[Federal Register Volume 63, Number 210 (Friday, October 30, 1998)]
[Notices]
[Pages 58446-58451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28988]
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SOCIAL SECURITY ADMINISTRATION
Office of the Commissioner; 1999 Cost-of-Living Increase and
Other Determinations
AGENCY: Social Security Administration.
ACTION: Notice.
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SUMMARY: The Commissioner has determined--
(1) A 1.3 percent cost-of-living increase in Social Security
benefits under title II of the Social Security Act (the Act), effective
for December 1998;
(2) An increase in the Federal Supplemental Security Income (SSI)
monthly benefit amounts under title XVI of the Act for 1999 to $500 for
an eligible individual, $751 for an eligible individual with an
eligible spouse, and $250 for an essential person;
(3) The national average wage index for 1997 to be $27,426.00;
(4) The Old-Age, Survivors, and Disability Insurance (OASDI)
contribution and benefit base to be $72,600 for remuneration paid in
1999 and self-employment income earned in taxable years beginning in
1999;
(5) For beneficiaries under age 65, the monthly exempt amount under
the Social Security retirement earnings test for taxable years ending
in calendar year 1999 to be $800;
(6) The dollar amounts (``bend points'') used in the benefit
formula for workers who become eligible for benefits in 1999 to be $505
and $3,043;
(7) The dollar amounts (``bend points'') used in the formula for
computing maximum family benefits for workers who become eligible for
benefits in 1999 to be $645, $931, and $1,214;
(8) The amount of earnings a person must have to be credited with a
quarter of coverage in 1999 to be $740;
(9) The ``old-law'' contribution and benefit base to be $53,700 for
1999;
(10) The monthly amount of substantial gainful activity applicable
to
[[Page 58447]]
statutorily blind individuals in 1999 to be $1,110;
(11) The domestic worker coverage threshold to be $1,100 for 1999;
and
(12) The OASDI fund ratio to be 171.2 percent for 1998.
FOR FURTHER INFORMATION CONTACT: Jeffrey L. Kunkel, Office of the Chief
Actuary, Social Security Administration, 6401 Security Boulevard,
Baltimore, MD 21235, (410) 965-3013. For information on eligibility or
claiming benefits, call 1-800-772-1213. A summary of the information in
this announcement is available in a recorded message by telephoning
(410) 965-3053. Information relating to this announcement is also
available on the Internet. The address is http://www.ssa.gov/OACT/COLA/
Intro.html.
SUPPLEMENTARY INFORMATION: The Commissioner is required by the Act to
publish within 45 days after the close of the third calendar quarter of
1998 the benefit increase percentage and the revised table of ``special
minimum'' benefits (section 215(i)(2)(D)). Also, the Commissioner is
required to publish on or before November 1 the national average wage
index for 1997 (section 215(a)(1)(D)), the OASDI fund ratio for 1998
(section 215(i)(2)(C)(ii)), the OASDI contribution and benefit base for
1999 (section 230(a)), the amount of earnings required to be credited
with a quarter of coverage in 1999 (section 213(d)(2)), the monthly
exempt amounts under the Social Security retirement earnings test for
1999 (section 203(f)(8)(A)), the formula for computing a primary
insurance amount for workers who first become eligible for benefits or
die in 1999 (section 215(a)(1)(D)), and the formula for computing the
maximum amount of benefits payable to the family of a worker who first
becomes eligible for old-age benefits or dies in 1999 (section
203(a)(2)(C)).
Cost-of-Living Increases
General. The cost-of-living increase is 1.3 percent for benefits
under titles II and XVI of the Act.
Under title II, OASDI benefits will increase by 1.3 percent
beginning with December 1998 benefits.
(All benefits for a given month are normally payable in the following
month. However, those benefits for December 1998 that are normally paid
on the third of the following month will be paid on December 31, 1998,
because January 3, 1999, is a Sunday.) This increase is based on the
authority contained in section 215(i) of the Act (42 U.S.C. 415(i)).
