Social Security COVID Correction and Equity Act

II 116TH CONGRESS 2D SESSION S. 4986 To prevent an unintended drop in Social Security benefits due to COVID– 19 and the application of the National Average Wage Index, and improve Social Security and Supplemental Security Income benefits on an emer- gency basis. IN THE SENATE OF THE UNITED STATES DECEMBER 9, 2020 Ms. HIRONO introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To prevent an unintended drop in Social Security benefits due to COVID–19 and the application of the National Average Wage Index, and improve Social Security and Supplemental Security Income benefits on an emergency basis. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Social Security COVID 4 Correction and Equity Act’’. 5 SEC. 2. TABLE OF CONTENTS. 6 The table of contents for this Act is as follows: 7 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4986 IS Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. Preventing an unintended drop in benefits relating to the application of the National Average Wage Index. Sec. 4. Across-the-board benefit increase. Sec. 5. Increase in minimum benefit for lifetime low earners based on years in the workforce. Sec. 6. Increase in threshold amounts and rate for inclusion of Social Security benefits in income. Sec. 7. Extension of child’s benefit for full-time post-secondary school students under age 23. Sec. 8. Improving Social Security benefits for widows and widowers in two-in- come households. Sec. 9. Increasing access to benefits for children who live with grandparents or other relatives. Sec. 10. Update in eligibility for the Supplemental Security Income program. Sec. 11. Support and maintenance furnished in kind not included as income. Sec. 12. Holding SSI, Medicaid, and CHIP beneficiaries harmless. Sec. 13. Expedited adjustment of underpayments. Sec. 14. Appropriation of funds. SEC. 3. PREVENTING AN UNINTENDED DROP IN BENEFITS 1 RELATING TO THE APPLICATION OF THE NA- 2 TIONAL AVERAGE WAGE INDEX. 3 (a) MODIFICATIONS RELATED TO COMPUTATION OF 4 PRIMARY INSURANCE AMOUNT.—Section 215 of the So- 5 cial Security Act (42 U.S.C. 415) is amended— 6 (1) in subsection (a)(1)(B)(ii)(I)— 7 (A) in subclause (I)— 8 (i) by striking ‘‘the national’’ and in- 9 serting ‘‘(aa) the national’’; and 10 (ii) by striking ‘‘, by’’ at the end and 11 inserting ‘‘; or’’; and 12 (B) by adding at the end of subclause (I) 13 the following: 14 ‘‘(bb) if higher (and if such second 15 calendar year is after 2019), the highest 16 VerDate Sep 11 2014 00:09 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4986 IS national average wage index (as so de- 1 fined) for any calendar year before such 2 second calendar year, by’’; and 3 (2) in subsection (b)(3)(A)(ii)— 4 (A) in subclause (I)— 5 (i) by striking ‘‘the national’’ and in- 6 serting ‘‘(aa) the national’’; and 7 (ii) by striking ‘‘, by’’ at the end and 8 inserting ‘‘; or’’; and 9 (B) by adding at the end of subclause (I) 10 the following: 11 ‘‘(bb) if higher (and if such second 12 calendar year is after 2019), the highest 13 national average wage index (as so de- 14 fined) for any calendar year before such 15 second calendar year, by’’. 16 (b) MODIFICATION RELATED TO REDUCTION OF 17 BENEFITS BASED ON DISABILITY.—Section 18 224(f)(2)(B)(i) of such Act (42 U.S.C. 424(f)(2)(B)(i)) is 19 amended by inserting ‘‘(or if higher (and if such calendar 20 year is after 2019), the highest national average wage 21 index (as so defined) for any calendar year before such 22 calendar year)’’ after ‘‘made’’. 23 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4986 IS SEC. 4. ACROSS-THE-BOARD BENEFIT INCREASE. 1 (a) IN GENERAL.—Section 215(a)(1)(A)(i) of the So- 2 cial Security Act (42 U.S.C. 415(a)(1)(A)(i)) is amended 3 by striking ‘‘90 percent’’ and inserting ‘‘93 percent’’. 4 (b) EFFECTIVE DATE.— 5 (1) IN GENERAL.—The amendment made by 6 subsection (a) shall apply with respect to monthly 7 insurance benefits payable for months in calendar 8 year 2020. 9 (2) RECOMPUTATION OF PRIMARY INSURANCE 10 AMOUNTS.—Notwithstanding section 215(f) of the 11 Social Security Act, the Commissioner of Social Se- 12 curity shall recompute primary insurance amounts 13 to the extent necessary— 14 (A) to carry out the amendments made by 15 this section; and 16 (B) to account for the nonapplication of 17 such amendments after calendar year 2020. 18 (c) RULE OF CONSTRUCTION.—For purposes of ap- 19 plying subparagraphs (A) and (B) of section 215(i)(1) of 20 the Social Security Act in any calendar year, nothing in 21 this Act shall be considered a general benefit increase 22 under title II of such Act. 23 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4986 IS SEC. 5. INCREASE IN MINIMUM BENEFIT FOR LIFETIME 1 LOW EARNERS BASED ON YEARS IN THE 2 WORKFORCE. 3 (a) IN GENERAL.—Section 215(a)(1) of the Social 4 Security Act (42 U.S.C. 415(a)(1)) is amended— 5 (1) by redesignating subparagraph (D) as sub- 6 paragraph (E); and 7 (2) by inserting after subparagraph (C) the fol- 8 lowing new subparagraph: 9 ‘‘(D)(i) Effective with respect to monthly insurance 10 benefits payable for months in calendar year 2020, no pri- 11 mary insurance amount computed under subparagraph 12 (A) may be less than the greater of— 13 ‘‘(I) the minimum monthly amount computed 14 under subparagraph (C); or 15 ‘‘(II) in the case of an individual who has more 16 than 10 years of work (as defined in clause (iv)(I)), 17 the alternative minimum amount determined under 18 clause (ii). 19 ‘‘(ii)(I) The alternative minimum amount determined 20 under this clause is the applicable percentage of 1⁄12 of 21 the poverty guideline for 2019. 