may be used to determine the required number of QCs for a full 

insured status.

A. Determine the earlier of:

1. The year the person attained age 62 (if born 1-2-13 or later); or
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2. The year of disability onset; or

3. The year of death; and

B. Subtract the later of:

1. The year 1951; or

2. The year the person attained age 22.

The result is the number of QCs needed for fully insured status.

Alternate insured status requirements apply for a person who is disabled before age 31 

and for a statutorily blind individual (see FOM-1-230.30.2 and 230.30.3).

230.25.3 Quarters of Coverage Table

The following table may also be used to determine the number of QCs needed for a fully 

insured status, instead of using the rules in FOM-1-230.25.2.

A. If the person was born before 1930 and is retiring based on age, find the year of 

birth in the first section to determine the number of QCs required (in the third 

section).

B. If the person was born before 1930 and became disabled or died before age 62 

(or age 65 if born before 1-2-13), find the year of disability onset or death in the 

second section to determine the number of QC's required (in the third section).

C. If the person was born after 1-1-30, find the person's age in the year of death or 

disability onset in the last column. The number of required QC's is shown in the 

preceding column.

Year of birth

Year of retirement Age, 

disability QCS Onset, or 

death required

Age in year of 

Disability or Death (if 

born After 1-1-30)

Men Women

1892 1895 1957 6 28 or younger

1893 1896 1958 7 29

1894 1897 1959 8 30

1895 1898 1960 9 31

1896 1899 1961 10 32

1897 1900 1962 11 33

1898 1901 1963 12 34

1899 1902 1964 13 35

1900 1903 1965 14 36

1901 1904 1966 15 37

1902 1905 1967 16 38
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1903 1906 1968 17 39

1904 1907 1969 18 40

1905 1908 1970 19 41

1906 1909 1971 20 42

1907 1910 1972 21 43

1908 1911 1973 22 44

1909 1912 1974 23 45

1910 ---- 1975 24 46

1911 ---- (1975) 24 --

1912 ---- (1975) 24 --

1913 1913 1975 24 --

1914 1914 1976 25 47

1915 1915 1977 26 48

1916 1916 1978 27 49

1917 1917 1979 28 50

1918 1918 1980 29 51

1919 1919 1981 30 52

1920 1920 1982 31 53

1921 1921 1983 32 54

1922 1922 1984 33 55

1923 1923 1985 34 56

1924 1924 1986 35 57

1925 1925 1987 36 58

1926 1926 1988 37 59

1927 1927 1989 38 60

1928 1928 1990 39 61

1929 1929 1991 40 62

230.25.4 Effect of Disability Freeze

The general effect of establishing a disability freeze (DF) is to reduce the number of 

QCs which would otherwise be required for a fully insured status. Any year that is partly 

or wholly within a DF period is not counted as an elapsed year; only the first and last 

quarters of a DF can be counted as QCs.

However, if excluding the disability freeze period results in a decrease or denial of 

benefits because the QCs in the DF period are not counted, the DF must be 

disregarded for both insured status determinations and benefit computations.

230.30 Disability Insured Status Under The RR And SS Acts

A disability insured status based on wages only is required under the SAA for payment 

of a disability insurance benefit and for entitlement to disability hospital insurance 

coverage. A DIB insured status based on social security wages alone is needed to pay 

a disability vested dual benefit under the RRA. (The employee must be eligible for an 
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SS DIB, even though he does not have to file for the SS benefit, to be entitled to a 

vested dual benefit based on disability.)

A DIB insured status is needed under the RRA to qualify an employee for payment of 

the DIB O/M and disability hospital insurance coverage. This DIB insured status is 

determined as if railroad service after 1936 were social security wages. This 

determination is separate from the determination of a DIB insured status based on 

wages only that can entitle a beneficiary to a social security DIB payment or an RRA 

VDB based on disability.

An occupational disability annuitant may be deemed to have a DIB insured status for 

Medicare only if:

A. He met the 20/40 earnings requirement (see FOM-I-230.30.1) on the annuity 

beginning date, but was not totally and permanently disabled on that date; and

B. He later becomes totally and permanently disabled, but does not meet the 

earnings requirement on the date of disability onset. He is deemed to meet the 

20/40 requirement as of the disability onset date.

The DF granted for Medicare only will not allow payment of the O/M or affect the 

computation of any PIA (Primary Insurance Amount).

230.30.1 Requirements For Regular DIB Insured Status

An employee must meet the following requirements to have a DIB insured status. 

Special provisions apply for an employee who is disabled before age 31 or who is 

statutorily blind (see FOM-I-230.30.2 and 230.30.3).

A. 20/40 earnings requirement - An employee who becomes disabled after he 

attains age 31 must meet the 20/40 earnings requirement to have a disability 

insured status. The 20/40 requirement is met if, in the quarter of disability onset 

or in a following quarter while the employee is continuously disabled, the 

employee has at least 20 QCs in a period of 40 consecutive calendar quarters 

ending with that quarter. 

In determining if the 20/40 requirement is met under the RRA, railroad 

compensation QCs are combined with wage QCs, except when vested dual 

benefit eligibility is being determined. Only wage QCs are used to determine a 

disability insured status for SSA DIB benefits and for an RRA vested dual benefit 

based on disability.

B. Fully insured status - The employee must also meet the QC requirement for a 

fully insured status. The fully insured status is determined as if the employee 

attained SSA retirement age in the quarter of disability onset or in a following 

quarter while the employee is continuously disabled. Railroad compensation is 

counted as wages in determining if the fully insured requirement is met under the 

RRA, except when vested dual benefit eligibility is being determined.
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C. Disability freeze - Every employee disability annuitant is also rated under the 

SSA for a disability freeze. Non-disability annuitants may also file for a freeze. A 

disability freeze protects against the loss of or reduction in benefits because of 

disability. The DF insures that the period during which the employee is disabled 

and unlikely to have substantial earnings will not count against him in 

determining insured status or the amount of a PIA. The RRB uses the DF in 

retirement cases to increase PIAs, establish eligibility for the DIB O/M and vested 

dual benefit entitlement based on disability and for early Medicare coverage. In 

survivor cases, the freeze may increase the death PIA.

1. Requirements for a DF - To qualify for a DF, an employee must be totally 

and permanently disabled for all regular employment. He must also meet 

the 20/40 earnings requirement and the fully insured status requirement to 

qualify for a DF. A DF may be established by the RRB or Social Security 

Administration, separately or jointly. In DF determinations for RR 

employees, both RR and SS earnings are considered in determining if the 

20/40 requirement is met.

2. When a DF begins - A disability freeze may begin retroactively with the 

first day the employee meets the 20/40 earnings requirement and has 

been rated totally and permanently disabled. There is no 12-month limit 

on retroactivity, except as stated in B3. following.

Payment of benefits is limited to the usual 12 months prior to the month 

the application is filed.

3. Filing for a DF - An application for a disability annuity is also an application 

for a DF. A non-disability applicant may also file for a DF. BRB may 

request a Form AA-1d (Application for Determination of Employee 

Disability) for a DF decision if the DF was denied when the application for 

a disability annuity was filed initially, because the employee was not totally 

and permanently disabled, but he later becomes qualified. An AA-1d may 

also be needed if an application for a DF was never filed with the RRB.

If an eligible employee died before filing, a survivor may file an application 

after the death of a disabled employee to establish a DF. The application 

must be filed within 3 months after the month of death, and should only be 

filed when the employee was under age 62 on his disability onset date (or 

under age 63 if the employee was disabled for more than 24 months prior 

to his death), and he was unable to work because of disability for a period 

of 5 full months, beginning before the year of death.

If disability has ceased before an application for a DF is filed, the 

application must be filed no later than:

a. Twelve months following the month the employee attains age 65; or
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b. Fourteen months following the month disability ceased.

In this case, however, the time limit for filing may be extended to 36 

months after the month disability ceased, if the applicant failed to file a 

timely application because he was physically or mentally incapable of filing 

an application.

