Annuities
are payable to surviving widows and widowers, children and
certain other dependents. Lump-sum benefits are payable after
the death of a railroad employee only if there are no qualified
survivors of the employee immediately eligible for annuities.
With the exception of a residual lump-sum death benefit, eligibility
for survivor benefits depends on whether or not the employee
was “insured” under the Railroad Retirement Act at the time
of death.
An employee
is insured if he or she has at least 10 years of railroad
service, or 5 years performed after 1995, and a “current connection”
with the railroad industry as of the month the annuity begins
or the month of death, whichever occurs first. The current
connection requirement is described at the beginning of this
publication.
If a
deceased employee was not so insured, jurisdiction of any
survivor benefits payable is transferred to the Social Security
Administration and any survivor benefits are paid by that
agency instead of the Board. Regardless of which agency
has jurisdiction, the deceased employee's railroad retirement
and social security credits will be combined for the purpose
of benefit computations.
Types
of Survivor Benefits
Annuities
are payable to widows, widowers, and unmarried children; in
certain cases, benefits are also payable to parents, remarried
widow(er)s, grandchildren and surviving divorced spouses.
WIDOWS’
and WIDOWERS’
ANNUITIES are payable
at:
Age
60; age reductions are
applied to annuities awarded before full retirement age. The
eligibility age for unreduced annuities is gradually rising
from age 65 to age 67, depending on the year of birth.
Ages
50-59 if the widow(er) is totally and permanently
disabled and unable to work in any regular employment. The
disability must have begun within seven years after the employee's
death or within seven years after the termination of an annuity
based on caring for a child of the deceased employee. A five-month
waiting period is required after the onset of disability before
a disability annuity can begin.
Any
age if the widow(er) is caring for an unmarried child
of the deceased employee under age 18 or a disabled child
of any age who became disabled before age 22.
Generally,
the widow(er) must have been married to the employee for at
least 9 months prior to death, unless she or he was the natural
parent of their child, the employee's death was accidental
or while on active duty in the U.S. Armed Forces, the
widow(er)
was potentially entitled to certain railroad retirement or
social security benefits in the month before the month of
death, or the marriage was postponed due to State
restrictions on divorce due to mental incompetence or
similar incapacity.
Survivor
annuities may also be payable to a surviving
divorced spouse, or remarried widow(er).
Benefits are limited to the amounts social security would
pay and therefore are less than the amount of the survivor
annuity otherwise payable.
A surviving
divorced spouse may qualify if she or he was married to the
employee for at least 10 years, is unmarried or remarried
under the conditions described in the next paragraph, and
is age 60 or older (50 if disabled). A surviving divorced
spouse who is unmarried can qualify at any age if caring for
the employee’s child and the child is under age 16 or disabled,
in which case the 10-year marriage requirement does not apply.
The portion
of a survivor annuity equivalent to a social security benefit
may be paid to a widow(er) or surviving divorced spouse who
remarries after age 60, or to a disabled widow(er) or disabled
surviving divorced spouse who remarries after age 50; however,
remarriage prior to age 60 (or age 50 if disabled) would not
prevent eligibility if such remarriage ends. Such social security
level benefits may also be paid to a younger widow(er) or
surviving divorced spouse caring for the employee’s child
who is under age 16 or disabled, if the remarriage is to a
person receiving railroad retirement or social security benefits
or the remarriage ends.
OTHER
SURVIVOR ANNUITIES are
payable to:
An unmarried
child under age 18.
An unmarried
child age 18 in full-time attendance at an elementary or secondary
school or in approved homeschooling, until the student
attains age 19 or the end of the school term in progress when
the student attains age 19. In most cases where a student
attains age 19 during the school term, benefits are limited
to the two months following the month age 19 is attained.
An unmarried
disabled child over age
18 if the child became totally and permanently disabled before
age 22.
An unmarried
dependent grandchild meeting
any of the requirements described above for a child, if both
the grandchild’s parents are deceased or disabled.
A parent
at age 60 who was dependent on the employee for at least half
of the parent’s support. If the employee was also survived
by a widow(er), surviving divorced spouse or child who could
ever qualify for an annuity, the parent's annuity is limited
to the amount that social security would pay.
