TN 25 (07-03)

A. POLICY

1. General

A savings clause was provided to protect beneficiaries who were entitled for the month of 5/78 from a future reduction in their benefits because the widow(er) is due an increase for DRCs. The only criterion for this to apply is entitlement for the specific month of 5/78. Entitlement before or after 5/78 is immaterial.

2. Payment Amount

This saving clause does not establish a new family maximum but does permit payment to exceed the established maximum using the savings clause maximum. The maximum will revert to a table maximum when the savings clause no longer applies.

B. EXAMPLE

In 3/00 a widow is to be entitled. The PIA is $400. The family maximum is $700. A son has been entitled continuously since 3/78. In 3/00 the original rates would be $400 for the widow and $300 for the child. The widow is due an increase of $10 because of the deceased numberholder’s DRCs. Using the steps:

1. Step 1

The widow's benefit including the DRCs without considering the family maximum is $410.

2. Step 2

The child’s original rate is $300.

3. Step 3

The total of all rates from Step 1 and 2 for all the survivors entitled on the record is $710.

4. Step 4

Dividing the family maximum by step 3 is $700/$710.

5. Step 5

Multiply Step 1 by Step 4 for the widow: $410 x 700/710 = 404.20.

This is the WIB adjusted for the maximum.

6. Step 6

Multiply Step 2 by Step 4 for the child: $300 x 700/710 = 295.70.

This is the adjusted survivor rate.

Because the son was entitled for 5/78, he is protected by the savings clause and his rate will remain at $300. The MBR will show a PIA of $400.00 and a savings clause family maximum of $704.20.