P.L. 109-482

SEC. 201. REDISTRIBUTION OF CERTAIN UNUSED SCHIP ALLOTMENTS FOR FISCAL 2004 AND 2005 TO REDUCE FUNDING SHORTFALLS FOR FISCAL YEAR 2007.-Continued

Appendix A

Cost-of-Living Increase and Other Determinations for 2007 235

AGENCY: Social Security Administration.

ACTION: Notice.

SUMMARY: The Commissioner has determined

(1) A 3.3 percent cost-of-living increase in Social Security benefits under title II of the Social Security Act (the Act), effective for December 2006;

(2) An increase in the Federal Supplemental Security Income (SSI) monthly benefit amounts under title XVI of the Act for 2007 to $623 for an eligible individual, $934 for an eligible individual with an eligible spouse, and $312 for an essential person;

(3) The student earned income exclusion to be $1,510 per month in 2007 but not more than $6,100 in all of 2007;

(4) The dollar fee limit for services performed as a representative payee to be $34 per month ($66 per month in the case of a beneficiary who is disabled and has an alcoholism or drug addiction condition that leaves him or her incapable of managing benefits) in 2007;

(5) The dollar limit on the administrative-cost assessment charged to attorneys representing claimants to be $77 in 2007;

(6) The national average wage index for 2005 to be $36,952.94;

(7) The Old-Age, Survivors, and Disability Insurance (OASDI) contribution and benefit base to be $97,500 for remuneration paid in 2007 and self-employment income earned in taxable years beginning in 2007;

(8) The monthly exempt amounts under the Social Security retirement earnings test for taxable years ending in calendar year 2007 to be $1,080 and $2,870;

(9) The dollar amounts ("bend points") used in the primary insurance amount benefit formula for workers who become eligible for benefits, or who die before becoming eligible, in 2007 to be $680 and $4,100;

(10) The dollar amounts ("bend points") used in the formula for computing maximum family benefits for workers who become eligible for benefits, or who die before becoming eligible, in 2007 to be $869, $1,255, and $1,636;

(11) The amount of taxable earnings a person must have to be credited with a quarter of coverage in 2007 to be $1,000;

(12) The "old-law" contribution and benefit base to be $72,600 for 2007;

(13) The monthly amount deemed to constitute substantial gainful activity for statutorily blind individuals in 2007 to be $1,500, and the corresponding amount for non-blind disabled persons to be $900;

(14) The earnings threshold establishing a month as a part of a trial work period to be $640 for 2007; and

(15) Coverage thresholds for 2007 to be $1,500 for domestic workers and $1,300 for election workers.

SUPPLEMENTARY INFORMATION: In accordance with the Act, the Commissioner must publish within 45 days after the close of the third calendar quarter of 2006 the benefit increase percentage and the revised table of "special minimum" benefits (section 215(i)(2)(D)). Also, the Commissioner must publish on or before November 1 the national average wage index for 2005 (section 215(a)(1)(D)), the OASDI fund ratio for 2006 (section 215(i)(2)(C)(ii)), the OASDI contribution and benefit base for 2007 (section 230(a)), the amount of earnings required to be credited with a quarter of coverage in 2007 (section 213(d)(2)), the monthly exempt amounts under the Social Security retirement earnings test for 2007 (section 203(f)(8)(A)), the formula for computing a primary insurance amount for workers who first become eligible for benefits or die in 2007 (section 215(a)(1)(D)), and the formula for computing the maximum amount of benefits payable to the family of a worker who first becomes eligible for old-age benefits or dies in 2007 (section 203(a)(2)(C)).

235 This material was published in the Federal Register on October 26, 2006 at 71 FR 62636.

Cost-of-Living Increases

General

The next cost-of-living increase, or automatic benefit increase, is 3.3 percent for benefits under titles II and XVI of the Act. Under title II, OASDI benefits will increase by 3.3 percent for individuals eligible for December 2006 benefits, payable in January 2007. This increase is based on the authority contained in section 215(i) of the Act (42 U.S.C. 415(i)).

Under title XVI, Federal SSI payment levels will also increase by 3.3 percent effective for payments made for the month of January 2007 but paid on December 29, 2006. This is based on the authority contained in section 1617 of the Act (42 U.S.C. 1382f).