Survivor
Annuity Estimates
The best
way for survivors to obtain an annuity estimate is to visit
or telephone the nearest Board field office. Active or retired
employees who are concerned about the amount of benefits which
would be payable to their survivors may also receive estimates
from the nearest Board field office.
The following
information may be helpful in providing an idea of the amount
of potential survivor benefits:
The average
annuity awarded to widow(er)s in fiscal year 2003, excluding
remarried widow(er)s and surviving divorced spouses, was
$1,344
a month. Children received $953 a month, on the average. Total
family benefits for widow(er)s with children averaged $2,769
a month. The average annuity awarded to remarried widow(er)s
or surviving divorced spouses in fiscal year 2003 was $751
a month.
Survivor
Annuity Tiers
Survivor
annuities, like retirement annuities, consist of tier I and
tier II components.
Tier I
is based on the deceased employee's combined railroad retirement
and social security credits, and is generally equivalent to
the amount that would have been payable under social security.
Tier
II amounts are percentages
of the deceased employee's tier II amount, as described in
the section
on formulas.
Survivor
annuity amounts may also be determined under certain minimum
provisions which guarantee that a widow(er)'s annuity will
be at least equal to the two-tier benefit the deceased employee
would have received at the time of the award of the widow(er)'s
annuity, minus certain reductions including those for age
and receipt of social security benefits, and no less than the spouse
annuity she or he was receiving just prior to the employee's
death.
Survivors
with Dual Benefits
Social
Security Benefits
The tier
I portion is reduced by the amount of any social security
benefits received by a survivor annuitant, even if the social
security benefits are based on the survivor's own earnings.
This reduction follows the principles of social security law
which, in effect, limit payment to the higher of any two or
more benefits payable to an individual at one time. When both
railroad retirement annuities and social security benefits
are payable, they are generally combined into a single payment
issued through the Board. A survivor annuitant must notify
the Board if any benefits are received directly from the Social
Security Administration or if those benefits increase.
Public
Pensions
The tier
I portion of a widow(er)’s annuity may be reduced
for receipt of any Federal, State or local government pension
based on the widow(er)’s own earnings. The reduction generally
does not apply if social security taxes were deducted from
the public service wages for the last 60 months of
employment. (This 60-month period is being phased in
over the next 5 years and there are some
exceptions.)
Most
military service pensions and payments from the Department of
Veterans Affairs will not cause a reduction. For those
subject to the public pension reduction, the tier I reduction
is equal to 2/3 of the amount of the public pension.
Employee
Annuity
If a
widow(er) is qualified for a railroad retirement employee
annuity as well as a survivor annuity, a special guaranty
applies in some cases. If both the widow(er) and the deceased
employee started railroad employment after 1974, the survivor
annuity payable to the widow(er) is reduced by the amount
of the employee annuity.
If either
the deceased employee or the survivor annuitant had some service
before 1975 but had not completed 120 months of railroad service
before 1975, the employee annuity and the tier II portion
of the survivor annuity would be payable to the widow(er).
The tier I portion of the survivor annuity would be payable
only to the extent that it exceeds the tier I portion of the
employee annuity.
If either
the deceased employee or the survivor annuitant completed
120 months of railroad service before 1975, the widow or dependent
widower may receive both an employee annuity and a survivor
annuity, without a full dual benefit reduction.
Cost-of-living
Increases in Survivor Annuities
Cost-of-living
increases, effective December 1 and included in the January
payment, are made on the basis of increases in national prices
or, in some circumstances, average national wages, and calculated
the same way as cost-of-living increases in employee and spouse
annuities.
However,
in the case of widow(er)s' annuities computed on the basis of
the initial
minimum amount provided under 2001 legislation, the monthly
amount will not increase until the amount payable under
previous law plus cost-of-living increases is higher than
the initial minimum amount.
Work
and Earnings Limitations
A survivor
annuity is not payable for any month the survivor works for
an employer covered under the Railroad Retirement Act.