4. DF previously terminated - If an employee had a DF that was previously 

terminated because disability ceased, that prior DF must be considered 

when an employee acquires a subsequent DF on the basis that he is 

again disabled. In determining whether the employee meets the 20/40 

requirement for a subsequent disability insured status, no quarter that is 

wholly within a previous DF period is counted. The first and last quarter of 

a previous DF period may be counted, if either is a QC.

5. When a DF may be disregarded - A DF may be disregarded if use of the 

DF would result in a denial or loss of benefits, as long as entitlement 

exists without it. If there are high earnings within a DF period, the PIA 

may be higher if the DF is disregarded. However, if the DF is disregarded 

for one purpose (e.g. determining insured status), it must be disregarded 

for all purposes (e.g., PIA computations).

6. DF ending date - The ending date of a DF is the earliest of:

a. The last day of the month in which the employee dies; or

b. The last day of the month preceding the month in which the 

employee attains age 65; or

c. The last day of the second month after the month in which the 

disability ceases. See FOM-I-210.95 if a trial work period extension 

applies.

D. Waiting period - Under Social Security Administration rules, the employee must 

serve a waiting period of 5 months before the DF is effective. The employee 

must be disabled throughout those 5 months. If the employee is not continuously 

disabled throughout the waiting period, a disability freeze may not be 

established. (Before 1-1-73, the waiting period was 6 months.)

1. Duration of the waiting period - The waiting period cannot begin earlier 

than 17 months before the month the application is filed (counting 

backward from the filing date). The waiting period begins in the first 

month in which:

a. The employee is totally and permanently disabled and has been 

under this disability for the entire month (i.e., the date of onset is on 

or before the first day of the month); and
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b. The employee meets the 20/40 earnings requirement and the fully 

insured status requirement. An individual who has a disability 

insured status on the disability onset date, and remains 

continuously disabled through the first month of the waiting period, 

retains this disability insured status (even if the waiting period 

begins in a quarter after onset).

In determining the duration of the waiting period, a full month is 

counted for the month the DF begins if it begins on the first day of 

the month. The month disability ceases is counted as a full month 

if the DF ceases on the last day of the month. If the employee dies 

on the last day of the month, that month is counted as a full month.

Once the waiting period is met, the DF is established from the 

disability onset date. It continues up to the attainment of age 65, 

termination of disability, or death.

Under the RRA, a VDB based on disability or the DIB O/M cannot 

begin until the first of the month following the month in which the 

waiting period ends.

2. When a waiting period is not required - If the employee previously had a 

DF or DIB which ended within 5 years (60 months) before the month his 

current disability began, no waiting period is required. The 60-month 

period begins with the month in which the prior DF ceased or DIB 

terminated, and ends with the month before the first month throughout all 

of which the employee is under a disability.

230.30.2 Alternate Disability Insured Status Before Age 31

If an employee becomes disabled before age 31, he has a disability insured status if he:

A. Is under a disability which began before the quarter in which he attained age 31; 

and

B. Is fully insured (see FOM-I-230.25); and

C. Has earned QCs in at least one-half of the calendar quarters during the period 

beginning with the quarter after the quarter in which he attained age 21, and 

ending with the quarter in which the period of disability began; or

D. If that period contains less than 12 calendar quarters, he has earned at least six 

QCs in the 12-quarter period ending with the quarter in which the period of 

disability began. The six QC rule will always apply if the disability begins in the 

quarter of age 24 attainment or before.

The required quarters must be earned within the period after age 21, or in the 12-

quarter period described in D., if applicable. When the number of elapsed 
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quarters in the period after age 21 is odd, the odd one is dropped in computing 

the number of required quarters.

If the employee attained age 21 before 1937, he must be fully insured and have 

earned QCs in half of the quarters in the period beginning after 12-31-36 and 

ending with the quarter in which the period of disability began. The six QC 

minimum requirement also applies in this case when the period contains less 

than 12 calendar quarters.

Each period ends with the quarter in which the period of disability began. When 

the period of disability cannot begin in the quarter of onset because the worker is 

not fully insured at that time, it begins with the first quarter in which the qualifying 

QC is earned. 

EXAMPLE: The employee (date of birth 5-13-50) became disabled 1-15-80 at 

age 29. In determining the number of QCs necessary for insured status, count 

the quarters in the period which begins with the quarter after the worker attains 

21 and ends with the quarter in which he became disabled. Since he attained 21 

in 5-71 and became disabled on 1-15-80, the period contains 35 calendar 

quarters. Since this is an odd number, one quarter is dropped. In this case, the 

period then has 34 quarters for computing the QC requirement. The employee 

must have earned 17 QC (1/2 of 34) during the period. The QCs must actually 

have been earned during this period, i.e., QCs which he had earned before 7-1-

71 cannot be counted toward the DIB insured status.

Before the 1983 SSA amendments, an employee who was disabled and insured 

under the age 31 provision, who recovered and again became disabled after 

attaining age 31, had to meet the regular 20/40 and fully insured status 

requirements. The requirements were relaxed under the 1983 amendments for 

employees who do not meet the regular requirements, and file applications after 

4-20-83. The disabled employee is insured if he has QCs in one-half of the 

quarters elapsing after the quarter in which he attained age 21, up to and 

including the quarter in which disability began. If the number of elapsed quarters 

is less than 12, the employee must have at least six QCs in the 12-quarter period 

ending with the quarter in which disability began.

230.30.3 Disability Insured Status for Statutory Blindness

For benefits payable January 1973 or later, a statutorily blind worker no longer needs to 

meet a "20/40" or "disability before age 31" insured status test. There is a minimum 

requirement of six QCs. In determining the number of QCs required for a fully insured 

status, the individual must have at least one quarter of coverage for each year elapsing 

after 1950 (or, if later, the year in which he attained age 21) up to the year in which the 

sixth QC is earned. There is a minimum requirement of six QCs. When the period of 

disability does not begin with the quarter of onset because insured status is not met at 

that point, it will begin with the first quarter after that in which a fully insured status 

exists, provided the employee is disabled in that quarter. The fully insured status is 
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determined as if the employee attained SSA retirement age in that quarter. This 

provision applies regardless of the age at which the individual is disabled.

Statutorily blind applicants under age 55 must not be able to perform any substantial 

gainful activity (SGA) to become entitled to DIB benefits. A statutorily blind applicant 

age 55-64 may not become entitled to a DIB benefit if he is performing SGA comparable 

to the activity he engaged in during the 10 years before his blindness or age 55, 

whichever is later. However, the ability to perform SGA does not affect eligibility for a 

DF. A statutorily blind employee who has a disability freeze but cannot become entitled 

to a monthly disability benefit (i.e., he is under age 55 and able to engage in SGA or he 

is age 55 or over and able to engage in comparable SGA) and who later becomes 

unable to engage in such SGA, and is therefore entitled to a DIB under SSA rules, must 

serve a waiting period before DIB (or the RR Act DIB O/M or DIB vested dual benefit) 

payments can begin. However, months after age 55 in which he was engaging in noncomparable SGA can be counted as months in the waiting period, if they are after the 

disability onset.

EXAMPLE: The employee (date of birth 7-12-47) is statutorily blind from birth. He first 

secures employment through vocational rehabilitation in the third quarter of 1967, and 

has sporadic work attempts after that. His employment record is as follows:

1967 NNCC 1973 CNNN

1968 NNNN 1974 NNNN

1969 NNNN 1975 NCNN

1970 NNNN 1976 CNNC

1971 NNNN 1977 CCCC

1972 NNCN

Although the employee's disability onset is at birth and he acquires his sixth QC in the 

first quarter of 1976, the period of disability cannot begin at that point since he would 

require seven QCs to be fully insured as of that quarter (i.e., there are 7 years elapsing 

between 1968, the year he attained age 21, and 1976, the year in which he has his 

qualifying QC for a fully insured status). His period of disability would begin with the last 

quarter in 1976, since this is the first point at which he is both fully insured and under a 

disability.

