GN 02603: Readjustment Procedures
TN 6 (09-11)
A. Deduction events
The following deductions, listed in order of priority, are subject to the deduction-before-reduction provision:
Deduction because of entitlement to a benefit on another record if the case meets the requirements. For information on dual entitlement deductions, see GN 02603.045;
Suspension because of failure to file a certificate of election when a spouse under full retirement age is converted to a widow(er);
Deduction because of suspension of an auxiliary or survivor benefit under the prisoner suspension provision (For prisoner suspension, see GN 02607.000; and for fugitive felon suspension refer to the note under GN 02613.001A);
Deduction because of suspension of an auxiliary or survivor benefit for noncompliance with the drug addiction and alcoholism treatment provisions of P.L. 103-296;
Foreign work test deduction for an auxiliary or survivor;
No child-in-care deduction;
Annual earnings test deduction for an auxiliary or survivor;
Unpaid maritime tax deduction; and
Penalty deduction for any beneficiary.
B. Policy exceptions
Deductions not listed in GN 02603.040A do not qualify for deduction before reduction. Some of the deductions that do not qualify, are:
Government Pension Offset;
Age reduction;
Workers' Compensation or Public Disability Benefit Offset (see DI 52150.075 for an exception to this rule);
Disabled adult child or disabled widow suspended for performing substantial gainful activity (SGA) during an extended period of eligibility (EPE);
Work deductions for the number holder that apply to the auxiliaries;
Supplementary Medical Insurance premium (SMI) deductions; and
Deductions because of suspension for failure to meet lawful presence requirements.
In addition, deduction before reduction does not apply to benefits withheld because of the non-payment provisions. The non-payment provisions are:
Deportation;
Alien non-payment; and
Conviction for subversive activities.