SSR 67-28: SECTION 228(c)(1) and (h)(2). -- SPECIAL AGE 72 PAYMENTS FOR UNINSURED INDIVIDUALS -- REDUCTION BECAUSE OF ELIGIBILITY FOR GOVERNMENTAL PENSION

SSR 67-28

Where an individual is receiving disability retired pay as a veteran under Chapter 61, Title 10 of the United States Code (rather than compensation under the laws administered by the Veterans' Administration), held, he is thus eligible for a "periodic benefit under a governmental pension system" within the meaning of section 228(c)(1) of the Social Security Act, as amended, and any benefit to which he may be entitled under the special age 72 provisions of section 228 of the Act must be reduced by the amount of such disability retired pay.

Public Law 89-368, enacted March 15, 1966, added section 228 to the Social Security Act which provides, effective October 1966, monthly payments of $35 to certain persons who are not insured under the regular or the transitional insured status provisions of the Act and who reach age 72 before 1968, or who have at least 3 quarters of coverage, earned at any time, for each calendar year after 1966 and before the year in which age 72 is attained.

Advise has been requested as to whether disability retired pay received under Chapter 61, Title 10 of the United States Code, by a veteran of the United States Armed Forces is a "periodic benefit under a governmental pension system" within the meaning of section 228(c)(1) and section 228(h)(2) of the Social Security Act.

Section 228(c)(1) of the Act provides as follows:

The benefit amount of any individual under this section for any month shall be reduced (but not below zero) by the amount of any periodic benefit under a governmental pension system for which he is eligible for such month.

The term "governmental pension system" as defined in section 228(h)(2) of the Act means:

* * * the insurance system established by this title or any other system or fund established by the United States, a State, any political subdivision of a State, or any wholly owned instrumentality of any one or more of the foregoing which provides for payment of (A) pensions, (B) retirement or retired pay, or (C) annuities or similar amounts payable on account of personal services performed by any individual (not including any payment under any workmen's compensation law or any payment by the Veterans' Administration as compensation for service-connected disability or death). (Emphasis supplied.)

If disability retired pay received under Chapter 61, Title 10 of the United States Code is a "periodic benefit under a governmental pension system" within the meaning of the Act, then, in accordance with the provisions of section 228(c) of the Act, the amount of the special age 72 payment to which a veteran is entitled for any month under section 228(a) of the Act must be reduced by the amount of the disability retired pay for which he is eligible for that month. It is true that section 3105 of Title 38, United States Code, provides that a veteran has the right to waive disability retired pay for which he is eligible in favor of a pension or compensation under the laws administered by the Veterans' Administration. The mere existence of the right by a veteran to waive the disability retired pay under Chapter 61, Title 10 of the U.S. Code in favor of a payment from the Veterans' Administration does not, however, bring the payment within the exclusion of section 228(h)(2)(C). The exclusion specifically relates to a payment by the Veterans' Administration. (If the option is exercised, and the payment from the Veterans' Administration is based on a service-connected disability, the amount received from the Veterans' Administration would fall within the exclusion.)

Accordingly, it is held that disability retired pay for which a veteran is eligible under Chapter 61, Title 10 of the United States Code, is a "periodic benefit under a governmental pension system" within the meaning of section 228(c)(1) and section 228(h)(2) and will result in a reduction of any special age 72 payment to which the veteran is entitled under section 228 of the Social Security Act.

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