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1 and supplemental annuity computed under the preceding . subsections of this section would, before any reductions on 3 account of age, before any reduction due to such individual's + entitlement to a monthly insurance benefit under the Social

5 Security Act, and disregarding any increases in such total o amount which become effective after the date on which such

ī individual's annuity under section 2 (a) (1) of this Act

8 begins to accrue, exceed an amount equal to the sum of

9 (A) 100 per centum of his 'final average monthly compen10 sation' up to an amount equal to 50 per centum of one 11 twelfth of the maximum annual taxable 'wages' (as defined 12 in section 3121 of the Internal Revenue Code of 1954) for 13 the calendar year in which such individual's annuity under

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section 2 (a) (1) of this Act begins to accrue, plue (B) 80

15 per centum of so much of his 'final average monthly com

16 pensation' as exceeds 50 per centum of one-twelfth of the 17 maximum annual taxable 'wages' (as defined in section 3121

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18 of the Internal Revenue Code of 1954) for the calendar 19 year in which such individual's annuity under section 2 (a)

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(1) of this Act begins to accrue, the supplemental annuity

21 of such individual first, and then, if necessary, the annuity

22 amount of such individual as computed under subsections 23 (b), (c), and (d) of this section, shall be reduced until 24 such total amount of such individual's annuity and supple

25 mental annuity equals such sum or until such supplemental i annuity and such annuity amount computed under subsections 2 (b), (c), and (d) of this section are reduced to zero, which3 ever occurs first: Prorided, however, That the provisions of 4 this subdivision shall not operate to reduce the total amount 5 of an individual's annuity and supplemental annuity com6 puted under the preceding subsections of this section below

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$1,200. For purposes of this subdivision, the final average

8 monthly compensation of an individual shall be determined

9 by dividing the total compensation received by such indi10 vidual in the two calendar years, consecutive or otherwise, in 11 which he was credited with the highest total compensation 12 during the ten-year period ending with December 31 of the 13 year in which such individual's annuity under section 2 (a) 14 (1) of this Act begins to accrue by 24. For purposes of this 15 subdivision, the term “compensation' shall include 'compen16 sation' as defined in section 1 (b) of this Act, 'wages’ as 17 defined in section 209 of the Social Security Act, ‘self18 employment income' as defined in section 211 (b) of the 19 Social Security Act, and wages deemed to have been paid 20 under section 217 or 229 of the Social Security Act on 21 account of military service: Prorided, however, That in no 22 case shall the compensation with respect to any calendar

month exceed the limitation on the compensation for such 24 month prescribed in subsection (j) of this section. Wages 25 and self-employment income included as compensation for

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1 purposes of this subdivision shall, in the absence of evidence

2 to the contrary, be presumed to have been paid in equal pro

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portions with respect to all months in the calendar quarter in

4 which credited, in the case of wages, or in equal proportions

5 with respect to all months in the calendar year in which

6 credited, in the case of self-employment income. 7 “(2) If, in the case of an individual whose annuity 8 under section 2 (a) (1) of this Act began to accrue prior

9 to January 1, 1983, the annuity (before any reduction due 10 to such individual's entitlement to a monthly insurance bene

11 fit under the Social Security Act and disregarding any

12 amount provided by subsection (b) of this section) plus

13 the supplemental annuity to which such individual is entitled

14 for any month under this Act, together with the annuity, if 15 any, of the spouse of such individual (before any reduction

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due to such spouse's entitlement to a wife's or husband's insurance benefit under the Social Security Act and disre

18 garding any amount provided by section 4 (e) of this Act), 19 before any reductions under the provisions of section 2 (f) of

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this Act, is less than the total amount which would have been

21 payable to such individual and his spouse for such month, on

22 the basis of the individual's compensation and years of serv23 ice, under the provisions of the Railroad Retirement Act of

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1937 as in effect on December 31, 1974, disregarding, for

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purposes of the computations under such Railroad Retirement

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1 Act of 1937, compensation for any month after December 31. 2 1974, in excess of one-twelfth of the maximum annual tax

3 able ‘wages' (as defined in section 3121 of the Internal Rer

4 enue Code of 1954) for the calendar year 1974, the annuity 5 of such individual and the annuity of such spouse, if any, 6 shall be increased, without regard to the provisions of sub

ī division (1) of this subsection, proportionately so as to

& equal such total amount. For the purpose of computing 9 amounts under this subdivision, the Board shall bave the 10 authority to approximate the effect of the reductions pre11 scribed by sections 3 (a) (2) and 3 (a) (3) of the Railroad 12 Retirement Act of 1937. For purposes of computing amounts 13 payable under the Railroad Retirement Act of 1937, any 14 increases in the amounts determined under the first proviso 15 of section 3 (e) of such Act which would have become 16 effective after December 31, 1974, shall be disregarded. 17 “(3) If for any month in which an annuity accrues 18 and is payable under this Act the annuity to which an in19 dividual is entitled under this Act (or would have been

20 entitled except for a reduction pursuant to a joint and sur

21 vivor election), together with the annuity, if any, of the 22 spouse of such individual, is less than the total amount, or

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the additional amount, which would have been payable to

24 all persons for such month under the Social Security Act 25 if such individual's service as an employee after December 31, i 1936, were included in the term 'employment' as defined in

2. that Act, such annuity or annuities shall be increased pro

3 portionately to such total amount, or such additional amount:

4 Provided, however, That if an annuity accrues to an individ5 ual or a spouse for a part of a month, the amount payable 6 for such part of a month under this subdivision shall be

7 one-thirtieth of the amount payable under this subdivision

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for an entire month multiplied by the number of days in

9 such part of a month. For purposes of this subdivision, (i) 10 persons not entitled to an annuity under section 2 of this Act

11 shall not be included in the computation under this sub

12 division except a spouse who could qualify for an annuity

13 under section 2 (c) of this Act if the individual from whom

14 the spouse's annuity under this Act would derive had at

15 tained age 60 or 62, as the case may be, and such individual's 16 children who meet the definition as such contained in sec

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tion 216(e) of the Social Security Act; (ü) after an annuity

18 has been certified for payment and this subdivision was in19 applicable after allowing for any waiting period under 20 section 223 (c) (2) of the Social Security Act, and after 21 having considered the inclusion of all persons who were then 22 eligible for inclusion in the computation under this subdivi23 sion, or was then applicable but later became inapplicable,

24 any recertification in such annuity under this subdivision

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shall not take into account persons not entitled to an annuity

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