§8349 Offset Relating to Certain Benefits Under the Social Security Act

Summary

People who get certain federal retirement annuities and who are (or would be) eligible for Social Security retirement benefits must have their federal annuity cut. The cut starts the first month they both get the federal annuity and are (or would be) entitled to Social Security. The amount taken off is basically the part of the Social Security benefit that comes from federal earnings — the difference between the benefit with those federal wages and the benefit if those federal wages were left out (calculated as if the person is fully insured). When figuring those Social Security amounts, some Social Security rules and the requirement to have filed an application are ignored. The reduction can’t be bigger than a limit based on a service fraction under section 8421(b)(3) (using “service” to mean federal service), and the annuity can never be reduced below zero. Amounts are adjusted under section 8340. The rule applies to service-based annuities except annuities under section 8337 and ignores section 8345(j) if it would apply. Disability and survivor annuities tied to a person covered by section 8402(b)(2) must be reduced the same way if those people or their survivors are (or would be) eligible for similar Social Security benefits from that person’s wages or self-employment. The cuts stop if the Social Security entitlement ends (or would end). For applying Social Security section 224, use the federal annuity amount before this reduction. “Federal service” means work that counts for Social Security and chapter 21 because of the 1983 amendments. People made subject to these rules by section 8347(o) are included, and for them “Federal service” means work done after December 31, 1983. The Office will write rules to carry this out.