Notch Fairness Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 3839 To amend title II of the Social Security Act to allow workers who attain age 65 after 1981 and before 1992 to choose either lump sum payments over four years totaling $5,000 or an improved benefit computation formula under a new 10-year rule governing the transition to the changes in benefit computation rules enacted in the Social Security Amendments of 1977, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 11, 2021 Ms. MENG (for herself and Mr. SAN NICOLAS) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend title II of the Social Security Act to allow workers who attain age 65 after 1981 and before 1992 to choose either lump sum payments over four years totaling $5,000 or an improved benefit computation formula under a new 10-year rule governing the transition to the changes in benefit computation rules enacted in the Social Security Amendments of 1977, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS 2 •HR 3839 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Notch Fairness Act 2 of 2021’’. 3 SEC. 2. NEW GUARANTEED MINIMUM PRIMARY INSURANCE 4 AMOUNT WHERE ELIGIBILITY ARISES DUR- 5 ING TRANSITIONAL PERIOD. 6 (a) IN GENERAL.—Section 215(a) of the Social Secu- 7 rity Act is amended— 8 (1) in paragraph (4)(B), by inserting ‘‘(with or 9 without the application of paragraph (8))’’ after 10 ‘‘would be made’’, and by striking ‘‘1984’’ in clause 11 (i) and inserting ‘‘1989’’; and 12 (2) by adding at the end the following: 13 ‘‘(8)(A) In the case of an individual described in 14 paragraph (4)(B) (subject to subparagraphs (F) and (G) 15 of this paragraph), the amount of the individual’s primary 16 insurance amount as computed or recomputed under para- 17 graph (1) shall be deemed equal to the sum of— 18 ‘‘(i) such amount, and 19 ‘‘(ii) the applicable transitional increase amount 20 (if any). 21 ‘‘(B) For purposes of subparagraph (A)(ii), the term 22 ‘applicable transitional increase amount’ means, in the 23 case of any individual, the product derived by multi- 24 plying— 25 ‘‘(i) the excess under former law, by 26 VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS 3 •HR 3839 IH ‘‘(ii) the applicable percentage in relation to the 1 year in which the individual becomes eligible for old- 2 age insurance benefits, as determined by the fol- 3 lowing table: 4 ‘‘If the individual becomes The applicable eligible for such benefits in: percentage is: 1979 ................................................................................................... 55 1980 ................................................................................................... 45 1981 ................................................................................................... 35 1982 ................................................................................................... 32 1983 ................................................................................................... 25 1984 ................................................................................................... 20 1985 ................................................................................................... 16 1986 ................................................................................................... 10 1987 ................................................................................................... 3 1988 ................................................................................................... 5. ‘‘(C) For purposes of subparagraph (B), the term ‘ex- 5 cess under former law’ means, in the case of any indi- 6 vidual, the excess of— 7 ‘‘(i) the applicable former law primary insur- 8 ance amount, over 9 ‘‘(ii) the amount which would be such individ- 10 ual’s primary insurance amount if computed or re- 11 computed under this section without regard to this 12 paragraph and paragraphs (4), (5), and (6). 13 ‘‘(D) For purposes of subparagraph (C)(i), the term 14 ‘applicable former law primary insurance amount’ means, 15 in the case of any individual, the amount which would be 16 such individual’s primary insurance amount if it were— 17 VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS 4 •HR 3839 IH ‘‘(i) computed or recomputed (pursuant to 1 paragraph (4)(B)(i)) under section 215(a) as in ef- 2 fect in December 1978, or 3 ‘‘(ii) computed or recomputed (pursuant to 4 paragraph (4)(B)(ii)) as provided by subsection (d), 5 (as applicable) and modified as provided by subparagraph 6 (E). 7 ‘‘(E) In determining the amount which would be an 8 individual’s primary insurance amount as provided in sub- 9 paragraph (D)— 10 ‘‘(i) subsection (b)(4) shall not apply, 11 ‘‘(ii) section 215(b) as in effect in December 12 1978 shall apply, except that section 215(b)(2)(C) 13 (as then in effect) shall be deemed to provide that 14 an individual’s ‘computation base years’ may include 15 only calendar years in the period after 1950 (or 16 1936 if applicable) and ending with the calendar 17 year in which such individual attains age 61, plus 18 the 3 calendar years after such period for which the 19 total of such individual’s wages and self-employment 20 income is the largest, and 21 ‘‘(iii) subdivision (I) in the last sentence of 22 paragraph (4) shall be applied as though the words 23 ‘without regard to any increases in that table’ in 24 VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS 5 •HR 3839 IH such subdivision read ‘including any increases in 1 that table’. 