Provisions Affecting Level of Monthly Benefits
These provisions modify the formula used for calculating the basic Social Security monthly benefit called the Primary Insurance Amount (PIA). We provide a summary list of all options (printer-friendly PDF version) in this category. For each provision listed below, we provide an estimate of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, we provide graphs and detailed single year tables. We base all estimates on the intermediate assumptions described in the 2020 Trustees Report.
Choose the type of estimates (summary or detailed) from the list of provisions.
We group these provisions as follows:- B1: PIA bend point and factor changes, adjusting for inflation. These provisions reduce benefits for some future beneficiaries. Future PIA bend points and formula factors change so that the growth in benefits from one cohort to the next reflect some degree of inflation, rather than growth in average wages as specified in current law.
- B2: PIA bend point and factor changes, adjusting for longevity. These provisions reduce benefits for some future beneficiaries. Future PIA formula factors decrease as a result of increased longevity (people living longer).
- B3: PIA bend point and factor changes, other adjustments. These provisions specify other changes in future PIA bend points and formula factors.
- B4: Computation year changes. These provisions specify changes to the number of years used in determining benefits.
- B5: Minimum benefits. These provisions provide an increase in benefits to targeted individuals, generally those with low earnings and full work careers.
- B6: Benefit Increases for Older Beneficiaries. These provisions provide an increase in benefits for beneficiaries who have been on the rolls for at least 20 years.
- B7: Other benefit adjustments.
Number | Table and graph selection |
---|---|
B1.1 |
Price indexing of PIA factors beginning with those newly eligible for OASDI
benefits in 2027: Reduce factors so that initial benefits grow by inflation
rather than by the SSA average wage index.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2027: Create a new bend
point at the 30th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 30th percentile and below.
Reduce the 32 and 15 percent factors above the 30th percentile such that the
initial benefit for a worker with AIME equal to the taxable maximum grows by
inflation rather than the growth in the SSA average wage index.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2027: Create a new bend
point at the 40th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 40th percentile and below.
Reduce the 32 and 15 percent factors above the 40th percentile such that the
initial benefit for a worker with AIME equal to the taxable maximum grows by
inflation rather than the growth in the SSA average wage index.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning
with individuals newly eligible for OASDI benefits in 2027: Create a
new bend point at the 50th percentile of the AIME distribution of newly
retired workers. Maintain current-law benefits for earners at the 50th
percentile and below. Reduce the 32 and 15 percent factors above the 50th
percentile such that the initial benefit for a worker with AIME equal to
the taxable maximum grows by inflation rather than the growth in the SSA
average wage index.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2027: Create a new bend
point at the 60th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 60th percentile and below.
Reduce the 32 and 15 percent factors above the 60th percentile such that the
initial benefit for a worker with AIME equal to the taxable maximum grows by
inflation rather than the growth in the SSA average wage index.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.6 (2024) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2024: Create a new bend point
at the 30th percentile of the AIME distribution of newly retired workers. Maintain
current-law benefits for earners at the 30th percentile and below. Reduce the
32 and 15 percent factors above the 30th percentile such that the initial benefit
for a worker with AIME equal to the taxable maximum grows by inflation rather
than the growth in the SSA average wage index. Disabled workers are: (a) not
affected prior to normal retirement age; and (b) subject to a proportional reduction
in benefits, based on the worker's years of disability, upon conversion to
retired-worker beneficiary status. Young survivors (children of deceased workers
and surviving spouses with a child in care) are not affected.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.6 (2029) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2029: Create a new bend point
at the 30th percentile of the AIME distribution of newly retired workers. Maintain
current-law benefits for earners at the 30th percentile and below. Reduce the
32 and 15 percent factors above the 30th percentile such that the initial benefit
for a worker with AIME equal to the taxable maximum grows by inflation rather
than the growth in the SSA average wage index. Disabled workers are: (a) not