Under title XVI, Federal SSI payment levels will also increase by
1.3 percent effective for payments made for the month of January 1999
but paid on December 31, 1998. This is based on the authority contained
in section 1617 of the Act (42 U.S.C. 1382f).
Automatic Benefit Increase Computation. Under section 215(i) of the
Act, the third calendar quarter of 1998 is a cost-of-living computation
quarter for all the purposes of the Act. The Commissioner is,
therefore, required to increase benefits, effective with December 1998,
for individuals entitled under section 227 or 228 of the Act, to
increase primary insurance amounts of all other individuals entitled
under title II of the Act, and to increase maximum benefits payable to
a family. For December 1998, the benefit increase is the percentage
increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers from the third quarter of 1997 through the third
quarter of 1998.
Section 215(i)(1) of the Act provides that the Consumer Price Index
for a cost-of-living computation quarter shall be the arithmetic mean
of this index for the 3 months in that quarter. The arithmetic mean is
rounded, if necessary, to the nearest 0.1. The Department of Labor's
Consumer Price Index for Urban Wage Earners and Clerical Workers for
each month in the quarter ending September 30, 1997, is: for July 1997,
157.5; for August 1997, 157.8; and for September 1997, 158.3. The
arithmetic mean for this calendar quarter is 157.9. The corresponding
Consumer Price Index for each month in the quarter ending September 30,
1998, is: for July 1998, 159.8; for August 1998, 160.0; and for
September 1998, 160.2. The arithmetic mean for this calendar quarter is
160.0. Thus, because the Consumer Price Index for the calendar quarter
ending September 30, 1998, exceeds that for the calendar quarter ending
September 30, 1997 by 1.3 percent, a cost-of-living benefit increase of
1.3 percent is effective for benefits under title II of the Act
beginning December 1998.
Title II Benefit Amounts. In accordance with section 215(i) of the
Act, in the case of insured workers and family members for whom
eligibility for benefits (i.e., the worker's attainment of age 62, or
disability or death before age 62) occurred before 1999, benefits will
increase by 1.3 percent beginning with benefits for December 1998 which
are payable in January 1999. In the case of first eligibility after
1998, the 1.3 percent increase will not apply.
For eligibility after 1978, benefits are generally determined by a
benefit formula provided by the Social Security Amendments of 1977
(Pub. L. 95-216), as described later in this notice.
For eligibility before 1979, benefits are determined by means of a
benefit table. A copy of this table may be obtained by writing to:
Social Security Administration, Office of Public Inquiries, 4100 Annex,
Baltimore, MD 21235. The table is also available on the Internet at
address http://www.ssa.gov/OACT/ProgData/tableForm.html.
Section 215(i)(2)(D) of the Act requires that, when the
Commissioner determines an automatic increase in Social Security
benefits, the Commissioner shall publish in the Federal Register a
revision of the range of the primary insurance amounts and
corresponding maximum family benefits based on the dollar amount and
other provisions described in section 215(a)(1)(C)(i). These benefits
are referred to as ``special minimum'' benefits and are payable to
certain individuals with long periods of relatively low earnings. To
qualify for such benefits, an individual must have at least 11 ``years
of coverage.'' To earn a year of coverage for purposes of the special
minimum, a person must earn at least a certain proportion (25 percent
for years before 1991, and 15 percent for years after 1990) of the
``old-law'' contribution and benefit base. In accordance with section
215(a)(1)(C)(i), the table below shows the revised range of primary
insurance amounts and corresponding maximum family benefit amounts
after the 1.3 percent benefit increase.
