
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC424a]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
  SUBCHAPTER II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE 
                                BENEFITS
 
Sec. 424a. Reduction of disability benefits


(a) Conditions for reduction; computation

    If for any month prior to the month in which an individual attains 
the age of 65--
        (1) such individual is entitled to benefits under section 423 of 
    this title, and
        (2) such individual is entitled for such month to--
            (A) periodic benefits on account of his or her total or 
        partial disability (whether or not permanent) under a workmen's 
        compensation law or plan of the United States or a State, or
            (B) periodic benefits on account of his or her total or 
        partial disability (whether or not permanent) under any other 
        law or plan of the United States, a State, a political 
        subdivision (as that term is used in section 418(b)(2) of this 
        title), or an instrumentality of two or more States (as that 
        term is used in section 418(g) of this title), other than (i) 
        benefits payable under title 38, (ii) benefits payable under a 
        program of assistance which is based on need, (iii) benefits 
        based on service all or substantially all of which was included 
        under an agreement entered into by a State and the Commissioner 
        of Social Security under section 418 of this title, and (iv) 
        benefits under a law or plan of the United States based on 
        service all or substantially all of which is employment as 
        defined in section 410 of this title,

the total of his benefits under section 423 of this title for such month 
and of any benefits under section 402 of this title for such month based 
on his wages and self-employment income shall be reduced (but not below 
zero) by the amount by which the sum of--
        (3) such total of benefits under sections 423 and 402 of this 
    title for such month, and
        (4) such periodic benefits payable (and actually paid) for such 
    month to such individual under such laws or plans,

exceeds the higher of--
        (5) 80 per centum of his ``average current earnings'', or
        (6) the total of such individual's disability insurance benefits 
    under section 423 of this title for such month and of any monthly 
    insurance benefits under section 402 of this title for such month 
    based on his wages and self-employment income, prior to reduction 
    under this section.

In no case shall the reduction in the total of such benefits under 
sections 423 and 402 of this title for a month (in a continuous period 
of months) reduce such total below the sum of--
        (7) the total of the benefits under sections 423 and 402 of this 
    title, after reduction under this section, with respect to all 
    persons entitled to benefits on the basis of such individual's wages 
    and self-employment income for such month which were determined for 
    such individual and such persons for the first month for which 
    reduction under this section was made (or which would have been so 
    determined if all of them had been so entitled in such first month), 
    and
        (8) any increase in such benefits with respect to such 
    individual and such persons, before reduction under this section, 
    which is made effective for months after the first month for which 
    reduction under this section is made.

For purposes of clause (5), an individual's average current earnings 
means the largest of (A) the average monthly wage (determined under 
section 415(b) of this title as in effect prior to January 1979) used 
for purposes of computing his benefits under section 423 of this title, 
(B) one-sixtieth of the total of his wages and self-employment income 
(computed without regard to the limitations specified in sections 
409(a)(1) and 411(b)(1) of this title) for the five consecutive calendar 
years after 1950 for which such wages and self-employment income were 
highest, or (C) one-twelfth of the total of his wages and self-
employment income (computed without regard to the limitations specified 
in sections 409(a)(1) and 411(b)(1) of this title) for the calendar year 
in which he had the highest such wages and income during the period 
consisting of the calendar year in which he became disabled (as defined 
in section 423(d) of this title) and the five years preceding that year.

(b) Reduction where benefits payable on other than monthly basis

    If any periodic benefit for a total or partial disability under a 
law or plan described in subsection (a)(2) of this section is payable on 
other than a monthly basis (excluding a benefit payable as a lump sum 
except to the extent that it is a commutation of, or a substitute for, 
periodic payments), the reduction under this section shall be made at 
such time or times and in such amounts as the Commissioner of Social 
Security finds will approximate as nearly as practicable the reduction 
prescribed by subsection (a) of this section.

(c) Reductions and deductions under other provisions

    Reduction of benefits under this section shall be made after any 
reduction under subsection (a) of section 403 of this title, but before 
deductions under such section and under section 422(b) \1\ of this 
title.
---------------------------------------------------------------------------
    \1\ See References in Text note below.
---------------------------------------------------------------------------

(d) Exception

    The reduction of benefits required by this section shall not be made 
if the law or plan described in subsection (a)(2) of this section under 
which a periodic benefit is payable provides for the reduction thereof 
when anyone is entitled to benefits under this subchapter on the basis 
of the wages and self-employment income of an individual entitled to 
benefits under section 423 of this title, and such law or plan so 
provided on February 18, 1981.