affected prior to normal retirement age; and (b) subject to a proportional reduction
in benefits, based on the worker's years of disability, upon conversion to retired-worker
beneficiary status.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.7 |
Progressive price indexing (40th percentile) of PIA factors for individuals
newly eligible for OASI benefits in 2028 through 2065: Create a new bend
point at the 40th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 40th percentile and below. Reduce
the 32 and 15 percent factors above the 40th percentile such that the initial
benefit for a worker with AIME equal to the taxable maximum grows by inflation
rather than the growth in the SSA average wage index. Disabled workers are: (a)
not affected prior to normal retirement age; and (b) subject to a proportional
reduction in benefits, based on the worker's years of disability, upon conversion
to retired-worker beneficiary status. Young survivors (children of deceased workers
and surviving spouses with a child in care) are not affected.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B1.8 |
Progressive price indexing (50th percentile) of PIA factors for
individuals newly eligible for OASI benefits in 2025 through 2064:
Create a new bend point at the 50th percentile of the AIME distribution
of newly retired workers. Maintain current-law benefits for earners
at the 50th percentile and below. Reduce the 32 and 15 percent factors
above the 50th percentile such that the initial benefit for a worker
with AIME equal to the taxable maximum grows by inflation rather than
the growth in the SSA average wage index. Disabled workers are: (a)
not affected prior to normal retirement age; and (b) subject to a proportional
reduction in benefits, based on the worker's years of disability, upon
conversion to retired-worker beneficiary status.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B2.1 |
Beginning with those newly eligible for OASI benefits in 2030, multiply
the PIA factors by the ratio of life expectancy at 67 for 2025 to the life
expectancy at age 67 for the 4th year prior to the year of benefit eligibility.
Unisex life expectancies, based on period life tables as computed by SSA's
Office of the Chief Actuary, are used to determine the ratio. Disabled
workers are: (a) not affected prior to normal retirement age; and (b)
subject to a proportional reduction in benefits, based on the worker's
years of disability, upon conversion to retired-worker beneficiary status.
Summary measures and graphs
(PDF version)
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B3.8 |
Beginning with those newly eligible for OASDI benefits in 2027, create a
new bend point at the 50th percentile of the AIME distribution of newly retired
workers and gradually reduce all PIA factors except for the 90 percent factor.
By 2060: a) the 32 percent PIA factor below the new bend point reduces to
30 percent; b) the 32 percent PIA factor above the new bend point reduces
to 10 percent; and c) the 15 percent PIA factor reduces to 5 percent.
Summary measures and graphs
(PDF version)
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B3.9 |
Beginning with those newly eligible for OASDI benefits in 2033, gradually
reduce the 15 percent PIA factor in each year so that it reaches 10 percent
for those newly eligible in 2062 and later.
Summary measures and graphs
(PDF version)
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B3.10 |
Beginning with those newly eligible for OASDI benefits in 2027, gradually
increase the first PIA bend point in each year so that it is 15 percent higher
for those newly eligible in 2041 and later.
Summary measures and graphs
(PDF version)
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B3.11 |
Increase the first PIA factor from 90 percent to 93 percent for all
beneficiaries eligible as of January 2022 and for those newly eligible
for benefits after 2021.
Summary measures and graphs
(PDF version)
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B3.12 |
Use an annualized "mini-PIA" formula beginning with retired workers
newly eligible in 2027. For each indexed earnings year, compute an
individual AIME and an individual PIA. Sum these individual PIAs for
the 40 highest years of indexed earnings and divide that total amount
by 37 to get the PIA for this provision. Phase-in over five years,
meaning that in 2027, 80 percent of the benefit would be based on the
old 35-year average PIA formula and 20 percent on the new mini-PIA
formula, shifting by 20 percentage points each year until 100 percent
is based on the new mini-PIA formula for those attaining age 62 in 2031.
Disabled worker benefits are unchanged under this provision.
Summary measures and graphs
(PDF version)
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B3.13 |
For retired worker beneficiaries newly eligible in 2027 (excluding
disabled workers), add a new bend point at the wage-indexed equivalent
of the 50th percentile of the AIME distribution minus $100 (for 2015
eligibility) and change the PIA factors to 95/32/15/5. Also move the
current-law first bend point from the wage-indexed equivalent of $960
in 2020 to $1,220 in 2020. Phase this provision in over 10 years (2027-2036).