Special Minimum Primary Insurance Amounts and Maximum Family
Benefits Payable for Dec. 1998
------------------------------------------------------------------------
Primary
Number of years of coverage insurance Maximum family
amount benefit
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11...................................... $27.90 $42.20
12...................................... 56.10 84.80
13...................................... 84.70 127.40
14...................................... 112.80 169.80
15...................................... 141.20 212.00
[[Page 58448]]
16...................................... 169.60 255.00
17...................................... 198.00 297.70
18...................................... 226.40 340.10
19...................................... 254.70 382.70
20...................................... 283.00 425.10
21...................................... 311.70 468.00
22...................................... 339.80 510.40
23...................................... 368.40 553.60
24...................................... 396.80 595.90
25...................................... 425.10 638.00
26...................................... 453.80 681.40
27...................................... 482.00 723.70
28...................................... 510.30 766.10
29...................................... 538.60 808.80
30...................................... 567.00 851.10
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Section 227 of the Act provides flat-rate benefits to a worker who
became age 72 before 1969 and was not insured under the usual
requirements, and to his or her spouse or surviving spouse. Section 228
of the Act provides similar benefits at age 72 for certain uninsured
persons. The current monthly benefit amount of $203.10 for an
individual under sections 227 and 228 of the Act is increased by 1.3
percent to obtain the new amount of $205.70. The current monthly
benefit amount of $101.50 for a spouse under section 227 is increased
by 1.3 percent to $102.80.
Title XVI Benefit Amounts. In accordance with section 1617 of the
Act, Federal SSI benefit amounts for the aged, blind, and disabled are
increased by 1.3 percent effective January 1999. For 1998, the monthly
benefit amounts for an eligible individual, an eligible individual with
an eligible spouse, and for an essential person--$494, $741, and $247,
respectively--were derived from corresponding yearly unrounded Federal
SSI benefit amounts of $5,932.89, $8,898.33, and $2,973.24. For 1999,
these yearly unrounded amounts are increased by 1.3 percent to
$6,010.02, $9,014.01, and $3,011.89, respectively. Each of these
resulting amounts must be rounded, when not a multiple of $12, to the
next lower multiple of $12. Accordingly, the corresponding annual
amounts, effective for 1999, are $6,000, $9,012, and $3,000. The
corresponding monthly amounts for 1999 are determined by dividing the
yearly amounts by 12, giving $500, $751, and $250, respectively. The
monthly amount is reduced by subtracting monthly countable income. In
the case of an eligible individual with an eligible spouse, the amount
payable is further divided equally between the two spouses.
Fee for Services Performed as a Representative Payee. Sections
205(j)(4)(A)(i) and 1631(a)(2)(D)(i) of the Act permit a qualified
organization to collect from an individual a monthly fee for expenses
incurred in providing services performed as such individual's
representative payee. Currently the fee is limited to the lesser of (1)
10 percent of the monthly benefit involved, or (2) $27 per month ($52
per month in any case in which the individual is entitled to disability
benefits and the Commissioner has determined that payment to the
representative payee would serve the interest of the individual because
the individual has an alcoholism or drug addiction condition and is
incapable of managing such benefits). The dollar fee limits are subject
to increase by the automatic cost-of-living increase, with the
resulting amounts rounded to the nearest whole dollar amount. Due to
the rounding provision, the current $27 amount remains the same for
1999, while the current $52 amount is increased by 1.3 percent to $53
for 1999.
National Average Wage Index for 1997
General. Under various provisions of the Act, several amounts are
scheduled to increase automatically for 1999 based on the annual
increase in the national average wage index. The amounts are (1) the
OASDI contribution and benefit base, (2) the retirement test exempt
amount for beneficiaries under age 65, (3) the dollar amounts, or
``bend points,'' in the primary insurance amount and maximum family
benefit formulas, (4) the amount of earnings required for a worker to
be credited with a quarter of coverage, (5) the ``old-law''
contribution and benefit base (as determined under section 230 of the
Act as in effect before the 1977 amendments), and (6) the substantial
gainful activity amount applicable to statutorily blind individuals.
Also, section 3121(x) of the Internal Revenue Code requires that the
domestic employee coverage threshold be based on changes in the
national average wage index.
