[Federal Register Volume 64, Number 205 (Monday, October 25, 1999)]
[Notices]
[Pages 57506-57512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27865]


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SOCIAL SECURITY ADMINISTRATION


Office of the Commissioner; Cost-of-Living Increase and Other 
Determinations for the Year 2000

AGENCY: Social Security Administration.

ACTION: Notice.

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[[Page 57507]]

SUMMARY: The Commissioner has determined--
    (1) A 2.4 percent cost-of-living increase in Social Security 
benefits under title II of the Social Security Act (the Act), effective 
for December 1999;
    (2) An increase in the Federal Supplemental Security Income (SSI) 
monthly benefit amounts under title XVI of the Act for 2000 to $512 for 
an eligible individual, $769 for an eligible individual with an 
eligible spouse, and $257 for an essential person;
    (3) The national average wage index for 1998 to be $28,861.44;
    (4) The Old-Age, Survivors, and Disability Insurance (OASDI) 
contribution and benefit base to be $76,200 for remuneration paid in 
2000 and self-employment income earned in taxable years beginning in 
2000;
    (5) For beneficiaries under age 65, the monthly exempt amount under 
the Social Security retirement earnings test for taxable years ending 
in calendar year 2000 to be $840;
    (6) The dollar amounts (``bend points'') used in the benefit 
formula for workers who become eligible for benefits in 2000 to be $531 
and $3,202;
    (7) The dollar amounts (``bend points'') used in the formula for 
computing maximum family benefits for workers who become eligible for 
benefits in 2000 to be $679, $980, and $1,278;
    (8) The amount of earnings a person must have to be credited with a 
quarter of coverage in 2000 to be $780;
    (9) The ``old-law'' contribution and benefit base to be $56,700 for 
2000;
    (10) The monthly amount of substantial gainful activity applicable 
to statutorily blind individuals in 2000 to be $1,170;
    (11) Coverage thresholds for 2000 to be $1,200 for domestic workers 
and $1,100 for election workers; and
    (12) The OASDI fund ratio to be 193.6 percent for 1999.

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 (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/
index.html.

SUPPLEMENTARY INFORMATION: The Commissioner is required by the Act to 
publish within 45 days after the close of the third calendar quarter of 
1999 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 1998 (section 215(a)(1)(D)), the OASDI fund ratio for 1999 
(section 215(i)(2)(C)(ii)), the OASDI contribution and benefit base for 
2000 (section 230(a)), the amount of earnings required to be credited 
with a quarter of coverage in 2000 (section 213(d)(2)), the monthly 
exempt amounts under the Social Security retirement earnings test for 
2000 (section 203(f)(8)(A)), the formula for computing a primary 
insurance amount for workers who first become eligible for benefits or 
dies in 2000 (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 2000 (section 
203(a)(2)(C)).

Cost-of-Living Increases

General

    The cost-of-living increase is 2.4 percent for benefits under 
titles II and XVI of the Act.
    Under title II, OASDI benefits will increase by 2.4 percent 
beginning with December 1999 benefits, payable in January 2000. 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 
2.4 percent effective for payments made for the month of January 2000 
but paid on December 30, 1999. 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 1999 
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 1999, 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 1999, the benefit 
increase is the percentage increase in the Consumer Price Index for 
Urban Wage Earners and Clerical Workers from the third quarter of 1998 
through the third quarter of 1999.
    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, 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. The corresponding 
Consumer Price Index for each month in the quarter ending September 30, 
1999, is: for July 1999, 163.3; for August 1999, 163.8; and for 
September 1999, 164.7. The arithmetic mean for this calendar quarter is 
163.9. Thus, because the Consumer Price Index for the calendar quarter 
ending September 30, 1999, exceeds that for the calendar quarter ending 
September 30, 1998 by 2.4 percent, a cost-of-living benefit increase of 
2.4 percent is effective for benefits under title II of the Act 
beginning December 1999.