The phase-in would work on a weighted-average basis: 90% of CL formula
+ 10% of proposal formula for 2027, 80% of CL formula + 20% of proposal
formula for 2028, and so on.
Summary measures and graphs
(PDF version)
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B3.14 |
Beginning with those newly eligible for OASDI benefits in 2022, reduce
the 15 percent PIA factor by 2 percentage points per year so that it reaches
5 percent for those newly eligible in 2026 and later.
Summary measures and graphs
(PDF version)
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B3.15 |
Increase the 90 percent PIA formula factor to 91 percent for beneficiaries
newly eligible in 2025, 92 percent for those newly eligible in 2026, ...,
reaching 95 percent for those newly eligible in 2029 and later.
Summary measures and graphs
(PDF version)
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B3.16 |
For retired worker and disabled worker beneficiaries becoming initially
eligible in January 2027 or later, phase in a new benefit formula (from
2027 to 2036). Replace the existing two primary insurance amount (PIA)
bend points with three new bend points as follows: (1) 25% AWI/12 from
2 years prior to initial eligibility; (2) 100% AWI/12 from 2 years prior
to initial eligibility; and (3) 125% AWI/12 from 2 years prior to initial
eligibility. The new PIA factors are 95%, 27.5%, 5% and 2%. During the
phase in, those becoming newly eligible for benefits will receive an increasing
portion of their benefits based on the new formula, reaching 100% of the
new formula in 2036.
Summary measures and graphs
(PDF version)
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B4.1 |
Increase the number of years used to calculate benefits for retirees
and survivors (but not for disabled workers) from 35 to 38, phased in
over the years 2021-2025.
Summary measures and graphs
(PDF version)
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B4.2 |
Increase the number of years used to calculate benefits for retirees
and survivors (but not for disabled workers) from 35 to 40, phased in
over the years 2021-2029.
Summary measures and graphs
(PDF version)
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B4.3 |
For the OASI and DI computation of the PIA, gradually reduce the maximum
number of drop-out years from 5 to 0, phased in over the years 2022-2030.
Summary measures and graphs
(PDF version)
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B4.4 |
Reduce the number of computation years (increase dropout years) for parents
having a child in care under the age of 6. The parent must have no earnings
(covered or non-covered) for the year to be eligible for the credit. Only one
parent can claim the childcare added dropout year for a given earnings year.
Each parent can earn at most 2 dropout years per child, and a maximum of 5
dropout years in total. The years designated as childcare years do not have
to be the years that could otherwise be included in the computation of the
average indexed monthly earnings (AIME). The provision would be effective
for all benefits payable for entitlement in January 2022 and later (without
regard for when the beneficiary became initially eligible).
Summary measures and graphs
(PDF version)
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B4.5 |
For retired and disabled workers, reduce the maximum number of dropout
years to 4 for workers newly eligible in 2022, to 3 for workers newly
eligible in 2023, and to 2 for workers newly eligible in 2024 and later.
Summary measures and graphs
(PDF version)
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B5.1 |
Increase the PIA to a level such that a worker with 30 years of earnings
at the minimum wage level receives an adjusted PIA equal to 120 percent
of the Federal poverty level for an aged individual. This provision takes
full effect for all newly eligible OASDI workers in 2038, and is phased
in for new eligibles in 2029 through 2037. The percentage increase in PIA
is lowered proportionately for those with fewer than 30 years of earnings,
down to no enhancement for workers with 20 or fewer years of earnings.
(Year-of-work requirements are "scaled" for disabled workers based on their
years of potential work from age 22 to benefit eligibility). The benefit
enhancement percentage is reduced proportionately for workers with higher
average indexed monthly earnings (AIME), down to no enhancement for those
with AIME at least twice that of a 35-year steady minimum wage earner.
Summary measures and graphs
(PDF version)
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B5.2 |
Beginning for those newly eligible in 2021, reconfigure the special
minimum benefit: (a) A year of coverage is defined as a year in which
4 quarters of coverage are earned. (b) At implementation, set the PIA
for 30 years of coverage equal to 125 percent of the monthly poverty
level (about $1,301 in 2019). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,301/20 = $65.05. (c)
Index the initial PIA per year of coverage by wage growth for successive
cohorts.
