Occupational Disability Annuity

If you are unable to work in your regular railroad job, you may qualify for an occupational disability annuity.

To receive an occupational disability annuity, you must:

• have a current connection with the railroad industry, and;
• have 240 months of creditable railroad service, or have 120 months of creditable railroad service and be at least age 60, and;
• be "permanently disabled" for work in your "regular railroad occupation".

Total and Permanent Disability Annuity

If you are unable to work in any kind of regular job, you may qualify for a total and permanent disability annuity.

To receive a total and permanent disability annuity, you must:

• stop all work, and
• have 120 months of creditable railroad service, or have at least 60 months of creditable railroad service after 1995. (If you have less than 120 months of creditable railroad service, your Tier II benefit cannot begin before you attain age 62.) and
• be "permanently disabled" for any kind of "regular work".

When Your Disability Annuity Can Begin

You may select the date you wish your disability annuity payments to begin.

The day you may select is either:

• the earliest date permitted by law, or
• another date that may be more advantageous to you.

A. General Rule

Generally, the earliest annuity beginning date permitted by law is the latest of the following:

• The first day of the 12th month before the month in which the Railroad Retirement Board (RRB) received your annuity application, or
• the first day of the month following the disability annuity waiting period.

B. Previous Disability Annuity Rule

If you previously received a disability annuity which ended within 5 years of the month your current disability begins, the earliest annuity beginning date permitted by law is the latest of the following:

• The first day of the 12th month before the month in which the RRB received your annuity application, or;
• the first day of the month you again became disabled.

If the date you select is earlier than the earliest date permitted by law, your annuity will begin on the earliest date permitted by law.

C. Disability Annuity Waiting Period

If the beginning date of your annuity is determined under the General Rule as described above, a waiting period must be completed before your annuity can begin. The waiting period ends the last day of the 5^th month after the month your disability began.

How Work Can Affect Your Disability Annuity Payments

Work and earnings can affect the payment of your annuity and must be reported promptly to the RRB in order to avoid potential overpayments and penalties. The following describes the effect of work on your benefit payments.

A. Work in the Railroad Industry

Your annuity cannot be paid for any month that you work in the railroad industry.

B. Work for Your Last Nonrailroad Employer

Your Tier II and supplemental annuity, if any, are subject to deductions for earnings from your last nonrailroad employer. The deduction is $1 for each $2 in earnings not to exceed 50% of these components.

C. Work for any Employer

Note: Section C refers to disability earnings limits.  Refer to Form AB-31, How Work Affects Your Disability Annuity, for the current disability earnings limits.

• Earnings of more than the disability earnings limit from Any Work — If you are under "full retirement age", your annuity cannot be paid for any month you do any work and earn over the disability earnings limit*.
   
• Earnings — Earnings include wages before payroll deductions, commissions, and other payments for work (such as room and board) and net earnings from self-employment.
   
• Penalties for Late Reports — If your earnings are greater than the disability earnings limit* for a month, and you do not report it to us within two months, you will be penalized.
   
  • The first time that you report late, the penalty is one month’s annuity.
  • The second time that you report late, the penalty is one month’s annuity for each month you earned over the disability earnings limit.
     
• End-of-the-Year Adjustment — If your annuity was adjusted because you reported earnings over the disability earnings limit*, we will send you a form after the end of the calendar year on which to report your earnings. Annuity payments that have been withheld will be paid if you earned less than the disability earnings maximum*.
  • If you earned more than the disability earnings maximum*, you will not be entitled to an annuity for some months; the number depends on how much you earned.
  • Penalties for late reports can be applied to end-of-year adjustments if they were not already assessed during the year the excess earnings occurred.

Note: These disability work restrictions cease upon a disabled employee annuitant’s attainment of full retirement age, when the annuitant becomes subject to the work and earnings restrictions applicable to employee annuities based on age and service. This transition is effective no earlier than full retirement age even if the annuitant had 30 years of service.

* When determining if you have worked over the disability earnings limit/maximum, you must first deduct any impairment-related work expenses from your earnings.  Impairment-related work expenses include special expenses you paid for items or services you needed in order to work (see the definition for Impairment)

D. Substantial Gainful Activity

Substantial gainful activity is (in general) work which results in earnings. (Refer to Form AB-31, How Work Affects Your Disability Annuity).  It also refers to work activity involving the performance of significant physical or mental duties, or a combination of both, which are productive in nature. If you work and are receiving an annuity based on total and permanent disability, or if you have a period of disability or early Medicare, you may be subject to a finding of substantial gainful activity.

E. Work May Raise a Question About Your Condition

Until you reach full retirement age, your work and earnings will be evaluated to see if you are able to do "regular work". Also, any work performed after your disability annuity begins may raise a question about "medical recovery" regardless of the amount of your earnings. If this happens, you will be asked for additional information about your medical condition and we may request that you be examined.

In any case, all work and earnings by a disability annuitant must be reported promptly to the RRB in order to avoid potential overpayments and penalties.

A Conviction Due to a Criminal Offense Can Affect Your Annuity

The amount of your annuity may be affected if you are:

• convicted due to a criminal offense which was committed after October 19, 1980, or
• imprisoned or confined due to a criminal offense.

See definition of "Confinement (or imprisonment)"

When Your Disability Annuity Could End

A. At Full Retirement Age

At Full Retirement Age, your entitlement to a disability annuity ends, and your entitlement to an age-and-service annuity begins. This means that your entitlement to annuity payments is no longer affected by the restrictions that apply to disability annuitants as discussed in this booklet. However, your annuity is still subject to the restrictions discussed in booklet RB-1, Employee Annuity, for age-and-service annuitants. If you do not have a copy of this booklet, you should request one.

B. Before Full Retirement Age

Entitlement to disability annuity payments ends effective with the earliest of:

• the last day of the month before the month in which your death occurs, or
• the last day of the 2nd month after the month in which disability ends.

Disability ends if:

• you "medically recover" so that you are able to work, or
• you return to work and hold a job whether or not there has been any substantial improvement in your condition (see Trial Work Period).