Computation. The determination of the national average wage index
for calendar year 1997 is based on the 1996 national average wage index
of $25,913.90 announced in the Federal Register on October 30, 1997 (62
FR 58762), along with the percentage increase in average wages from
1996 to 1997 measured by annual wage data tabulated by the Social
Security Administration (SSA). The wage data tabulated by SSA include
contributions to deferred compensation plans, as required by section
209(k) of the Act. The average amounts of wages calculated directly
from these data were $24,859.17 and $26,309.73 for 1996 and 1997,
respectively. To determine the national average wage index for 1997 at
a level that is consistent with the national average wage indexing
series for 1951 through 1977 (published December 29, 1978, at 43 FR
61016), the 1996 national average wage index of $25,913.90 is
multiplied by the percentage increase in average wages from 1996 to
1997 (based on SSA-tabulated wage data) as follows (with the result
rounded to the nearest cent):
Amount. The national average wage index for 1997 is $25,913.90
times $26,309.73 divided by $24,859.17, which equals $27,426.00.
Therefore, the national average wage index for calendar year 1997 is
determined to be $27,426.00.
OASDI Contribution and Benefit Base
General. The OASDI contribution and benefit base is $72,600 for
remuneration paid in 1999 and self-employment income earned in taxable
years beginning in 1999.
The OASDI contribution and benefit base serves two purposes:
(a) It is the maximum annual amount of earnings on which OASDI
taxes are
[[Page 58449]]
paid. The OASDI tax rate for remuneration paid in 1999 is set by
statute at 6.2 percent for employees and employers, each. The OASDI tax
rate for self-employment income earned in taxable years beginning in
1999 is 12.4 percent. (The Hospital Insurance tax is due on
remuneration, without limitation, paid in 1999, at the rate of 1.45
percent for employees and employers, each, and on self-employment
income earned in taxable years beginning in 1999, at the rate of 2.9
percent.)
(b) It is the maximum annual amount used in determining a person's
OASDI benefits.
Computation. Section 230(b) of the Act provides the formula used to
determine the OASDI contribution and benefit base. Under the formula,
the base for 1999 shall be equal to the larger of (1) the 1994 base of
$60,600 multiplied by the ratio of the national average wage index for
1997 to that for 1992, or (2) the current base ($68,400). If the amount
so determined is not a multiple of $300, it shall be rounded to the
nearest multiple of $300.
Amount. The ratio of the national average wage index for 1997,
$27,426.00 as determined above, compared to that for 1992, $22,935.42,
is 1.1957924. Multiplying the 1994 OASDI contribution and benefit base
amount of $60,600 by the ratio of 1.1957924 produces the amount of
$72,465.02 which must then be rounded to $72,600. Because $72,600
exceeds the current base amount of $68,400, the OASDI contribution and
benefit base is determined to be $72,600 for 1999.
Retirement Earnings Test Exempt Amounts
General. Social Security benefits are withheld when a beneficiary
under age 70 has earnings in excess of the retirement earnings test
exempt amount. Since 1978, higher exempt amounts have applied to
beneficiaries aged 65 through 69 compared to those under age 65.
Formulas for determining the monthly exempt amounts are provided in
section 203(f)(8)(B) of the Act, as amended by section 102 of the
``Senior Citizens' Right to Work Act of 1996,'' title I of Pub. L. 104-
121. This amendment set the annual exempt amount for beneficiaries aged
65 through 69 to $12,500 for 1996, $13,500 for 1997, $14,500 for 1998,
$15,500 for 1999, $17,000 for 2000, $25,000 for 2001, and $30,000 for
2002. The corresponding monthly exempt amounts are exactly one-twelfth
of the annual amounts. After 2002, the monthly exempt amount for this
group of beneficiaries will increase under the applicable formula.
For beneficiaries aged 65 through 69, $1 in benefits is withheld
for every $3 of earnings in excess of the annual exempt amount. For
beneficiaries under age 65, $1 in benefits is withheld for every $2 of
earnings in excess of the annual exempt amount.
