SSR 83-9: TITLE II: WHAT CONSTITUTES "SUBSTANTIALLY ALL" STATE OR LOCAL COVERED EMPLOYMENT FOR PURPOSES OF EXCLUDING OFFSET (AGAINST DISABILITY BENEFITS)

PURPOSE: To state the policy in adjudicating those cases where a public disability benefit which would otherwise cause offset is based on State or local employment or employment with an instrumentality of two or more States, which was not wholly covered for Social Security purposes.

CITATIONS (AUTHORITY): Section 224 of the Social Security Act.

PERTINENT HISTORY: Section 224 of the Social Security Act provides for the reduction of Social Security Disability Insurance (DI) benefits when the worker is also entitled to workers' compensation payments and/or (beginning with claims where the month of entitlement is September 1981 or later and the disability onset was March 1,1 981, or later) other disability benefits under Federal, State, or local laws or plans (hereafter referred to as other "public disability benefits"). However, section 224(a)(2) further provides that certain other public disability benefits will not cause this reduction. (None of the exclusions apply to workers' compensation benefits.)

One such exclusion states that no offset will be caused by other public disability benefits based on State or local government service or service for an instrumentality of two or more States, "all, or substantially all," of which was covered by an agreement entered into under section 218 of the Act. This policy statement is intended to provide guidance in adjudicating those cases where a public disability benefit which would otherwise cause offset is based on State, or local, or multi-State instrumentality employment which was not wholly covered for Social Security purposes.

The Act, regulations, and the published legislative history do not indicate that amount would constitute "substantially all" for this purpose. Various reference sources, including Black's Law Dictionary, define "substantially" as "being largely, but not wholly that which is specified," "essentially," and" in the main." The specific language used in section 224(a)(2), however, is not just "substantially" but is "all, or substantially all."

This signifies that the Congress intended that the public disability benefit would be excluded from causing offset only where all of the State and local service was covered or only where an amount of such service closely approaching all was covered.

POLICY STATEMENT: In the absence of more definitive guidance from the Congress, it is reasonable to consider the "substantially all" requirement to be satisfied when 85 percent of the employment in question was covered by an agreement entered into pursuant to section 218 of the Social Security Act. This policy is justified by the following rationale:

: a. Individuals who began their service with a State or local government of multi-State instrumentality during the 1950's and '60's may have worked for a time before there was a section 218 agreement covering that employment. They are not probably older workers who might be counting on full title II disability benefits, as well as their disability benefits from that government or instrumentality in the event that they become disabled, and may not have made plans for other sources of income to cover the contingency. A more restrictive rule (e.g., 90-95 percent) would be must harder on these workers than it would be on a younger person, who may not have worked as long for the State or local government or instrumentality, but worked more recently when all of his/her work would be covered under a section 218 agreement.
: b. Under section 218(g), a State may terminate its section 218 agreement with the Secretary, affecting either the entire covered population or a particular coverage group, upon giving at least 2-years advance notice. Also, the Secretary may terminate the agreement in its entirety or with respect to one or more coverage groups, if the Secretary finds, after reasonable notice and opportunity for a hearing, that the State has failed to comply or can no longer legally comply, with the section 218 agreement. An 85 percent rule will allow a reasonable period of time for the State or the workers to provide substitute disability coverage before they lose the potential for receiving full title II benefits. A stricter rule might be unnecessarily harsh on both younger and older workers who lose title II coverage due to termination of a section 218 agreement.

EFFECTIVE DATE: This policy is effective September 1981, based on the effective date of legislation amending section 224.

CROSS-REFERENCES: Program Operations Manual System section DI A00203.005.B.

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