[Federal Register Volume 78, Number 214 (Tuesday, November 5, 2013)]
[Notices]
[Pages 66413-66418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-26569]


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SOCIAL SECURITY ADMINISTRATION

[Docket No. SSA-2013-0057]


Cost-of-Living Increase and Other Determinations for 2014

AGENCY: Social Security Administration.

ACTION: Notice.

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SUMMARY: Under title II of the Social Security Act (Act), there will be 
a 1.5 percent cost-of-living increase in Social Security benefits 
effective December 2013. As a result of this increase, the following 
items will increase for 2014:
    (1) The maximum Federal Supplemental Security Income (SSI) monthly 
benefit amounts for 2014 under title XVI of the Act will be $721 for an 
eligible individual, $1,082 for an eligible individual with an eligible 
spouse, and $361 for an essential person;
    (2) The special benefit amount under title VIII of the Act for 
certain World War II veterans will be $540.75 for 2014;
    (3) The student earned income exclusion under title XVI of the Act 
will be $1,750 per month in 2014, but not more than $7,060 for all of 
2014;
    (4) The dollar fee limit for services performed as a representative 
payee will be $40 per month ($77 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 2014; and
    (5) The dollar limit on the administrative-cost fee assessment 
charged to an appointed representative such as an attorney, agent, or 
other person who represents claimants will be $89 beginning in December 
2013.
    The national average wage index for 2012 is $44,321.67. This index 
affects the following amounts:
    (1) The Old-Age, Survivors, and Disability Insurance (OASDI) 
contribution and benefit base will be $117,000 for remuneration paid in 
2014 and self-employment income earned in taxable years beginning in 
2014;
    (2) The monthly exempt amounts under the OASDI retirement earnings 
test for taxable years ending in calendar year 2014 will be $1,290 for 
beneficiaries who will attain their Normal Retirement Age (NRA) 
(defined below) after 2014 and $3,450 for those who attain NRA in 2014;
    (3) The dollar amounts (``bend points'') used in the primary 
insurance amount (PIA) benefit formula for workers who become eligible 
for benefits, or who die before becoming eligible, in 2014 will be $816 
and $4,917;
    (4) 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 2014 will be $1,042, $1,505, and 
$1,962;
    (5) The amount of taxable earnings a person must have to be 
credited with a quarter of coverage in 2014 will be $1,200;
    (6) The ``old-law'' contribution and benefit base under title II of 
the Act will be $87,000 for 2014;
    (7) The monthly amount deemed to constitute substantial gainful 
activity (SGA) for statutorily blind individuals in 2014 will be 
$1,800, and the corresponding amount for non-blind disabled persons 
will be $1,070;
    (8) The earnings threshold establishing a month as a part of a 
trial work period will be $770 for 2014; and
    (9) Coverage thresholds for 2014 will be $1,900 for domestic 
workers and $1,600 for election officials and election workers.

FOR FURTHER INFORMATION CONTACT: Susan C. Kunkel, Office of the Chief 
Actuary, Social Security Administration, 6401 Security Boulevard, 
Baltimore, MD 21235, (410) 965-3000. Information relating to this 
announcement is available on our Internet site at 
www.socialsecurity.gov/oact/cola/index.html. For information on 
eligibility or claiming benefits, call 1-800-772-1213, or visit our 
Internet site 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 2013 
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 2012 (section 
215(a)(1)(D)), the OASDI fund ratio for 2013 (section 
215(i)(2)(C)(ii)), the OASDI contribution and benefit base for 2014 
(section 230(a)), the amount of earnings required to be credited with a 
quarter of coverage in 2014 (section 213(d)(2)), the monthly exempt 
amounts under the Social Security retirement earnings test for 2014 
(section 203(f)(8)(A)), the formula for computing a PIA for workers who 
first become eligible for benefits or die in 2014 (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 2014 (section 203(a)(2)(C)).

Cost-of-Living Increases

General

    The cost-of-living increase is 1.5 percent for benefits under 
titles II and XVI of the Act. Under title II, OASDI benefits will 
increase by 1.5 percent for individuals eligible for December 2013 
benefits, payable in January 2014. This increase is based on the 
authority contained in section 215(i) of the Act.
    Pursuant to section 1617 of the Act, Federal SSI payment levels 
will also increase by 1.5 percent effective for payments made for the 
month of January 2014 but paid on December 31, 2013.

