Cost-of-Living Increase and Other Determinations for 2009, 64651-64657 [E8-25905]

Agencies

• Office of the Commissioner
• Social Security Administration

[Federal Register Volume 73, Number 211 (Thursday, October 30, 2008)]
[Notices]
[Pages 64651-64657]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25905]


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SOCIAL SECURITY ADMINISTRATION

Office of the Commissioner

[Docket No. SSA-2008-0049]


Cost-of-Living Increase and Other Determinations for 2009

AGENCY: Social Security Administration.

ACTION: Notice.

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SUMMARY: We have determined--
    (1) A 5.8 percent cost-of-living increase in Social Security 
benefits under title II of the Social Security Act (the Act), effective 
for December 2008;
    (2) An increase in the Federal Supplemental Security Income (SSI) 
monthly benefit amounts under title XVI of the Act for 2009 to $674 for 
an eligible individual, $1,011 for an eligible individual with an 
eligible spouse, and $338 for an essential person;
    (3) The student earned income exclusion to be $1,640 per month in 
2009 but not more than $6,600 in all of 2009;
    (4) The dollar fee limit for services performed as a representative 
payee to be $37 per month ($72 per month in the case of a beneficiary 
who is disabled and has an alcoholism or drug addiction condition that 
leaves him or her incapable of managing benefits) in 2009;
    (5) The dollar limit on the administrative-cost assessment charged 
to attorneys representing claimants to be $83 in 2009;
    (6) The national average wage index for 2007 to be $40,405.48;
    (7) The Old-Age, Survivors, and Disability Insurance (OASDI) 
contribution and benefit base to be $106,800 for remuneration paid in 
2009 and self-employment income earned in taxable years beginning in 
2009;
    (8) The monthly exempt amounts under the Social Security retirement

[[Page 64652]]

earnings test for taxable years ending in calendar year 2009 to be 
$1,180 and $3,140;
    (9) The dollar amounts (``bend points'') used in the primary 
insurance amount benefit formula for workers who become eligible for 
benefits, or who die before becoming eligible, in 2009 to be $744 and 
$4,483;
    (10) The bend points used in the formula for computing maximum 
family benefits for workers who become eligible for benefits, or who 
die before becoming eligible, in 2009 to be $950, $1,372, and $1,789;
    (11) The amount of taxable earnings a person must have to be 
credited with a quarter of coverage in 2009 to be $1,090;
    (12) The ``old-law'' contribution and benefit base to be $79,200 
for 2009;
    (13) The monthly amount deemed to constitute substantial gainful 
activity for statutorily blind individuals in 2009 to be $1,640, and 
the corresponding amount for non-blind disabled persons to be $980;
    (14) The earnings threshold establishing a month as a part of a 
trial work period to be $700 for 2009; and
    (15) Coverage thresholds for 2009 to be $1,700 for domestic workers 
and $1,500 for election workers.

FOR FURTHER INFORMATION CONTACT: Jeffrey L. Kunkel, Office of the Chief 
Actuary, Social Security Administration, 6401 Security Boulevard, 
Baltimore, MD 21235, (410) 965-3013. Information relating to this 
announcement is available on our Internet site at 
www.socialsecurity.gov/OACT/COLA/. For information on 
eligibility or claiming benefits, call 1-800-772-1213, or visit our 
Internet site, Social Security Online, at www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION: In accordance with the Act, we must publish 
within 45 days after the close of the third calendar quarter of 2008 
the benefit increase percentage and the revised table of ``special 
minimum'' benefits (section 215(i)(2)(D)). Also, we must publish on or 
before November 1 the national average wage index for 2007 (section 
215(a)(1)(D)), the OASDI fund ratio for 2008 (section 
215(i)(2)(C)(ii)), the OASDI contribution and benefit base for 2009 
(section 230(a)), the amount of earnings required to be credited with a 
quarter of coverage in 2009 (section 213(d)(2)), the monthly exempt 
amounts under the Social Security retirement earnings test for 2009 
(section 203(f)(8)(A)), the formula for computing a primary insurance 
amount for workers who first become eligible for benefits or die in 
2009 (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 2009 (section 203(a)(2)(C)).

