Tom Margenau

Q: My husband and I live in Utah. We went to file for our Social Security benefits last week. And we were shocked to learn that his claim must be processed by some railroad board. Why? The work he did for the railroad was more than 30 years ago.

A: I can explain. But frankly, I can’t quite understand it. Recently, I wrote a column in which I bragged about the fact that I can give the rationale behind almost all Social Security rules and regulations. But I admitted there were several rules that I couldn’t explain. I forgot to add this one. It involves the jurisdiction of Social Security claims involving people who also worked for a railroad.

Many of my readers may not be aware of this, but people who work for a railroad don’t pay into Social Security. Instead, they are covered by the Railroad Retirement System. Why that is dates back to the 1930s. Congress started working on setting up a pension system for railroaders before they got going on Social Security legislation. Once they got the ball rolling on Social Security, I guess Congress figured that people who worked for a railroad didn’t need to be covered under the new Social Security law since they already had their own pension system.

But almost all railroad employees have worked at other jobs where they have paid into Social Security. And here’s the rub. The rules say that if you have just 10 or more years of railroad work, the Railroad Retirement Board has jurisdiction of not only the payment of railroad benefits, but also of any claims for Social Security benefits that you or your dependents or survivors might file.

You didn’t tell me how long your husband worked for the railroad. But here is a typical example. Hal worked for a railroad for just over 12 years early in his life. However, he spent the rest of his career, about 40 years, working at jobs where he paid into Social Security. So when he files for Social Security retirement benefits, Hal is surprised, and probably a little upset, to learn that his Social Security claim must be sent to the Railroad Retirement Board for processing. And if his wife files for spousal benefits on Hal’s record, her claim is shipped to RRB for processing, too. They will end up getting whatever Social Security benefits they are due, with some augmented RRB benefits. But again, the rules say the RRB takes charge of both Social Security and railroad claims.

I understand they have to set up the payment of whatever extra railroad benefits might be due. But why they have to take control of the Social Security claim is a bit of a mystery.

Anyway, that’s why your husband’s claim was shipped to the RRB for processing. And one possible downside to that development is the service you can expect. Unlike the Social Security Administration, which has something like 1,300 field offices around the country, the RRB has only 30 or so, and most of them are clustered east of the Mississippi. The good news is that they appear to have a really good website: www.rrb.gov.

Q: I worked for a railroad for eight years back when I was in my early 20s. Someone told me that I must file for my Social Security benefits with the Railroad Retirement Board. This doesn’t make sense.

A: You’re right. It doesn’t make sense. And that’s because it’s not true. Your railroad work didn’t meet that 10-year threshold mark that requires RRB jurisdiction.

In fact, you and I are in the same boat. I worked for a railroad for about five years when I was in my late teens and early 20s. And because I had fewer than 10 years of railroad work, those railroad earnings were automatically transferred to my Social Security account, and they are treated like any other earnings I might have. The same thing will happen with you. And when it comes time to file for Social Security, you will deal with the Social Security Administration, not the Railroad Retirement Board.

That’s really all the railroad-related questions I have. But I’ve got some space left to answer a few general questions about Social Security.

Q: I just signed up for my Social Security. I am 62. And I was told by the Social Security agent that my Medicare coverage will start two years from now. But all my friends tell me I have to wait until I am 65. Who is right?

A: I wonder if you filed for Social Security disability benefits instead of retirement? Or maybe you filed for both? Because if you applied for disability benefits, the law says that Medicare coverage kicks in 24 months after your claim is approved. But if you are getting just retirement benefits, then you have to wait until age 65 before you can get Medicare.

Q: I am an 86-year-old widower who still works full time. Here is something that puzzles me. I am paying Social Security taxes twice. Why in the world am I doing that?

A: You didn’t fully explain what you meant by the statement, “I am paying Social Security taxes twice.” But I can take a guess.

First of all, anyone who is working at a job covered by Social Security (which are almost all jobs in this country), has to have Social Security payroll taxes deducted from his or her salary. And that happens whether you are 16 years old or 86 years old.

As a completely separate issue, the Social Security benefits you get may be subject to federal income taxes. Those rules are way too complicated for me to explain in today’s column. But in a nutshell, I can tell you that if you file an individual tax return and if your net taxable income is over $25,000, you will probably pay taxes on those benefits.

So the two taxes you are talking about are entirely separate issues. One is a payroll tax on your salary, and the other is an income tax on your total income.