Summary measures and graphs
(PDF version)
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B5.3 |
Beginning for those newly eligible in 2021, reconfigure the special minimum
benefit: (a) A year of coverage is defined to be either a year in which 4
quarters of coverage are earned or a child is in care. Childcare years are
granted to parents who have a child under 5, with a limit of 8 such years.
(b) At implementation, set the PIA for 30 years of coverage equal to 125 percent
of the monthly poverty level (about $1,301 in 2019). For those with under 30
years of coverage, the PIA per year of coverage over 10 years is $1,301/20
= $65.05. (c) Index the initial PIA per year of coverage by wage growth for
successive cohorts.
Summary measures and graphs
(PDF version)
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B5.4 |
Beginning for those newly eligible in 2027, reconfigure the special minimum
benefit: (a) A year of coverage is defined as a year in which 4 quarters of
coverage are earned. (b) At implementation, set the PIA for 30 years of coverage
equal to 125 percent of the monthly poverty level (about $1,301 in 2019). For
those with under 30 years of coverage, the PIA per year of coverage over 10
years is $1,301/20 = $65.05. (c) From 2019 to the year of implementation, 2027,
index the PIA per year of coverage using the chain-CPI index. Then, for later
years, index the PIA per year of coverage by wage growth for successive cohorts.
(d) Scale work requirements for disabled workers, based on the number of years
of non-disabled potential work.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B5.5 |
Beginning for those newly eligible in 2022, reconfigure the special
minimum benefit: (a) A year of coverage is defined as a year in which
either 20 percent of the "old law maximum" is earned or a child is
in care. Childcare years are granted to parents who have a child under
6, with a limit of 8 such years. (b) At implementation, set the PIA
for 30 years of coverage equal to 133 percent of the Census monthly
poverty level (about $1,359 in 2019). For those with under 30 years
of coverage, the PIA per year of coverage over 19 years is $1,359/11
= $123.50. (c) Index the initial PIA per year of coverage by wage growth
for successive cohorts. (d) Scale work requirements for disabled workers,
based on the number of years of non-disabled potential work.
Summary measures and graphs
(PDF version)
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B5.6 |
Beginning for those newly eligible in 2021, reconfigure the special minimum
benefit: (a) A year of coverage is defined to be either a year in which 4
quarters of coverage are earned or a child is in care. Childcare years are
granted to parents who have a child under 6, with a limit of 5 such years.
(b) At implementation, set the PIA for 30 years of coverage equal to 100 percent
of the monthly poverty level (about $1,063 in 2020). For those with under 30
years of coverage, the PIA per year of coverage over 10 years is $1,063/20
= $53.15. (c) From 2020 to the year of implementation, 2021, index the PIA
per year of coverage using the CPI index. Then, for later years, index the
PIA per year of coverage by wage growth for successive cohorts. (d) Scale
work requirements for disabled workers, based on the number of years of
non-disabled potential work.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
B5.7 |
Beginning for those newly eligible in 2023, reconfigure the special minimum
benefit: (a) The number of years of work (YOWs) is determined as total quarters
of coverage divided by 4, ignoring any fraction. Childcare years are granted
to parents who have a child under 6, with a limit of 5 such years. (b) At
implementation, set the PIA for 30+ YOWs equal to 100 percent of the monthly
HHS poverty level for the year prior to eligibility. For workers between 11
and 29 YOWs, reduce the special minimum by 3 1/3 percentage points per YOW so
that at 29 YOWs the minimum would be 96 2/3% of poverty, ..., down to 11 YOWs
at 36 2/3% of poverty. No minimum for 10 or fewer YOWs.
Summary measures and graphs
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B5.8 |
Beginning in 2025, create a Basic Minimum Benefit (BMB) within Social Security
(i.e., the cost of the BMB would be charged as a cost to the OASI Trust Fund),
with the following specifications: (1) Eligibility for the BMB would be limited
to OASI beneficiaries who have attained normal retirement age (NRA) or above.
