[Federal Register Volume 82, Number 240 (Friday, December 15, 2017)]
[Notices]
[Pages 59937-59942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27105]


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SOCIAL SECURITY ADMINISTRATION

[Docket No. SSA-2017-0053]


Cost-of-Living Increase and Other Determinations for 2018

AGENCY: Social Security Administration.

ACTION: Notice.

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SUMMARY: We are republishing the Cost-of-Living Increase and Other 
Determinations for 2018 with revisions to the average wage index and 
certain related dollar amounts. Under title II of the Social Security 
Act (Act), there will be a 2.0 percent cost-of-living increase in 
Social Security benefits effective December 2017. In addition, the 
national average wage index for 2016 is $48,642.15. The cost-of-living 
increase and national average wage index affect other program 
parameters as described below.

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 (TTY 1-800-325-
0778), or visit our internet site at www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION: Because of the 2.0 percent cost-of-living 
increase, the following items will increase for 2018:
    (1) The maximum Federal Supplemental Security Income (SSI) monthly 
payment amounts for 2018 under title XVI of the Act will be $750 for an 
eligible individual, $1,125 for an eligible individual with an eligible 
spouse, and $376 for an essential person;
    (2) The special benefit amount under title VIII of the Act for 
certain World War II veterans will be $562.50 for 2018;
    (3) The student earned income exclusion under title XVI of the Act 
will be $1,820 per month in 2018, but not more than $7,350 for all of 
2018;
    (4) The dollar fee limit for services performed as a representative 
payee will be $42 per month ($80 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 2018; 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 $93 beginning in December 
2017.
    The national average wage index for 2016 is $48,642.15. This index 
affects the following amounts:
    (1) The Old-Age, Survivors, and Disability Insurance (OASDI) 
contribution and benefit base will be $128,400 for remuneration paid in 
2018 and self-employment income earned in taxable years beginning in 
2018;
    (2) The monthly exempt amounts under the OASDI retirement earnings 
test for taxable years ending in calendar year 2018 will be $1,420 for 
beneficiaries who will attain their Normal Retirement Age (NRA) 
(defined in the Retirement Earnings Test Exempt Amounts section below) 
after 2018 and $3,780 for those who attain NRA in 2018;
    (3) The dollar amounts (``bend points'') used in the primary 
insurance amount (PIA) formula for workers who become eligible for 
benefits, or who die before becoming eligible, in 2018 will be $895 and 
$5,397;
    (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 2018 will be $1,144, $1,651, and 
$2,154;
    (5) The taxable earnings a person must have to be credited with a 
quarter of coverage in 2018 will be $1,320;
    (6) The ``old-law'' contribution and benefit base under title II of 
the Act will be $95,400 for 2018;
    (7) The monthly amount deemed to constitute substantial gainful 
activity (SGA) for statutorily blind persons in 2018 will be $1,970. 
The corresponding amount for non-blind disabled persons will be $1,180;
    (8) The earnings threshold establishing a month as a part of a 
trial work period will be $850 for 2018; and
    (9) Coverage thresholds for 2018 will be $2,100 for domestic 
workers and $1,800 for election officials and election workers.
    According to section 215(i)(2)(D) of the Act, we must publish the 
benefit increase percentage and the revised table of ``special 
minimum'' benefits within 45 days after the close of the third calendar 
quarter of 2017. We must also publish the following by November 1: The 
national average wage index for 2016 (215(a)(1)(D)), the OASDI fund 
ratio for 2017 (section 215(i)(2)(C)(ii)), the OASDI contribution and 
benefit base for 2018 (section 230(a)), the earnings required to be 
credited with a quarter of coverage in 2018 (section 213(d)(2)), the 
monthly exempt amounts under the Social Security retirement earnings 
test for 2018 (section 203(f)(8)(A)), the

[[Page 59938]]

formula for computing a PIA for workers who first become eligible for 
benefits or die in 2018 (section 215(a)(1)(D)), and the formula for 
computing the maximum benefits payable to the family of a worker who 
first becomes eligible for old-age benefits or dies in 2018 (section 
203(a)(2)(C)).

Cost-of-Living Increases

General

    The cost-of-living increase is 2.0 percent for monthly benefits 
under title II and for monthly payments under title XVI of the Act. 
Under title II, OASDI benefits will increase by 2.0 percent for 
individuals eligible for December 2017 benefits, payable in January 
2018. We base this increase 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 2.0 percent effective for payments made for 
January 2018 but paid on December 29, 2017.