Computation. Under the formula applicable to beneficiaries under
age 65, the monthly exempt amount for 1999 shall be the larger of (1)
the 1994 monthly exempt amount multiplied by the ratio of the national
average wage index for 1997 to that for 1992, or (2) the 1998 monthly
exempt amount ($760). If the amount so determined is not a multiple of
$10, it shall be rounded to the nearest multiple of $10.
Exempt Amount for Beneficiaries Under Age 65. The ratio of the
national average wage index for 1997, $27,426.00, compared to that for
1992, $22,935.42, is 1.1957924. Multiplying the 1994 retirement
earnings test monthly exempt amount of $670 by the ratio 1.1957924
produces the amount of $801.18. This must then be rounded to $800.
Because $800 is larger than the corresponding current exempt amount of
$760, the retirement earnings test monthly exempt amount for
beneficiaries under age 65 is thus determined to be $800 for 1999. The
corresponding retirement earnings test annual exempt amount for these
beneficiaries is $9,600.
Computing Benefits After 1978
General. The Social Security Amendments of 1977 provided a method
for computing benefits which generally applies when a worker first
becomes eligible for benefits after 1978. This method uses the worker's
``average indexed monthly earnings'' to compute the primary insurance
amount. The computation formula is adjusted automatically each year to
reflect changes in general wage levels, as measured by the national
average wage index.
A worker's earnings are adjusted, or ``indexed,'' to reflect the
change in general wage levels that occurred during the worker's years
of employment. Such indexation ensures that a worker's future benefits
reflect the general rise in the standard of living that occurs during
his or her working lifetime. A certain number of years of earnings are
needed to compute the average indexed monthly earnings. After the
number of years is determined, those years with the highest indexed
earnings are chosen, the indexed earnings are summed, and the total
amount is divided by the total number of months in those years. The
resulting average amount is then rounded down to the next lower dollar
amount. The result is the average indexed monthly earnings.
For example, to compute the average indexed monthly earnings for a
worker attaining age 62, becoming disabled before age 62, or dying
before attaining age 62, in 1999, the national average wage index for
1997, $27,426.00, is divided by the national average wage index for
each year prior to 1997 in which the worker had earnings. The actual
wages and self-employment income, as defined in section 211(b) of the
Act and credited for each year, is multiplied by the corresponding
ratio to obtain the worker's indexed earnings for each year before
1997. Any earnings in 1997 or later are considered at face value,
without indexing. The average indexed monthly earnings is then computed
and used to determine the worker's primary insurance amount for 1999.
Computing the Primary Insurance Amount. The primary insurance
amount is the sum of three separate percentages of portions of the
average indexed monthly earnings. In 1979 (the first year the formula
was in effect), these portions were the first $180, the amount between
$180 and $1,085, and the amount over $1,085. The dollar amounts in the
formula which govern the portions of the average indexed monthly
earnings are frequently referred to as the ``bend points'' of the
formula. Thus, the bend points for 1979 were $180 and $1,085.
The bend points for 1999 are obtained by multiplying the
corresponding 1979 bend-point amounts by the ratio between the national
average wage index for 1997, $27,426.00, and for 1977, $9,779.44. These
results are then rounded to the nearest dollar. For 1999, the ratio is
2.8044551. Multiplying the 1979 amounts of $180 and $1,085 by 2.8044551
produces the amounts of $504.80 and $3,042.83. These must then be
rounded to $505 and $3,043. Accordingly, the portions of the average
indexed monthly earnings to be used in 1999 are determined to be the
first $505, the amount between $505 and $3,043, and the amount over
$3,043.
Consequently, for individuals who first become eligible for old-age
insurance benefits or disability insurance benefits in 1999, or who die
in 1999 before becoming eligible for benefits, their primary insurance
amount will be the sum of:
(a) 90 percent of the first $505 of their average indexed monthly
earnings, plus
(b) 32 percent of their average indexed monthly earnings over $505
and through $3,043, plus
[[Page 58450]]
(c) 15 percent of their average indexed monthly earnings over
$3,043.