OASI beneficiaries under NRA would not be eligible for the BMB. (2) The BMB would
be calculated on a household basis and split equally between members of the household.
In the case of a married couple, both spouses would need to claim any Social
Security benefits for which they are eligible before they could receive the BMB.
If both spouses have claimed and one is NRA or above and the other has not yet
attained NRA, only the half of the BMB for the spouse over NRA would be payable.
(3) The BMB amount for single beneficiaries would be equal to either: 1) the BMB
base ($604 in 2015) - 0.70 * current monthly OASI benefit (not including any BMB),
if positive; or 2) zero. (4) The BMB amount for married beneficiaries would be
equal to either: 1) the BMB base ($906 in 2015) - 0.70 * total household monthly
OASI benefits (not including any BMB), if positive; or 2) zero. (5) The BMB bases
for singles and couples would be updated annually for changes in the average wage
index (AWI). (6) Single filers with Adjusted Gross Income (AGI) over $30,000 and
joint filers with AGI (including taxable SS benefits) over $45,000 would be subject
to clawback of the BMB through the income tax system. Any BMB would be reduced by
one dollar for every dollar of income above the thresholds. (Thresholds, in 2015
dollars, would be indexed to chained CPI-U.) Clawbacks would be credited back to
the OASI Trust Fund.
Summary measures and graphs
(PDF version)
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B5.9 |
Beginning for those newly eligible in 2022, reconfigure the special minimum
benefit: (a) A year of coverage is defined as a year in which 4 quarters of
coverage are earned. (b) At implementation, set the PIA for 40 years of coverage
equal to 125 percent of the monthly Aged Federal poverty level (about $1,277
in 2019). For those with 20 or fewer years of coverage, phase up linearly
from 0 percent of the poverty level for 10 years of coverage to 100 percent
of the poverty level. For those having between 20 and 40 years of coverage,
phase up linearly from 100 percent of the poverty level at 20 years of coverage
to 125% of the poverty level for 40 or more years of coverage. (c) For newly
eligible workers in 2022 and 2023, index the applicable poverty level using
the CPI index, to the year prior to eligibility. Then, for newly eligible
workers in 2024 and later, index the PIA per year of coverage by wage growth
for successive cohorts. (d) Disabled workers have a somewhat similar minimum
benefit, with work requirements scaled based on the number of years of non-disabled
potential work.
Summary measures and graphs
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B5.10 |
Reconfigure the special minimum benefit, phased in for retired and disabled
workers newly eligible from 2027 through 2036: (a) A year of work (YOW) coverage
is equal to earnings at or above $10,875 in 2020 (reflecting a full-time worker
earning the federal minimum wage), adjusted thereafter for wage growth. (b)
At implementation, set the minimum PIA at zero percent of AWI for those with
10 or fewer YOWs to 15 percent of AWI for those with 15 YOWs, increasing linearly
so that it reaches 19 percent for 19 YOWs. Then the minimum PIA would jump
up to 25 percent of AWI for those with 20 YOWs, increasing linearly so that
it equals 35 percent of AWI for those with 35 or more YOWs. (c) Use the AWI
for two years prior to the year of initial eligibility in the minimum PIA
calculation with COLA increase after the year of initial eligibility. (d) Scale
the YOW requirements for disabled workers, based on the number of years of
non-disabled potential work.
Summary measures and graphs
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B5.11 |
Beginning for those newly eligible in 2021, reconfigure the special minimum
benefit: (a) The number of years of work (YOWs) is determined as total quarters
of coverage divided by 4, ignoring any fraction. Childcare years are granted
to parents who have a child under 6, with a limit of 5 such years. (b) For
beneficiaries becoming newly eligible in 2021, set the initial special minimum
benefit for 30+ YOWs equal to 100 percent of the monthly HHS poverty level
for 2020. For beneficiaries becoming newly eligible after 2021, the initial
special minimum benefit is indexed by the AWI. For workers between 11 and 29
YOWs, reduce the special minimum by 3 1/3 percentage points per YOW so that
at 29 YOWs the minimum would be 96 2/3% of poverty, ..., down to 11 YOWs at
36 2/3% of poverty. No minimum for 10 or fewer YOWs.
