How Much Can I Make Drawing Railroad Retirement Disability

Benefits Under Railroad Retirement and Social Security

Employers and employees covered by the Railroad Retirement Deed pay higher retirement taxes than those covered by the Social Security Human action, and so that railroad retirement benefits remain substantially higher than social security benefits.

The post-obit questions and answers show the differences in railroad retirement and social security benefits payable at the close of the fiscal year catastrophe September 30, 2002. Information technology too shows the differences in age requirements and payroll taxes nether the two systems.

1. How do the average monthly railroad retirement and social security benefits paid to retired employees and spouses compare?

The average age annuity being paid by the Railroad Retirement Board at the finish of fiscal year 2002 to career rail employees was $ane,930 a month, and for all retired rail employees the boilerplate was $one,495. The average age retirement benefit being paid under social security was $880 a calendar month. Spouse benefits averaged $580 a month nether railroad retirement compared to $430 under social security.

The Railroad Retirement Act too provides supplemental railroad retirement annuities of between $23 and $43 a month, which are payable to employees who retire directly from the rail industry with 25 or more years of service.

2. Are the benefits awarded to recent retirees mostly greater than the benefits payable to those who retired years ago?

Yes, because recent awards are based on higher average earnings. For career railroad employees retiring at the end of fiscal year 2002, regular annuity awards averaged over $two,575 a month while monthly benefits awarded to workers retiring at full retirement age under social security averaged some $ane,160. If spouse benefits are added, the combined benefits for the employee and spouse would approximate $3,615 nether railroad retirement coverage, compared to $1,740 nether social security. Adding a supplemental annuity to the railroad family'due south benefit increases average total benefits for current career rail retirees to about $3,655 a calendar month.

3. How much are the disability benefits currently awarded?

Disabled railroad workers retiring straight from the railroad industry at the end of fiscal twelvemonth 2002 were awarded $2,165 a month on the average while awards for disabled workers nether social security averaged over $890.

While both the Railroad Retirement and Social Security Acts provide benefits to workers who are totally disabled for whatsoever regular work, the Railroad Retirement Act likewise provides disability benefits specifically for career employees who are disabled for work in their regular railroad occupation. Career employees may be eligible for such an occupational disability annuity at historic period sixty with ten years of service, or at any historic period with 20 years of service.

4. Can railroaders retire at earlier ages than workers under social security?

Railroad employees with thirty or more than years of creditable service are eligible for regular annuities based on historic period and service the start full month they are age 60, and track employees with less than 30 years of creditable service are eligible for regular annuities based on age and service the first full calendar month they are age 62.

No early on retirement reduction applies if a rail employee retires at historic period 60 or older with 30 years of service and his or her retirement is after 2001, or if the employee retired before 2002 at age 62 or older with 30 years of service.

Early retirement reductions are otherwise applied to annuities awarded before full retirement age—the historic period at which an employee tin receive full benefits with no reduction for early retirement. This ranges from historic period 65 for those built-in before 1938 to historic period 67 for those born in 1960 or later, the same every bit under social security.

Nether social security, a worker cannot begin receiving retirement benefits based on age until age 62, regardless of how long he or she worked, and social security retirement benefits are reduced for retirement prior to full retirement historic period regardless of years of coverage.

v. Does social security offer any benefits that are not bachelor under railroad retirement?

Social security does pay sure types of benefits that are non available under railroad retirement. For example, social security provides children's benefits when an employee is disabled, retired or deceased. Under electric current constabulary, the Railroad Retirement Human activity just provides children'southward benefits if the employee is deceased.

However, the Railroad Retirement Act includes a special minimum guaranty provision which ensures that railroad families will not receive less in monthly benefits than they would have if railroad earnings were covered by social security rather than railroad retirement laws. This guaranty is intended to cover situations in which one or more than members of a family would otherwise be eligible for a type of social security benefit that is not provided nether the Railroad Retirement Human activity. Therefore, if a retired runway employee has children who would otherwise be eligible for a do good under social security, the employee's annuity tin can be increased to reflect what social security would pay the family.

vi. How much are monthly benefits for survivors under railroad retirement and social security?

Survivor benefits are generally higher if payable past the Board rather than social security. At the end of fiscal year 2002, the average annuity being paid to all aged and disabled widow(er)s averaged $945 a month, compared to $835 under social security.

