Policy and Systems

Definition Of A Residual Lump-Sum

The residual lump-sum is the means by which railroad employees and their survivors are guaranteed to receive at least as much in benefits as the employee paid in railroad retirement taxes for the years 1937 through 1974. A residual lump-sum is not taxable for Federal income tax purposes.

The amount of the residual lump-sum equals the amount of the railroad retirement taxes paid by the employee prior to 1975 plus an allowance for interest.

The gross residual amount is reduced by:

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When A Lump-Sum Death Payment is Not Payable

The "1937 Act" or "1981 Amendment" lump-sum death payment cannot be paid if there is any survivor of the employee who is eligible for a railroad retirement annuity in the month the employee died.

In addition, a lump-sum death payment can only be paid if an application is filed by the second anniversary of the employee's death. If no application for the lump-sum death payment or a monthly benefit is received by that date, the lump-sum death payment cannot be paid.

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People Eligible To Receive A 1981 Amendment Lump-Sum Death Payment

A "1981 Amendment" lump-sum death payment is payable only to the widow(er) who was living in the same household with the employee at the time of the employee's death.

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When The 1937 Act Lump-Sum Death Payment Can Be Paid Directly To The Funeral Home

There are two situations in which the lump-sum death payment can be paid to the funeral home:

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Who Can Get Medicare?

Hospital Insurance (Part A)

If you are age 65 or older.--Most people age 65 or older who are citizens or permanent residents of the United States are eligible for free Medicare hospital insurance (Part A). You are eligible at age 65 if you receive or are eligible to receive railroad retirement or social security benefits. (Although the age requirements for some unreduced railroad retirement benefits have risen just like those for social security requirements, beneficiaries are still eligible for Medicare at age 65.)

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Who Can Get Medicare?

Hospital Insurance (Part A)

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People Eligible to Receive A 1937 Act Lump-Sum Death Payment

If the employee was survived by a widow(er) who was living with the employee, the entire lump-sum death payment is paid to the widow(er).

If no widow(er) qualifies and all of the employee's funeral expenses have not been paid, the lump-sum death payment is paid to the funeral home. If the unpaid funeral home expenses are greater than the lump-sum death payment, the entire lump-sum death payment is paid to the funeral home.

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Credit For Employee's Military Service

If the employee was never in the military service, go on to the next section.

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Important Reminders

Filing Requirements - To avoid losing sickness benefits, your benefit application must be received by a Railroad Retirement Board (RRB) office within 10 days of the first day for which you want to claim benefits. Your sickness claims must be filed within 30 days of the last day of the claim or 30 days from the date we mail the form to you, whichever is later.

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Checking Your Benefits by Telephone

You can obtain detailed information about your sickness benefit payments and claims at any time, by calling our national automated telephone service. Calling this number gives you access to:

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