Computation

    Computation of the cost-of-living increase is based on an increase 
in a Consumer Price Index produced by the Bureau of Labor Statistics. 
At the time the Act was amended to provide cost-of-living increases, 
only one Consumer Price Index existed, namely the Consumer Price Index 
for Urban Wage Earners and Clerical Workers. Although the Bureau of 
Labor Statistics has since developed other consumer price indices, we 
follow precedent by continuing to use the Consumer Price Index for 
Urban Wage Earners and Clerical Workers. We refer to this index in the 
following paragraphs as the CPI.
    Section 215(i)(1)(B) of the Act defines a ``computation quarter'' 
to be a third calendar quarter in which the average CPI 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 2016, was based on the CPI increase from the 
third quarter of 2014 to the third quarter of 2016. Therefore, the last 
computation quarter is the third quarter of 2016. The law states 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 2016 to the third 
quarter of 2017.
    Section 215(i)(1) of the Act states 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 
each month in the quarter ending September 30, 2016, the last 
computation quarter, is: For July 2016, 234.771; for August 2016, 
234.904; and for September 2016, 235.495. The arithmetic mean for the 
calendar quarter ending September 30, 2016 is 235.057. The CPI for each 
month in the quarter ending September 30, 2017, is: For July 2017, 
238.617; for August 2017, 239.448; and for September 2017, 240.939. The 
arithmetic mean for the calendar quarter ending September 30, 2017 is 
239.668. The CPI for the calendar quarter ending September 30, 2017, 
exceeds that for the calendar quarter ending September 30, 2016 by 2.0 
percent (rounded to the nearest 0.1). Therefore, beginning December 
2017 a cost-of-living benefit increase of 2.0 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 2017, the OASDI fund ratio is assets of 
$2,847,687 million divided by estimated expenditures of $954,027 
million, or 298.5 percent. Because the 298.5 percent OASDI fund ratio 
exceeds 20.0 percent, the benefit increase for December 2017 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 payments; (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 (that is, the worker's 
attainment of age 62, or disability or death before age 62) occurred 
before 2018, benefits will increase by 2.0 percent beginning with 
benefits for December 2017, which are payable in January 2018. For 
those first eligible after 2017, the 2.0 percent increase will not 
apply.
    For eligibility after 1978, we determine benefits using a 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 using 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 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 low earnings. To qualify for these 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 maximum family benefit amounts after the 2.0 
percent benefit increase.

  Special Minimum PIAs and Maximum Family Benefits Payable for December
                                  2017
------------------------------------------------------------------------
                                                               Maximum
          Number of years of coverage               PIA         family
                                                               benefit
------------------------------------------------------------------------
11............................................       $40.80       $62.10
12............................................        83.30       126.10
13............................................       125.90       190.10
14............................................       168.30       253.60
15............................................       210.50       317.10
16............................................       253.30       381.20
17............................................       295.80       445.40
18............................................       338.30       508.80
19............................................       380.80       572.70
20............................................       423.50       636.00
21............................................       466.00       700.40
22............................................       508.20       764.00
23............................................       551.50       828.80
24............................................       593.90       892.00
25............................................       636.00       955.30
26............................................       679.30     1,020.10
27............................................       721.30     1,083.70
28............................................       763.80     1,147.20
29............................................       806.40     1,211.50
30............................................       848.80     1,274.60
------------------------------------------------------------------------

Title XVI Payment Amounts

    In accordance with section 1617 of the Act, maximum Federal SSI

[[Page 59939]]

payments amounts for the aged, blind, and disabled will increase by 2.0 
percent effective January 2018. For 2017, we derived the monthly 
payment amounts for an eligible individual, an eligible individual with 
an eligible spouse, and for an essential person--$735, $1,103, and 
$368, respectively--from yearly, unrounded Federal SSI payment amounts 
of $8,830.84, $13,244.80, and $4,425.55. For 2018, these yearly 
unrounded amounts respectively increase by 2.0 percent to $9,007.46, 
$13,509.70, and $4,514.06. We must round each of these resulting 
amounts, when not a multiple of $12, to the next lower multiple of $12. 
Therefore, the annual amounts, effective for 2018, are $9,000, $13,500, 
and $4,512. Dividing the yearly amounts by 12 gives the respective 
monthly amounts for 2018--$750, $1,125, and $376. For 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 who reside outside the United States. Section 805 
of the Act 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.'' Therefore, the 
monthly benefit for 2018 under this provision is 75 percent of $750, or 
$562.50.

