Appendix K to the report of the 1983 Greenspan Commission on Social Security Reform

Appendix K- Section H

SUMMARY OF SECTION H - PROPOSALS AFFECTING PRIMARILY WOMEN
		OASDI Cost 1983-89 (billions)
Option No.	Description	II-B	III	Long-Term Cost
H-1	Divorced and disabled widow(er)'s benefits not to be terminated upon remarriage.	*	*	*
H-2	Provide benefits of 71.5% of deceased worker's PIA to disabled widow(er)s claiming benefits at ages 50-59.	+$1	+$1	+.01%
H-3	Provide benefits of 100% of the deceased worker's PIA to disabled widow(er)s claiming benefits at ages 50-64.	+6	+6	+.03
H-4	Permit widow(er)s to rescind an early-retirement decision in certain cases, by counting the reduction in the widow(er)'s benefit as "repayment" of the early-retirement benefits paid.	*	*	*
H-5	Provide indexing of earnings records for purposes of deferred survivor benefits by wages instead of by prices.	*	*	+.05
H-6	Permit a divorced spouse to receive benefits regardless of whether the insured former spouse has retired.	*	*	*
H-7	Change special-minimum benefit to allow credit for 10 childcare years; increase number of years countable toward the special-minimum benefit from 30 to 35 years.	+15	+16	+.14
H-8	Allow up to 3, 5, or 10 childcare drop-out years in computing the average earnings.	n.a.	n.a.	**
H-9	Adopt comprehensive earnings sharing, with 80% inheritance of earnings credits.	n.a.	n.a.	-.06
H-10	Adopt earnings sharing with 100% inheritance of earnings credits.	n.a.	n.a.	+.35
H-11	Adopt limited earnings sharing at divorce, and inheritance of earnings credits.	n.a.	n.a.	+.07
H-12	Adopt the HHS development of the recommendations of the 1979 Advisory Council regarding earnings sharing.	n.a.	n.a.	+.12
n.a. = Not available. * Less than $\ billion or less than .005% of payroll (as the case may be). ** The costs of each of these alternatives are shown on subsequent pages.

H. PROPOSALS AFFECTING PRIMARILY WOMEN

Widow(er)'s Benefits

Present law. Benefits for widow(er)s who are divorced spouses and for disabled widow(er)s terminate when the beneficiary remarries.

Option.

H-1 Do not terminate such benefits upon remarriage, effective in 1984.

Costs (in billions of dollars)
Estimate	1983	1984	1985	1986	1987	1988	1989	1983-89
II-B	0	+.0	+.0	+.0	+.0	+.0	+.0	+.1
III	0	+.0	+.0	+.0	+.0	+.0	+.0	+.1

Long-Term Cost: Negligible

Disabled Widow(er)'s Benefits

Present law. Reduced benefits for widow(er)s without dependent children are available at ages 60-64 (71 1/2% of PIA at age 60), and 100% of the PIA is available at age 65. Disabled widow(er)s are eligible for reduced benefits at ages 50-59 (50% of PIA at age 50).

Option.

H-2 Provide benefit of 71.5% of PIA (same as widow(er)'s benefits at age 60) to disabled widow(er)s claiming benefits at ages 50-59, effective in 1984.

Costs (in billions of dollars)
Estimate	1983	1984	1985	1986	1987	1988	1989	1983-89
II-B	0	+.2	+.2	+.2	+.2	+.3	+.3	+1.4
III	0	+.2	+.2	+.2	+.2	+.3	+.3	+1.4

Long-Term Cost: +.01% of taxable payroll

H-3 Provide benefit of 100% of PIA to disabled widow(er)s aged 50-64, effective in 1984.