Automatic Benefit Increase Computation

Under section 215(i) of the Act, the third calendar quarter of 2006 is a cost-ofliving computation quarter for all the purposes of the Act. The Commissioner is, therefore, required to increase benefits, effective for December 2006, for individuals entitled under section 227 or 228 of the Act, to increase primary insurance amounts of all other individuals entitled under title II of the Act, and to increase maximum benefits payable to a family. For December 2006, the benefit increase is the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers from the third quarter of 2005 to the third quarter of 2006.

Section 215(1)(1) of the Act provides that the Consumer Price Index for a cost-ofliving computation quarter shall be the arithmetic mean of this index for the 3 months in that quarter. We round the arithmetic mean, if necessary, to the nearest 0.1. The Department of Labor's Consumer Price Index for Urban Wage Earners and Clerical Workers for each month in the quarter ending September 30, 2005, is: for July 2005, 191.0; for August 2005, 192.1; and for September 2005, 195.0. The arithmetic mean for this calendar quarter is 192.7. The corresponding Consumer Price Index for each month in the quarter ending September 30, 2006, is: for July 2006, 199.2; for August 2006, 199.6; and for September 2006, 198.4. The arithmetic mean for this calendar quarter is 199.1. Thus, because the Consumer Price Index for the calendar quarter ending September 30, 2006, exceeds that for the calendar quarter ending September 30, 2005 by 3.3 percent (rounded to the nearest 0.1), a cost-ofliving benefit increase of 3.3 percent is effective for benefits under title II of the Act beginning December 2006.

Section 215(i) also specifies that an automatic benefit increase under title II, effective for December of any year, will be limited to the increase in the national average wage index for the prior year if the "OASDI fund ratio" for that year is below 20.0 percent. The OASDI fund ratio for a year is the ratio of the combined assets of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds at the beginning of that year to the combined expenditures of these funds during that year. (The expenditures in the ratio's denominator exclude transfer payments between the two trust funds, and reduce any transfers to the Railroad Retirement Account by any transfers from that account into either trust fund.) For 2006, the OASDI fund ratio is assets of $1,858,660 million divided by estimated expenditures of $560,000 million, or 331.9 percent. Because the 331.9-percent OASDI fund ratio exceeds 20.0 percent, the automatic benefit increase for December 2006 is not limited. Title II Benefit Amounts

In accordance with section 215(i) of the Act, in the case of workers and family members for whom eligibility for benefits (i.e., the worker's attainment of age 62, or disability or death before age 62) occurred before 2007, benefits will increase by 3.3 percent beginning with benefits for December 2006 which are payable in January 2007. In the case of first eligibility after 2006, the 3.3 percent increase will not apply.

For eligibility after 1978, benefits are generally determined using a benefit formula provided by the Social Security Amendments of 1977 (Pub. L. 95-216), as described later in this notice.

For eligibility before 1979, we determine benefits by means of a benefit table. The table is available on the Internet at http://www.socialsecurity.gov/OACT/ProgData/ tableForm.html, or by writing to: Social Security Administration, Office of Public Inquiries, Windsor Park Building, 6401 Security Boulevard, Baltimore, MD 21235.

Section 215(i)(2)(D) of the Act requires that, when the Commissioner determines an automatic increase in Social Security benefits, the Commissioner will publish in the Federal Register a revision of the range of the primary insurance amounts and corresponding maximum family benefits based on the dollar amount and other provisions described in section 215(a)(1)(C)(i). We refer to these benefits as "special minimum" benefits. These benefits are payable to certain individuals with long periods of relatively low earnings. To qualify for such benefits, an individual must have at least 11 "years of coverage." To earn a year of coverage for purposes of the special minimum benefit, a person must earn at least a certain proportion of the "old-law" contribution and benefit base (described later in this notice). For years before 1991, the proportion is 25 percent; for years after 1990, it is 15 percent. In accordance with section 215(a)(1)(C)(i), the table below shows the revised range of primary insurance amounts and corresponding maximum family benefit amounts after the 3.3 percent automatic benefit increase.