This amount is then rounded to the next lower multiple of $.10 if
it is not already a multiple of $.10. This formula and the rounding
adjustment described above are contained in section 215(a) of the Act
(42 U.S.C. 415(a)).
Maximum Benefits Payable to a Family
General. The 1977 amendments continued the long established policy
of limiting the total monthly benefits that a worker's family may
receive based on his or her primary insurance amount. Those amendments
also continued the then existing relationship between maximum family
benefits and primary insurance amounts but did change the method of
computing the maximum amount of benefits that may be paid to a worker's
family. The Social Security Disability Amendments of 1980 (Pub. L. 96-
265) established a formula for computing the maximum benefits payable
to the family of a disabled worker. This formula is applied to the
family benefits of workers who first become entitled to disability
insurance benefits after June 30, 1980, and who first become eligible
for these benefits after 1978. For disabled workers initially entitled
to disability benefits before July 1980, or whose disability began
before 1979, the family maximum payable is computed the same as the
old-age and survivor family maximum.
Computing the Old-Age and Survivor Family Maximum. The formula used
to compute the family maximum is similar to that used to compute the
primary insurance amount. It involves computing the sum of four
separate percentages of portions of the worker's primary insurance
amount. In 1979, these portions were the first $230, the amount between
$230 and $332, the amount between $332 and $433, and the amount over
$433. The dollar amounts in the formula which govern the portions of
the primary insurance amount are frequently referred to as the ``bend
points'' of the family-maximum formula. Thus, the bend points for 1979
were $230, $332, and $433.
The bend points for 1999 are obtained by multiplying the
corresponding 1979 bend-point amounts by the ratio between the national
average wage index for 1997, $27,426.00, and the average for 1977,
$9,779.44. This amount is then rounded to the nearest dollar. For 1999,
the ratio is 2.8044551. Multiplying the amounts of $230, $332, and $433
by 2.8044551 produces the amounts of $645.02, $931.08, and $1,214.33.
These amounts are then rounded to $645, $931, and $1,214. Accordingly,
the portions of the primary insurance amounts to be used in 1999 are
determined to be the first $645, the amount between $645 and $931, the
amount between $931 and $1,214, and the amount over $1,214.
Consequently, for the family of a worker who becomes age 62 or dies
in 1999 before age 62, the total amount of benefits payable to them
will be computed so that it does not exceed:
(a) 150 percent of the first $645 of the worker's primary insurance
amount, plus
(b) 272 percent of the worker's primary insurance amount over $645
through $931, plus
(c) 134 percent of the worker's primary insurance amount over $931
through $1,214, plus
(d) 175 percent of the worker's primary insurance amount over
$1,214.
This amount is then rounded to the next lower multiple of $.10 if
it is not already a multiple of $.10. This formula and the rounding
adjustment described above are contained in section 203(a) of the Act
(42 U.S.C. 403(a)).
Quarter of Coverage Amount
General. The 1999 amount of earnings required for a quarter of
coverage is $740. A quarter of coverage is the basic unit for
determining whether a worker is insured under the Social Security
program. For years before 1978, an individual generally was credited
with a quarter of coverage for each quarter in which wages of $50 or
more were paid, or an individual was credited with 4 quarters of
coverage for every taxable year in which $400 or more of self-
employment income was earned. Beginning in 1978, wages generally are no
longer reported on a quarterly basis; instead, annual reports are made.
With the change to annual reporting, section 352(b) of the Social
Security Amendments of 1977 amended section 213(d) of the Act to
provide that a quarter of coverage would be credited for each $250 of
an individual's total wages and self-employment income for calendar
year 1978 (up to a maximum of 4 quarters of coverage for the year).