Cost-of-Living Increases

General

    The next cost-of-living increase, or automatic benefit increase, is 
5.8 percent for benefits under titles II and XVI of the Act. Under 
title II, OASDI benefits will increase by 5.8 percent for individuals 
eligible for December 2008 benefits, payable in January 2009. This 
increase is based on the authority contained in section 215(i) of the 
Act.
    Under title XVI, Federal SSI payment levels will also increase by 
5.8 percent effective for payments made for the month of January 2009 
but paid on December 31, 2008. This is based on the authority contained 
in section 1617 of the Act.

Automatic Benefit Increase Computation

    Under section 215(i) of the Act, the third calendar quarter of 2008 
is a cost-of-living computation quarter for all the purposes of the 
Act. We are required to increase benefits, effective for December 2008, 
for individuals entitled under title II of the Act and to increase 
maximum benefits payable to a family. For December 2008, the benefit 
increase is the percentage increase in the Consumer Price Index (CPI) 
for Urban Wage Earners and Clerical Workers from the third quarter of 
2007 to the third quarter of 2008.
    Section 215(i)(1) of the Act provides that the CPI for a cost-of-
living computation quarter shall be the arithmetic mean of this index 
for the 3 months in that quarter. In accordance with 20 CFR 404.275, we 
round the arithmetic mean, if necessary, to the nearest 0.001.
    The CPI for Urban Wage Earners and Clerical Workers for each month 
in the quarter ending September 30, 2007, is: For July 2007, 203.700; 
for August 2007, 203.199; and for September 2007, 203.889. The 
arithmetic mean for that calendar quarter is 203.596. The corresponding 
CPI for each month in the quarter ending September 30, 2008, is: For 
July 2008, 216.304; for August 2008, 215.247; and for September 2008, 
214.935. The arithmetic mean for this calendar quarter is 215.495. 
Thus, because the CPI for the calendar quarter ending September 30, 
2008, exceeds that for the calendar quarter ending September 30, 2007 
by 5.8 percent (rounded to the nearest 0.1), beginning December 2008, a 
cost-of-living benefit increase of 5.8 percent is effective for 
benefits under title II of the Act.
    Section 215(i) also specifies that an automatic benefit increase 
under title II, effective for December of any year, will be limited to 
the increase in the national average wage index for the prior year if 
the ``OASDI fund ratio'' for that year is below 20 percent. The OASDI 
fund ratio for a year is the ratio of the combined assets of the Old-
Age and Survivors Insurance and Disability Insurance Trust Funds at the 
beginning of that year to the combined expenditures of these funds 
during that year. (The expenditures in the ratio's denominator exclude 
transfer payments between the two trust funds and reduce any transfers 
to the Railroad Retirement Account by any transfers from that account 
into either trust fund.) For 2008, the OASDI fund ratio is assets of 
$2,238,500 million divided by estimated expenditures of $623,507 
million, or 359 percent. Because the 359 percent OASDI fund ratio 
exceeds 20 percent, the automatic benefit increase for December 2008 is 
not limited.

Title II Benefit Amounts

    In accordance with section 215(i) of the Act, in the case of 
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 2009, benefits will increase by 5.8 percent beginning 
with benefits for December 2008 which are payable in January 2009. In 
the case of first eligibility after 2008, the 5.8 percent increase will 
not apply.
    For eligibility after 1978, benefits are generally determined using 
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, we determine benefits by means of a 
benefit table. The table is available on the Internet at 
www.socialsecurity.gov/OACT/ProgData/tableForm.html, or by writing to: 
Social Security Administration, Office of Public Inquiries, Windsor 
Park Building, 6401 Security Boulevard, Baltimore, MD 21235.
    Section 215(i)(2)(D) of the Act requires that, when we determine an 
automatic increase in Social Security benefits, we will 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). We 
refer to these benefits as ``special minimum'' benefits. These benefits 
are payable to certain individuals with long periods of

[[Page 64653]]

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 benefit, a person must earn at 
least a certain proportion of the ``old-law'' contribution and benefit 
base (described later in this notice). For years before 1991, the 
proportion is 25 percent; for years after 1990, it is 15 percent. 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 5.8 percent automatic benefit 
increase.