(e) Conditions for payment

    If it appears to the Commissioner of Social Security that an 
individual may be eligible for periodic benefits under a law or plan 
which would give rise to reduction under this section, the Commissioner 
may require, as a condition of certification for payment of any benefits 
under section 423 of this title to any individual for any month and of 
any benefits under section 402 of this title for such month based on 
such individual's wages and self-employment income, that such individual 
certify (i) whether he has filed or intends to file any claim for such 
periodic benefits, and (ii) if he has so filed, whether there has been a 
decision on such claim. The Commissioner of Social Security may, in the 
absence of evidence to the contrary, rely upon such a certification by 
such individual that he has not filed and does not intend to file such a 
claim, or that he has so filed and no final decision thereon has been 
made, in certifying benefits for payment pursuant to section 405(i) of 
this title.

(f) Redetermination of reduction

    (1) In the second calendar year after the year in which reduction 
under this section in the total of an individual's benefits under 
section 423 of this title and any benefits under section 402 of this 
title based on his wages and self-employment income was first required 
(in a continuous period of months), and in each third year thereafter, 
the Commissioner of Social Security shall redetermine the amount of such 
benefits which are still subject to reduction under this section; but 
such redetermination shall not result in any decrease in the total 
amount of benefits payable under this subchapter on the basis of such 
individual's wages and self-employment income. Such redetermined benefit 
shall be determined as of, and shall become effective with, the January 
following the year in which such redetermination was made.
    (2) In making the redetermination required by paragraph (1), the 
individual's average current earnings (as defined in subsection (a) of 
this section) shall be deemed to be the product of--
        (A) his average current earnings as initially determined under 
    subsection (a) of this section; and
        (B) the ratio of (i) the national average wage index (as defined 
    in section 409(k)(1) of this title) for the calendar year before the 
    year in which such redetermination is made to (ii) the national 
    average wage index (as so defined) for the calendar year before the 
    year in which the reduction was first computed (but not counting any 
    reduction made in benefits for a previous period of disability).

Any amount determined under this paragraph which is not a multiple of $1 
shall be reduced to the next lower multiple of $1.

(g) Proportionate reduction; application of excess

    Whenever a reduction in the total of benefits for any month based on 
an individual's wages and self-employment income is made under this 
section, each benefit, except the disability insurance benefit, shall 
first be proportionately decreased, and any excess of such reduction 
over the sum of all such benefits other than the disability insurance 
benefits shall then be applied to such disability insurance benefit.

(h) Furnishing of information

    (1) Notwithstanding any other provision of law, the head of any 
Federal agency shall provide such information within its possession as 
the Commissioner of Social Security may require for purposes of making a 
timely determination of the amount of the reduction, if any, required by 
this section in benefits payable under this subchapter, or verifying 
other information necessary in carrying out the provisions of this 
section.
    (2) The Commissioner of Social Security is authorized to enter into 
agreements with States, political subdivisions, and other organizations 
that administer a law or plan subject to the provisions of this section, 
in order to obtain such information as the Commissioner may require to 
carry out the provisions of this section.

(Aug. 14, 1935, ch. 531, title II, Sec. 224, as added Pub. L. 89-97, 
title III, Sec. 335, July 30, 1965, 79 Stat. 406; amended Pub. L. 90-
248, title I, Sec. 159(a), Jan. 2, 1968, 81 Stat. 869; Pub. L. 92-603, 
title I, Sec. 119(a), (b), Oct. 30, 1972, 86 Stat. 1352; Pub. L. 94-202, 
Sec. 8(j), Jan. 2, 1976, 89 Stat. 1140; Pub. L. 95-216, title II, 
Sec. 205(d), title III, Sec. 353(c), Dec. 20, 1977, 91 Stat. 1529, 1553; 
Pub. L. 97-35, title XXII, Sec. 2208(a), Aug. 13, 1981, 95 Stat. 839; 
Pub. L. 99-272, title XII, Sec. 12109(a), Apr. 7, 1986, 100 Stat. 286; 
Pub. L. 99-509, title IX, Sec. 9002(c)(2)(F), Oct. 21, 1986, 100 Stat. 
1972; Pub. L. 101-239, title X, Sec. 10208(b)(2)(A), (C), (d)(2)(A)(i), 
(iii), Dec. 19, 1989, 103 Stat. 2477, 2478, 2480, 2481; Pub. L. 103-296, 
title I, Sec. 107(a)(4), title III, Sec. 321(e)(2)(H), Aug. 15, 1994, 
108 Stat. 1478, 1540.)