Computation

    Section 215(i)(1)(B) of the Act defines a ``computation quarter'' 
to be a third calendar quarter in which the average Consumer Price 
Index (CPI) for Urban Wage Earners and Clerical Workers exceeded the 
average CPI in the previous computation quarter. The last cost-of-
living increase, effective for those eligible to receive title II 
benefits for December 2012, was based on the CPI increase from the 
third quarter of 2011 to the third quarter of 2012. Accordingly, the 
last computation quarter is the third quarter of 2012. The law 
stipulates that a cost-of-living increase for benefits is determined 
based on the percentage increase, if any, in the CPI from the last 
computation quarter to the third quarter of the current year. 
Therefore, we compute the increase in the CPI from the third quarter of 
2012 to the third quarter of 2013.
    Section 215(i)(1) of the Act provides that the CPI for a cost-of-
living computation quarter is 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, 2012, is: For July 2012, 225.568; for August 2012, 
227.056; and for September 2012, 228.184. The arithmetic mean for that 
calendar quarter is 226.936. The corresponding CPI for each month in 
the quarter ending September 30, 2013, is:

[[Page 66414]]

For July 2013, 230.084; for August 2013, 230.359; and for September 
2013, 230.537. The arithmetic mean for this calendar quarter is 
230.327. The CPI for the calendar quarter ending September 30, 2013, 
exceeds that for the calendar quarter ending September 30, 2012 by 1.5 
percent (rounded to the nearest 0.1). Therefore, beginning December 
2013 a cost-of-living benefit increase of 1.5 percent is effective for 
benefits under title II of the Act.
    Section 215(i) also specifies that a 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 20.0 percent. The OASDI fund ratio for a 
year is the ratio of the combined assets of the OASDI Trust Funds at 
the beginning of that year to the combined expenditures of these funds 
during that year. For 2013, the OASDI fund ratio is assets of 
$2,732,334 million divided by estimated expenditures of $825,382 
million, or 331.0 percent. Because the 331.0 percent OASDI fund ratio 
exceeds 20.0 percent, the benefit increase for December 2013 is not 
limited.

Program Amounts That Change Based on the Cost-of-Living Increase

    The following program amounts change based on the cost-of-living 
increase: (1) Title II benefits; (2) title XVI benefits; (3) title VIII 
benefits; (4) the student earned income exclusion; (5) the fee for 
services performed by a representative payee; and (6) the appointed 
representative fee assessment.

Title II Benefit Amounts

    In accordance with section 215(i) of the Act, for 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 2014, benefits will increase by 1.5 percent beginning with 
benefits for December 2013, which are payable in January 2014. In the 
case of first eligibility after 2013, the 1.5 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 
increase in Social Security benefits, we will publish in the Federal 
Register a revision of the range of the PIAs 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 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 PIAs and 
corresponding maximum family benefit amounts after the 1.5 percent 
benefit increase.

  Special Minimum PIAs and Maximum Family Benefits Payable for December
                                  2013
------------------------------------------------------------------------
                                                               Maximum
         Number of  years of  coverage              PIA         family
                                                               benefit
------------------------------------------------------------------------
11............................................       $39.30       $59.80
12............................................        80.20       121.40
13............................................       121.20       182.80
14............................................       161.90       243.90
15............................................       202.40       304.90
16............................................       243.50       366.50
17............................................       284.40       428.20
18............................................       325.30       489.20
19............................................       366.10       550.60
20............................................       407.10       611.50
21............................................       448.00       673.30
22............................................       488.60       734.50
23............................................       530.10       796.70
24............................................       570.90       857.50
25............................................       611.50       918.20
26............................................       653.00       980.60
27............................................       693.40     1,041.70
28............................................       734.30     1,102.80
29............................................       775.20     1,164.60
30............................................       816.00     1,225.20
------------------------------------------------------------------------

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 1.5 
percent effective January 2014. For 2013, we derived the monthly 
benefit amounts for an eligible individual, an eligible individual with 
an eligible spouse, and for an essential person--$710, $1,066, and 
$356, respectively--from corresponding yearly unrounded Federal SSI 
benefit amounts of $8,529.32, $12,792.55, and $4,274.43. For 2014, 
these yearly unrounded amounts increase by 1.5 percent to $8,657.26, 
$12,984.44, and $4,338.55, 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 2014, are $8,652, $12,984, and $4,332. Dividing the 
yearly amounts by 12 gives the corresponding monthly amounts for 2014-
$721, $1,082, and $361, respectively. In the case of an eligible 
individual with an eligible spouse, we equally divide the amount 
payable between the two spouses.

Title VIII Benefit Amount

    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.'' Accordingly, the 
monthly benefit for 2014 under this provision is 75 percent of $721, or 
$540.75.

