Old-law Contribution and Benefit Base
Contribution & Benefit Base
Year of Coverage
Latest amount & definition
The "old-law" contribution and benefit base for 2016 is $88,200.
This is the base that would have been effective without the enactment of the
1977 amendments to the Social Security Act. The present-law
contribution and benefit base is substantially higher
than the old-law base.
Purpose of the old-law base
The old-law contribution and benefit base is used by:
- the Railroad Retirement program to determine certain tax liabilities
and tier II benefits payable under that program to supplement the tier I
payments which correspond to basic Social Security benefits,
- the Pension Benefit Guaranty Corporation to determine the maximum amount
of pension guaranteed under the Employee Retirement Income Security Act,
- Social Security to determine a year of coverage in
computing the special minimum benefit,
- Social Security to determine a year of coverage (acquired whenever earnings
equal or exceed 25 percent of the old-law base for this purpose only) in
computing benefits for persons who are also eligible to receive pensions
based on non-covered employment.
Determination of the old-law contribution and benefit base for 2016
The formula for determining the old-law contribution and benefit base is
set by law. The formula is applicable only if a
cost-of-living increase becomes effective for
December of the year in which a determination of the base would ordinarily be made.
Because there is no cost-of-living increase for December 2015, there can be no
increase in the old-law contribution and benefit base for 2016. Thus the
old-law base for next year is the same as this year's base, $88,200.