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 2000, benefits will increase by 2.4 percent 
beginning with benefits for December 1999 which are payable in January 
2000. In the case of first eligibility after 1999, the 2.4 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

[[Page 57508]]

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 2.4 percent 
benefit increase.

  Special Minimum Primary Insurance Amounts and Maximum Family Benefits
                        Payable For December 1999
------------------------------------------------------------------------
                                                     Primary    Maximum
            Number of years of coverage             insurance    family
                                                      amount    benefit
------------------------------------------------------------------------
11................................................      28.50      43.20
12................................................      57.40      86.80
13................................................      86.70     130.40
14................................................     115.50     173.80
15................................................     144.50     217.00
16................................................     173.60     261.10
17................................................     202.70     304.80
18................................................     231.80     348.20
19................................................     260.80     391.80
20................................................     289.70     435.30
21................................................     319.10     479.20
22................................................     347.90     522.60
23................................................     377.20     566.80
24................................................     406.30     610.20
25................................................     435.30     653.30
26................................................     464.60     697.70
27................................................     493.50     741.00
28................................................     522.50     784.40
29................................................     551.50     828.20
30................................................     580.60     871.50
------------------------------------------------------------------------

    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 $205.70 for an 
individual under sections 227 and 228 of the Act is increased by 2.4 
percent to obtain the new amount of $210.60. The current monthly 
benefit amount of $102.80 for a spouse under section 227 is increased 
by 2.4 percent to $105.20.

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 2.4 percent 
effective January 2000. For 1999, the monthly benefit amounts for an 
eligible individual, an eligible individual with an eligible spouse, 
and for an essential person--$500, $751, and $250, respectively--were 
derived from corresponding yearly unrounded Federal SSI benefit amounts 
of $6,010.02, $9,014.01, and $3,011.89. For 2000, these yearly 
unrounded amounts are increased by 2.4 percent to $6,154.26, $9,230.35, 
and $3,084.18, 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 2000, are 
$6,144, $9,228, and $3,084. The corresponding monthly amounts for 2000 
are determined by dividing the yearly amounts by 12, giving $512, $769, 
and $257, 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 
($53 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. The 
current amounts are thus increased by 2.4 percent to $28 and $54 for 
2000.

National Average Wage Index for 1998

General

    Under various provisions of the Act, several amounts are scheduled 
to increase automatically for 2000 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); (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.

Computation

    The determination of the national average wage index for calendar 
year 1998 is based on the 1997 national average wage index of 
$27,426.00 announced in the Federal Register on October 30, 1998 (63 FR 
58446), along with the percentage increase in average wages from 1997 
to 1998 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 $26,309.73 and $27,686.75 for 1997 and 1998, 
respectively. To determine the national average wage index for 1998 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 1997 national average wage index of $27,426.00 is 
multiplied by the percentage increase in average wages from 1997 to 
1998 (based on SSA-tabulated wage data) as follows (with the result 
rounded to the nearest cent):

Amount

    The national average wage index for 1998 is $27,426.00 times 
$27,686.75 divided by $26,309.73, which equals $28,861.44. Therefore, 
the national average wage index for calendar year 1998 is determined to 
be $28,861.44.

OASDI Contribution and Benefit Base

General

    The OASDI contribution and benefit base is $76,200 for remuneration 
paid in 2000 and self-employment income earned in taxable years 
beginning in 2000.
    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 2000 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 2000 is 12.4 percent. (The Hospital Insurance tax is

[[Page 57509]]

due on remuneration, without limitation, paid in 2000, at the rate of 
1.45 percent for employees and employers, each, and on self-employment 
income earned in taxable years beginning in 2000, 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 2000 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 1998 to 
that for 1992; or (2) the current base ($72,600). 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 1998, $28,861.44 
as determined above, compared to that for 1992, $22,935.42, is 
1.2583785. Multiplying the 1994 OASDI contribution and benefit base 
amount of $60,600 by the ratio of 1.2583785 produces the amount of 
$76,257.74 which must then be rounded to $76,200. Because $76,200 
exceeds the current base amount of $72,600, the OASDI contribution and 
benefit base is determined to be $76,200 for 2000.