  Special Minimum Primary Insurance Amounts and Maximum Family Benefits
                        Payable for December 2008
------------------------------------------------------------------------
                                                  Primary      Maximum
          Number of years of coverage            insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $36.90       $56.10
12............................................        75.10       113.70
13............................................       113.60       171.00
14............................................       151.60       228.10
15............................................       189.40       285.20
16............................................       227.80       342.80
17............................................       266.10       400.50
18............................................       304.30       457.60
19............................................       342.40       515.00
20............................................       380.70       572.00
21............................................       419.10       629.80
22............................................       457.00       687.00
23............................................       495.80       745.10
24............................................       533.90       802.00
25............................................       572.00       858.70
26............................................       610.80       917.10
27............................................       648.50       974.30
28............................................       686.80     1,031.40
29............................................       725.00     1,089.10
30............................................       763.20     1,145.80
------------------------------------------------------------------------

Title XVI Benefit Amounts

    In accordance with section 1617 of the Act, maximum Federal SSI 
benefit amounts for the aged, blind, and disabled will increase by 5.8 
percent effective January 2009. For 2008, we derived the monthly 
benefit amounts for an eligible individual, an eligible individual with 
an eligible spouse, and for an essential person--$637, $956, and $319, 
respectively--from corresponding yearly unrounded Federal SSI benefit 
amounts of $7,651.53, $11,476.00, and $3,834.53. For 2009, these yearly 
unrounded amounts increase by 5.8 percent to $8,095.32, $12,141.61, and 
$4,056.93, 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 2009, are 
$8,088, $12,132, and $4,056. Dividing the yearly amounts by 12 gives 
the corresponding monthly amounts for 2009--$674, $1,011, and $338, 
respectively. In the case of an eligible individual with an eligible 
spouse, we equally divide the amount payable between the two spouses.
    Title VIII of the Act provides for special benefits to certain 
World War II veterans residing outside the United States. Section 805 
provides that ``[t]he benefit under this title payable to a qualified 
individual for any month shall be in an amount equal to 75 percent of 
the Federal benefit rate [the maximum amount for an eligible 
individual] under title XVI for the month, reduced by the amount of the 
qualified individual's benefit income for the month.'' Thus the monthly 
benefit for 2009 under this provision is 75 percent of $674, or 
$505.50.

Student Earned Income Exclusion

    A blind or disabled child, who is a student regularly attending 
school, college, university, or a course of vocational or technical 
training, can have limited earnings that are not counted against his or 
her SSI benefits. The maximum amount of such income that may be 
excluded in 2008 is $1,550 per month but not more than $6,240 in all of 
2008. These amounts increase based on a formula set forth in regulation 
20 CFR 416.1112.
    To compute each of the monthly and yearly maximum amounts for 2009, 
we increase the corresponding unrounded amount for 2008 by the latest 
cost-of-living increase. If the amount so calculated is not a multiple 
of $10, we round it to the nearest multiple of $10. The unrounded 
monthly amount for 2008 is $1,548.10. We increase this amount by 5.8 
percent to $1,637.89, which we then round to $1,640. Similarly, we 
increase the unrounded yearly amount for 2008, $6,240.38, by 5.8 
percent to $6,602.32 and round this to $6,600. Thus, the maximum amount 
of the income exclusion applicable to a student in 2009 is $1,640 per 
month but not more than $6,600 in all of 2009.

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) $35 per month 
($68 per month in any case in which the individual is entitled to 
disability benefits and we have 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. Thus, we 
increase the current amounts by 5.8 percent to $37 and $72 for 2009.

Attorney Assessment Fee

    Under sections 206(d) and 1631(d) of the Act, whenever a fee for 
services is required to be paid to an attorney who has represented a 
claimant, we must impose on the attorney an assessment to cover 
administrative costs. Such assessment shall be no more than 6.3 percent 
of the attorney's fee or, if lower, a dollar amount that is subject to 
increase by the automatic cost-of-living increase. We derive the dollar 
limit for December 2008 by increasing the unrounded limit for December 
2007, $79.25, by 5.8 percent, which gives $83.85. We then round $83.85 
to the next lower multiple of $1. The dollar limit effective for 
December 2008 is thus $83.

National Average Wage Index for 2007

General

    Under various provisions of the Act, several amounts increase 
automatically with annual increases in the national average wage index. 
The amounts are: (1) The OASDI contribution and benefit base; (2) the 
exempt amounts under the retirement earnings test; (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); (6) the substantial 
gainful activity amount applicable to statutorily blind individuals; 
and (7) the coverage threshold for election officials and election 
workers. 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.
    In addition to the amounts required by statute, two amounts 
increase automatically under regulatory requirements. The amounts are: 
(1) The substantial gainful activity amount applicable to non-blind 
disabled persons; and (2) the monthly earnings threshold that 
establishes a month as part of a trial work period for disabled 
beneficiaries.