Computation. Under the prescribed formula, the quarter of coverage
amount for 1999 shall be equal to the larger of (1) the 1978 amount of
$250 multiplied by the ratio of the national average wage index for
1997 to that for 1976, or (2) the current amount of $700. Section
213(d) further provides that if the amount so determined is not a
multiple of $10, it shall be rounded to the nearest multiple of $10.
Quarter of Coverage Amount. The ratio of the national average wage
index for 1997, $27,426.00, compared to that for 1976, $9,226.48, is
2.9725312. Multiplying the 1978 quarter of coverage amount of $250 by
the ratio of 2.9725312 produces the amount of $743.13, which must then
be rounded to $740. Because $740 exceeds the current amount of $700,
the quarter of coverage amount is determined to be $740 for 1999.
``Old-Law'' Contribution and Benefit Base
General. The 1999 ``old-law'' contribution and benefit base is
$53,700. This is the base that would have been effective under the Act
without the enactment of the 1977 amendments. The base is computed
under section 230(b) of the Act as it read prior to the 1977
amendments.
The ``old-law'' contribution and benefit base is used by:
(a) the Railroad Retirement program to determine certain tax
liabilities and tier II benefits payable under that program to
supplement the tier I payments which correspond to basic Social
Security benefits,
(b) the Pension Benefit Guaranty Corporation to determine the
maximum amount of pension guaranteed under the Employee Retirement
Income Security Act (as stated in section 230(d) of the Social Security
Act),
(c) Social Security to determine a year of coverage in computing
the special minimum benefit, as described earlier, and
(d) Social Security to determine a year of coverage (acquired
whenever earnings equal or exceed 25 percent of the ``old-law'' base
for this purpose only) in computing benefits for persons who are also
eligible to receive pensions based on employment not covered under
section 210 of the Act.
Computation. The base is computed using the automatic adjustment
formula in section 230(b) of the Act as it read prior to the enactment
of the 1977 amendments, but with the revised indexing formula
introduced by section 321(g) of the ``Social Security Independence and
Program Improvements Act of 1994.'' Under the formula, the ``old-law''
contribution and benefit base shall be the larger of (1) the 1994
``old-law'' base ($45,000) multiplied by the ratio of the national
average wage index for 1997 to that for 1992, or (2) the current ``old-
law'' base ($50,700). If the amount so determined is not a multiple of
$300, it shall be rounded to the nearest multiple of $300.
Amount. The ratio of the national average wage index for 1997,
$27,426.00, compared to that for 1992, $22,935.42, is 1.1957924.
Multiplying the 1994 ``old-law'' contribution and benefit base amount
of $45,000 by the
[[Page 58451]]
ratio of 1.1957924 produces the amount of $53,810.66 which must then be
rounded to $53,700. Because $53,700 exceeds the current amount of
$50,700, the ``old-law'' contribution and benefit base is determined to
be $53,700 for 1999.
Substantial Gainful Activity Amount for Blind Individuals
General. A finding of disability under titles II and XVI of the Act
requires that a person be unable to engage in substantial gainful
activity (SGA). Under current regulations, a person who is not
statutorily blind and who is earning more than $500 a month (net of
impairment-related work expenses) is ordinarily considered to be
engaging in SGA. Section 223(d)(4)(A) of the Act specifies a higher SGA
amount for statutorily blind individuals. This higher SGA amount
increases in accordance with increases in the national average wage
index.
Computation. The monthly SGA amount for statutorily blind
individuals for 1999 shall be the larger of (1) such amount for 1994
multiplied by the ratio of the national average wage index for 1997 to
that for 1992, or (2) such amount for 1998. If the amount so determined
is not a multiple of $10, it shall be rounded to the nearest multiple
of $10.
SGA Amount for Statutorily Blind Individuals. The ratio of the
national average wage index for 1997, $27,426.00, compared to that for
1992, $22,935.42, is 1.1957924. Multiplying the 1994 monthly SGA amount
for statutorily blind individuals of $930 by the ratio of 1.1957924
produces the amount of $1,112.09. This must then be rounded to $1,110.