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B6.1 |
Provide a 5 percent increase to the monthly benefit amount (MBA) of any beneficiary
who is 85 or older at the beginning of 2021 or who reaches their 85th birthday after
the beginning of 2021.
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B6.2 |
Provide the same dollar amount increase to the monthly benefit amount
(MBA) of any beneficiary who is 85 or older at the beginning of 2021
or who reaches their 85th birthday after the beginning of 2021. The
dollar amount of increase equals 5 percent of the average retired-worker
MBA in the prior year.
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B6.3 |
Provide an increase in the benefit level of any beneficiary who is
85 or older at the beginning of 2022 or who reaches their 85th birthday
after the beginning of 2022. Increase the beneficiary's PIA based
on an amount equal to the average retired-worker PIA at the end of
2021, or at the end of the year age 80 if later. Increase the beneficiary's
PIA by 5 percent of this amount for those older than 85 at the beginning
of 2022 and by 5 percent of this amount at age 85 for others, phased
in at 1 percent per year for ages 81-85.
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B6.4 |
Starting in 2021, provide a 5 percent uniform benefit increase 24 years
after initial benefit eligibility. Phase in the benefit increase at 1 percent
per year from the 20th through 24th years after eligibility. For disabled
workers, the eligibility age is the initial entitlement year to the benefit.
The benefit increase is equal to 5 percent of the PIA of a worker assumed
to have career-average earnings equal to SSA's average wage index. Auxiliary
beneficiaries receive benefit enhancement based on the PIA of the governing worker.
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B6.5 |
Starting in 2023, provide a 5 percent uniform PIA increase 20 years after
benefit eligibility. Phase in the PIA increase at 1 percent per year from
the 16th through 20th years after eligibility. The full PIA increase is equal
to 5 percent of the PIA of a worker assumed to have career-average earnings
equal to the SSA average wage index. Auxiliary beneficiaries receive benefit
enhancement based on the PIA of the governing worker.
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B6.6 |
Starting in 2027, provide a uniform PIA increase in the 24th year of
benefit eligibility. Phase in the PIA increase at 0.5 percent per year
from the 15th through the 24th years of eligibility. The full PIA increase
is equal to 5 percent of the average retired worker PIA in December
of the 14th year of benefit eligibility. A similar additional PIA increase
applies in the 43rd year of benefit eligibility (age 104), phased in
from the 34rd through the 43nd years of eligibility. For those past the
15th year of eligibility in 2027 (over age 76 for retirees), phase in
the PIA enhancement over 10 years starting in 2027. Auxiliary beneficiaries
receive benefit enhancement based on the PIA of the governing worker.
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B6.7 |
Starting in January 2027, provide an addition to monthly benefits for all
beneficiaries who have been eligible for at least 20 years, with the following
specifications: (1) Augment benefits (not the PIA) for those of qualifying
age and eligibility duration with a MAGI below about $27,000 if single and
$54,000 if married. MAGI is set to equal the IRMAA definition (AGI plus
tax-exempt interest income). Index these thresholds after 2027 by the increase
in the C-CPI-U; (2) The full additional amount is applicable for those born
1961 and later, once 24 years elapse from initial eligibility. The basic
additional amount is calculated as 5 percent of the PIA for a hypothetical
worker with earnings equal to the AWI each year; (3) For those born prior
to 1961, the full additional amount is multiplied by the number of years
they have been affected by the C-CPI-U, divided by 24; (4) Beneficiaries
will receive 20 percent of their additional amount in their 20th year after
initial eligibility, 40 percent in their 21st year after initial eligibility,...,
and 100 percent of their additional amount in their 24th and later years
after benefit eligibility; (5) Retired and disabled worker beneficiaries,
dually entitled spouse beneficiaries, and all survivor beneficiaries received
their addition as described above. Spousal beneficiaries (aged or with child
in care) and child beneficiaries of a living retired or disabled worker receive
50 percent of the additional amount described above. Other beneficiary types
(such as parents of deceased workers) will receive the percentage of the flat
benefit that equals the percentage of the insured worker's PIA that they receive;
(6) The AWI used is for the second year prior to the beneficiary's initial eligibility
year, with applicable COLAs applied up to the age when the addition is received;
and (7) The additional amount is added to the monthly benefit after reductions
for early claiming or increases for delayed claiming have been applied.
