SECTION 4(a-1) (ii) OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT; SECTION 3 (e) OF THE RAILROAD RETIREMENT ACT-RECOVERY OF SICKNESS BENEFITS WHERE SOCIALSECURITY-MINIMUM ANNUITY WAS BASED IN PART ON ANNUITANT'S HAVING WIFE AND CHILD 20 CFR 225.6 L-60-550 Although increase in disability annuity under overall "social-security-minimum" provision was based in part on annuitant's having a wife and child, all of the increased annuity must be taken into consideration in recovering sickness benefits paid the annuitant with respect to days for which his increased annuity accrued. B was paid sickness benefits under the Railroad Unemployment Insurance Act with respect to days in the period beginning July 1, 1959, and ending September 6, 1959. During this period he was entitled to an annuity under the Railroad Retirement Act at the rate of $108.70 a month. In September 1959, B's annuity was increased to $253 a month under the so-called over-all "social-security-minimum" provision of section 3 (e) of the Railroad Retirement Act. Section 3 (e) provides, in pertinent part, as follows: *if for any entire month in which an annuity accrues and is payable under this Act the annuity to which an employee is entitled under this Act (or would have been entitled except for a reduction pursuant to section 2(a)3 or a joint and survivor election), together with his or her spouse's annuity, if any, or the total of survivor annuities under this Act deriving from the same employee, is less than 110 per centum of the amount, or 110 per centum of the additional amount which would have been payable to all persons for such month under the Social Security Act (deeming completely and partially insured individuals to be fully and currently insured respectively, individuals entitled to insurance annuities under subsections (a) and (d) of section 5 to have attained age sixty-five, women entitled to spouses' annuities pursuant to elections made under subsection (h) of section 2 to be entitled to wife's insurance benefits determined under section 202 (q) of the Social Security Act, and individuals entitled to insurance annuities under subsection (c) of section 5 on the basis of disability to be less than eighteen years of age and disregarding any possible deductions under subsections (g) and (h) (2) of section 203 of the Social Security Act) if such employee's service as an employee after December 31, 1936, were included in the term "employment" as defined in that Act and quarters of coverage were determined in accordance with section 5(1) (4) of this Act, such annuity or annuities, shall be increased proportionately to a total of 110 per centum of such amount or 110 per centum of such additional amount. In other words, section 3(e) in effect guarantees that the monthly total of annuities under the Railroad Retirement Act will not be less than 110 percent of the total amount of benefits or additional benefits which would be payable for the month under the Social Security Act if the employee's railroad service after 1936 were "employment" under the Social Security Act. B and his wife were respectively 57 and 49 years of age, and their 12-year old son was living with them. Since B had not attained age 65, his wife could not be entitled to a spouse's annuity under the Railroad Retirement Act. However, benefits she would have been entitled to under the Social Security Act, based in part on the fact that she was caring for B's 12-year old son, if B's services had been covered by that Act, were a factor which entered into the computation of the increase in B's annuity under section 3(e). The increase to $253 was retroactive to July 1, 1959. A question was therefore presented as to the recovery of the sickness benefits which had been paid for days in the period beginning July 1, 1959. Section 4 (a-1) of the Railroad Unemployment Insurance Act provides as follows: There shall not be considered as a day of unemployment or as a day of sickness, with respect to any employee (ii) any day in any period with respect to which the Board finds that he is receiving or will have received annuity payments or pensions under the Railroad Retirement Act of 1935 or the Railroad Retirement Act of 1937, or insurance benefits under title II of the Social Security Act, or unemployment, maternity, or sickness benefits under an unemployment, maternity, or sickness compensation law other than this Act, or any other social insurance payments under any law: Provided, That if an employee receives or is held entitled to receive any such payments, other than unemployment, maternity, or sickness payments, with respect to any period which include days of unemployment or sickness in a registration period, after benefits under this Act for such registration period will have been paid, the amount by which such benefits under this Act will have been increased by including such days as days of unemployment or as days of sickness shall be recoverable by the Board: Provided further, That, if that part of any such payment or payments, other than unemployment, maternity, or sickness payments, which is apportionable to such days of unemploy ment or days of sickness is less in amount than the benefits under this Act which, but for this paragraph, would be payable and not recoverable with respect to such days of unemployment or days of sickness, the preceding provisions of this paragraph shall not apply