social security benefit

These spousal annuities are initially computed to equal half of the worker’s unreduced Tier I benefit, but can be reduced based on applicable factors such as early receipt. To be eligible based on a current marriage, the marriage generally must be at least 1 year old or the couple must have conceived a child and the spouse must cease any employment covered by RRB . Divorced spouses are eligible for Tier I spousal benefits under the same conditions as those that apply to Social Security. In the following years, substantial benefit increases in Social Security and the railroad program, largely caused by inflation, raised the specter of insolvency.

When can my spouse collect half of my Social Security?

If you are receiving retirement or disability benefits, your spouse may be eligible for spouse benefits if they are: At least age 62. Any age and caring for a child who is under age 16 or who has a disability that began before age 22.

The Railroad Board survivor Benefits are very similar to Social Security and Medicare Benefits. You’re automatically enrolled in Medicare at age 65 if you’re receiving RRB benefits. You’ll receive Original Medicare but can still decline it to go with a Medicare Advantage option. Conclusions are based on information provided by you in response to the questions you answered.

Our experts have helped thousands like you get cash benefits.

The new Tier I benefit was designed to be equivalent to the annuity that would be offered by Social Security, while Tier II was structured to provide additional benefits comparable to private, multiemployer pension plans. This dual-beneficiary arrangement was considered both unfair and financially untenable, with RRB incurring an interchange cost of roughly $450 million annually while it was in effect . The new provision was phased in gradually for those in or close to retirement, and the additional amount provided for this group of retirees was known as the vested dual benefit. The number of dually vested beneficiaries has decreased with time; as of September 30, 2007, RRB listed only 39,998 people in current payment status for this benefit . Legislation enacted in 1974 restructured railroad retirement benefits into two tiers, so as to coordinate them more fully with social security benefits. The first tier is based on combined railroad retirement and social security credits, using social security benefit formulas.


A scaled earner, as constructed by Social Security’s Office of the Chief Actuary, is a stylized worker designed to reflect the changes in earnings that occur over a person’s lifetime. For example, an individual’s earnings generally begin at age 21, at a point lower than the average earnings seen in the overall economy. Earnings, relative to the economy-wide average, then rise steadily before reaching a plateau in middle age and ultimately declining in the final years prior to retirement. The scaled medium earnings profile is more realistic than a steady medium earner assumed to earn the average wage in each year he or she is employed . Another additional 11 federal arrests occurred on October 27, 2011, including two doctors and a former union official. In February 2014, physician Peter J. Lesniewski was charged for providing “fraudulent medical narratives in support of the disability applications of at least 230 LIRR employees.”

Working After Retirement

Railroad retirement benefit payments are financed primarily by payroll taxes paid by railroad employers and their employees. Since 2002, funds not needed immediately for benefit payments or administrative expenses have been invested by an independent National Railroad Retirement Investment Trust, which qualifies as non profit 501. As of September 30, 2009, Trust-managed assets and RRB assets held in reserve totaled almost $25 billion. Employees may be eligible for such an occupational disability annuity at age 60 with 10 years of service, or at any age with 20 years of service. If an employee is receiving a railroad retirement disability annuity, tier I benefits for the employee and spouse may, under certain circumstances, be reduced for receipt of workers’ compensation or public disability benefits. The tier II portion of a railroad retirement annuity is based on the railroad employee’s railroad service and earnings alone and is computed under a separate formula.

  • One unique aspect of the Railroad Retirement system is the private investment of some of its funds through the National Railroad Retirement Investment Trust .
  • Early retirement reductions are applied to the spouse annuity if the spouse retires prior to the full retirement age, which ranges from age 65 to age 67, just as for an employee, depending on the year of birth.
  • The U.S. Railroad Retirement Board is an independent agency in the executive branch of the United States government created in 1935 to administer a social insurance program providing retirement benefits to the country’s railroad workers.
  • For example, Social Security provides children’s benefits when an employee is disabled, retired or deceased, whereas the RRB only pays children’s benefits if the employee is deceased.
  • For the total disability annuity, the RRB follows the same definition of disability as the SSA.