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 2000 shall be the larger of: (1) The 1994 
monthly exempt amount multiplied by the ratio of the national average 
wage index for 1998 to that for 1992; or (2) the 1999 monthly exempt 
amount ($800). 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 1998, $28,861.44, 
compared to that for 1992, $22,935.42, is 1.2583785. Multiplying the 
1994 retirement earnings test monthly exempt amount of $670 by the 
ratio 1.2583785 produces the amount of $843.11. This must then be 
rounded to $840. Because $840 is larger than the corresponding current 
exempt amount of $800, the retirement earnings test monthly exempt 
amount for beneficiaries under age 65 is thus determined to be $840 for 
2000. The corresponding retirement earnings test annual exempt amount 
for these beneficiaries is $10,080.

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 2000, the national average wage index for 
1998, $28,861.44, is divided by the national average wage index for 
each year prior to 1998 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 
1998. Any earnings in 1998 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 2000.

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 2000 are obtained by multiplying the 
corresponding 1979 bend-point amounts by the ratio between the national 
average wage index for 1998, $28,861.44, and for 1977, $9,779.44. These 
results are then rounded to the nearest dollar. For 2000, the ratio is 
2.9512365. Multiplying the 1979 amounts of $180 and $1,085 by 2.9512365 
produces the amounts of $531.22 and $3,202.09. These must then be 
rounded to $531 and $3,202. Accordingly, the portions of the average 
indexed monthly earnings to be used in 2000 are determined to be the 
first $531, the amount between $531 and $3,202, and the amount over 
$3,202.
    Consequently, for individuals who first become eligible for old-age 
insurance benefits or disability insurance benefits in 2000, or who die 
in 2000 before becoming eligible for benefits, their primary insurance 
amount will be the sum of:
    (a) 90 percent of the first $531 of their average indexed monthly 
earnings, plus

[[Page 57510]]

    (b) 32 percent of their average indexed monthly earnings over $531 
and through $3,202, plus
    (c) 15 percent of their average indexed monthly earnings over 
$3,202.
    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 2000 are obtained by multiplying the 
corresponding 1979 bend-point amounts by the ratio between the national 
average wage index for 1998, $28,861.44, and the average for 1977, 
$9,779.44. This amount is then rounded to the nearest dollar. For 2000, 
the ratio is 2.9512365. Multiplying the amounts of $230, $332, and $433 
by 2.9512365 produces the amounts of $678.78, $979.81, and $1,277.89. 
These amounts are then rounded to $679, $980, and $1,278. Accordingly, 
the portions of the primary insurance amounts to be used in 2000 are 
determined to be the first $679, the amount between $679 and $980, the 
amount between $980 and $1,278, and the amount over $1,278.
    Consequently, for the family of a worker who becomes age 62 or dies 
in 2000 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 $679 of the worker's primary insurance 
amount, plus
    (b) 272 percent of the worker's primary insurance amount over $679 
through $980, plus
    (c) 134 percent of the worker's primary insurance amount over $980 
through $1,278, plus
    (d) 175 percent of the worker's primary insurance amount over 
$1,278.
    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 amount of earnings required for a quarter of coverage in 2000 
is $780. 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 
2000 shall be equal to the larger of: (1) The 1978 amount of $250 
multiplied by the ratio of the national average wage index for 1998 to 
that for 1976; or (2) the current amount of $740. 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 1998, $28,861.44, 
compared to that for 1976, $9,226.48, is 3.1281095. Multiplying the 
1978 quarter of coverage amount of $250 by the ratio of 3.1281095 
produces the amount of $782.03, which must then be rounded to $780. 
Because $780 exceeds the current amount of $740, the quarter of 
coverage amount is determined to be $780 for 2000.

``Old-Law'' Contribution and Benefit Base

General.