Benefits awarded by the Board at the finish of fiscal year 2002 to anile and disabled widow(er)s of railroaders averaged $1,315 a month, compared to virtually $715 nether social security.

The annuities existence paid at the cease of fiscal year 2002 to widowed mothers/fathers averaged $one,230 a month and children's annuities averaged $730, compared to $630 and $575 a month for widowed mothers/fathers and children, respectively, under social security.

Those awarded at the terminate of fiscal year 2002 were $1,500 a calendar month for widowed mothers/fathers and $990 a month for children under railroad retirement, compared to $635 and $595 for widowed mothers/fathers and children, respectively, under social security.

The benefits to aged and disabled widow(er)southward and widowed mothers/fathers at the cease of fiscal year 2002 reflect the Railroad Retirement and Survivors' Comeback Deed of 2001.

7. How do railroad retirement and social security lump-sum death benefit provisions differ?

Both the railroad retirement and social security systems provide a lump-sum death benefit. The railroad retirement lump-sum do good is generally payable but if survivor annuities are not immediately due upon an employee's death. The social security lump-sum do good may be payable regardless of whether monthly benefits are too due. Both railroad retirement and social security provide a lump-sum benefit of $255. However, if a railroad employee completed ten years of service before 1975, the average railroad retirement lump-sum do good payable is $950. Also, if an employee had less than ten years of service, but had at least 5 years of such service after 1995, he or she would have to have had an insured status nether social security law (counting both railroad retirement and social security credits) in order for the $255 lump-sum benefit to be payable.

The social security lump sum is generally only payable to the widow or widower living with the employee at the time of decease. Under railroad retirement, if the employee had 10 years of service before 1975, and was non survived past a living-with widow or widower, the lump sum may exist paid to the funeral home or the payer of the funeral expenses.

The railroad retirement system likewise provides, under certain conditions, a residual lump-sum decease do good which ensures that a railroad family receives at least every bit much in benefits equally the employee paid in railroad retirement taxes before 1975. This benefit is, in effect, a refund of an employee's pre-1975 railroad retirement taxes, after subtraction of whatsoever benefits previously paid on the basis of the employee's service. Withal, an employee's benefits generally exceed taxes within 2 years; this death benefit is, consequently, seldom payable.

viii. How practise railroad retirement and social security payroll taxes compare? (PDF format requires Reader version 5)

Railroad retirement payroll taxes, similar railroad retirement benefits, are calculated on a two-tier basis. Runway employees and employers pay tier I taxes at the same rate equally social security taxes, 7.65 pct, consisting of half-dozen.twenty percent on earnings up to $87,000 in 2003 and one.45 percentage for Medicare hospital insurance on all earnings.

In addition, rails employees and employers both pay tier II taxes which are used to finance railroad retirement do good payments over and above social security levels.

In 2003, the tier II tax rate on employees is 4.90 percent and on rail employers and rail labor organizations it is fourteen.20 percentage on employee earnings upwardly to $64,500. On track employee representatives the charge per unit is also 14.20 percent in 2003. An employee representative is a labor official of a not-covered labor organization who represents employees covered under the Acts administered by the Railroad Retirement Lath.

Beginning with the taxes payable for calendar twelvemonth 2004, tier Ii taxes on both employers and employees will be based on an boilerplate business relationship benefits ratio. Depending on that ratio, the tier Ii tax rate for employers will range between eight.xx percent and 22.x percent, while the tier Ii tax rate for employees will be between 0 pct and four.90 percentage.

9. How much are regular railroad retirement taxes for an employee earning $87,000 in 2003 compared to social security taxes?

The maximum amount of regular railroad retirement taxes that an employee earning $87,000 tin can pay in 2003 is $ix,816.00, compared to $6,655.fifty nether social security. For railroad employers, the maximum annual regular retirement taxes on an employee earning $87,000 are $fifteen,814.50 compared to $6,655.fifty under social security. Employees earning over $87,000, and their employers, volition pay more in retirement taxes than the above amounts because the Medicare hospital insurance tax of ane.45 percent is applied to all earnings.

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Source: https://disabilityadvocates.net/railroad-retirement-disability-appeals-procedures/benefits-under-railroad-retirement-and-social-security/

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