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 do not count against his or her 
SSI payments. The maximum amount of such income that we may exclude in 
2017 is $1,790 per month, but not more than $7,200 in all of 2017. 
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 2018, 
we increase the unrounded amount for 2017 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 2017 is $1,786.71. We increase this amount by 2.0 percent to 
$1,822.44, which we then round to $1,820. Similarly, we increase the 
unrounded yearly amount for 2017, $7,202.19, by 2.0 percent to 
$7,346.23 and round this to $7,350. Therefore, the maximum amount of 
the income exclusion applicable to a student in 2018 is $1,820 per 
month but not more than $7,350 in all of 2018.

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 a monthly fee from a beneficiary for 
expenses incurred in providing services as the beneficiary's 
representative payee. In 2017, the fee is limited to the lesser of: (1) 
10 percent of the monthly benefit involved; or (2) $41 each month ($78 
each month when 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. Therefore, we increase the 
current amounts by 2.0 percent to $42 and $80 for 2018.

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. The 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 2017 by increasing 
the unrounded limit for December 2016, $91.47, by 2.0 percent, which is 
$93.30. We then round $93.30 to the next lower multiple of $1. The 
dollar limit effective for December 2017 is, therefore, $93.

National Average Wage Index for 2016

Computation

    We determined the national average wage index for calendar year 
2016 based on the 2015 national average wage index of $48,098.63, 
published in the Federal Register on October 27, 2016 (81 FR 74859), 
and the percentage increase in average wages from 2015 to 2016, 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 from 
these data were $46,119.78 for 2015 and $46,640.94 for 2016. To 
determine the national average wage index for 2016 at a level 
consistent with the national average wage indexing series for 1951 
through 1977 (published December 29, 1978, at 43 FR 61016), we multiply 
the 2015 national average wage index of $48,098.63 by the percentage 
increase in average wages from 2015 to 2016 (based on SSA-tabulated 
wage data) as follows. We round the result to the nearest cent.

National Average Wage Index Amount

    Multiplying the national average wage index for 2015 ($48,098.63) 
by the ratio of the average wage for 2016 ($46,640.94) to that for 2015 
($46,119.78) produces the 2016 index, $48,642.15. The national average 
wage index for calendar year 2016 is about 1.13 percent higher than the 
2015 index.

Program Amounts That Change Based on the National Average Wage Index

    Under the Act, 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 earnings required 
to credit a worker 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 substantial 
gainful activity (SGA) amount applicable to statutorily blind 
individuals; and (8) the coverage threshold for election officials and 
election workers. Additionally, under section 3121(x) of the Internal 
Revenue Code, the domestic employee coverage threshold is based on 
changes in the national average wage index.
    Two amounts also 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 $128,400 for 
remuneration paid in 2018 and self-employment income earned in taxable 
years beginning in 2018. The OASDI contribution and benefit base serves 
as the maximum annual earnings on which OASDI taxes are paid. It is 
also the maximum annual earnings used in determining a person's OASDI 
benefits.

[[Page 59940]]

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 2018 is the larger of: (1) The 1994 base of $60,600 multiplied by 
the ratio of the national average wage index for 2016 to that for 1992; 
or (2) the current base ($127,200). If the resulting amount is not a 
multiple of $300, we round it to the nearest multiple of $300.

OASDI Contribution and Benefit Base Amount

    Multiplying the 1994 OASDI contribution and benefit base ($60,600) 
by the ratio of the national average wage index for 2016 ($48,642.15 as 
determined above) to that for 1992 ($22,935.42) produces $128,522.36. 
We round this amount to $128,400. Because $128,400 exceeds the current 
base amount of $127,200, the OASDI contribution and benefit base is 
$128,400 for 2018.

Retirement Earnings Test Exempt Amounts

General

    We withhold Social Security benefits when a beneficiary under the 
NRA has earnings over the applicable retirement earnings test exempt 
amount. The NRA is the age when retirement benefits (before rounding) 
are equal to the PIA. The NRA is age 66 for those born in 1943-54, and 
it gradually increases to age 67 for those born in 1960 or later. A 
higher exempt amount applies in the year in which a person attains NRA, 
but only for earnings in months before such attainment. A lower exempt 
amount applies at all other ages below NRA. Section 203(f)(8)(B) of the 
Act provides formulas for determining the monthly exempt amounts. The 
annual exempt amounts are exactly 12 times the monthly amounts.
    For beneficiaries who attain NRA in the year, we withhold $1 in 
benefits for every $3 of earnings over the annual exempt amount for 
months before NRA. For all other beneficiaries under NRA, we withhold 
$1 in benefits for every $2 of earnings over the annual exempt amount.