                       References in Text

    Section 422(b) of this title, referred to in subsec. (c), was 
repealed by Pub. L. 106-170, title I, Sec. 101(b)(1)(C), Dec. 17, 1999, 
113 Stat. 1873.


                            Prior Provisions

    A prior section 224 of act Aug. 14, 1935, was classified to section 
424 of this title prior to repeal by Pub. L. 85-840, title II, Sec. 206, 
Aug. 28, 1958, 72 Stat. 1025.


                               Amendments

    1994--Subsecs. (a)(2)(B), (b), (e), (f)(1). Pub. L. 103-296, 
Sec. 107(a)(4), substituted ``Commissioner of Social Security'' for 
``Secretary'' wherever appearing and ``the Commissioner may require'' 
for ``he may require'' in subsec. (e).
    Subsec. (f)(2). Pub. L. 103-296, Sec. 321(e)(2)(H), inserted ``and'' 
at end of subpar. (A), added subpar. (B), and struck out former subpars. 
(B) and (C) which read as follows:
    ``(B) the ratio of (i) the deemed average total wages (as defined in 
section 409(k)(1) of this title) for the calendar year before the year 
in which such redetermination is made to (ii)(I) the average of the 
total wages ((as defined in regulations of the Secretary and computed 
without regard to the limitations specified in section 409(a)(1) of this 
title) reported to the Secretary of the Treasury or his delegate for 
calendar year 1977 or, if later, the calendar year before the year in 
which the reduction was first computed (but not counting any reduction 
made in benefits for a previous period of disability), if such calendar 
year is before 1991, or (II) the deemed average total wages (as defined 
in section 409(k)(1) of this title) for the calendar year before the 
year in which the reduction was first computed (but not counting any 
reduction made in benefits for a previous period of disability), if such 
calendar year is after 1990; and
    ``(C) in any case in which the reduction was first computed before 
1978, the ratio of (i) the average of the taxable wages reported to the 
Secretary for the first calendar quarter of 1977 to (ii) the average of 
the taxable wages reported to the Secretary for the first calendar 
quarter of the calendar year before the year in which the reduction was 
first computed (but not counting any reduction made in benefits for a 
previous period of disability).''
    Subsec. (h). Pub. L. 103-296, Sec. 107(a)(4), substituted 
``Commissioner of Social Security'' for ``Secretary'' in pars. (1) and 
(2) and ``the Commissioner may'' for ``he may'' in par. (2).
    1989--Subsec. (a). Pub. L. 101-239, Sec. 10208(d)(2)(A)(iii), 
substituted ``409(a)(1)'' for ``409(a)'' in cls. (B) and (C) of last 
sentence.
    Subsec. (f)(2)(B)(i). Pub. L. 101-239, Sec. 10208(b)(2)(A), 
substituted ``the deemed average total wages (as defined in section 
409(k)(1) of this title)'' for ``the average of the total wages (as 
defined in regulations of the Secretary and computed without regard to 
the limitations specified in section 409(a)(1) of this title) reported 
to the Secretary of the Treasury or his delegate''.
    Pub. L. 101-239, Sec. 10208(d)(2)(A)(i), substituted ``409(a)(1)'' 
for ``409(a)''.
    Subsec. (f)(2)(B)(ii). Pub. L. 101-239, Sec. 10208(b)(2)(C), 
inserted ``(I)'' after ``(ii)'', substituted ``(as defined in 
regulations of the Secretary and computed without regard to the 
limitations specified in section 409(a)(1) of this title)'' for ``as so 
defined and computed)'' and inserted ``, if such calendar year is before 
1991, or (II) the deemed average total wages (as defined in section 
409(k)(1) of this title) for the calendar year before the year in which 
the reduction was first computed (but not counting any reduction made in 
benefits for a previous period of disability), if such calendar year is 
after 1990'' before ``; and'' at end.
    1986--Subsec. (a)(2). Pub. L. 99-272, Sec. 12109(a)(1), amended par. 
(2) generally. Prior to amendment, par. (2) read as follows: ``such 
individual is entitled for such month to periodic benefits on account of 
such individual's total or partial disability (whether or not permanent) 
under--
        ``(A) a workmen's compensation law or plan of the United States 
    or a State, or
        ``(B) any other law or plan of the United States, a State, a 
    political subdivision (as that term is used in section 418(b)(2) of 
    this title), or an instrumentality of two or more States (as that 
    term is used in section 418(k) of this title),
other than benefits payable under title 38, benefits payable under a 
program of assistance which is based on need, benefits based on service 
all, or substantially all, of which was included under an agreement 
entered into by a State and the Secretary under section 418 of this 