but such benefits under this Act for such days of unemployment or days of sickness shall be diminished or recoverable in the amount of such part of such other payment or payments; Thus, under section 4(a-1) (ii) of the Railroad Unemployment Insurance Act, sickness benefits are payable for a day with respect to which the em ployee is entitled to an annuity only in the amount by which the sickness benefits for the day exceed the annuity apportionable to that day. Before the increase in his annuity under the "social-security-minimum" provision, sickness benefits to which B was otherwise entitled for days in the period beginning July 1, 1959, exceeded the amount of his annuity apportionable to the corresponding days by $233.01, and he was paid sickness benefits in that amount. However, following the increase in his annuity under the minimum provision, the sickness benefits otherwise payable for days in the period beginning July 1, 1959, were less than the annuity apportionable to those days. The Board therefore recovered the $233.01 previously paid as sickness benefits for those days by deducting that amount from an accrual of the increased annuity. B had died meanwhile. His wife objected to the recovery of $233.01 as "excessive", contending that the $253 minimum annuity included a payment "for her caring for his child under 18." It is held that although the benefits the wife would have been entitled to if B's service had been "employment" under the Social Security Act were a factor in the increase in B's annuity to $253 under the social-security minimum provision, the entire $253 was in form and substance his annuity. As a consequence, no part of the $253 was excluded from the operation of section 4(a-1) (ii). It follows that the $233.01 was properly recoverable out of the accrued increase in B's annuity. B's case is distinguishable from the one considered in Associate General Counsel's opinion L-56-600. That dealt with an election by a wife under 65, but at least 62 years of age, to have her husband's Railroad Retirement Act annuity increased under the "social-security-minimum" provision of section 3(e) until she becomes entitled at age 65 or later to a spouse's annuity. Under the Social Security Act, as amended in 1956, a wife may elect to take her wife's benefit as early as age 62 rather than wait until age 65; however, unless she has a child in her care, her benefit is reduced actuarily. The idea of the actuarial reduction in such cases is carried out in the administration of the Railroad Retirement Act also. The increase in the husband's annuity under the "social-security-minimum" provision of section 3(e) of the Railroad Retirement Act takes into consideration the actuarial reduction in the electing wife's Social Security Act wife's benefit, if she does not have a child under 18. The effect of the actuarial reduction is, of course, continued after the wife reaches age 65 if the minimum provision continues to apply despite her becoming entitled to a spouse's annuity under the Railroad Retirement Act. However, if the minimum provision ceases to apply when the amount of the spouse's annuity payable to her after reaching age 65 is added to the amount of her husband's annuity, with the result that she would, except for her election, be qualified for her normal spouse's annuity, an actuarial reduction is made in her spouse's annuity to compensate for the increased annuity previously paid to her husband on the basis of her election. Associate General Counsel's opinion L-56-490 (wives' benefits). It was held in L-56-600 that section 4 (a-1) (ii) of the Railroad Unemploy. ment Insurance Act does not operate on the part of the husband's minimum annuity payable pursuant to the wife's election; the reasoning was that in substance, if not in form, that part of the husband's annuity is a redistribu. tion of the spouse's annuity which the wife would become entitled to at age 65 but which she elected to anticipate at an earlier age, and it is paid to the husband on a temporary basis only. In the instant case, on the other hand, there is no such election and no acturial adjustment. Consequently, no sound reason appears for holding that any part of B's annuity was in reality his wife's or his child's. INDEX Page Exemption of, from state judicial process. ANNUITY Employee Annuity- Company is not "last person" by whom annuitant was em- Ruling No. No. L-60-153 L-60-401 Physician on pay roll of employer Capacity in which he acts L-60-263.1 Service to "last person" by whom employed before annuity Service which would not affect annuity payments.. Annuity terminated upon marriage may be reinstated after Applicability of work deduction provision in cases of disabled Effect of employee's public acknowledgment of children, to Social security minimum provision does not apply to increase Qualification for reduced spouse's annuity required inde- L-60-100 Spouse's annuity may be reinstated after divorce decree set L-60-45 Widow's Annuity— Annulment of voidable marriage in New York (which mar- Court order for support pendente lite which terminated before Reinstatement of annuity terminated by marriage permitted Widow who was in the month prior to her marriage, or would L-60-336 121 71 Wife's benefit under Social Security Act not regular contri- L-60-535 106 Widow's Current Insurance Annuity- Child not in care of widow while child is in institution and |