    The ``old-law'' contribution and benefit base for 2000 is $56,700. 
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 ``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 1998 to that for 1992; or (2) the 
current ``old-law'' base ($53,700). If the amount so determined is not 
a multiple of $300, it shall be rounded to the nearest multiple of 
$300.

[[Page 57511]]

Amount

    The ratio of the national average wage index for 1998, $28,861.44, 
compared to that for 1992, $22,935.42, is 1.2583785. Multiplying the 
1994 ``old-law'' contribution and benefit base amount of $45,000 by the 
ratio of 1.2583785 produces the amount of $56,627.03 which must then be 
rounded to $56,700. Because $56,700 exceeds the current amount of 
$53,700, the ``old-law'' contribution and benefit base is determined to 
be $56,700 for 2000.

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 $700 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 2000 
shall be the larger of: (1) Such amount for 1994 multiplied by the 
ratio of the national average wage index for 1998 to that for 1992; or 
(2) such amount for 1999. 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 1998, $28,861.44, 
compared to that for 1992, $22,935.42, is 1.2583785. Multiplying the 
1994 monthly SGA amount for statutorily blind individuals of $930 by 
the ratio of 1.2583785 produces the amount of $1,170.29. This must then 
be rounded to $1,170. Because $1,170 is larger than the current amount 
of $1,110, the monthly SGA amount for statutorily blind individuals is 
determined to be $1,170 for 2000.

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 per annum in calendar year 1994. The statute held the 
coverage threshold at the $1,000 level for 1995 and then increased the 
threshold in $100 increments for years after 1995. Section 3121(x) of 
the Internal Revenue Code provides the formula for increasing the 
threshold.

Computation

    Under the formula, the domestic employee coverage threshold amount 
for 2000 shall be equal to the 1995 amount of $1,000 multiplied by the 
ratio of the national average wage index for 1998 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 1998, $28,861.44, 
compared to that for 1993, $23,132.67, is 1.2476485. Multiplying the 
1995 domestic employee coverage threshold amount of $1,000 by the ratio 
of 1.2476485 produces the amount of $1,247.65, which must then be 
rounded to $1,200. Accordingly, the domestic employee coverage 
threshold amount is determined to be $1,200 for 2000.

Election Worker Coverage Threshold

General

    Section 303(b) of Pub. L. 103-296, the ``Social Security 
Independence and Program Improvements Act of 1994,'' increased from 
$100 a year to $1,000 a year the amount an election official or 
election worker must be paid for the earnings to be covered under 
Social Security or Medicare, effective January 1, 1995. Beginning in 
the year 2000, the coverage threshold increases automatically with 
increases in the national average wage index.

Computation

    Under the formula, the election worker coverage threshold amount 
for 2000 shall be equal to the 1999 amount of $1,000 multiplied by the 
ratio of the national average wage index for 1998 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

    The ratio of the national average wage index for 1998, $28,861.44, 
compared to that for 1997, $27,426.00, is 1.0523387. Multiplying the 
1999 election worker coverage threshold amount of $1,000 by the ratio 
of 1.0523387 produces the amount of $1,052.34, which must then be 
rounded to $1,100. Accordingly, the election worker coverage threshold 
amount is determined to be $1,100 for 2000.

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 1999 is the ratio of: (1) 
The combined assets of the OASI and DI Trust Funds at the beginning of 
1999 to (2) the estimated expenditures of the OASI and DI Trust Funds 
during 1999, 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 1999 equaled $762,460 million, and the expenditures are estimated to 
be $393,826 million. Thus, the OASDI fund ratio for 1999 is 193.6 
percent, which exceeds the applicable threshold of 20.0 percent. 
Therefore, the stabilizer provision does not affect the benefit 
increase for December 1999. 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--

[[Page 57512]]

Survivors Insurance; 96.006 Supplemental Security Income)

    Dated: October 20, 1999.
Kenneth S. Apfel,
Commissioner, Social Security Administration.
[FR Doc. 99-27865 Filed 10-22-99; 8:45 am]
BILLING CODE 4191-02-P