Survivors
who are receiving social security benefits have their railroad
retirement annuity and social security benefit combined for
earnings limitations purposes. Prior to the calendar year
in which full retirement age is attained, there is a deduction
of $1 in benefits for every $2 earned over an exempt amount
($11,640 in 2004). The deduction is $1 for every $3 earned
over an exempt amount ($31,080 in 2004) for the months in
the calendar year in which the individual attains full retirement
age, up to the month of attainment. Work deductions stop effective
with the month full retirement age is attained. In the first
year in which a survivor is both entitled to an annuity and
has a non-work month, a full annuity can be paid for those
months in which the survivor had low earnings or did not have
substantial self-employment, no matter what total earnings
for the year were.
As work
and earnings may affect the payment of an annuity, they must
be reported promptly to the Board in order to prevent potential
overpayments and penalties.
These
earnings restrictions do not apply to disabled widow(er)s
under age 60 or to disabled children. However, any work or
earnings by a disability annuitant must be reported and are
reviewed to determine whether they indicate recovery from
the disability.
When
Survivor Payments Stop
Payments
stop upon death, and no annuity is payable for the month of
death.
A widow(er)’s
annuity or surviving divorced spouse’s benefit stops if (1)
the annuity was based on caring for a child under age 18 (16
for a surviving divorced spouse) or a disabled child and the
child is no longer under age 18 (16 for a surviving divorced
spouse) or disabled or in the care of the widow(er) or surviving
divorced spouse and the widow(er) or surviving divorced
spouse is still under age 60, or (2) the annuity was based on disability
and the beneficiary recovers from the disability before age
60. A disability annuity can be reinstated if the disability
recurs within seven years and the widow(er) is still under
age 60. Remarriage will reduce a widow(er)’s annuity rate,
and, in some cases, prevent payment.
A child’s
or grandchild’s annuity will stop if he or she
(1) marries, (2) reaches age 18, or (3) recovers from the
disability on which his or her annuity was based. If the child
is 18 and a full-time elementary or high school student, the
annuity stops upon graduation from high school, attainment
of age 19, or the end of the first school term after attainment
of age 19. In most cases where a student attains age 19 during
the school term, benefits are limited to the two months following
the month age 19 is attained.
A parent's
survivor annuity may stop upon remarriage; in certain cases,
a remarried parent is entitled to a tier I benefit.
Any of
the above occurrences must be reported promptly to the Board
in order to prevent an overpayment.
Lump-sum
Death Benefits
A lump-sum
death benefit is payable to certain survivors of an employee
with 10 or more years of railroad service, or less than 10
years if at least 5 years were after 1995, and a current connection with the railroad
industry if there is no survivor immediately eligible for
an annuity upon the employee’s death.
The amount
payable depends primarily on whether the deceased employee
was credited with 10 years of service before January 1, 1975,
in which case the average benefit payable is about $900. In
all other cases where a lump sum is payable, the benefit is $255.
If the
employee had 10 years of service prior to 1975, the lump-sum
benefit is payable to the widow(er) if she or he were either
living with or supported by the employee at the time of death,
or if the employee were under a court order for support. If
the employee was not survived by a qualified widow(er), the
benefit may be paid to the funeral home or the payer of the
funeral expenses, but the amount paid cannot exceed the actual
costs involved. If the employee did not have 10 years of service
before 1975, the lump sum is payable only
to the widow(er) living in the same household as the employee
at the time of the employee’s death.
If the employee had less than 10 years of service but had 5
years after 1995, he or she must have met social security's
insured status requirements for the lump sum to be payable.
If a
widow(er) is eligible for monthly benefits at the time of
the employee’s death, but the widow(er) had excess earnings
deductions which prevented annuity payments or for any other
reason did not receive monthly benefits in the 12-month period
beginning with the month of the employee’s death totaling
at least as much as the lump sum, the difference between the
lump-sum benefit and monthly benefits actually paid, if any,
is payable in the form of a deferred lump-sum benefit.
Residual
Lump-sum Payment
The
railroad retirement system also provides, under certain
conditions, a residual lump-sum death benefit which ensures
that a railroad family receives at least as much in benefits
as the employee paid in railroad retirement taxes before
1975. This benefit is, in effect, a refund of an
employee's pre-1975 railroad retirement taxes, after
subtraction of any benefits previously paid on the basis of
the employee's service. However, an employee's
benefits generally exceed taxes within 2 years; this death
benefit is, consequently, seldom payable.
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