230.30.4 Use of Federal Service QC's for Disability Insured Status for Medicare

Employees who lack a disability insured status based on wage and compensation QCs 

can use Federal employment QCs after 1982 to fulfill requirements for Medicare 

purposes only. In addition, federal employment before 1983 can qualify as "deemed" 

QCs if the individual was an employee of the Federal government (i.e., an 

employer/employee relationship existed between the individual and the Federal agency 

or instrumentality) at any time after 12/31/82 and before 2/1/83. Use of Federal QCs is 

limited to Medicare eligibility and cannot be used to qualify an employee for the DIB 

O/M or for increasing any other benefit.
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230.35 Currently Insured Status Under The SSA

A currently insured status under the SSA is used as an alternative to a fully insured 

status for payment of a child's, mother's, or father's benefit, or the lump-sum death 

benefit.

230.35.1 Test Period

The wage earner is currently insured under the SSA if he has a minimum of six QCs 

during any one of the following periods:

A. The 13-quarter period ending with the quarter in which he died; or

B. The 13-quarter period ending with the quarter in which he became entitled to an 

RIB; or

C. The 13-quarter period ending with the quarter in which he most recently became 

entitled to a DIB.

230.35.2 Effect of Disability Freeze

In determining the 13-quarter period, only the first and last quarters of a DF period can 

be QCs. However, if excluding a DF period would result in a decrease or denial of 

benefits because there are potential QCs in the period which could not be counted, the 

period of disability is disregarded for both insured status determinations and benefit 

computations. If the wage earner has acquired six QCs during the 13-quarter period 

preceding the onset of the disability, and the disability freeze continued uninterrupted 

until either entitlement to a life benefit or death, the disability period preserves a 

currently insured status.

230.40 Transitionally Insured Status Under The RR And SS Acts

230.40.1 Requirements

The 1965 amendments to the SSA introduced a special transitional insured status 

requirement for certain workers, age 72, who are uninsured solely because they do not 

have a minimum of six QCs. The provision that the wage earner must have at least one 

QC for each elapsed year was retained, but the minimum requirement for these wage 

earners was lowered from six QCs to three QCs. This reduction in the minimum QC 

requirement affected primarily those wage earners who attained age 72 in 1963 or 

earlier, if a male, or in 1966 or earlier, if a female. If, however, a period of disability 

beginning before 1957 was established based primarily on earnings creditable for 

freeze purposes only (RR or M/S credits), the provisions could have applied if the wage 

earner attained age 72 before 1969.
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The provision did not apply to an employee under the RRA. However, this provision 

was applied under the 1937 RRA to widows of employees insured under this transitional 

insured status provision. Beginning 1-1-75, widow(er)s were not affected because the 

quarter of coverage requirement no longer applied.

230.40.2 Spouse of Wage Earner

The wife of a transitionally insured wage earner could have qualified for a wife's SS 

benefit at age 72 if she attained age 72 before 1969.

Benefit payments under the transitional insured status provision were restricted to wage 

earners and the wives and widows of male wage earners. No provisions were made for 

the payment of a lump sum, mother's, child's, husband's, widower's, parents’, or a 

surviving divorced wife's benefit. However, husbands and widowers did become eligible 

for benefits effective 5-1-83, under the 1983 SSA amendments.

230.40.3 Widow(er)s of Transitionally Insured Persons

Effective 9-1-65, a widow of a transitionally insured wage earner who attained age 72 

before 1969 could qualify for a widow's SS benefit under certain conditions. A surviving 

divorced wife could not qualify under this provision. Widowers became eligible for 

benefits effective 5-1-83, under the 1983 SSA amendments.

A. Wage earner died in or after 9-1965 - The widow(er) of a wage earner who 

became entitled to a benefit under the transitional insured status provision, or 

who could have become entitled had he filed an application, is eligible for a 

widow(er)'s benefit at age 72 if she attained age 72 before 1969.

B. Wage earner died before 9-1965 - If the wage earner attained age 65 or died 

before 1957 and was not insured because he did not have six QCs, his widow(er) 

may become eligible for benefits at age 72, if she attained age 72 before 1969.

C. Effect on RRB beneficiaries - Under the 1937 RRA, widows who attained age 72 

before 1969 were eligible for insurance annuities at age 72 if the employee had 

at least 120 months of RR service, a C/C with the RR industry, and sufficient 

QCs to be transitionally insured under the SSA. RRB beneficiaries were no 

longer affected beginning 1-1-75, because the QC requirement was eliminated.

NOTE: Compensation QCs earned after attainment of age 65 and before 1939 

may be used to produce a transitionally insured status for payment of survivor 

benefits under the RRA, or for purposes of applying the O/M, even though 

earnings in that period would not produce QCs creditable under the SSA.

230.40.4 Amount of Benefit Payable

Persons who have qualified for benefits based on transitional insured status are eligible 

for benefit payments as follows:
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Beneficiary Amount Effective Date

(Wage Earner or $ 64.40 6-1-74

Widow(er) of 69.60 6-1-75

Wage Earner) 74.10 6-1-76

 78.50 6-1-77

 83.70 6-1-78

 92.00 6-1-79

105.20 6-1-80

117.00 6-1-81

125.60 6-1-82

(Spouse of $ 31.10 3-1-74

Wage Earner) 32.20 6-1-74

 34.80 6-1-75

 37.10 6-1-76

 39.30 6-1-77

 41.90 6-1-78

 46.10 6-1-79

 52.70 6-1-80

 58.70 6-1-81

 63.00 6-1-82

230.45 Prouty Benefits Under The SSA

The Prouty benefit provision of the SSA provides monthly payments for persons age 72 

or over who cannot qualify for an insured status under either the regular or the 

transitional provisions.

230.45.1 Requirements

The beneficiary is entitled to payments under the Prouty provision if:

A. He has filed an application; and

B. He is either a U.S. citizen who resides in the U.S., or is an alien lawfully admitted 

to the U.S. for permanent residence, who has resided in the U.S. for the five-year 

period preceding the month he files an application; and

C. He attained age 72 before 1968; or

D. He attained age 72 after 1967 and has at least three QCs (whenever acquired) 

for each calendar year elapsing after 1966 and before the year in which he 

attained age 72. This requirement is the same for both men and women. The 

breakdown of the QC requirement is:
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Year Attains Age 72 QC Requirement

1968 3

1969 6

1970 (applies only to men) 9

1971 (applies only to men) 12

NOTE: In 1970 or later, the QC requirement applies only to men because a 

woman age 72 in 1970 would need only nine QCs to be fully insured. Similarly, 

1971 is the last year the special provision applies since men would require only 

14 QCs in 1972 to be fully insured and would require 15 QCs under the special 

provision.

The amount of Prouty benefits payable is the same as the amount payable based 

on a transitionally insured status (see FOM-I-230.40.4). Before the 1983 SSA 

amendments, the husband received the larger benefit payable to the wage 

earner, and the wife received the smaller benefit. Beginning 5-1-83, both the 

husband and the wife receive the higher amount ($125.60).

No benefits are payable under the RRA based on the Prouty provision.

230.45.2 Offset Under the RRA

Under the 1937 RRA, if an annuitant was entitled to a Prouty benefit and the railroad 

annuity was greater than the Prouty benefit, the annuity was not reduced for Prouty 

entitlement (the Prouty benefit is completely offset by another government pension). If 

the railroad annuity was less than the Prouty benefit, the annuity was reduced, subject 

to a reduction limitation, by the difference between the Prouty benefit and the RRA 

annuity.

Under the 1974 act, the same principle applies. However, since an employee or 

widow's original tier I rate will always equal or exceed the Prouty benefit rate, no 

reduction for Prouty entitlement is made in tier I of an employee's or widow's annuity.