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 2013 is $1,730 per month, but not more than $6,960 in all 
of 2013. 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 2014, 
we increase the corresponding unrounded amount for 2013 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 2013 is $1,725.70. We increase this amount by 1.5 
percent to $1,751.59, which we then round to $1,750. Similarly, we 
increase the unrounded yearly amount for 2013, $6,956.28, by 1.5 
percent to $7,060.62 and round this to $7,060. Accordingly, the maximum 
amount of the income exclusion applicable to a student in 2014 is 
$1,750 per month but not more than $7,060 in all of 2014.

[[Page 66415]]

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 a beneficiary a monthly fee for 
expenses incurred in providing services performed as such beneficiary's 
representative payee. In 2013 the fee is limited to the lesser of: (1) 
10 percent of the monthly benefit involved; or (2) $39 per month ($76 
per month in any case in which the beneficiary is entitled to 
disability benefits and has an alcoholism or drug addiction condition 
that makes the individual incapable of managing such benefits). The 
dollar fee limits are subject to increase by the cost-of-living 
increase, with the resulting amounts rounded to the nearest whole 
dollar amount. Accordingly, we increase the current amounts by 1.5 
percent to $40 and $77 for 2014.

Appointed Representative Fee Assessment

    Under sections 206(d) and 1631(d) of the Act, whenever we pay a fee 
to a representative such as an attorney, agent, or other person who 
represents claimants, we must impose on the representative an 
assessment to cover administrative costs. Such assessment is no more 
than 6.3 percent of the representative's authorized fee or, if lower, a 
dollar amount that is subject to increase by the cost-of-living 
increase. We derive the dollar limit for December 2013 by increasing 
the unrounded limit for December 2012, $88.35, by 1.5 percent, which is 
$89.68. We then round $89.68 to the next lower multiple of $1. The 
dollar limit effective for December 2013 is, therefore, $89.

National Average Wage Index for 2012

Computation

    We determined the national average wage index for calendar year 
2012 based on the 2011 national average wage index of $42,979.61, 
announced in the Federal Register on October 30, 2012 (77 FR 65754), 
along with the percentage increase in average wages from 2011 to 2012, 
as 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 $41,211.36 and $42,498.21 for 2011 and 
2012, respectively. To determine the national average wage index for 
2012 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 2011 national average wage index of 
$42,979.61 by the percentage increase in average wages from 2011 to 
2012 (based on SSA-tabulated wage data) as follows, with the result 
rounded to the nearest cent.

Amount

    Multiplying the national average wage index for 2011 ($42,979.61) 
by the ratio of the average wage for 2012 ($42,498.21) to that for 2011 
($41,211.36) produces the 2012 index, $44,321.67. The national average 
wage index for calendar year 2012 is about 3.12 percent higher than the 
2011 index.

Program Amounts That Change Based on the National Average Wage Index

    The following amounts change with annual changes in the national 
average wage index: (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 PIA formula; (4) the bend points in the 
maximum family benefit formula; (5) the amount of earnings required for 
a worker to be credited with a quarter of coverage; (6) the old-law 
contribution and benefit base (as determined under section 230 of the 
Act as in effect before the 1977 amendments); (7) the SGA amount 
applicable to statutorily blind individuals; and (8) 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 under regulatory requirements--the SGA amount applicable to 
non-blind disabled persons, and the monthly earnings threshold that 
establishes a month as part of a trial work period for disabled 
beneficiaries.

OASDI Contribution and Benefit Base

General

    The OASDI contribution and benefit base is $117,000 for 
remuneration paid in 2014 and self-employment income earned in taxable 
years beginning in 2014. The OASDI contribution and benefit base serves 
as the maximum annual amount of earnings on which OASDI taxes are paid. 
It is also 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 2014 is the larger of: (1) The 1994 base of $60,600 multiplied by 
the ratio of the national average wage index for 2012 to that for 1992; 
or (2) the current base ($113,700). If the resulting amount is not a 
multiple of $300, it is 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 2012 
($44,321.67 as determined above) to that for 1992 ($22,935.42) produces 
the amount of $117,106.78. We round this amount to $117,000. Because 
$117,000 exceeds the current base amount of $113,700, the OASDI 
contribution and benefit base is $117,000 for 2014.