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B6.8 |
Starting in 2022, provide an additional monthly benefit equal to 1/12th
of 2 percent of the AWI for the second prior year. This additional benefit
would be available to those meeting any of the following four requirements:
(a) Social Security beneficiaries who have attained age 82; (b) Social
Security beneficiaries who have attained NRA and have both AIME at or below
the first PIA bend point ($960 for 2020 initial eligibility) and at least
11 "years of coverage" as used for Windfall Elimination Provision purposes
(earnings above $25.575 for 2020); (c) Individuals who have received Social
Security benefits and/or SSI payments for at least 240 distinct months after
attaining age 19; or (d) SSI recipients who have attained the Social Security
NRA. This additional benefit would be paid out of the applicable Social
Security OASI or DI Trust Fund for any month in which the individual is
in receipt of a Social Security benefit; it would be paid out of the General
Fund of the Treasury for any month in which the individual is in receipt
of an SSI monthly payment but not a Social Security monthly benefit.
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B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2021 and later.
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B7.3 |
Give credit to parents with a child under 6 for earnings for up to five years.
The earnings credited for a childcare year equal one half of the SSA average
wage index (about $27,821 in 2020). The credits are available for all past years
to newly eligible retired-worker and disabled-worker beneficiaries starting in
2021. The 5 years are chosen to yield the largest increase in AIME.
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B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning
of 2021 and for those newly eligible for benefits after the beginning of 2021.
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B7.7 |
Reduce individual Social Security benefits if modified adjusted gross income,
or MAGI (AGI less taxable Social Security benefits plus nontaxable interest
income) is above $60,000 for single taxpayers or $120,000 for taxpayers filing
jointly. This provision is effective for individuals newly eligible for benefits
in 2025 or later. The percentage reduction increases linearly up to 50 percent
for single/joint filers with MAGI of $180,000/$360,000 or above. Index the MAGI
thresholds for years after 2024, based on changes in the SSA average wage index.
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B7.8 |
Replace the Windfall Elimination Provision (WEP) and Government Pension
Offset (GPO) with a revised reduction for most OASI benefits based on all
earnings, beginning with beneficiaries newly eligible in 2027.
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B7.9 |
Beginning for newly eligible retired workers and spouses in 2027, all
claimants who are married would receive a specified joint-and-survivor
annuity benefit (i.e., surviving spouses would receive 75 percent of
the decedents' benefits, in addition to their own) that would be payable
if both were still alive. Initial benefits would be actuarially adjusted
to keep the expected value of benefits equivalent to what would otherwise
be current law.
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B7.10 |
Replace the current-law WEP with a new calculation for most OASI and DI
benefits based on covered and non-covered earnings, phased in for beneficiaries
becoming newly eligible in 2027 through 2036. For this new approach, compute
a PIA based on all past earnings (covered and non-covered), and multiply
by the "non-covered earnings ratio." This ratio is equal to the current-law
concept of the average indexed monthly earnings computed without non-covered
earnings divided by a modified average indexed monthly earnings that includes
both covered and non-covered earnings in our records.
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B7.11 |
Beginning in January 2023, eliminate the retirement earnings test for
all beneficiaries under normal retirement age, including retired workers,
aged spouses, aged widow(er)s, young spouses with a child in care, young
surviving spouses with a child in care, and children.
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B7.12 |
Provide an option to split the 8-percent delayed retirement credit (DRC)
to offer a lump sum benefit at initial entitlement equal to 2 percent of
the 8 percent DRC earned, and a 6 percent DRC on subsequent monthly benefits,
effective for workers newly entitled to retired worker benefits in 2023
and later. Widows are held harmless from the lump-sum decision.
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B7.13 |
Eliminate the DI 5-month waiting period for disabled workers and disabled
surviving spouses, and eliminate the 24-month Medicare (HI) waiting period
for individuals who have become entitled to Social Security disability benefits.
Effective with 2021 applications.
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