Computation

    Under the formula that applies to beneficiaries attaining NRA after 
2018, the lower monthly exempt amount for 2018 is the larger of: (1) 
The 1994 monthly exempt amount multiplied by the ratio of the national 
average wage index for 2016 to that for 1992; or (2) the 2017 monthly 
exempt amount ($1,410). If the resulting amount is not a multiple of 
$10, we round it to the nearest multiple of $10.
    Under the formula that applies to beneficiaries attaining NRA in 
2018, the higher monthly exempt amount for 2018 is the larger of: (1) 
The 2002 monthly exempt amount multiplied by the ratio of the national 
average wage index for 2016 to that for 2000; or (2) the 2017 monthly 
exempt amount ($3,740). If the resulting amount is not a multiple of 
$10, we round it 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 2016 
($48,642.15) to that for 1992 ($22,935.42) produces $1,420.96. We round 
this to $1,420. Because $1,420 exceeds the current exempt amount of 
$1,410, the lower retirement earnings test monthly exempt amount is 
$1,420 for 2018. The lower annual exempt amount is $17,040 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 2016 
($48,642.15) to that for 2000 ($32,154.82) produces $3,781.87. We round 
this to $3,780. Because $3,780 exceeds the current exempt amount of 
$3,740, the higher retirement earnings test monthly exempt amount is 
$3,780 for 2018. The higher annual exempt amount is $45,360 under the 
retirement earnings test.

Primary Insurance Amount 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 
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 2018, we multiply each of the 1979 
bend-point amounts by the ratio of the national average wage index for 
2016 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 2016 ($48,642.15) to that 
for 1977 ($9,779.44) produces the amounts of $895.31 and $5,396.70. We 
round these to $895 and $5,397. Therefore, the portions of the AIME to 
be used in 2018 are the first $895, the amount between $895 and $5,397, 
and the amount over $5,397.
    Therefore, for individuals who first become eligible for old-age 
insurance benefits or disability insurance benefits in 2018, or who die 
in 2018 before becoming eligible for benefits, their PIA will be the 
sum of:

(a) 90 percent of the first $895 of their AIME, plus
(b) 32 percent of their AIME over $895 and through $5,397, plus
(c) 15 percent of their AIME over $5,397.

    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 are stated in section 215(a) of the Act.

Maximum Benefits Payable to a Family

General

    The 1977 amendments continued the policy of limiting the total 
monthly benefits that a worker's family may receive based on the 
worker's PIA. Those amendments also continued the relationship between 
maximum family benefits and PIAs but changed the method of computing 
the maximum 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

[[Page 59941]]

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 2018, we multiply each of the 1979 
bend-point amounts by the ratio of the national average wage index for 
2016 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 2016 ($48,642.15) to that for 1977 
($9,779.44) produces the amounts of $1,144.00, $1,651.34, and 
$2,153.71. We round these amounts to $1,144, $1,651, and $2,154. 
Therefore, the portions of the PIAs to be used in 2018 are the first 
$1,144, the amount between $1,144 and $1,651, the amount between $1,651 
and $2,154, and the amount over $2,154.
    Thus, for the family of a worker who becomes age 62 or dies in 2018 
before age 62, we will compute the total benefits payable to them so 
that it does not exceed:

(a) 150 percent of the first $1,144 of the worker's PIA, plus
(b) 272 percent of the worker's PIA over $1,144 through $1,651, plus
(c) 134 percent of the worker's PIA over $1,651 through $2,154, plus
(d) 175 percent of the worker's PIA over $2,154.

    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 are stated in section 203(a) of the Act.

Quarter of Coverage Amount

General

    The earnings required for a quarter of coverage in 2018 is $1,320. 
A quarter of coverage is the basic unit for determining if 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 yearly instead of quarterly. With the change to yearly 
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. The amendment also provided a 
formula for years after 1978.

Computation

    Under the prescribed formula, the quarter of coverage amount for 
2018 is the larger of: (1) The 1978 amount of $250 multiplied by the 
ratio of the national average wage index for 2016 to that for 1976; or 
(2) the current amount of $1,300. Section 213(d) provides that if the 
resulting amount is not a multiple of $10, we round it 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 2016 ($48,642.15) to that for 
1976 ($9,226.48) produces $1,318.00. We then round this amount to 
$1,320. Because $1,320 exceeds the current amount of $1,300, the 
quarter of coverage amount is $1,320 for 2018.

