Relationship of Dual Benefit Windfall Payments to Total Railroad Retirement Benefits

HRD-82-97: Published: Jul 12, 1982. Publicly Released: Aug 11, 1982.

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Pursuant to a congressional request, GAO examined: (1) the relationship of railroad retirement dual benefit windfall payments to the total payments railroad retirement beneficiaries receive, and (2) the potential effect on railroad retirement beneficiaries of reduced windfall payments under various appropriation levels.

GAO obtained and analyzed payment data from the Railroad Retirement Board's records on the 1 million beneficiaries receiving railroad retirement benefits. Of those, approximately 383,000 were receiving windfall benefits in December 1981; these beneficiaries were categorized into about 292,000 family units. Family units were used because there were often multiple beneficiaries in a given household, and GAO was interested in determining the total benefits received so that they could be used as an indicator of a family's need. GAO found that, although windfall benefits made up a larger share of the total income for families whose combined benefits were below the poverty level, the overwhelming portion of windfall funds went to family units in the upper benefit ranges. The oldest age groups are most affected by cuts in windfall, and couples fare much better than retired employees or sole survivors. GAO noted that reductions in appropriations do not appear to result in substantial additional numbers of families' falling below the selected benefit cutoff points. GAO concluded that relatively nominal funding would be required to protect certain family units in the lower benefit ranges from incurring reductions in benefits because of cuts in windfall.

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