[[Page 64654]]

Computation

    We determined the national average wage index for calendar year 
2007 based on the 2006 national average wage index of $38,651.41 
announced in the Federal Register on October 25, 2007 (72 FR 60703), 
along with the percentage increase in average wages from 2006 to 2007 
measured by annual wage data. We tabulate the annual wage data 
including 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 $37,078.27 and $38,760.95 for 2006 and 
2007, respectively. To determine the national average wage index for 
2007 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), we multiply the 2006 national average wage index of 
$38,651.41 by the percentage increase in average wages from 2006 to 
2007 (based on SSA-tabulated wage data) as follows, with the result 
rounded to the nearest cent.

Amount

    Multiplying the national average wage index for 2006 ($38,651.41) 
by the ratio of the average wage for 2007 ($38,760.95) to that for 2006 
($37,078.27) produces the 2007 index, $40,405.48. The national average 
wage index for calendar year 2007 is about 4.54 percent greater than 
the 2006 index.

OASDI Contribution and Benefit Base

General

    The OASDI contribution and benefit base is $106,800 for 
remuneration paid in 2009 and self-employment income earned in taxable 
years beginning in 2009.
    The OASDI contribution and benefit base serves two purposes:
    (a) It is the maximum annual amount of earnings on which OASDI 
taxes are paid. The OASDI tax rate for remuneration paid in 2009 is 6.2 
percent for employees and employers, each. The OASDI tax rate for self-
employment income earned in taxable years beginning in 2009 is 12.4 
percent. (The Hospital Insurance tax is due on remuneration, without 
limitation, paid in 2009, at the rate of 1.45 percent for employees and 
employers, each, and on self-employment income earned in taxable years 
beginning in 2009, at the rate of 2.9 percent.)
    (b) It is the maximum annual amount of earnings 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 2009 shall be the larger of: (1) The 1994 base of $60,600 
multiplied by the ratio of the national average wage index for 2007 to 
that for 1992; or (2) the current base ($102,000). If the resulting 
amount is not a multiple of $300, it shall be rounded to the nearest 
multiple of $300.

Amount

    Multiplying the 1994 OASDI contribution and benefit base amount 
($60,600) by the ratio of the national average wage index for 2007 
($40,405.48 as determined above) to that for 1992 ($22,935.42) produces 
the amount of $106,759.42. We round this amount to $106,800. Because 
$106,800 exceeds the current base amount of $102,000, the OASDI 
contribution and benefit base is $106,800 for 2009.

Retirement Earnings Test Exempt Amounts

General

    We withhold Social Security benefits when a beneficiary under the 
normal retirement age (NRA) has earnings in excess of the applicable 
retirement earnings test exempt amount. (NRA is the age of initial 
benefit entitlement for which the benefit, before rounding, is equal to 
the worker's primary insurance amount. The NRA is age 66 for those born 
in 1943-54, and it gradually increases to age 67.) A higher exempt 
amount applies in the year in which a person attains his or her NRA, 
but only with respect to earnings in that year's months prior to such 
attainment, and a lower exempt amount applies at all other ages below 
NRA. Section 203(f)(8)(B) of the Act, as amended by section 102 of Pub. 
L. 104-121, provides formulas for determining the monthly exempt 
amounts. The corresponding annual exempt amounts are exactly 12 times 
the monthly amounts.
    For beneficiaries attaining NRA in the year, we withhold $1 in 
benefits for every $3 of earnings in excess of the annual exempt amount 
for months prior to such attainment. For all other beneficiaries under 
NRA, we withhold $1 in benefits for every $2 of earnings in excess of 
the annual exempt amount.

Computation

    Under the formula applicable to beneficiaries who are under NRA and 
who will not attain NRA in 2009, the lower monthly exempt amount for 
2009 shall be the larger of: (1) The 1994 monthly exempt amount 
multiplied by the ratio of the national average wage index for 2007 to 
that for 1992; or (2) the 2008 monthly exempt amount ($1,130). If the 
resulting amount is not a multiple of $10, it shall be rounded to the 
nearest multiple of $10.
    Under the formula applicable to beneficiaries attaining NRA in 
2009, the higher monthly exempt amount for 2009 shall be the larger of: 
(1) The 2002 monthly exempt amount multiplied by the ratio of the 
national average wage index for 2007 to that for 2000; or (2) the 2008 
monthly exempt amount ($3,010). If the resulting amount is not a 
multiple of $10, it shall be rounded to the nearest multiple of $10.

