Prepared by Public Affairs 312-751-4777
Recently-enacted legislation (Public Law 109-478) increases the amount
employees receiving railroad retirement disability annuities can earn without
losing any benefits. The new law also provides a mechanism for annually indexing
these disability earnings limits to average national wage increases.
Effective January 1, 2007, the monthly allowable amount a disability annuitant
can earn increases to $700, after deduction of disability-related work expenses,
from the previous statutory amount of $400. The annual earnings limitation
likewise increases in 2007 to $8,400, after deduction of disability-related work
expenses, from the previous limit of $4,800.
If a disabled annuitant’s earnings in a year (after deduction of
disability-related work expenses) exceed the annual limit, the annuity is not
payable for the number of months derived by dividing the amount by which those
earnings exceed the annual limit by the amount of the monthly limit. Any
resulting fraction of a month equal to or greater than one-half (0.5) is rounded
up, increasing the number of months in which the annuity is not payable by one.
For example, a disability annuitant earns $8,700 in 2007, which is $300 over the
annual limit. Dividing $300 by $700 (the monthly limit for 2007) yields a
remainder of 0.43. As this is less than half, no benefits would be lost.
Another disability annuitant earns $9,500 in 2007, which is $1,100 over the
annual limit. Dividing $1,100 by $700 yields 1.57. As the remainder (.57) is
more than half, the annuitant would lose 2 months of benefits.
As under prior law, these disability work restrictions cease upon a disabled
employee annuitant’s attainment of full retirement age. This transition is
effective no earlier than full retirement age even if the annuitant had 30 years
of service. Earnings deductions continue to apply to those working for their
last pre-retirement nonrailroad employer.
If a disabled annuitant works before full retirement age, this may also raise a
question about the possibility of that individual’s recovery from disability,
regardless of the amount of earnings. Consequently, any earnings must be
reported promptly to avoid overpayments, which are recoverable by the RRB and
may also include penalties.
Employee disability annuitants with questions about their earnings should
contact the nearest RRB office. RRB offices are open to the public from 9:00
a.m. to 3:30 p.m., Monday through Friday, except on Federal holidays. They can
find the address and phone number of the RRB office serving their area by
calling the toll-free RRB Help Line at 1-800-808-0772. The RRB Help Line is an
automated telephone service available 24 hours a day, 7 days a week. Field
office locations can also be found on the RRB’s Web site at www.rrb.gov.
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