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Railroad Retirement Act Benefits – Tier One & Tier Two | New York Disability Laws

Gabe Hermann | 1114 Views | 04/10/2015

Railroad Retirement Act Benefits

Hi, I’m Gabe Herman, and today we’re going to speak about what benefits are available under the Railroad Retirement Act that are different from those received from Social Security. The Railroad Retirement Act provides for two kinds of benefits to railroad employees: tier one benefits and tier two benefits.

Tier One & Tier Two Benefits

A tier one benefit corresponds neatly with the benefits that a claimant would collect under the Social Security Act. Tier two benefits, on the other hand, are a pension benefit unique to railroad workers who retire or are rewarded a disability annuity. The combined tier one and tier two benefits are generally higher than what a Social Security beneficiary would collect.

Dual Benefit Reduction

If somebody is eligible for both Social Security and railroad benefits because of their work history, that person will only get the larger benefit, whether it is the Social Security benefit or the railroad benefit. This reduction occurs because benefits are based on combining railroad and Social Security credits, figured under Social Security’s formulas, and reflects what Social Security would pay if railroad work were covered by that system.

The dual-benefit reduction follows the principles of Social Security under which a beneficiary receives only the higher of any two benefits that are payable. Railroad retirement benefits rise with cost-of-living adjustments at the same rate and at the same time that Social Security benefits increase. Generally, tier one benefits are calculated using the same formulas as Social Security benefits.

By: Gabe Hermann

Railroad Retirement Act Benefits – Tier One & Tier Two | New York Disability Laws

Railroad Retirement Act Benefits

Hi, I’m Gabe Herman, and today we’re going to speak about what benefits are available under the Railroad Retirement Act that are different from those received from Social Security. The Railroad Retirement Act provides for two kinds of benefits to railroad employees: tier one benefits and tier two benefits.

Tier One & Tier Two Benefits

A tier one benefit corresponds neatly with the benefits that a claimant would collect under the Social Security Act. Tier two benefits, on the other hand, are a pension benefit unique to railroad workers who retire or are rewarded a disability annuity. The combined tier one and tier two benefits are generally higher than what a Social Security beneficiary would collect.

Dual Benefit Reduction

If somebody is eligible for both Social Security and railroad benefits because of their work history, that person will only get the larger benefit, whether it is the Social Security benefit or the railroad benefit. This reduction occurs because benefits are based on combining railroad and Social Security credits, figured under Social Security’s formulas, and reflects what Social Security would pay if railroad work were covered by that system.

The dual-benefit reduction follows the principles of Social Security under which a beneficiary receives only the higher of any two benefits that are payable. Railroad retirement benefits rise with cost-of-living adjustments at the same rate and at the same time that Social Security benefits increase. Generally, tier one benefits are calculated using the same formulas as Social Security benefits.

By: Gabe Hermann