Costs (in billions of dollars)
Estimate	1983	1984	1985	1986	1987	1988	1989	1983-89
II-B	0	+.8	+.8	+.9	+1.0	+1.0	+1.1	+5.6
III	0	+.8	+.8	+.9	+1.0	+1.1	+1.2	+5.8

Long-Term Cost: +.03% of taxable payroll

Limit on Widow(er)'s Benefits

Present law. There is an over-riding limit which is only applicable when the deceased worker had received early-retirement benefits; then, the widow's benefit cannot exceed the larger of the early-retirement benefit or 82.5% of the PIA. This maximum is applicable only when the widow is at least age 62 and has the most effect when the woman was older than her husband.

Option.

H-4 When such limit on widow(er)'s benefits is applicable, and the retired worker dies before age 65, the widow(er) may "rescind" the early-retirement decision by counting the reduction in the widow(er)'s benefit resulting from such limit as "repayment" of the early-retirement benefits paid "including any auxiliary benefits). The period of repayment should be determined from the amounts payable to the beneficiaries who are eligible as of the date of the worker's death.

Long-Term Cost: Negligible

Computation of Deferred Widow(er)'s Benefits

Present law. If a worker dies before reaching age 62, benefits for the widow(er) are based on the worker's earnings, as indexed to average wage levels in the second year preceding death; the benefit is indexed in and after the year of death to reflect changes in the CPI.

Option.

H-5 Index earnings records for purposes of deferred survivor benefits (e.g., a woman widowed at age 55 is first eligible for widow's benefits at age 60) through the earlier of (1) the year that the worker would have reached age 60, or (2) two years before the survivor becomes eligible for aged widow's benefits at age 60, effective in 1985.

Costs (in billions of dollars)
Estimate	1983	1984	1985	1986	1987	1988	1989	1983-89
II-B	0	0	+.0	+.0	+.0	+.1	+.1	+.2
III	0	0	+.0	+.0	+.0	+.1	+.1	+.2

Long-Term Cost: +.05% of taxable payroll

Divorced Persons

Present law. A divorced spouse cannot receive spouse's benefits until the former spouse begins to receive benefits.

Option.

H-6 A divorced spouse (divorced at least 3 years) would be able to receive benefits if he or she meets the age requirements for eligibility, regardless of whether or not the insured former spouse, aged 62 or over, has retired (the earnings test would apply to each independently), effective in 1984.*

Costs (in billions of dollars)
Estimate	1983	1984	1985	1986	1987	1988	1989	1983-89
II-B	0	+.0	+.0	+.0	+.0	+.0	+.0	+.1
III	0	+.0	+.0	+.0	+.0	+.0	+.0	+.1

Long-Term Cost: Negligible

* As an alternative, the option could provide for a 1-year divorce requirement, instead of a 3-year requirement.

Childcare Credits

Present law. To compute the Average Indexed Monthly Earnings of retired workers, the 5 lowest years of indexed earnings are dropped from the appropriate averaging period. For workers attaining age 62 in 1991 or later, retirement benefits will be based on the highest 35 years of indexed earnings. Present law also provides a special minimum benefit as an alternative computation based on the worker's "years of coverage", which is designed for long-service workers with earnings at approximately the Federal minimum-wage level.

Options.

H-7 Change provisions for special-minimum benefit so as to allow credit for up to 10 childcare years (in which the worker had a child age 6 or under and did not earn enough to gain a year of coverage). Increase the number of years countable toward the special minimum benefit from 30 to 35, effective in 1984.

Costs (in billions of dollars)
Estimate	1983	1984	1985	1986	1987	1988	1989	1983-89
II-B	0	+1.8	+2.1	+2.4	+2.6	+2.9	+3.2	+15.0
III	0	+1.8	+2.2	+2.5	+2.8	+3.2	+3.6	+16.1

Long-Term Cost: +.14% of taxable payroll

H-8 Allow up to (alternatively) 3, 5, or 10 childcare drop-out years in computing Average Indexed: Monthly Earnings for the purpose of calculating benefits under the regular benefit formula for each year the worker had a child under age 7 and did not earn more than half of the average wage of all covered workers during the year, effective in 1984.**

Long-Term Cost for Allowing up to 3 Years: +.21% of taxable payroll
Long-Term Cost for Allowing up to 5 Years: +.36% of taxable payroll
Long-Term Cost for Allowing up to 10 Years: +.60% of taxable payroll

** Cost data for the short-term period are not available, but relatively little increase in cost would be involved during 1983-89.