Lower Exempt Amount

    Multiplying the 1994 retirement earnings test monthly exempt amount 
of $670 by the ratio of the national average wage index for 2007 
($40,405.48) to that for 1992 ($22,935.42) produces the amount of 
$1,180.34. We round this to $1,180. Because $1,180 is larger than the 
corresponding current exempt amount of $1,130, the lower retirement 
earnings test monthly exempt amount is $1,180 for 2009. The 
corresponding lower annual exempt amount is $14,160 under the 
retirement earnings test.

Higher Exempt Amount

    Multiplying the 2002 retirement earnings test monthly exempt amount 
of $2,500 by the ratio of the national average wage index for 2007 
($40,405.48) to that for 2000 ($32,154.82) produces the amount of 
$3,141.48. We round this to $3,140. Because $3,140 is larger than the 
corresponding current exempt amount of $3,010, the higher retirement 
earnings test monthly exempt amount is $3,140 for 2009. The 
corresponding higher annual exempt amount is $37,680 under the 
retirement earnings test.

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. We adjust the computation formula each year to reflect changes 
in general wage levels, as measured by the national average wage index.
    We also adjust, or ``index,'' a worker's earnings to reflect the 
change in general wage levels that occurred during the worker's years 
of employment. Such indexing ensures that a worker's future

[[Page 64655]]

benefit level will reflect the general rise in the standard of living 
that will occur during his or her working lifetime. To compute the 
average indexed monthly earnings, we first determine the required 
number of years of earnings. Then we select that number of years with 
the highest indexed earnings, add the indexed earnings, and divide the 
total amount by the total number of months in those years. We then 
round the resulting average amount 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 2009, we divide the national average wage 
index for 2007, $40,405.48, by the national average wage index for each 
year prior to 2007 in which the worker had earnings. Then we multiply 
the actual wages and self-employment income, as defined in section 
211(b) of the Act and credited for each year, by the corresponding 
ratio to obtain the worker's indexed earnings for each year before 
2007. We consider any earnings in 2007 or later at face value, without 
indexing. We then compute the average indexed monthly earnings for 
determining the worker's primary insurance amount for 2009.

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. We call the dollar amounts in the formula governing the 
portions of the average indexed monthly earnings the bend points of the 
formula. Thus, the bend points for 1979 were $180 and $1,085.
    To obtain the bend points for 2009, we multiply each of the 1979 
bend-point amounts by the ratio of the national average wage index for 
2007 to that average for 1977. We then round these results to the 
nearest dollar. Multiplying the 1979 amounts of $180 and $1,085 by the 
ratio of the national average wage index for 2007 ($40,405.48) to that 
for 1977 ($9,779.44) produces the amounts of $743.70 and $4,482.87. We 
round these to $744 and $4,483. Accordingly, the portions of the 
average indexed monthly earnings to be used in 2009 are the first $744, 
the amount between $744 and $4,483, and the amount over $4,483.
    Consequently, for individuals who first become eligible for old-age 
insurance benefits or disability insurance benefits in 2009, or who die 
in 2009 before becoming eligible for benefits, their primary insurance 
amount will be the sum of:
    (a) 90 percent of the first $744 of their average indexed monthly 
earnings, plus
    (b) 32 percent of their average indexed monthly earnings over $744 
and through $4,483, plus
    (c) 15 percent of their average indexed monthly earnings over 
$4,483.
    We round this amount to the next lower multiple of $0.10 if it is 
not already a multiple of $0.10. This formula and the rounding 
adjustment described above are contained in section 215(a) of the Act.