A spouse's gross tier I rate, however, will not always equal or exceed the Prouty benefit 

rate. However, in most cases, the Prouty benefit is completely offset by another 

government pension. In such cases, the spouse annuity is not reduced for Prouty 

entitlement.

Entitlement to a Prouty benefit is not based on a permanent insured status under the 

SSA. Therefore, annuitants entitled to a Prouty benefit are not eligible for a vested dual 

benefit computation.
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230.50 Employee Permanently Insured Status Under The RRA For 

Vested Dual Benefit

The employee is permanently insured for a vested dual benefit on December 31, 1974, 

on his own wage record, if he would be insured under the SSA for an RIB (fully insured 

status) or a DIB (DIB insured status) on the basis of wages, military service used as 

wages, or self-employment income (SEI) quarters of coverage credited through the 

earlier of December 31, 1974 or December 31 of the vesting year. The RR service 

requirements for an employee on the rolls after 12-31-74 (see FOM-I-305.50) must be 

met. Prior to the 1981 RRA amendments, an employee who was entitled to a wife's SS 

benefit or a dependent male spouse or widower's SS benefit could be permanently 

insured for a VDB, if the vesting requirements are met.

An annuitant on the rolls as of 12-31-74 who is transitionally insured under the SA is 

also permanently insured for the vested dual benefit. A female employee who was on 

the rolls as of 12-31-74 and is entitled to a wife's transitional benefit under the SSA, 

could be permanently insured for a VDB prior to the 1981 RRA amendments. Also, an 

employee on the rolls receiving an SSA parent's benefit on 12-31-74 could be 

permanently insured for a vested dual benefit prior to the 1981 RRA amendments.

230.55 Spouse Permanently Insured Status Under The RR ACT For 

Vested Dual Benefit

Before the 1981 RRA amendments were enacted, the female or male spouse was 

permanently insured for a vested dual benefit on his or her own record on December 

31, 1974, if (s)he would be insured under the SSA for an RIB or DIB on the basis of 

SSA wages, military service used as wages, or SEI quarters of coverage on his or her 

own wage record credited through the earlier of December 31, 1974 or December 31 of 

the vesting year. When determining the spouse vested status, the employee annuitant's 

RR service record must fulfill the requirements indicated in FOM-I-320.60.

A female spouse or dependent male spouse on the rolls as of 12-31-74 who is 

transitionally insured under the SSA, or, if female, is entitled to a transitional wife's 

benefit under the SSA, was also permanently insured for the vested dual benefit prior to 

the amendments.

Before the 1981 amendments, if the employee is permanently insured for a vested dual 

benefit and meets the requirements in FOM-I-305.50, a female or male spouse could be 

entitled to at least one-half of the employee's vested dual benefit amount.

230.60 Widow(er) Permanently Insured Status Under The RRA For 

Vested Dual Benefit

Before the 1981 RRA amendments were enacted, the widow or dependent widower 

was permanently insured for a vested dual benefit on his or her own wage record on 

December 31, 1974, if he or she would be fully insured under the SSA for an RIB or DIB 
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on the basis of wages on his or her own wage record credited to years before l975, and 

the employee had at least 10 years of RR service before 1-1-75. Non-dependent 

widowers are not entitled to a vested dual benefit.

230.65 Retirement Work Deduction Insured Status Under The RRA

An employee has a work deduction insured status as of the quarter in which he 

becomes fully insured under the SSA, based on social security earnings after 1936 and 

railroad compensation quarters of coverage after 1974. The total of those wage and 

compensation QCs are considered in determining if an employee has a work deduction 

insured status.

A spouse of a railroad employee has a work deduction insured status if:

A. The employee has or acquires a work deduction insured status; or

B. If the spouse is entitled to a vested dual benefit based on the spouse's own or 

the employee's earnings record.

230.70 Compensation Quarter Of COGE Defined

In general, a compensation quarter of coverage is a unit of service and earnings after 

1936 in employment covered by the RRA and in creditable military service (when M/S

earnings are used as compensation). Each quarter is a period of 3 calendar months 

beginning January 1, April 1, July 1 or October 1 and ending on March 31, June 30, 

September 30 or December 31 respectively. Since compensation is reported to the 

RRB on an annual basis, it is presumed to be paid in equal amounts in each of the 

months of service in the calendar year in which it is credited, when a quarters of 

coverage determination is made.

230.75 Use Of Compensation QCs Under The 1974 RRA

Compensation QCs are used along with wage QCs to determine the employee's fully 

insured status for the retirement age and service O/M computation, to establish a 

disability insured status, for the retirement DIB O/M computation, or to determine the 

employee's HI insured status.

Compensation QCs are never used to determine the employee's permanently insured 

status for vested dual benefit entitlement. However, if a spouse or widow(er) has less 

than 120 months of railroad service and this service is before 1975, the Social Security 

Administration will use the compensation QCs as wages for a fully insured status or HI 

insured status. RRB would treat the compensation as wages in determining the 

spouse's or widow(er)'s permanently insured status for a vested dual benefit, if a VDB 

was paid prior to the 1981 RRA amendments.

Only the employee's compensation QCs earned 1-1-75 or later combined with wage 

QCs earned after 1936 are used to determine the employee's work deduction insured 
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status. However, if the spouse has less than 120 months of RR service, this service was 

before 1975, and this compensation was used as wages to determine her vested dual 

benefit entitlement, the compensation is used as wages to determine her work 

deduction insured status.

230.80 Determining Compensation QCs Before January 1, 1978

Before January 1, 1978, compensation QCs are based on the employee's total months 

of creditable service in a calendar year after 1936, and the total compensation paid for 

that service in the calendar year. If the employee returns to employer service after the 

annuity beginning date (ABD), additional compensation QCs can be credited for this 

service (up to a maximum of 4 QCs per year), regardless of the effect that such 

employment has on the annuity.

230.80.1 Regular Method Before January 1, 1978

Usually, the compensation QCs in a calendar year are determined according to the 

following table (for exceptions see section 230.80.2):

Total Compensation Paid in the Calendar Year

Months of Service 

in a Calendar Year

$00.00 to 

$49.99

$50.00 to 

$99.99

$100.00 to 

$149.99

$150.00 to 

$199.99

$200.00 or 

More

1 - 3 0 1 1 11

4 - 6 0 1 2 22

7 - 9 0 1 2 33

10 - 12 0 1 2 34

Earnings after the quarter in which the employee attained age 65 and before 1939 may 

be used as compensation QCs only to produce a transitional insured status for survivor 

benefits.

Earnings due to military service creditable as RR service can be used as compensation 

to establish compensation quarters of coverage.

230.80.2 Alternative Method Before January 1, 1978

The alternative method of determining QCs may be used for retirement O/M cases 

when the use of the table in the preceding section for determining compensation QCs 

does not produce sufficient QCs to establish either:

A. A fully insured status under the SSA; or
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B. The qualifying QCs which would enable the employee to meet certain eligibility 

requirements under the SSA, including the establishment of a disability freeze.

The compensation credited in each calendar year is prorated equally to each month in 

that year for which the employee is credited with railroad service, even though some 

months in the beginning or ending calendar years are before or after the period being 

tested. The monthly amounts thus obtained are allocated to calendar quarters. Each 

calendar quarter in which the compensation totals $50 or more is a QC.

If fewer than four QCs are established in a calendar year and the employee has been 

credited with wages under the SSA for a calendar quarter to which less than $50 in 

compensation was allocated, the compensation allocated is combined with the wages 

reported for that calendar quarter. A QC will be allowed for each such calendar quarter 

in which compensation and wages total $50 or more.

The alternative method of determining QCs in life cases is applied to calendar years in 

reverse chronological order until the QCs established are sufficient to meet eligibility 

requirements under the SSA. In determining whether an employee meets the 20/40 test 

for establishing a disability freeze, the alternative method is applied to the calendar year 

in which the disability began and to each preceding year back to and including the year 

in which the 40-quarter period begins.

