[Code of Federal Regulations]
[Title 20, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR226.73]

[Page 446]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
                  CHAPTER II--RAILROAD RETIREMENT BOARD
 
PART 226_COMPUTING EMPLOYEE, SPOUSE, AND DIVORCED SPOUSE ANNUITIES
--Table of Contents
 
 Subpart F_Reduction for Workers' Compensation and Disability Benefits 
              Under a Federal, State, or Local Law or Plan
 
Sec. 226.73  Changes in reduction amount.

    The reduction amount is not changed when a tier I benefit increases 
because of a recomputation or a general adjustment in annuity rates, 
such as a cost-of-living increase. However, the reduction amount may 
change for the following reasons:
    (a) A spouse or divorced spouse becomes entitled to a tier I benefit 
after the effective date of the reduction. The reduction amount is 
recomputed as if the spouse or divorced spouse were entitled to a tier I 
benefit on the date the reduction first applied. The new reduction 
amount applies beginning with the date the spouse or divorced spouse 
tier I benefit begins.

    Example: An employee became entitled to an annuity with a tier I 
component of $500 on May 1, 1991. He was also receiving a state 
disability benefit of $300 a month based on employment not covered under 
the Social Security Act. On June 1, 1991, the employee's tier I 
increased to $520.70. On October 1, 1991, the employee's wife becomes 
entitled to an annuity with a tier I benefit of $260.00. The tier I 
amount ($250) that would have been payable to the wife on May 1, 1991 
(assuming she had been eligible for a benefit at that time) is used to 
determine the reduction for other disability benefits beginning October 
1, 1991.

    (b) The tier I benefit of a spouse or divorced spouse annuity ends 
after the effective date of the reduction. The new reduction amount is 
computed using the tier I rate to which the employee was entitled when 
the reduction first applied. The new reduction amount applies beginning 
with the month after the month in which the spouse or divorced spouse 
tier I benefit ends.
    (c) The average current earnings are redetermined, as shown in Sec. 
226.74.
    (d) The amount of the other disability benefit changes. The 
reduction amount is recomputed to use the new benefit rate beginning 
with the date on which the new rate is payable. Any increases in the 
tier I amounts which were effective after the reduction first applied 
are not included in computing the new reduction amount.

    Example: The employee's tier I benefit is $500 on May 1, 1991, when 
the annuity is first reduced for other disability benefits. The tier I 
increases to $520 effective June 1, 1991. When the amount of the 
disability benefit changes on October 1, 1991, $500, not $520, is used 
as the employee tier I amount in recomputing the reduction amount.