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 changed 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 applies 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, we compute the family maximum payable 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. We refer to such dollar amounts in the formula as the 
bend points of the family-maximum formula.
    To obtain the bend points for 2009, we multiply each of the 1979 
bend-point amounts by the ratio of the national average wage index for 
2007 to that average for 1977. Then we round this amount to the nearest 
dollar. Multiplying the amounts of $230, $332, and $433 by the ratio of 
the national average wage index for 2007 ($40,405.48) to that for 1977 
($9,779.44) produces the amounts of $950.29, $1,371.72, and $1,789.02. 
We round these amounts to $950, $1,372, and $1,789. Accordingly, the 
portions of the primary insurance amounts to be used in 2009 are the 
first $950, the amount between $950 and $1,372, the amount between 
$1,372 and $1,789, and the amount over $1,789.
    Consequently, for the family of a worker who becomes age 62 or dies 
in 2009 before age 62, we will compute the total amount of benefits 
payable to them so that it does not exceed:
    (a) 150 percent of the first $950 of the worker's primary insurance 
amount, plus
    (b) 272 percent of the worker's primary insurance amount over $950 
through $1,372, plus
    (c) 134 percent of the worker's primary insurance amount over 
$1,372 through $1,789, plus
    (d) 175 percent of the worker's primary insurance amount over 
$1,789.
    We then round this amount to the next lower multiple of $0.10 if it 
is not already a multiple of $0.10. This formula and the rounding 
adjustment described above are contained in section 203(a) of the Act.

Quarter of Coverage Amount

General

    The amount of earnings required for a quarter of coverage in 2009 
is $1,090. A quarter of coverage is the basic unit for determining 
whether a worker is insured under the Social Security program. For 
years before 1978, we generally credited an individual with a quarter 
of coverage for each quarter in which wages of $50 or more were paid, 
or with 4 quarters of coverage for every taxable year in which $400 or 
more of self-employment income was earned. Beginning in 1978, employers 
generally report wages on an annual basis instead of a quarterly basis. 
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.

[[Page 64656]]

Computation

    Under the prescribed formula, the quarter of coverage amount for 
2009 shall be the larger of: (1) The 1978 amount of $250 multiplied by 
the ratio of the national average wage index for 2007 to that for 1976; 
or (2) the current amount of $1,050. Section 213(d) further provides 
that if the resulting amount is not a multiple of $10, it shall be 
rounded to the nearest multiple of $10.

Quarter of Coverage Amount

    Multiplying the 1978 quarter of coverage amount ($250) by the ratio 
of the national average wage index for 2007 ($40,405.48) to that for 
1976 ($9,226.48) produces the amount of $1,094.82. We then round this 
amount to $1,090. Because $1,090 exceeds the current amount of $1,050, 
the quarter of coverage amount is $1,090 for 2009.

``Old-Law'' Contribution and Benefit Base

General

    The ``old-law'' contribution and benefit base for 2009 is $79,200. 
This is the base that would have been effective under the Act without 
the enactment of 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 (section 230(d) of the 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 ``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 2007 to that for 1992; or (2) the 
current ``old-law'' base ($75,900). If the resulting amount is not a 
multiple of $300, it shall be rounded to the nearest multiple of $300.

Amount

    Multiplying the 1994 ``old-law'' contribution and benefit base 
amount ($45,000) by the ratio of the national average wage index for 
2007 ($40,405.48) to that for 1992 ($22,935.42) produces the amount of 
$79,276.80. We round this amount to $79,200. Because $79,200 exceeds 
the current amount of $75,900, the ``old-law'' contribution and benefit 
base is $79,200 for 2009.

Substantial Gainful Activity Amounts

General

    A finding of disability under titles II and XVI of the Act requires 
that a person, except for a title XVI disabled child, be unable to 
engage in substantial gainful activity (SGA). A person who is earning 
more than a certain monthly amount (net of impairment-related work 
expenses) is ordinarily considered to be engaging in SGA. The amount of 
monthly earnings considered as SGA depends on the nature of a person's 
disability. Section 223(d)(4)(A) of the Act specifies a higher SGA 
amount for statutorily blind individuals under title II while Federal 
regulations (20 CFR 404.1574 and 416.974) specify a lower SGA amount 
for non-blind individuals. Both SGA amounts increase in accordance with 
increases in the national average wage index.

Computation

    The monthly SGA amount for statutorily blind individuals under 
title II for 2009 shall be the larger of: (1) Such amount for 1994 
multiplied by the ratio of the national average wage index for 2007 to 
that for 1992; or (2) such amount for 2008. The monthly SGA amount for 
non-blind disabled individuals for 2009 shall be the larger of: (1) 
Such amount for 2000 multiplied by the ratio of the national average 
wage index for 2007 to that for 1998; or (2) such amount for 2008. In 
either case, if the resulting amount is not a multiple of $10, it shall 
be rounded to the nearest multiple of $10.