Retirement Earnings Test Exempt Amounts

General

    We withhold Social Security benefits when a beneficiary under the 
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 PIA. The NRA is 
age 66 for those born in 1943-54, and it gradually increases reaching 
age 67 for those born in 1960 or later. A higher exempt amount applies 
in the year in which a person attains his or her NRA, but only with 
respect to earnings in 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 Public Law 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 attaining NRA after 
2014, the lower monthly exempt amount for 2014 is the larger of: (1) 
The 1994 monthly exempt amount multiplied by the ratio of the national 
average wage index for 2012 to that for 1992; or (2) the 2013 monthly 
exempt amount ($1,260). If the resulting amount is not a multiple

[[Page 66416]]

of $10, it is rounded to the nearest multiple of $10.
    Under the formula applicable to beneficiaries attaining NRA in 
2014, the higher monthly exempt amount for 2014 is the larger of: (1) 
The 2002 monthly exempt amount multiplied by the ratio of the national 
average wage index for 2012 to that for 2000; or (2) the 2013 monthly 
exempt amount ($3,340). If the resulting amount is not a multiple of 
$10, it is 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 2012 
($44,321.67) to that for 1992 ($22,935.42) produces the amount of 
$1,294.74. We round this to $1,290. Because $1,290 exceeds the 
corresponding current exempt amount of $1,260, the lower retirement 
earnings test monthly exempt amount is $1,290 for 2014. The 
corresponding lower annual exempt amount is $15,480 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 2012 
($44,321.67) to that for 2000 ($32,154.82) produces the amount of 
$3,445.96. We round this to $3,450. Because $3,450 exceeds the 
corresponding current exempt amount of $3,340, the higher retirement 
earnings test monthly exempt amount is $3,450 for 2014. The 
corresponding higher annual exempt amount is $41,400 under the 
retirement earnings test.

Primary Insurance Amount Benefit Formula

General

    The Social Security Amendments of 1977 provided a method for 
computing benefits that generally applies when a worker first becomes 
eligible for benefits after 1978. This method uses the worker's average 
indexed monthly earnings (AIME) to compute the PIA. 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 the general wage levels that occurred during the worker's years of 
employment. Such indexing ensures that a worker's future benefit level 
will reflect the general rise in the standard of living that will occur 
during his or her working lifetime. To compute the AIME, we first 
determine the required number of years of earnings. We then select the 
number of years with the highest indexed earnings, add the indexed 
earnings for those years, 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 AIME.

Computing the PIA

    The PIA is the sum of three separate percentages of portions of the 
AIME. 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 AIME the ``bend points'' of the formula. 
Therefore, the bend points for 1979 were $180 and $1,085.
    To obtain the bend points for 2014, we multiply each of the 1979 
bend-point amounts by the ratio of the national average wage index for 
2012 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 2012 ($44,321.67) to that 
for 1977 ($9,779.44) produces the amounts of $815.78 and $4,917.36. We 
round these to $816 and $4,917. Accordingly, the portions of the AIME 
to be used in 2014 are the first $816, the amount between $816 and 
$4,917, and the amount over $4,917.
    Consequently, for individuals who first become eligible for old-age 
insurance benefits or disability insurance benefits in 2014, or who die 
in 2014 before becoming eligible for benefits, their PIA will be the 
sum of:
    (a) 90 percent of the first $816 of their AIME, plus
    (b) 32 percent of their AIME over $816 and through $4,917, plus
    (c) 15 percent of their AIME over $4,917.
    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 PIA. Those amendments also continued the then-
existing relationship between maximum family benefits and PIAs 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 PIA. It involves computing the sum of four separate 
percentages of portions of the worker's PIA. 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 2014, we multiply each of the 1979 
bend-point amounts by the ratio of the national average wage index for 
2012 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 2012 ($44,321.67) to that for 1977 
($9,779.44) produces the amounts of $1,042.39, $1,504.67, and 
$1,962.41. We round these amounts to $1,042, $1,505, and $1,962. 
Accordingly, the portions of the PIAs to be used in 2014 are the first 
$1,042, the amount between $1,042 and $1,505, the amount between $1,505 
and $1,962, and the amount over $1,962.
    Consequently, for the family of a worker who becomes age 62 or dies 
in 2014 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 $1,042 of the worker's PIA, plus
    (b) 272 percent of the worker's PIA over $1,042 through $1,505, 
plus
    (c) 134 percent of the worker's PIA over $1,505 through $1,962, 
plus
    (d) 175 percent of the worker's PIA over $1,962.
    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.

[[Page 66417]]

Quarter of Coverage Amount

General

    The amount of earnings required for a quarter of coverage in 2014 
is $1,200. 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.