title, and benefits under a law or plan of the United States based on 
service all or part of which is employment as defined in section 410 of 
this title,''.
    Subsec. (a)(2)(B). Pub. L. 99-509 substituted ``section 418(g)'' for 
``section 418(k)''.
    Pub. L. 99-272, Sec. 12109(a)(2), substituted ``all or substantially 
all of which'' for ``all or part of which'' in cl. (iv).
    1981--Subsec. (a). Pub. L. 97-35, Sec. 2208(a)(2)-(4), in provision 
preceding par. (1) substituted ``age of 65'' for ``age of 62'', in par. 
(2) inserted provisions including periodic benefits under any other law 
or plan of the United States, a State, a political subdivision, or an 
instrumentality of two or more States and excluding specified benefits 
and struck out provision requiring that the Secretary receive notice, in 
a prior month, of the entitlement for such month, and in par. (4) 
substituted ``such laws or plans'' for ``the workmen's compensation law 
or plan''.
    Subsec. (b). Pub. L. 97-35, Sec. 2208(a)(5), substituted ``for a 
total or partial disability under a law or plan described in subsection 
(a)(2) of this section'' for ``under a workmen's compensation law or 
plan''.
    Subsec. (d). Pub. L. 97-35, Sec. 2208(a)(6), substituted ``law or 
plan described in subsection (a)(2) of this section'' for ``workmen's 
compensation law or plan'' and ``section 423 of this title, and such law 
or plan so provided on February 18, 1981'' for ``section 423 of this 
title''.
    Subsec. (e). Pub. L. 97-35, Sec. 2208(a)(7), struck out ``workmen's 
compensation'' after ``periodic benefits under a''.
    Subsec. (h). Pub. L. 97-35, Sec. 2208(a)(8), added subsec. (h).
    1977--Subsec. (a). Pub. L. 95-216, Secs. 205(d), 353(c)(1), struck 
out provisions following par. (8) under which the Secretary, in cases 
where an individual's wages and self-employment income reported to the 
Secretary for a calendar year reached the limitations specified in 
sections 409(a) and 411(b)(1) of this title, was required to estimate 
the total of such wages and self-employment income on the basis of such 
information as might be available to him indicating the extent (if any) 
by which the wages and self-employment income exceeded limitations, and, 
effective with respect to monthly benefits under this subchapter payable 
for months after Dec. 1978, and with respect to lump-sum death payments 
with respect to death occurring after Dec. 1978, inserted ``(determined 
under section 415(b) of this title as in effect prior to January 1979)'' 
after ``(A) the average monthly wage'' in provisions following par. (8).
    Subsec. (f)(2). Pub. L. 95-216, Sec. 353(c)(2), divided existing 
provisions into subpars. (A) and (B), added subpar. (C), and in subpar. 
(B) as so redesignated substituted ``(i) the average of the total wages 
(as defined in regulations of the Secretary and computed without regard 
to the limitations specified in section 409(a) of this title) reported 
to the Secretary of the Treasury or his delegate for the calendar year 
before the year in which such redetermination is made to (ii) the 
average of the total wages (as so defined and computed) reported to the 
Secretary of the Treasury or his delegate for calendar year 1977 or, if 
later, the calendar year before the year'' for ``(i) the average of the 
taxable wages of all persons for whom taxable wages were reported to the 
Secretary for the first calendar quarter of the calendar year before the 
calendar year in which the redetermination is made, to (ii) the average 
of the taxable wages of such persons reported to the Secretary for the 
first calendar quarter of the taxable year before the calendar year''.
    1976--Subsec. (f)(2). Pub. L. 94-202 substituted ``calendar year 
before the calendar year'' for ``calendar year'' and ``taxable year 
before the calendar year'' for ``taxable year''.
    1972--Subsec. (a). Pub. L. 92-603 added cl. (C) in provisions for 
the determination of an individual's average current earnings so as to 
introduce into the formula a factor of one-twelfth of the total wages 
and self-employment income for the calendar year in which he had the 
highest such wages and income during the year in which he became 
disabled and the five years preceding that year.
    1968--Subsec. (a). Pub. L. 90-248 inserted in cl. (B) of first 
sentence following par. (8) ``(computed without regard to the 
limitations specified in sections 409(a) and 411(b)(1) of this title)'' 
before ``for the five'', and inserted last sentence authorizing the 
Secretary, in certain cases, to estimate the total of wages and self-
employment income for purposes of cl. (B) indicating the extent such 
earnings exceed the limitations in sections 409(a) and 411(b)(1) of this 
title.