SGA Amount for Statutorily Blind Individuals

    Multiplying the 1994 monthly SGA amount for statutorily blind 
individuals ($930) by the ratio of the national average wage index for 
2007 ($40,405.48) to that for 1992 ($22,935.42) produces the amount of 
$1,638.39. We then round this amount to $1,640. Because $1,640 is 
larger than the current amount of $1,570, the monthly SGA amount for 
statutorily blind individuals is $1,640 for 2009.

SGA Amount for Non-Blind Disabled Individuals

    Multiplying the 2000 monthly SGA amount for non-blind individuals 
($700) by the ratio of the national average wage index for 2007 
($40,405.48) to that for 1998 ($28,861.44) produces the amount of 
$979.99. We then round this amount to $980. Because $980 is larger than 
the current amount of $940, the monthly SGA amount for non-blind 
disabled individuals is $980 for 2009.

Trial Work Period Earnings Threshold

General

    During a trial work period, a beneficiary receiving Social Security 
disability benefits may test his or her ability to work and still be 
considered disabled. We do not consider services performed during the 
trial work period as showing that the disability has ended until 
services have been performed in at least 9 months (not necessarily 
consecutive) in a rolling 60-month period. In 2008, any month in which 
earnings exceed $670 is considered a month of services for an 
individual's trial work period. In 2009, this monthly amount increases 
to $700.

Computation

    The method used to determine the new amount is set forth in our 
regulations at 20 CFR 404.1592(b). Monthly earnings in 2009, used to 
determine whether a month is part of a trial work period, is such 
amount for 2001 ($530) multiplied by the ratio of the national average 
wage index for 2007 to that for 1999, or, if larger, such amount for 
2008. If the amount so calculated is not a multiple of $10, we round it 
to the nearest multiple of $10.

Amount

    Multiplying the 2001 monthly earnings threshold ($530) by the ratio 
of the national average wage index for 2007 ($40,405.48) to that for 
1999 ($30,469.84) produces the amount of $702.82. We then round this 
amount to $700. Because $700 is larger than the current amount of $670, 
the monthly earnings threshold is $700 for 2009.

Domestic Employee Coverage Threshold

General

    The minimum amount a domestic worker must earn so that such 
earnings are covered under Social Security or Medicare is the domestic 
employee coverage threshold. For 2009, this threshold is $1,700. 
Section 3121(x) of the Internal Revenue Code provides the formula for 
increasing the threshold.

[[Page 64657]]

Computation

    Under the formula, the domestic employee coverage threshold amount 
for 2009 shall be equal to the 1995 amount of $1,000 multiplied by the 
ratio of the national average wage index for 2007 to that for 1993. If 
the resulting amount is not a multiple of $100, it shall be rounded to 
the next lower multiple of $100.

Domestic Employee Coverage Threshold Amount

    Multiplying the 1995 domestic employee coverage threshold amount 
($1,000) by the ratio of the national average wage index for 2007 
($40,405.48) to that for 1993 ($23,132.67) produces the amount of 
$1,746.68. We then round this amount to $1,700. Accordingly, the 
domestic employee coverage threshold amount is $1,700 for 2009.

Election Worker Coverage Threshold

General

    The minimum amount an election worker must earn so that such 
earnings are covered under Social Security or Medicare is the election 
worker coverage threshold. For 2009, this threshold is $1,500. Section 
218(c)(8)(B) of the Act provides the formula for increasing the 
threshold.

Computation

    Under the formula, the election worker coverage threshold amount 
for 2009 shall be equal to the 1999 amount of $1,000 multiplied by the 
ratio of the national average wage index for 2007 to that for 1997. If 
the amount so determined is not a multiple of $100, it shall be rounded 
to the nearest multiple of $100.

Election Worker Coverage Threshold Amount

    Multiplying the 1999 election worker coverage threshold amount 
($1,000) by the ratio of the national average wage index for 2007 
($40,405.48) to that for 1997 ($27,426.00) produces the amount of 
$1,473.25. We then round this amount to $1,500. Accordingly, the 
election worker coverage threshold amount is $1,500 for 2009.

(Catalog of Federal Domestic Assistance: Program Nos. 96.001, Social 
Security-Disability Insurance; 96.002, Social Security-Retirement 
Insurance; 96.004, Social Security-Survivors Insurance; 96.006, 
Supplemental Security Income)

    Dated: October 24, 2008.
Michael J. Astrue,
Commissioner of Social Security.
[FR Doc. E8-25905 Filed 10-29-08; 8:45 am]
BILLING CODE 4191-02-P