Computation

    Under the prescribed formula, the quarter of coverage amount for 
2014 is the larger of (1) the 1978 amount of $250 multiplied by the 
ratio of the national average wage index for 2012 to that for 1976; or 
(2) the current amount of $1,160. Section 213(d) provides that if the 
resulting amount is not a multiple of $10, it is 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 2012 ($44,321.67) to that for 
1976 ($9,226.48) produces the amount of $1,200.94. We then round this 
amount to $1,200. Because $1,200 exceeds the current amount of $1,160, 
the quarter of coverage amount is $1,200 for 2014.

Old-Law Contribution and Benefit Base

General

    The old-law contribution and benefit base for 2014 is $87,000. This 
base 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 that 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 is the larger of: (1) The 
1994 old-law base ($45,000) multiplied by the ratio of the national 
average wage index for 2012 to that for 1992; or (2) the current old-
law base ($84,300). If the resulting amount is not a multiple of $300, 
it is 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 2012 
($44,321.67) to that for 1992 ($22,935.42) produces the amount of 
$86,960.48. We round this amount to $87,000. Because $87,000 exceeds 
the current amount of $84,300, the old-law contribution and benefit 
base is $87,000 for 2014.

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 SGA. A person who is earning more than a certain monthly 
amount 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.

Computation

    The monthly SGA amount for statutorily blind individuals under 
title II for 2014 is the larger of: (1) Such amount for 1994 multiplied 
by the ratio of the national average wage index for 2012 to that for 
1992; or (2) such amount for 2013. The monthly SGA amount for non-blind 
disabled individuals for 2014 is the larger of: (1) Such amount for 
2000 multiplied by the ratio of the national average wage index for 
2012 to that for 1998; or (2) such amount for 2013. In either case, if 
the resulting amount is not a multiple of $10, it is 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 
2012 ($44,321.67) to that for 1992 ($22,935.42) produces the amount of 
$1,797.18. We then round this amount to $1,800. Because $1,800 exceeds 
the current amount of $1,740, the monthly SGA amount for statutorily 
blind individuals is $1,800 for 2014.

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 2012 
($44,321.67) to that for 1998 ($28,861.44) produces the amount of 
$1,074.97. We then round this amount to $1,070. Because $1,070 exceeds 
the current amount of $1,040, the monthly SGA amount for non-blind 
disabled individuals is $1,070 for 2014.

Trial Work Period Earnings Threshold

General

    During a trial work period of 9 months in a rolling 60-month 
period, a beneficiary receiving Social Security disability benefits may 
test his or her ability to work and still receive monthly benefit 
payments. To be considered a trial work period month, earnings must be 
over a certain level. In 2014, any month in which earnings exceed $770 
is considered a month of services for an individual's trial work 
period.

Computation

    The method used to determine the new amount is set forth in our 
regulations at 20 CFR 404.1592(b). Monthly earnings in 2014, 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 2012 to that for 1999 or, if larger, such amount for 
2013. 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 2012 ($44,321.67) to that for 
1999 ($30,469.84) produces the amount of $770.94. We then round this 
amount to

[[Page 66418]]

$770. Because $770 exceeds the current amount of $750, the monthly 
earnings threshold is $770 for 2014.

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 2014, this threshold is $1,900. 
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 2014 is equal to the 1995 amount of $1,000 multiplied by the ratio 
of the national average wage index for 2012 to that for 1993. If the 
resulting amount is not a multiple of $100, it is 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 2012 
($44,321.67) to that for 1993 ($23,132.67) produces the amount of 
$1,915.98. We then round this amount to $1,900. Accordingly, the 
domestic employee coverage threshold amount is $1,900 for 2014.

Election Official and Election Worker Coverage Threshold

General

    The minimum amount an election official and election worker must 
earn so that such earnings are covered under Social Security or 
Medicare is the election official and election worker coverage 
threshold. For 2014, this threshold is $1,600. Section 218(c)(8)(B) of 
the Act provides the formula for increasing the threshold.

Computation

    Under the formula, the election official and election worker 
coverage threshold amount for 2014 is equal to the 1999 amount of 
$1,000 multiplied by the ratio of the national average wage index for 
2012 to that for 1997. If the amount so determined is not a multiple of 
$100, it is 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 2012 
($44,321.67) to that for 1997 ($27,426.00) produces the amount of 
$1,616.05. We then round this amount to $1,600. Accordingly, the 
election worker coverage threshold amount is $1,600 for 2014.

(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 31, 2013.
Carolyn W. Colvin,
Acting Commissioner of Social Security.
[FR Doc. 2013-26569 Filed 11-1-13; 4:15 pm]
BILLING CODE P