Old-Law Contribution and Benefit Base

General

    The old-law contribution and benefit base for 2018 is $95,400. 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 2016 to that for 1992; or (2) the current old-
law base ($94,500). If the resulting amount is not a multiple of $300, 
we round it to the nearest multiple of $300.

Old-Law Contribution and Benefit Base Amount

    Multiplying the 1994 old-law contribution and benefit base 
($45,000) by the ratio of the national average wage index for 2016 
($48,642.15) to that for 1992 ($22,935.42) produces $95,437.40. We 
round this amount to $95,400. Because $95,400 exceeds the current 
amount of $94,500, the old-law contribution and benefit base is $95,400 
for 2018.

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 monthly 
earnings considered as SGA depends on the nature of a person's 
disability. Section 223(d)(4)(A) of the Act specifies the SGA amount 
for statutorily blind individuals under title II while our regulations 
(20 CFR 404.1574 and 416.974) specify the SGA amount for non-blind 
individuals.

Computation

    The monthly SGA amount for statutorily blind individuals under 
title II for 2018 is the larger of: (1) The amount for 1994 multiplied 
by the ratio of the national average wage index for 2016 to that for 
1992; or (2) the amount for 2017. The monthly SGA amount for non-blind 
disabled individuals for 2018 is the larger of: (1) the amount for 2000 
multiplied by the ratio of the national average wage index for 2016 to 
that for 1998; or (2) the amount for 2017. In either case, if the 
resulting amount is not a multiple of $10, we round it to the nearest 
multiple of $10.

[[Page 59942]]

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 
2016 ($48,642.15) to that for 1992 ($22,935.42) produces $1,972.37. We 
then round this amount to $1,970. Because $1,970 exceeds the current 
amount of $1,950, the monthly SGA amount for statutorily blind 
individuals is $1,970 for 2018.

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 2016 
($48,642.15) to that for 1998 ($28,861.44) produces $1,179.76. We then 
round this amount to $1,180. Because $1,180 exceeds the current amount 
of $1,170, the monthly SGA amount for non-blind disabled individuals is 
$1,180 for 2018.

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 2018, any month in which earnings exceed $850 
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 2018, used to 
determine whether a month is part of a trial work period, is the larger 
of: (1) The amount for 2001 ($530) multiplied by the ratio of the 
national average wage index for 2016 to that for 1999; or (2) the 
amount for 2017. If the amount so calculated is not a multiple of $10, 
we round it to the nearest multiple of $10.

Trial Work Period Earnings Threshold Amount

    Multiplying the 2001 monthly earnings threshold ($530) by the ratio 
of the national average wage index for 2016 ($48,642.15) to that for 
1999 ($30,469.84) produces $846.09. We then round this amount to $850. 
Because $850 exceeds the current amount of $840, the monthly earnings 
threshold is $850 for 2018.

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 2018, this threshold is $2,100. 
Section 3121(x) of the Internal Revenue Code provides the formula for 
increasing the threshold.

Computation

    Under the formula, the domestic employee coverage threshold for 
2018 is equal to the 1995 amount of $1,000 multiplied by the ratio of 
the national average wage index for 2016 to that for 1993. If the 
resulting amount is not a multiple of $100, we round it to the next 
lower multiple of $100.

Domestic Employee Coverage Threshold Amount

    Multiplying the 1995 domestic employee coverage threshold ($1,000) 
by the ratio of the national average wage index for 2016 ($48,642.15) 
to that for 1993 ($23,132.67) produces $2,102.75. We then round this 
amount to $2,100. Therefore, the domestic employee coverage threshold 
amount is $2,100 for 2018.

Election Official and Election Worker Coverage Threshold

General

    The minimum amount an election official and election worker must 
earn so the earnings are covered under Social Security or Medicare is 
the election official and election worker coverage threshold. For 2018, 
this threshold is $1,800. 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 for 2018 is equal to the 1999 amount of $1,000 
multiplied by the ratio of the national average wage index for 2016 to 
that for 1997. If the amount we determine is not a multiple of $100, it 
we round it to the nearest multiple of $100.

Election Official and Election Worker Coverage Threshold Amount

    Multiplying the 1999 coverage threshold amount ($1,000) by the 
ratio of the national average wage index for 2016 ($48,642.15) to that 
for 1997 ($27,426.00) produces $1,773.58. We then round this amount to 
$1,800. Therefore, the election official and election worker coverage 
threshold amount is $1,800 for 2018.

(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)


Nancy A. Berryhill,
Acting Commissioner of Social Security.
[FR Doc. 2017-27105 Filed 12-14-17; 8:45 am]
 BILLING CODE 4191-02-P