230.85 Determining Compensation QCs January 1, 1978 Or Later

A compensation quarter of coverage after 1-1978 for an O/M fully insured status, 

disability insured status, work deduction insured status, or HI insured status is 

determined using a method similar to the SSA wage quarter of coverage determination 

(see FOM-I-230.140). A QC is based on yearly earnings and is not assigned to a 

specific calendar quarter in the year unless it is necessary to meet the requirement for 

an insured status.

In such a case, the QC is assigned in the manner most advantageous to the employee.

There is a maximum of four QCs for each calendar year. If fewer than four QCs are 

established based on compensation and the employee has been credited with wages, 

military service used as wages or self-employment income for the year, the combined 

compensation and SS earnings are used to credit a QC (up to a maximum of 4 per 

calendar year).

For calendar years 1978 or later, the amount of earnings required for an employee to be 

credited with a QC is written into the Social Security Act and is adjusted each year with 

the rise in average wage levels as shown in the linked chart:

Determining QCs Based on Compensation, Wages, and/or Self-Employment Income 

January 1, 1978 or Later
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230.90 Wage Quarter Of Coverage Defined

In general, a wage quarter of coverage is a period which the employee earns a 

specified amount of non-railroad income creditable under the Social Security Act. Each 

quarter is a period of 3 calendar months beginning January 1, April 1, July 1 or October 

1, and ending on March 31, June 30, September 30 or December 31, respectively.

Wage QCs are based on the employee's wages after 1936, military service credits used 

as wages, and self-employment income for taxable years after 1950 through the quarter 

of death, regardless of the individual's age.

EXCEPTION: Individuals who attained age 65 before 1939 are not credited with wages 

after attainment of age 65 and before 1939. If the wage earner attained age 65 in the 

period in which the amounts were reported, SSA assumes such amounts were paid 

before age 65.

RR compensation after 1936 is used as wages by SSA to provide QCs for an SSA 

insured status only when the living RR employee does not have enough RR service for 

RRA retirement benefits (120 months) or when the deceased RR employee either does 

not have 120 months of RR service or does not have a current connection for RRA 

survivor benefits.

230.95 Use Of Wage QCs

Wage quarters of coverage are used to determine the individual's entitlement to the 

following benefits.

230.95.1 Determination at RRB Based on Combined Wages and Compensation 

Combined SS earnings and compensation are used at RRB to determine the 

employee's fully insured status for the retirement age and service O/M, to determine the 

employee's disability insured status, for the retirement DIB O/M, or to determine the 

employee's HI insured status.

230.95.2 Determination at RRB Based on Wages Only

The employee, spouse, or widow(er)'s wage QCs only are used at RRB to determine 

the individual's permanently insured status or DIB insured status used for vested dual 

benefit eligibility.

If the spouse or widow(er) has less than 120 months of railroad service and this service 

is before 1975, RRB would use the compensation QCs as wages in determining the 

spouse or widow(er)'s permanently insured status for vested dual benefit entitlement, if 

a VDB was paid prior to the 1981 RRA amendments.
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230.95.3 Wage QCs to Qualify for SSA Benefits

Wage QCs are used at SSA to determine the wage-earner's fully insured status or 

currently insured status for an RIB at the Social Security Administration or to determine 

the wage earners DIB insured status for a DIB at the Social Security Administration.

Wage QCs on the individual's own wage record are used at the Social Security 

Administration to determine the spouse's or widow(er)'s fully insured status or currently 

insured status for an RIB, or to determine the spouse's or widow(er)'s DIB insured 

status for a DIB. If the spouse or widow(er) has less than 120 months of railroad 

service, the Social Security Administration will use compensation QCs as wages.

230.100 Annual Wage Reporting

Public Law 94-202, enacted on January 2, 1976, changed the method of reporting 

wages from a quarterly basis to an annual basis. This change became effective with 

wage reports for the year 1978.

Under prior law, employers submitted quarterly reports of the wages subject to social 

security taxes to the Internal Revenue Service (IRS). Beginning January 1979, for the 

tax year 1978, employers began to file earnings reports with the Social Security 

Administration. The Social Security Administration then passes the income and tax data 

to IRS.

Annual reporting delays the posting of wages to the earnings record. Wages for the 

current year will not be posted to the earnings record until approximately 14 months 

after the close of the year. Wages for 1979 were not posted to records available to the 

RRB until early 1981. The Social Security Administration will include lag wages in the 

earnings record when the wage earner presents a Form W-2 (the annual wage reporting 

form); the Social Security Administration benefit may be recomputed to include those 

lag wages.

The change to annual reporting beginning January 1, 1978 affects the crediting of 

quarters of coverage. The differences in crediting QCs are reflected in the following 

sections.

230.105 Determining Wage QCs Before January 1, 1978

Before 1978, wages (other than agricultural or SE earnings) were reported to the Social 

Security Administration on a quarterly basis (except for the year 1937 in which semiannual reports were made). Under the normal method, the employee must have earned 

at least $50 in non-agricultural wages in the quarter to qualify it as a quarter of 

coverage. If the individual had more than one employer, it is immaterial that wages for 

each employer were less than $50, provided that the total wages for the quarter were at 

least $50. The QC is acquired as of the first day of that quarter, regardless of when in 

the quarter the $50 was first earned or paid.
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The simplified method of determining wage only QCs for the 1937-1950 period is 

explained in FOM-I-230.110.

If the wage earner has SE earnings, refer to FOM-I-230.120.

If the wage earner has agricultural wages before January 1, 1978, refer to FOM-I230.125.

If the employee has maximum creditable earnings for the year, refer to FOM-I-230.130

for an explanation of possible gift QCs.

230.110 Simplified Method Of Determining Wage QCs

The "simplified method" was developed to facilitate electronic data processing 

computation of QCs. Under this method, a wage earner is deemed to have one QC for 

each $400 in total wages earned before 1951. The simplified method applies only to the 

period 1937-1950.

230.110.1 When Simplified Method Applies

The simplified method is applicable for determining a fully-insured status under the 

SSA, or a work deduction insured status or permanently insured status under the RRA, 

and can be used only if:

A. There are at least 7 elapsed years after 1950 or after the year age 21 is attained, 

if later, up to the earlier of the year of attainment of retirement age under the SSA 

(see FOM-I-230.25.1), the year in which a disability freeze begins, or the year of 

death (but excluding any year wholly or partly within a period of disability); and

B. The wage earner is fully insured based on the number of QCs derived under this 

method plus the number of QCs credited under the normal method after 1950; 

and

C. In life cases, when the retirement application was filed after 1-2-68; and

D. In death cases, when the retirement application was filed before death and after 

1-2-68, or no retirement application was filed by an employee who died after 1-2-

68.

NOTE: The simplified method was also used for a completely insured status 

under the 1937 RRA.

If the wage earner is not insured under the simplified method, a wage breakdown 

from SSA will be used to determine QCs for the 1937-1950 period under the 

normal method.
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230.110.2 Determining Number of QCs

The total reported wages before 1951, regardless of yearly maximum, is divided by 

$400 to obtain the number of QCs for the period 1937-1950.

230.110.3 When Simplified Method Cannot Be Used

The simplified method cannot be used to determine QCs for: 

A. The 20/40 test in DIB or disability freeze cases;

B. A currently insured status;

C. A transitionally insured status;

D. An insured status for special age 72 Prouty benefits;

E. Entitlement to HI under the SSA deemed insured provision; or

F. Entitlement to the vested dual benefit if the vesting year was before 1951.

230.115 When A Calendar Quarter Cannot Be A QC

No calendar quarter can be counted as more than one quarter of coverage. Do not 

count as a QC:

A. Any calendar quarter after the quarter in which the wage earner died. (After 8-

1960, wages paid to survivors or the wage earner's estate in the quarter of death 

are considered to have been paid to the deceased wage earner, and may 

therefore be a QC. Before 9-1960, the quarter of death could not be counted 

unless the wage earner actually earned wages of least $50 in that quarter.); or

B. A calendar quarter, any of which was included in a period of disability freeze, 

other than the first and last quarter of such period. (Before 9-1960, only the first 

quarter of a period of disability freeze ending before 1951 can be a QC.); or

C. A quarter which has not yet begun.

230.120 Determining Wage QCs Based On Self-Employment Income 

Before 1978

In general, before January 1, 1978 the wage earner must have had net earnings of at 

least $400 in a taxable year to earn quarters of coverage based on self-employment 

income (SEI). If an individual has $400 or more of SEI for a taxable year after 1950 and 

before 1978, he is credited with four quarters of coverage for the year.

