20 CFR 404.401 – Deduction, reduction, and nonpayment of monthly benefits or lump-sum death payments
Under certain conditions, the amount of a monthly insurance benefit or the lump-sum death payment as calculated under the pertinent provisions of sections 202 and 203 of the Act (including reduction for age under section 202(q) of a monthly benefit) must be increased or decreased to determine the amount to be actually paid to a beneficiary. Increases in the amount of a monthly benefit or lump-sum death payment are based upon recomputation and recalculations of the primary insurance amount (see subpart C of this part). A decrease in the amount of a monthly benefit or lump-sum death payment is required in the following instances:
Terms Used In 20 CFR 404.401
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- earnings: as used in this subpart (other than as a part of the phrase "net earnings from self-employment") includes the sum of your wages for services rendered in a taxable year, plus your net earnings from self-employment for the taxable year, minus any net loss from self-employment for the same taxable year. See 20 CFR 404.429
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
(a) Reductions. A reduction of a person’s monthly benefit is required where:
(1) The total amount of the monthly benefits payable on an earnings record exceeds the maximum that may be paid (see § 404.403);
(2) An application for monthly benefits is effective for a month during a retroactive period, and the maximum has already been paid for that month or would be exceeded if such benefit were paid for that month (see § 404.406);
(3) An individual is entitled to old-age or disability insurance benefits in addition to any other monthly benefit (see § 404.407);
(4) An individual under full retirement age (see § 404.409) is concurrently entitled to disability insurance benefits and to certain public disability benefits (see § 404.408);
(5) An individual is entitled in a month to a widow’s or widower’s insurance benefit that is reduced under section 202 (e)(4) or (f)(5) of the Act and to any other monthly insurance benefit other than an old-age insurance benefit (see § 404.407(b)); or
(6) An individual is entitled in a month to old-age, disability, wife’s, husband’s, widow’s, or widower’s insurance benefit and reduction is required under section 202(q) of the Act (see § 404.410).
(b) Deductions. A deduction from a monthly benefit or a lump-sum death payment may be required because of:
(1) An individual’s earnings or work (see §§ 404.415 and 404.417);
(2) Failure of certain beneficiaries receiving wife’s or mother’s insurance benefits to have a child in her care (see § 404.421);
(3) The earnings or work of an old-age insurance beneficiary where a wife, husband, or child is also entitled to benefits (see §§ 404.415 and 404.417);
(4) Failure to report within the prescribed period either certain work outside the United States or not having the care of a child (see § 404.451);
(5) Failure to report within the prescribed period earnings from work in employment or self-employment (see § 404.453); or
(6) Certain taxes which were neither deducted from the wages of maritime employees nor paid to the Federal Government (see § 404.457).
(c) Adjustments. We may adjust your benefits to correct errors in payments under title II of the Act. We may also adjust your benefits if you received more than the correct amount due under titles VIII or XVI of the Act. For the title II rules on adjustment to your benefits, see subpart F of this part. For the rules on adjusting your benefits to recover title VIII overpayments, see § 408.930 of this chapter. For the rules on adjusting your benefits to recover title XVI overpayments, see § 416.572 of this chapter.
(d) Nonpayments. Nonpayment of monthly benefits may be required because:
(1) The individual is an alien who has been outside the United States for more than 6 months (see § 404.460);
(2) The individual on whose earnings record entitlement is based has been deported (see § 404.464);
(3) The individual is engaged in substantial gainful activity while entitled to disability insurance benefits based on “statutory blindness” (see § 404.467); or
(4) The individual has not provided satisfactory proof that he or she has a Social Security number or has not properly applied for a Social Security number (see § 404.469).
(e) Recalculation. A reduction by recalculation of a benefit amount may be prescribed because an individual has been convicted of certain offenses (see § 404.465) or because the primary insurance amount is recalculated (see subpart C of this part).
(f) Suspensions. Suspension of monthly benefits may be required pursuant to section 203(h)(3) of the Act (the Social Security Administration has information indicating that work deductions may reasonably be expected for the year), or pursuant to section 225 of the Act (the Social Security Administration has information indicating a beneficiary is no longer disabled).