Earnings Sharing Proposals

H-9 Comprehensive "No-Cost" Plan. The DHEW report, "Social Security and the Changing Roles of Men and Women", presented a comprehensive earnings-sharing proposal, within a "no cost" framework. Under the proposal, a person's Social Security protection would be based on her or his earnings when unmarried and, when married, on one-half of the total earnings credits of the married couple. A couple's annual earnings would be divided equally during years of marriage. The earnings would be split equally on divorce or when one spouse reaches age 62. Such split would not apply under certain conditions: (1) on death of a spouse, 80% of total earnings would be inherited, but not less than 100% of the earnings of the higher earner; (2) for purposes of benefits for young survivors, earnings would not be transferred between spouses with regard to a marriage in effect at time of death, and (3) for purposes of disability benefits, earnings would not be shared with regard to a marriage in effect at time of disability. The proposal did not include any transitional proposals.

Long-Term Cost: -.06% of taxable payroll

H-10 Plan for Earnings Sharing and Inheritance of Earnings Credits (considered but not recommended by 1979 Advisory Council). Credits earned during years of marriage would be divided equally between spouses. Benefits for each person would be based upon earnings before and after the marriage, plus half the couple's earnings during the marriage. Earnings would be shared only for years after 1980. If the higher-earner retired or became disabled before the lower-earner, he or she would receive benefits based on the higher-earner's full earnings, rather than half of the couple's combined earnings. Under a transitional provision (phased out by 2020), couples would receive the higher of the benefit calculated under earnings sharing or the benefit calculated under a transitional formula assuring the same purchasing power as under present law. A survivor would inherit the earnings credits of a deceased spouse acquired during the marriage. The survivor would receive 100% of the couple's combined earnings credits, plus any credits which the survivor had earned before or after the marriage.

Long-Term cost: +.35% of taxable payroll

H-11 1979 Advisory Council Recommendation for Inheritance of Earnings Credits at Death of Spouse and Limited Earnings Sharing at Divorce. A survivor could inherit the earnings credits of a deceased spouse from work that occurred during their marriage. At ages 60-61, reduced widow(er)'s benefits would be calculated only from inherited earnings credits. At age 62, the individual would be eligible for retired worker's benefits based on inherited earnings credits combined with own earnings credits. Inheritance would also eliminate disabled widow(er)'s benefits, because eligibility for DI could be established through inheritance.

Upon request by either partner in a marriage of at least 10 years that ended in divorce, earnings credits would be split, for purposes of calculating retirement benefits only.

Long-Term Cost: +.07% of taxable payroll, without hold-harmless provision*

H-12 HHS Development of the Recommendations of the 1979 Advisory Council. Either partner, at time of divorce, could apply to have earnings credits shared for years during a marriage. Disability benefits would be calculated based on shared earnings, but entitlement to disability could not be gained therefrom. Credits acquired during years of marriage would be credited to the earnings record of the surviving spouse. Inherited credits would substitute for all present-law benefits payable to aged and disabled widow(er)s. Benefits for surviving children, widowed mothers and fathers, and children of retired or disabled workers would not be affected. Under the transition provision, those reaching age 62 before 2010 would be eligible for the new basis, but would continue to be eligible for auxiliary and survivor benefits if higher.

Long-Term cost: +.12% of taxable payroll

* The Advisory Council did not recommend a hold-harmless provision, which would provide present benefits for aged and disabled widow(er)s forever, if higher. With such a provision, the estimated long-term cost of this proposal is +.22% of taxable payroll.