A quarter of coverage is acquired as of the first day of each quarter in which $100 is 

earned in SEI (up to a maximum of 4 QCs in a year).
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If the wage earner has SEI beginning 1-1978 or later, refer to FOM-I-230.140.

230.125 Determining Wage QC'S Based On Agricultural Wages Before 

January 1, 1978

Only cash remuneration may be used in determining if the amount paid for agricultural 

(AG) service in a calendar year is wages. Cash remuneration does not include payment 

in kind. However, cash in lieu of such items as board and lodgings, clothing, 

transportation costs, etc., constitutes wages.

See FOM-I-225.70 when a C/C determination in a survivor case involves agricultural 

wages.

230.125.1 Assignment of QCs for Years After 1954 and Before January 1, 1978

If a person was paid wages for agricultural labor in a calendar year after 1954, the QCs 

are based on annual amounts of wages. The QCs are ordinarily assigned to specific 

calendar quarters which are not otherwise QCs, in the following manner:

A. If $400 or more is paid in a calendar year, all 4 quarters are QCs;

B. If $300-399.99 is paid in a calendar year, the last 3 quarters of the year are QCs;

C. If $200-299.99 is paid in a calendar year, the last 2 quarters of the year are QCs; 

or

D. If $100-199.99 is paid in a calendar year, the last quarter of the year is a QC.

QCs for agricultural labor are acquired as of the first day of the quarter to which they are 

assigned.

230.125.2 Flexible Assignment of QCs

When a pattern of assigning QCs other than working from the last quarter of the year to 

the first (as described in the preceding section) would either:

A. Give the wage earner an insured status, or an insured status at an earlier date; 

or

B. Enable the wage earner to meet the QC requirement for a disability insured 

status, the QCs may be assigned to any other quarters of the year which will give 

the required insured status. In this respect, agricultural wages before 1-1-1978 

are unique.

Similarly, the QCs can be assigned to different quarters of the year in other 

instances in which QCs are a qualifying factor, for example, to enable the 

employee to meet the eligibility requirements for certain kinds of computations.
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230.125.3 Assignment of QCs Before 1955

When it is determined that wages were paid for agricultural labor in 1951 through 1954, 

the QCs are creditable as regular wage QCs.

230.130 Crediting Gift QCs

230.130.1 Before January 1, 1978

Before January 1, 1978, wages were reported to SSA on a quarterly basis (except for 

the year l937 in which semi-annual reports were made). An individual who earned the 

maximum creditable earnings in a year could be given 4 quarters of coverage in that 

year, regardless of when the wages were earned or paid in the year. The quarters that 

would not otherwise be counted are gift QCs.

The yearly earnings maximums used in determining whether gift QCs are applicable 

before 1-1978 are:

Years Maximum Years Maximum

1937-1950 $ 3,000 1972 $ 9,000

1951-1954 3,600 1973 10,800

1955-1958 4,200 1974 13,200

1959-1965 4,800 1975 14,100

1966-1967 6,600 1976 15,300

1968-1971 7,800 1977 16,500

230.130.2 Beginning January 1, 1978

Beginning January 1, 1978, the earnings for 1978 and later years are reported annually 

and are proportioned according to the total months of service. Gift QCs are no longer 

necessary.

230.135 Determining Wage QCs Based On RR Compensation Before 

January 1, 1978

When the RR compensation after 1936 cannot be used under the RRA (e.g. no current 

connection in a survivor case) the RR compensation record is transferred to the Social 

Security Administration. The Social Security Administration credits quarters of coverage 

based on these earnings according to the chart in FOM-I-230.80.1. The total 

compensation QCs for the year are added to the total SS QCs for each year. If the total 

for any year exceeds four QCs, the total is reduced to four.

EXCEPTIONS: Only the first and last quarters of a disability freeze period may be QCs.
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In survivor cases, the total QCs for the year of death cannot exceed the number of 

calendar quarters through the quarter of death.

If the wage earner is not insured under this procedure, SSA credits the earnings in a 

method similar to the RRB alternative method.

Compensation may also be used in determining the number of QCs in joint freeze 

cases. 

230.140 Determining Wage QCs Based On Wages And SelfEmployment Income January 1, 1978 Or Later

The 1977 Social Security Act amendments revised the method of crediting wage 

quarters of coverage January 1, 1978 or later. After 1977, all wages (including 

agricultural wages and M/S creditable as wages) and SEI are generally reported to SSA 

annually. The wages and SEI are assumed to be paid in equal proportions for months 

in a calendar year in which they are credited. At least $400 of net earnings from selfemployment is still required before SEI can be credited.

The amount of earnings required to establish a quarter of coverage based on wages or 

self-employment income is be adjusted each year with the rise in average wage levels 

as shown in the linked chart:

Determining QCs Based on Compensation, Wages, and/or Self-Employment Income 

January 1, 1978 or Later

230.145 Using Military Service To Establish QCs

Creditable military service earnings may be used as either compensation or wages to 

establish additional QCs. Under the RRA, an employee is credited with $160 a month 

in compensation for each month he was in creditable M/S after 1936 through 1967, and 

$260 for each month of M/S performed from 1968 through 1974. For months after 1974, 

an employee is credited with the actual amount of M/S basic pay that is creditable as 

SSA wages.

Under the SSA, wages of $160 are credited for each month of M/S that may count as 

wages. M/S performed after 1956 is creditable in the same manner as other wages. 

Military service cannot be used as wages under the SSA if the same period of service is 

being used as compensation by the RRB.

Military service used as wages may give the employee a fully insured status at the 

Social Security Administration based on wages only, a disability freeze or a DIB insured 

status at the Social Security Administration based on wages only, a permanently 

insured status for the vested dual benefit at RRB, or a work deduction insured status at 

the RRB.
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Military service used as either wages or compensation may give the employee a fully 

insured status for the retirement age and service O/M, a disability freeze or a DIB 

insured status at the RRB for the retirement DIB O/M or an HI insured status at the 

RRB.

M/S after 1-1-75 used as compensation may give the employee a work deduction 

insured status at the RRB.

230.150 Gift Wage Credits For Japanese Internees

The 1972 SSA amendments provide the awarding of gift wage quarters for individuals of 

Japanese ancestry who were interned in the U.S. during the period 12-7-41 through 12-

31-46. These gift quarters will be provided for any period after the individual attained 

age l8 and for which he was interned at a place within the U.S. operated by the U.S. 

government for internment of individuals of Japanese ancestry. It is not necessary for 

the individual to have been a U.S. citizen before or during the period 12-7-41 through 

12-31-46.

The RRA has no provisions for crediting service and compensation for these internees. 

However, if an inquiry is received, refer the individual to the nearest Social Security 

Administration district office so the gift QCs can be credited to his wage record.

230.151 Evidence Of Wages For PIA Recomputation

An employee's tier I PIA may be recomputed after the annuity beginning date, if the 

wages in the ABD year or later years are high enough to result in a PIA increase. An 

employee must be age 62 or a disability annuitant to receive a PIA recomputation.

Payment of the recomputation is usually delayed a year or more, because of the delay 

in posting lag wages under the annual reporting method. For example, wages earned in 

2006 will generally be posted to the earnings record in early 2007. The tier I would then 

be recomputed by RESCUE. However, a PIA may be recomputed earlier, if the 

employee requests payment. The employee must submit evidence of the lag wages or 

self-employment income.