                    Effective Date of 1994 Amendment

    Amendment by section 107(a)(4) of Pub. L. 103-296 effective Mar. 31, 
1995, see section 110(a) of Pub. L. 103-296, set out as a note under 
section 401 of this title.


                    Effective Date of 1989 Amendment

    Amendment by section 10208(b)(2)(A), (C) of Pub. L. 101-239 
applicable with respect to computation of average total wage amounts 
(under amended provisions) for calendar years after 1990, see section 
10208(c) of Pub. L. 101-239, set out as a note under section 430 of this 
title.


                    Effective Date of 1986 Amendments

    Amendment by Pub. L. 99-509 effective with respect to payments due 
with respect to wages paid after Dec. 31, 1986, including wages paid 
after such date by a State (or political subdivision thereof) that 
modified its agreement pursuant to section 418(e)(2) of this title prior 
to Oct. 21, 1986, with certain exceptions, see section 9002(d) of Pub. 
L. 99-509 set out as a note under section 418 of this title.
    Section 12109(b) of Pub. L. 99-272 provided that:
    ``(1) The amendment made by subsection (a)(1) [amending this 
section] shall be effective as though it had been included or reflected 
in the amendment made by section 2208(a)(3) of the Omnibus Budget 
Reconciliation Act of 1981 [Pub. L. 97-35, amending this section].
    ``(2) The amendment made by subsection (a)(2) [amending this 
section] shall apply only with respect to monthly benefits payable on 
the basis of the wages and self-employment income of individuals who 
become disabled (within the meaning of section 223(d) of the Social 
Security Act [section 423(d) of this title]) after the month in which 
this Act is enacted [April 1986].''


                    Effective Date of 1981 Amendment

    Section 2208(b) of Pub. L. 97-35 provided that: ``The amendments 
made by subsection (a) [amending this section] shall be effective with 
respect to individuals who first become entitled to benefits under 
section 223(a) of the Social Security Act [section 423(a) of this title] 
for months beginning after the month in which this Act is enacted 
[August 1981], but only in the case of an individual who became disabled 
within the meaning of section 223(d) of such Act after the sixth month 
preceding the month in which this Act is enacted.''


                    Effective Date of 1977 Amendment

    Amendment by section 205(d) of Pub. L. 95-216 effective with respect 
to monthly benefits under this subchapter payable for months after 
December 1978 and with respect to lump-sum death payments with respect 
to deaths occurring after December 1978, see section 206 of Pub. L. 95-
216, set out as a note under section 402 of this title.
    Section 353(c)(1) of Pub. L. 95-216 provided that the amendment made 
by that section is effective with respect to the estimates for calendar 
years beginning after Dec. 31, 1977.
    Amendment by section 353(c)(2) of Pub. L. 95-216 effective Jan. 1, 
1979, see section 353(g) of Pub. L. 95-216, set out as a note under 
section 418 of this title.


                    Effective Date of 1972 Amendment

    Section 119(c) of Pub. L. 92-603 provided that: ``The amendments 
made by subsections (a) and (b) [amending this section] shall apply with 
respect to monthly benefits under title II of the Social Security Act 
[this subchapter] for months after December 1972.''


  Effective Date of 1968 Amendments; Determination of Average Current 
     Earnings Upon Redetermination of Benefits Subject to Reduction

    Section 159(b) of Pub. L. 90-248 provided that:
    ``(1) The amendments made by subsection (a) [amending this section] 
shall apply only with respect to monthly benefits under title II of the 
Social Security Act [this subchapter] for months after January 1968.
    ``(2) For purposes of any redetermination which is made under 
section 224(f) of the Social Security Act [subsec. (f) of this section] 
in the case of benefits subject to reduction under section 224 of such 
Act, where such reduction as first computed was effective with respect 
to benefits for the month in which this Act is enacted [January 1968] or 
a prior month, the amendments made by subsection (a) of this section 
[amending subsec. (a) of this section] shall also be deemed to have 
applied in the initial determination of the `average current earnings' 
of the individual whose wages and self-employment income are involved.''


                             Effective Date

    Section 335 of Pub. L. 89-97 provided that this section is effective 
with respect to benefits under this subchapter for months after December 
1965 based on the wages and self-employment income of individuals 
entitled to benefits under section 423 of this title whose period of 
disability (as defined in this subchapter) began after June 1, 1965.

                  Section Referred to in Other Sections

    This section is referred to in sections 403, 409, 415 of this title; 
title 5 sections 8116, 8349, 8452; title 26 sections 86, 6050F; title 30 
section 922.