Any Social Security And Railroad Retirement Benefits benefits you received that are not included in your federal adjusted gross income cannot be deducted on your North Carolina return. If your federal adjusted gross income includes social security benefits, enter the taxable amount of social security benefits on Form D-400 Schedule S, Part B – Deductions from Federal Adjusted Gross Income, Line 19. The Railroad Retirement Board works with Social Security to provide retirement and disability benefits for qualified railroad workers and their qualified survivors. In 2008, more than 90 percent of Long Island Rail Road retirees were receiving occupational disability payments. A former LIRR pension department manager was arrested and charged with official misconduct for allegedly “taking money to help railroad employees find a doctor and fill out paperwork for federal disability payments”.

What Are Tier 1 Railroad Benefits?

Comments or questions about document content can not be answered by OFR staff. My expertise is limited to Social Security benefits, not Railroad Retirement benefits. What I can tell you is that if your wife was insured for SS benefits and assuming that you’re at least age 60 or at least age 50 and disabled, then you could likely qualify for widower’s benefits from the Social Security Administration . Your doctors and other providers should bill a separate contractor for services covered under Part B. Your providers must send Railroad Medicare Part B claims to the Part B contractor selected by RRB.

The purpose of this financial coordination is to place the social security trust funds in the same position they would be in if railroad service were covered by the social security program instead of the railroad retirement program. The payment of a railroad retirement annuity can be affected by entitlement to social security benefits, as well as certain other government benefits. Such dual entitlement, if not reported to the Railroad Retirement Board , can result in benefit overpayments which have to be repaid, sometimes with interest and penalties. The following questions and answers describe how the RRB adjusts railroad retirement benefits for annuitants who are also eligible for social security benefits and/or other benefit payments. Tier I benefits are also provided to spouses of employees qualifying for Railroad Retirement benefits.

Get On Track: Railroad Retirement and Social Security

Each type of survivor receives a different percentage of the railroad worker’s Tier I benefit. If you are under 65 and have a disability, you will have to fulfill different eligibility requirements to qualify for Medicare. Whether you are eligible for Medicare and when it begins depends on how RRB classifies your disability. Also, if you qualify for Medicare due to End-Stage Renal Disease , you should contact Social Security to enroll, even if you are a railroad worker.

  • In the following years, substantial benefit increases in Social Security and the railroad program, largely caused by inflation, raised the specter of insolvency.
  • Spouse benefits averaged $1,090 a month under Railroad Retirement compared to $765 under Social Security.
  • These benefit reductions are the same as those that apply under the earnings test used by Social Security.
  • Survivor benefits are generally higher if payable by the RRB rather than Social Security.
  • The Railroad Retirement Board works with Social Security to provide retirement and disability benefits for qualified railroad workers and their qualified survivors.

For information about nonresidents or dual-status aliens, please see International Taxpayers. However, the unemployment benefit and sickness benefit figures cited in this paragraph are for fiscal year 2007. In fiscal year 2007, the net rate of return on assets managed by the NRRIT was 16.38 percent, compared with the 5.3 percent return experienced by the Social Security Trust Fund—which is limited to investments in federal securities—during calendar year 2007 . Since passage of the Railroad Retirement Acts of the 1930s, numerous other railroad laws have subsequently been enacted. And to contact Social Security, you can go online and schedule an appointment to get more specific information on your benefits. aren’t limited to full-time, daily employees; workers get credit for a month’s worth of railroad service for any amount of time worked within that month, even if it’s a single day’s work. If you have any questions about your eligibility or benefits, contact your local RRB field office. Again, any earnings from railroad employment preclude an individual from receiving retirement benefits, but benefit reductions apply to all early retirees who have non-RRB-covered earnings over a certain limit. Prior to the year when the full retirement age is attained, benefits are reduced $1 for every $2 earned over the annual exempt amount, which in 2008 is $13,560. In the year full retirement age is attained, the reduction is $1 for every $3 earned over the annual exempt amount, which in 2008 is $36,120 . These benefit reductions are the same as those that apply under the earnings test used by Social Security.

CS Professional Suite Integrated software and services for tax and accounting professionals. If you purchase a product or register for an account through one of the links on our site, we may receive compensation. Benefits coordination can get complicated, so you should speak to both the Railroad Retirement Board and Social Security to better understand what your benefits will be.

Categories: Bookkeeping

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