SPECIAL MINIMUM PRIMARY INSURANCE AMOUNTS AND MAXIMUM FAMILY BENEFITS PAYABLE FOR DECEMBER 2006

In accordance with section 1617 of the Act, maximum SSI Federal benefit amounts for the aged, blind, and disabled will increase by 3.3 percent effective January 2007. For 2006, we derived the monthly benefit amounts for an eligible individual, an eligible individual with an eligible spouse, and for an essential person-$603, $904, and $302, respectively--from corresponding yearly unrounded Federal SSI benefit amounts of $7,240.56, $10,859.62, and $3,628.58. For 2007, these yearly unrounded amounts increase by 3.3 percent to $7,479.50, $11,217.99, and $3,748.32, respectively. Each of these resulting amounts must be rounded, when not a multiple of $12, to the next lower multiple of $12. Accordingly, the corresponding annual amounts, effective for 2007, are $7,476, $11,208, and $3,744. Dividing the yearly amounts by 12 gives the corresponding monthly amounts for 2007--$623, $934, and $312, respectively. In the case of an eligible individual with an eligible spouse, we equally divide the amount payable between the two spouses.

Title VIII of the Act provides for special benefits to certain World War II veterans residing outside the United States. Section 805 provides that "[t]he benefit under this title payable to a qualified individual for any month shall be in an amount equal to 75 percent of the Federal benefit rate [the maximum amount for an eligible individual] under title XVI for the month, reduced by the amount of the qualified individual's benefit income for the month.” Thus the monthly benefit for 2007 under this provision is 75 percent of $623, or $467.25.

Student Earned Income Exclusion

A blind or disabled child, who is a student regularly attending school, college, or university, or a course of vocational or technical training, can have limited earnings that are not counted against his or her SSI benefits. The maximum amount of such income that may be excluded in 2006 is $1,460 per month but not more than $5,910 in all of 2006. These amounts increase based on a formula set forth in regulation 20 CFR 416.1112.

To compute each of the monthly and yearly maximum amounts for 2007, we increase the corresponding unrounded amount for 2006 by the latest cost-of-living increase. If the amount so calculated is not a multiple of $10, we round it to the nearest multiple of $10. The unrounded monthly amount for 2006 is $1,464.95. We increase this amount by 3.3 percent to $1,513.29, which we then round to $1,510. Similarly, we increase the unrounded yearly amount for 2006, $5,905.21, by 3.3 percent to $6,100.08 and round this to $6,100. Thus the maximum amount of the income exclusion applicable to a student in 2007 is $1,510 per month but not more than $6,100 in all of 2007.

Fee for Services Performed as a Representative Payee

Sections 205(j)(4)(A)(i) and 1631(a)(2)(D)(i) of the Act permit a qualified organization to collect from an individual a monthly fee for expenses incurred in providing services performed as such individual's representative payee. Currently the fee is limited to the lesser of: (1) 10 percent of the monthly benefit involved; or (2) $33 per month ($64 per month in any case in which the individual is entitled to disability benefits and the Commissioner has determined that payment to the representative payee would serve the interest of the individual because the individual has an alcoholism or drug addiction condition and is incapable of managing such benefits). The dollar fee limits are subject to increase by the automatic cost-of-living increase, with the resulting amounts rounded to the nearest whole dollar amount. Thus we increase the current amounts by 3.3 percent to $34 and $66 for 2007. Attorney Assessment Fee

Under sections 206(d) and 1631(d) of the Act, whenever a fee for services is required to be paid to an attorney who has represented a claimant, the Commissioner must impose on the attorney an assessment to cover administrative costs. Such assessment shall be no more than 6.3 percent of the attorney's fee or, if lower, a dollar amount that is subject to increase by the automatic cost-of-living increase. We derive the dollar limit for December 2006 by increasing the unrounded limit for December 2005, $75.00, by 3.3 percent, which gives $77.47. We then round $77.47 to the next lower multiple of $1. The dollar limit effective for December 2006 is thus $77.

National Average Wage Index for 2005
General

Under various provisions of the Act, several amounts increase automatically with annual increases in the national average wage index. The amounts are: (1) The OASDI contribution and benefit base; (2) the exempt amounts under the retirement earnings test; (3) the dollar amounts, or "bend points,” in the primary insurance amount and maximum family benefit formulas; (4) the amount of earnings required for a worker to be credited with a quarter of coverage; (5) the "old-law" contribution and benefit base (as determined under section 230 of the Act as in effect before the 1977 amendments); (6) the substantial gainful activity amount applicable to statutorily blind individuals; and (7) the coverage threshold for election officials and election workers. Also, section 3121(x) of the Internal Revenue Code requires that the domestic employee coverage threshold be based on changes in the national average wage index.

In addition to the amounts required by statute, two amounts increase automatically under regulatory requirements. The amounts are (1) the substantial gainful activity amount applicable to non-blind disabled persons, and (2) the monthly earnings threshold that establishes a month as part of a trial work period for disabled beneficiaries.