230.151.1 When Immediate Recomputation May Be Paid

The tier I PIA may be recomputed immediately following a year of earnings, if the wages 

are high enough to cause a PIA increase and the employee requests an immediate 

recomputation based on lag wages in the previous year. A written request must be 

submitted. Do not solicit a request for recomputation.

Occasionally, when computing permanent work deductions, BRB may request earnings 

information for the purpose of manual recomputation. This type of request should be 

rare, as BRB will only request a manual recomputation based on unposted earnings if 

the recomputation affects the permanent work deductions. In order to create a 

recomputation that affects the permanent work deductions, the unposted earnings 
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would have to be at least one year earlier than the year for which permanent work 

deductions are being done. For example, if it is 1993 and BRB is doing permanent work 

deductions for 1992, a manual recomputation would only be necessary if 1991 earnings 

were still not posted to SSA's records. BRB would not pay a recomputation based on 

1992 earnings at this time, unless the employee requested it as explained above.

230.151.2 Evidence of Wages

An employee must submit Form W-2 (Wage and Tax Statement) as evidence of wages 

for a recomputation. Form W-2 is the only acceptable evidence; it must also meet the 

following requirements:

A. Either Copy C (employee's copy) or Copy D (employer's copy) of Form W-2 must 

be submitted. Photocopies of either Copy C or Copy D are also acceptable.

Do not accept Copy A (Social Security Administration's copy), Copy B (for 

Federal income tax return), or Copy 2 (for state or local income tax return). Since 

the employee should not have possession of these forms, the authenticity of the 

forms would be questionable; and

B. Form W-2 must not have a checkmark in the "correction" block, and it must not 

be a corrected Form W-2C; and

C. The following information must be shown on Form W-2:

1. The employee's name and social security number;

2. The employer's name;

3. The FICA (Federal Insurance Contributions Act) taxes withheld;

4. The total FICA wages;

5. The total wages, tips, and other compensation (for income tax purposes);

6. Two Employer Identification Numbers (EIN):

a. The first must be a nine-digit number, which is assigned to the 

employer by IRS; and

b. The second must begin with the digits "69," which is assigned to 

the employer by SSA.

If the employee's only evidence is an unacceptable or incomplete Form W-2, he should 

submit a statement explaining the discrepancy. The evidence may be acceptable if 

there is a good reason for the discrepancy.
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If the FICA wages on Form W-2 are different than the total wages, attempt to resolve 

the discrepancy according to FOM-I-1115.40.

230.151.3 Evidence of Self-Employment Income

The employee must submit photocopies of his income tax return, since SE income is 

not reported on Form W-2. The employee must submit:

A. Form 1040 - U.S. Individual Income Tax Return; and

B. Schedule SE - All self-employed individuals compute their self- employment 

income tax on Schedule SE (Computation of Social Security Self-Employment 

Tax); and

C. Employee's Statement - The employee must submit a signed statement that the 

tax return is a true and exact copy of the tax return filed with the IRS; and either

D. Schedule C - A self-employed individual, other than a farmer, reports his 

business income and expenses on Schedule C (Profit or Loss from Business or 

Profession); or

E. Schedule F - A self-employed farmer reports his business income and expenses 

on Schedule F (Schedule of Farm Income and Expenses); or

F. Form 1065 - Partners who are considered self-employed are credited with their 

distributive share or ordinary income whether or not actually distributed. These 

amounts are reported on Form 1065 (the partnership's informational return).

230.151.4 Development

When an employee requests an immediate recomputation of his tier I PIA, advise him to 

submit a written request. Also inform him that he must submit Form W-2 or the 

necessary SE forms. The recomputation may not be paid without evidence of wages or 

SE income.

BRB may ask you to contact the employee for evidence of lag wages or SE, when 

computing permanent work deductions for an employee whose earnings are high 

enough to cause a recomputation. Evidence may be required for more than 1 year, if 

the lag period includes the two previous years. If BRB requests evidence of lag wages 

for 2 or more years, the employee must always submit evidence for the earliest year(s) 

requested. A PIA cannot be recomputed for a later year if wages in the previous year(s) 

have not been established, since the PIA computation may be affected.

If the employee cannot submit the required evidence, advise BRB. The PIA 

recomputation will be handled mechanically at a later date, when the wages have been 

included on the earnings record.
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230.152 Erroneous 1978 And 1979 Wage Postings

As a result of a program error, the Social Security Administration may have doubled or 

halved 1978 and/or 1979 wage postings for an unknown number of railroad employees 

and annuitants. This error occurred during the transition from quarterly to annual 

reporting. The Social Security Administration is in the process of correcting the records 

involved and will provide the RRB with a listing of affected annuitants after all the 

corrections are made.

This error may affect the following PIAs on the MARC file: Tier I PIA 1, SS DF PIA and 

SS Age PIA. Do not attempt to adjust IMPACT or SPAR amounts or annuity estimates 

because of this error. The amounts shown should be only a few dollars from the actual 

amount. In addition, there is no way to identify which cases are involved and the 

direction and amount of the discrepancy.

BRB will handle any overpayments and underpayments due to this problem on a case 

by case basis until the situation is corrected. Any accruals due will be paid and any 

overpayments attributable to this error will be recovered as explained in FOM-I-1210.5 

and 1210.10.

230.155 Retirement Case With Less Than 120 Service Months

If employees do not have the number of railroad service months required to pay an 

annuity under the Railroad Retirement Act when they retire, SSA has jurisdiction of the 

payment of their retirement benefits, and includes the railroad service in determining 

eligibility for and computing those benefits.

230.155.1 Developing An Application

When employees claim less than 120 months of railroad service and claim less than 60 

months of railroad service after 1995, (including military service creditable as railroad 

service months, lag service or creditable railroad service based on pay for time lost), do 

not develop an application unless the employees insist on filing. If they insists on filing, 

submit the application and proofs for formal denial, but do not initiate any additional 

development, and do not release any G-88 series forms.

If individuals claim 120 months of service, or 60-119 months of railroad service with at 

least 60 months of railroad service after 1995, but it is doubtful that enough months can 

be established for them to be eligible, take the applications and available proofs as 

usual. However, do not initiate any additional development (e.g., do not schedule 

medical exams at RRB expense), and do not release form G-88A.2 unless lag railroad 

service may provide eligibility.

230.155.2 SSA Jurisdiction

When employees claim less than 120 months of railroad service and claim less than 60 

months of railroad service after 1995 and you do not take an application from them, 
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advise them to contact the servicing Social Security Administration district office if they 

have not done so already.

Do not request that Operations formally "transfer" credits in these cases. RRB 

mechanically transmits railroad employees' earnings information to SSA weekly, 

updating their records with the current RR earnings information. Since they already 

have the RR earnings, SSA will automatically use them in the computation of the SS 

benefits when employees have less than the required number of railroad service 

months.

If an application is filed with the RRB and it is determined that the employee does not 

have the required number of railroad service months, the Retirement Benefits Division 

sends copies of the application and proofs to SSA. Currently, Form RR-90, the printed 

record of railroad earnings, is also included with the material sent to SSA.

If the employee has Medicare coverage or will be age 65 within 3 months, SSA is 

advised that they have jurisdiction of the employee's Medicare.

SSA is not allowed to use railroad service if 120 months of 

service are established or if 60-119 months of railroad service with at least 60 

months after 1995 are established. If an employee subsequently acquires the railroad 

service needed to qualify for an annuity under the RRA, the SS benefit must be 

recomputed to exclude the RR service. If railroad service was 

required for SS benefit eligibility, the SS benefit is terminated

effective with the RRB's ABD.

If M/S creditable as compensation gives employees the required number of railroad 

service months, they may request either that:

1. their M/S be used only as wages under the SSA, if they do not want 

an RRA annuity; or,

2. their M/S credit used as compensation to give them 120 months or 

60-119 months with at least 60 months after 1995.