2 ‘‘(F) This paragraph shall apply in the case of any 3 individual only if such application results in a primary in- 4 surance amount for such individual that is greater than 5 it would be if computed or recomputed under paragraph 6 (4)(B) without regard to this paragraph. 7 ‘‘(G)(i) This paragraph shall apply in the case of any 8 individual subject to any timely election to receive lump 9 sum payments under this subparagraph. 10 ‘‘(ii) A written election to receive lump sum payments 11 under this subparagraph, in lieu of the application of this 12 paragraph to the computation of the primary insurance 13 amount of an individual described in paragraph (4)(B), 14 may be filed with the Commissioner of Social Security in 15 such form and manner as shall be prescribed in regula- 16 tions of the Commissioner. Any such election may be filed 17 by such individual or, in the event of such individual’s 18 death before any such election is filed by such individual, 19 by any other beneficiary entitled to benefits under section 20 202 on the basis of such individual’s wages and self-em- 21 ployment income. Any such election filed after December 22 31, 2022, shall be null and void and of no effect. 23 VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS 6 •HR 3839 IH ‘‘(iii) Upon receipt by the Commissioner of a timely 1 election filed by the individual described in paragraph 2 (4)(B) in accordance with clause (ii)— 3 ‘‘(I) the Commissioner shall certify receipt of 4 such election to the Secretary of the Treasury, and 5 the Secretary of the Treasury, after receipt of such 6 certification, shall pay such individual, from 7 amounts in the Federal Old-Age and Survivors In- 8 surance Trust Fund, a total amount equal to 9 $5,000, in 4 annual lump sum installments of 10 $1,250, the first of which shall be made during fis- 11 cal year 2023 not later than July 1, 2023, and 12 ‘‘(II) subparagraph (A) shall not apply in deter- 13 mining such individual’s primary insurance amount. 14 ‘‘(iv) Upon receipt by the Commissioner as of Decem- 15 ber 31, 2022, of a timely election filed in accordance with 16 clause (ii) by at least one beneficiary entitled to benefits 17 on the basis of the wages and self-employment income of 18 a deceased individual described in paragraph (4)(B), if 19 such deceased individual has filed no timely election in ac- 20 cordance with clause (ii)— 21 ‘‘(I) the Commissioner shall certify receipt of all 22 such elections received as of such date to the Sec- 23 retary of the Treasury, and the Secretary of the 24 Treasury, after receipt of such certification, shall 25 VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS 7 •HR 3839 IH pay each beneficiary filing such a timely election, 1 from amounts in the Federal Old-Age and Survivors 2 Insurance Trust Fund, a total amount equal to 3 $5,000 (or, in the case of two or more such bene- 4 ficiaries, such amount distributed evenly among such 5 beneficiaries), in 4 equal annual lump sum install- 6 ments, the first of which shall be made during fiscal 7 year 2023 not later than July 1, 2023, and 8 ‘‘(II) solely for purposes of determining the 9 amount of such beneficiary’s benefits, subparagraph 10 (A) shall be deemed not to apply in determining the 11 deceased individual’s primary insurance amount.’’. 12 (b) EFFECTIVE DATE AND RELATED RULES.— 13 (1) APPLICABILITY OF AMENDMENTS.— 14 (A) IN GENERAL.—Except as provided in 15 paragraph (2), the amendments made by this 16 Act shall be effective as though they had been 17 included or reflected in section 201 of the So- 18 cial Security Amendments of 1977. 19 (B) APPLICABILITY.—No monthly benefit 20 or primary insurance amount under title II of 21 the Social Security Act shall be increased by 22 reason of such amendments for any month be- 23 fore July 2023. 24 VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS 8 •HR 3839 IH (2) RECOMPUTATION TO REFLECT BENEFIT IN- 1 CREASES.—In any case in which an individual is en- 2 titled to monthly insurance benefits under title II of 3 the Social Security Act for June 2023, if such bene- 4 fits are based on a primary insurance amount com- 5 puted— 6 (A) under section 215 of such Act as in ef- 7 fect (by reason of the Social Security Amend- 8 ments of 1977) after December 1978, or 9 (B) under section 215 of such Act as in ef- 10 fect prior to January 1979 by reason of sub- 11 section (a)(4)(B) of such section (as amended 12 by the Social Security Amendments of 1977), 13 the Commissioner of Social Security (notwith- 14 standing section 215(f)(1) of the Social Security 15 Act) shall recompute such primary insurance 16 amount so as to take into account the amendments 17 made by this Act. 18 Æ VerDate Sep 11 2014 17:28 Jun 29, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H3839.IH H3839 lotter on DSK11XQN23PROD with BILLS