Family maximum defined. Under the Social Security Act, the amount of total monthly benefits that can be paid for any month on one person's earnings record is limited. This limited amount is called the family maximum. The family maximum is based on the survivor tier I PIA (see part 225 of this chapter). Generally, if three or more persons are entitled to benefits, their benefits will be adjusted for the family maximum.

Computation of the family maximum—(1) The employee attains age 62, has a period of disability or dies prior to 1979. The maximum is the amount appearing in column V of the applicable table published each year by the Secretary of Health and Human Services on the line on which appears in column IV the primary insurance amount of the insured individual whose compensation is the basis for the benefits payable. Where the total of the survivor benefits exceeds the maximum, the total tier I benefits for each month after 1964 are reduced to the amount appearing in column V. Each survivor's benefit is proportionately reduced, based on the percentage of the PIA used to compute the survivor benefits. However, when any of the persons entitled to benefits on the insured individual's compensation would, except for the limitation described in § 404.353(b) of title 20 (dealing with the entitlement to more than one child's benefit), be entitled to a child's annuity on the basis of the compensation of one or more other insured individuals, the total benefits payable may not be reduced to less than the smaller of—

The sum of the maximum amounts of benefits payable on the basis of the compensation of all such insured individuals, or

The last figure in column V of the applicable table published each year by the Secretary of Health and Human Services. The “applicable table” refers to the table which is effective for the month the benefit is payable.

The employee attains age 62, has a period of disability or dies in 1979. The maximum is computed as follows:

150 percent of the first $230 of the individual's primary insurance amount, plus

272 percent of the primary insurance amount over $230 but not over $332, plus

134 percent of the primary insurance amount over $332 but not over $433, plus

175 percent of the primary insurance amount over $433.

The employee attains age 62, or has a period of disability or dies after 1979. The maximum is computed as in paragraph (b)(2) of this section. However, the dollar amounts shown there will be updated each year after 1979 as average earnings rise. This updating is done by first dividing the average of the total wages for the second year before the individual dies or becomes eligible, by the average of the total wages for 1977. The result of that computation is then multiplied by each dollar amount in the formula in paragraph (b)(2) of this section. Each updated dollar amount will be rounded to the nearer dollar, if the amount is an exact multiple of $0.50 (but not of $1), it will be rounded to the next higher $1. Before November 2 of each calendar year after 1978, the Secretary of Health and Human Services will publish in the Federal Register the formula and updated dollar amounts to be used for determining the monthly maximum for the following year.

Special minimum PIA. Regardless of the method used to compute the primary insurance amount, if the special minimum primary insurance amount described in § 404.261 to this title is higher, then the family maximum will be based upon the special minimum primary insurance amount.