42 U.S.C. § 424a — Reduction of disability benefits

(a) Conditions for reduction; computation. This rule applies for any month before someone reaches retirement age (as section 416(l)(1) defines it), if: (1) they get disability benefits under section 423, and (2) that same month they also get periodic disability benefits under (A) a workers' compensation law or plan of the United States or a state, or (B) another federal, state, local-government, or multi-state disability law or plan — except this doesn't include (i) veterans' benefits under title 38, (ii) needs-based public assistance, (iii) benefits based mostly on work covered by a state Social Security agreement under section 418, or (iv) benefits under a federal law or plan based mostly on work already counted as "employment" under section 410. When both conditions apply, the total of the person's section 423 benefit plus any section 402 benefits paid to family members on that person's record gets reduced for that month — but never below zero. Here's the calculation, step by step. Add together: the total section 423 and 402 benefits for the month, and the periodic disability benefits actually paid that month under the other law or plan. Compare that sum to the higher of: 80% of the person's "average current earnings," or what the section 423 and 402 benefits would total before any reduction. If the combined total is bigger than that higher figure, the excess is the reduction. But the reduced total can never drop below the sum of: what the family actually received, after reduction, in the very first month this reduction applied, plus any later benefit increases granted since then, calculated before this section's reduction. "Average current earnings" means the largest of: the average monthly wage used to figure the section 423 benefit, under the pre-1979 version of section 415(b); one-sixtieth of the person's total wages and self-employment income (ignoring the caps in sections 409(a)(1) and 411(b)(1)) for their five highest-earning calendar years after 1950; or one-twelfth of that total for their single highest-earning year, counting only the year they became disabled (as section 423(d) defines it) and the five years before it. (b) Reduction where benefits are paid other than monthly. If the other disability benefit isn't paid monthly — not counting a lump sum, unless that lump sum really substitutes for regular periodic payments — the Commissioner of Social Security decides the timing and size of the reduction to come as close as practical to the reduction described in (a). (c) Reductions and deductions under other provisions. This section's reduction is applied after the reduction under section 403(a), but before the deductions described in section 403 and section 422(b). (d) Exception. This reduction does not apply if the other law or plan already reduces its own benefit whenever someone gets benefits under this subchapter based on the disabled person's record — and if that law or plan already had that rule on February 18, 1981. (e) Conditions for payment. If the Commissioner thinks someone might be eligible for benefits that would trigger this reduction, the Commissioner may require them, before approving payment, to certify whether they've filed or plan to file a claim for those other benefits, and if so, whether a decision has been made. The Commissioner may rely on that certification when approving benefits, unless there's evidence it's wrong. (f) Redetermination of reduction. In the second calendar year after a reduction first applies, and every third year after that, the Commissioner must recheck the reduction amount — but this recheck can never lower the family's total benefits below what they were getting. The redetermined benefit takes effect the following January. For this recheck, the person's "average current earnings" is multiplied by a ratio: the national average wage index for the year before the recheck, divided by that same index for the year before the reduction was first calculated. Round any result down to the next whole dollar. (g) Proportionate reduction; application of excess. When a family's benefits get reduced for a month, every benefit except the disability insurance benefit itself is cut proportionally first. Only if that isn't enough does the leftover reduction come out of the disability insurance benefit. (h) Furnishing of information. Any federal agency must give the Commissioner information it has that the Commissioner needs to calculate this reduction or verify related facts. The Commissioner may make agreements with states, local governments, and other organizations that run a covered disability law or plan, to get the information needed to apply this section.