Because $1,110 is larger than the current amount of $1,050, the monthly
SGA amount for statutorily blind individuals is determined to be $1,110
for 1999.
Domestic Employee Coverage Threshold
General. Section 2 of the ``Social Security Domestic Employment
Reform Act of 1994'' (Pub. L. 103-387) increased the threshold for
coverage of a domestic employee's wages paid per employer from $50 per
calendar quarter to $1,000 in calendar year 1994. The statute holds the
coverage threshold at the $1,000 level for 1995 and then increases the
threshold in $100 increments for years after 1995. The formula for
increasing the threshold is provided in section 3121(x) of the Internal
Revenue Code.
Computation. Under the formula, the domestic employee coverage
threshold amount for 1999 shall be equal to the 1995 amount of $1,000
multiplied by the ratio of the national average wage index for 1997 to
that for 1993. If the amount so determined is not a multiple of $100,
it shall be rounded to the next lower multiple of $100.
Domestic Employee Coverage Threshold Amount. The ratio of the
national average wage index for 1997, $27,426.00, compared to that for
1993, $23,132.67, is 1.1855960. Multiplying the 1995 domestic employee
coverage threshold amount of $1,000 by the ratio of 1.1855960 produces
the amount of $1,185.60, which must then be rounded to $1,100.
Accordingly, the domestic employee coverage threshold amount is
determined to be $1,100 for 1999.
OASDI Fund Ratio
General. In addition to providing an annual automatic cost-of-
living increase in OASDI benefits, section 215(i) of the Act also
includes a ``stabilizer'' provision that can limit such benefit
increase under certain circumstances. If the combined assets of the
OASI and DI Trust Funds, as a percentage of annual expenditures, are
below a specified threshold, the automatic benefit increase is equal to
the lesser of (1) the increase in the national average wage index or
(2) the increase in prices. The threshold specified for the OASDI fund
ratio is 20.0 percent for benefit increases for December of 1989 and
later. The law also provides for subsequent ``catch-up'' benefit
increases for beneficiaries whose previous benefit increases were
affected by this provision. ``Catch-up'' benefit increases can occur
only when trust fund assets exceed 32.0 percent of annual expenditures.
Computation. Section 215(i) specifies the computation and
application of the OASDI fund ratio. The OASDI fund ratio for 1998 is
the ratio of (1) the combined assets of the OASI and DI Trust Funds at
the beginning of 1998 to (2) the estimated expenditures of the OASI and
DI Trust Funds during 1998, excluding transfer payments between the
OASI and DI Trust Funds, and reducing any transfers to the Railroad
Retirement Account by any transfers from that account into either trust
fund.
Ratio. The combined assets of the OASI and DI Trust Funds at the
beginning of 1998 equaled $655,510 million, and the expenditures are
estimated to be $382,871 million. Thus, the OASDI fund ratio for 1998
is 171.2 percent, which exceeds the applicable threshold of 20.0
percent. Therefore, the stabilizer provision does not affect the
benefit increase for December 1998. Although the OASDI fund ratio
exceeds the 32.0-percent threshold for potential ``catch-up'' benefit
increases, no past benefit increase has been reduced under the
stabilizer provision. Thus, no ``catch-up'' benefit increase is
required.
(Catalog of Federal Domestic Assistance: Program Nos. 96.001 Social
Security-Disability Insurance; 96.002 Social Security-Retirement
Insurance; 96.003 Social Security-Special Benefits for Persons Aged
72 and Over; 96.004 Social Security-Survivors Insurance; 96.006
Supplemental Security Income.)
Dated: October 21, 1998.
Kenneth S. Apfel,
Commissioner, Social Security Administration.
[FR Doc. 98-28988 Filed 10-29-98; 8:45 am]
BILLING CODE 4190-29-P