If payment of the retirement annuity reverts to RRB because 120 

service months or 60-119 service months with at least 60 months of service after 

1995, have been established, RR credits are not "transferred" back 

to RRB, just as they are not "transferred" to SSA. The 

information remains in SSA's records, but cannot be used for SS

benefits.
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230.160 Jurisdiction Of Survivor Claims

Only one agency, RRB or SSA, can have jurisdiction of payment of survivor benefits on 

a deceased employee's account, even if both paid benefits while (s)he was still alive. It 

is RRB's responsibility to determine which agency has jurisdiction.

An exception is the payment of the residual lump sum (RLS). In specific circumstances, 

the RLS may still be payable by RRB even though SSA has jurisdiction of survivor 

benefits. 

The deceased employee's insured status will determine the jurisdiction of payment of 

survivor benefits. 

Whether paid by RRB or SSA, benefits are based on combined railroad and social 

security earnings.

Jurisdiction of the payment of survivor benefits should not be confused with certification 

of payment of the benefits to RRB by SSA. If SSA has jurisdiction of survivor benefits, 

that agency is responsible for paying those benefits and should not certify them to RRB 

for payment (see FOM I 705.10).

230.160.1 RRB Jurisdiction

RRB has jurisdiction of the payment of survivor benefits if the employee is completely 

insured under the Railroad Retirement Act (see FOM I 230.15). To be completely 

insured, an employee must have:

A. At least 120 months of creditable railroad service or at least 60 months of 

creditable railroad service after 1995; and

B. A current connection (C/C) with the railroad industry (including a deemed C/C 

(see FOM I 225.45)).

If these two requirements are met, RRB has survivor jurisdiction. 

230.160.2 Social Security Administration Jurisdiction

If the employee does not have 120 months of railroad service or at least 60 months after 

1995 or a C/C, SSA has jurisdiction of payment of survivor benefits.

SSA also assumes survivor jurisdiction if RRB had survivor jurisdiction, but the 

widow(er) elects payment of a residual lump-sum in lieu of future RRB benefits. In that 

case, RRB may not pay any further benefits. SSA may then pay survivor benefits based 

on wages only to any beneficiary entitled on the employee's account.
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230.160.3 Mechanical Transmittal of Jurisdiction Determinations to SSA

A. Information transmitted to SSA - In April 2000, RRB transmitted a file to SSA 

containing all the jurisdiction determinations that were in our records at that time. 

Since then, a file has been transmitted weekly that updates SSA's records with 

current RR earnings information (see FOM I 230.155.3) and current jurisdiction 

determinations.

RRB transmits three jurisdiction codes to SSA, which are based on the 

jurisdiction indicators in PREH.

• "R" (RRB Jurisdiction)

• "S" (SSA Jurisdiction)

• "U" (Jurisdiction unknown or not determined)

B. SSA handling - SSA stores the mechanically transmitted jurisdiction information 

in their Disability, Railroad, Alien, Military System (DRAMS). If RR involvement is 

indicated when SSA processes an initial claim, their system searches DRAMS for 

the RR information. Based on the RR information in DRAMS, SSA takes the 

following action.

• RRB Jurisdiction - SSA sends RRB certified SSA earnings and any claims 

material, and notifies the claimant of RRB jurisdiction.

• SSA Jurisdiction - SSA verifies insured status using both SSA and RR 

earnings, then processes the claim.

• Jurisdiction Unknown - A request is transmitted to SSA's Office of Earnings 

Operations (OEO) to obtain jurisdiction information. The Division of Earnings 

Operations (DERO) of OEO sends an Administrative Message to RRB 

requesting an RR-90. The Claims Certification Unit (CCU) produces the RR90 and sends it to DERO. Once SSA receives the RR-90, depending on the 

jurisdiction determination, SSA takes further action, as described above

C. Verification of Transfer of Information

To verify that a Transfer has been completed, access STAR. Generally, the 

Transfer categories on STAR will be SIS AT or SIS 73. View the closed work 

activity. If either these STAR categories shows that the action has been 

completed, there will be a DATE HANDLED. This will be confirmation that the 

Transfer has been processed. Assume all appropriate action has been taken. 

In addition, Transfer materials are imaged. The imaged documents should be 

accessible in approximately 10 working days from the completion date on STAR.
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230.160.4 Field Office Development

A preliminary jurisdiction determination must be made when notice of an employee's 

death is received. The APPLE Notice of Death screen displays the current connection 

code currently on PREH. If it does not appear correct, EDM, FSIS, Form Letter RL-94-

F, and information personally provided by a survivor of the employee may be used to 

make a preliminary C/C determination (see FOM I 225.95) and determine if the 

employee had 120 months or at least 60 months after 1995. Refer to the APPLE 

instructions for SCREEN COMPLETION FOR EMPLOYEE DEATHS (FOM I 1581.21) 

for making and transmitting a C/C determination.

If any SSA benefits were being paid on the employee's account and a definite 

determination (Y or N) is entered into APPLE, APPLE will also mechanically initiate a 

teletype transmittal to SSA indicating which agency has jurisdiction. 

A. Inquiry made at RRB - If a survivor inquiries about benefits at an RRB field office, 

handle according to the following directions. 

1. If it appears that RRB has jurisdiction of survivor benefits, develop an 

appropriate application.

2. If RRB jurisdiction is uncertain, develop an appropriate application and 

advise the applicant that, if SSA has jurisdiction, HQ will transfer copies of 

the application and supporting documents to the Social Security 

Administration. Forward the application as usual. HQ will advise the 

applicant if the application and proofs are forwarded to SSA. Do not, 

under any circumstances, transfer an application to an SSA office. 

3. If it appears that SSA has jurisdiction of survivor benefits, refer the 

prospective applicant to the servicing SSA district office. If the applicant 

indicates that a survivor application has already been filed with SSA, send 

any claims material that may be needed to the SSA district office where 

the application was filed. 

Form Letter RL-94a-F may be used to advise a survivor of the deceased 

employee that the employee apparently was not insured under the RRA at death. 

The letter suggests that the survivor contact the Social Security Administration 

district office if an application for survivor benefits has not been filed with that 

agency. 

If SSA does not take an application and tells the prospective applicant that no 

benefits are payable under the Social Security Act, develop an application if (s)he 

inquires again at RRB, even if it appears there is no insured status under the 

RRA. If SSA does, in fact, have jurisdiction, HQ will advise SSA accordingly and 

forward the necessary transfer information to that agency.

B. Inquiry made at SSA - If an inquiry is made at an SSA office, that office will take 

action based on the information in DRAMS, as described in 230.160.3.B, above. 
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C. Request from SSA D/O to verify jurisdiction or transfer RR credits - Because 

RRB now regularly transmits jurisdiction and earnings information to SSA, under 

normal circumstances, an SSA district office should not need to contact an RRB 

field office to provide verification of jurisdiction or request a transfer of RRB 

credits to SSA. 

If the SSA district office does contact your field office for this information and you need 

assistance from HQ to verify jurisdiction, contact a customer service representative in 

SBD. Use OUTLOOK, unless circumstances warrant calling directly. 

230.160.5 Handling by HQ

A. RRB jurisdiction - If SSA has developed an application and RRB has jurisdiction, 

they will transfer the application and proofs to RRB. If there is an indication that 

an RRB field office is also developing an application, the HQ examiner will notify 

the field office that an SSA application will be used to pay benefits.

B. Social Security Administration jurisdiction – The transfer information is faxed to a 

SSA processing center. In general, if there is any SSA benefit being paid on the 

employee's account or to an auxiliary beneficiary (e.g. spouse) on his or her own 

account, the material is faxed to a SSA processing center. Refer to RCM 11 RR3T for faxing instructions.

If the applicant has Medicare coverage or will be eligible within 4 months, Medicare 

jurisdiction is also transferred to SSA.

The applicant is notified when the application and Medicare coverage is transferred.

HQ forwards any claims material received after the initial transfer to SSA.