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Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).

Rule 7.6: Civil Service and Federal Employee Retirement Payments.

A. This type of income is defined as follows:

1. The Office of Personnel Management (OPM) makes US Civil Service and Federal Employee Retirement System (FERS) payments because of disability, retirement or death.

B. This type of income is treated as follows:

1. US Civil Service payments and FERS payments are counted as unearned income to the entitled retiree or individual survivor even when additional monies for other family members are included in the payment.

2. However, certain disability benefits paid within the first six (6) months after an employee last worked are treated as earned income.

3. OPM provides annuitants under the Retired Health Benefits (RHB) program free coverage under Part B of Medicare. All annuitants covered by the RHB program retired before 7/1/1960.

a) At the employee’s option, the Part B premium may instead be paid to another health insurance plan or paid directly to the annuitant for use in purchasing health insurance coverage privately.

b) The RHB payment is shown as a positive amount (addition) on the health benefits line of the OPM notice. RHB payments to annuitants are not income.

Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).

Rule 7.7: Other Government Pensions and Retirement Plans.

A. This type of income is defined as follows:

1. Payments made to former employees, their dependent(s) or survivor(s) by state, local (or foreign) governments.

a) Examples include State and Municipal retirement.

B. This type of income is treated as follows:

1. The full amount of benefits the recipient is entitled to receive is counted as unearned income.

Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).