22 ‘‘(II) For purposes of subclause (I), the applicable 23 percentage is the percentage specified in connection with 24 the number of years of work, as set forth in the following 25 table: 26 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 4986 IS ‘‘If the number of years The applicable of work is: percentage is: 11 ...................................................................................... 6.25 percent 12 ...................................................................................... 12.50 percent 13 ...................................................................................... 18.75 percent 14 ...................................................................................... 25.00 percent 15 ...................................................................................... 31.25 percent 16 ...................................................................................... 37.50 percent 17 ...................................................................................... 43.75 percent 18 ...................................................................................... 50.00 percent 19 ...................................................................................... 56.25 percent 20 ...................................................................................... 62.50 percent 21 ...................................................................................... 68.75 percent 22 ...................................................................................... 75.00 percent 23 ...................................................................................... 81.25 percent 24 ...................................................................................... 87.50 percent 25 ...................................................................................... 93.75 percent 26 ...................................................................................... 100.00 percent 27 ...................................................................................... 106.25 percent 28 ...................................................................................... 112.50 percent 29 ...................................................................................... 118.75 percent 30 or more ........................................................................ 125.00 percent. ‘‘(iii) For purposes of this subparagraph— 1 ‘‘(I) the term ‘year of work’ means, with re- 2 spect to an individual, a year to which 4 quarters of 3 coverage have been credited based on such individ- 4 ual’s wages and self-employment income; and 5 ‘‘(II) the ‘term poverty guideline for 2019’ 6 means the annual poverty guideline for 2019 (as up- 7 dated annually in the Federal Register by the De- 8 partment of Health and Human Services under the 9 authority of section 673(2) of the Omnibus Budget 10 Reconciliation Act of 1981) as applicable to a single 11 individual.’’. 12 (b) RECOMPUTATION OF PRIMARY INSURANCE 13 AMOUNTS.—Notwithstanding section 215(f) of the Social 14 Security Act, the Commissioner of Social Security shall 15 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 4986 IS recompute primary insurance amounts to the extent nec- 1 essary— 2 (1) to carry out the amendments made by this 3 section; and 4 (2) to account for the nonapplication of such 5 amendments after calendar year 2020. 6 (c) CONFORMING AMENDMENT.—Section 209(k)(1) 7 of such Act (42 U.S.C. 409(k)(1)) is amended by inserting 8 ‘‘215(a)(1)(E),’’ after ‘‘215(a)(1)(D),’’. 9 SEC. 6. INCREASE IN THRESHOLD AMOUNTS AND RATE 10 FOR INCLUSION OF SOCIAL SECURITY BENE- 11 FITS IN INCOME. 12 (a) IN GENERAL.—Subsection (a) of section 86 of the 13 Internal Revenue Code of 1986 is amended to read as fol- 14 lows: 15 ‘‘(a) IN GENERAL.—Gross income for the taxable 16 year of any taxpayer described in subsection (b) (notwith- 17 standing section 207 of the Social Security Act) includes 18 Social Security benefits in an amount equal to the lesser 19 of— 20 ‘‘(1) 85 percent of the Social Security benefits 21 received during the taxable year, or 22 ‘‘(2) one-half of the excess described in sub- 23 section (b)(1).’’. 24 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 4986 IS (b) BASE AMOUNT.—Subsection (c) of section 86 of 1 such Code is amended to read as follows: 2 ‘‘(c) BASE AMOUNT.—For purposes of this section, 3 the term ‘base amount’ means— 4 ‘‘(1) except as otherwise provided in this para- 5 graph, $35,000, 6 ‘‘(2) $50,000 in the case of a joint return, and 7 ‘‘(3) zero in the case of a taxpayer who— 8 ‘‘(A) is married as of the close of the tax- 9 able year (within the meaning of section 7703) 10 but does not file a joint return for such year, 11 and 12 ‘‘(B) does not live apart from his spouse at 13 all times during the taxable year.’’. 14 (c) TRANSFERS TO TRUST FUNDS.— 15 (1) HOSPITAL INSURANCE TRUST FUND HELD 16 HARMLESS.—Of the total revenue from taxation of 17 social security benefits, there are appropriated to the 18 Federal Hospital Insurance Trust Fund such 19 amounts as would be transferred to such fund under 20 section 121(e) of the Social Security Amendments of 21 1983 (42 U.S.C. 401 note) and section 86 of such 22 Code as such sections were in effect on the day be- 23 fore the date of the enactment of this Act, at such 24 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 4986 IS times and in such manner as would be provided 1 therein. 2 (2) TRANSFERS TO PAYOR FUNDS.—Of the bal- 3 ance of the total revenue from taxation of social se- 4 curity benefits remaining after appropriations under 5 paragraph (1) have been made, there are appro- 6 priated to each payor fund amounts equivalent to 7 the portion of such balance equal to a fraction— 8 (A) the numerator of which is the amount 9 equivalent to the net revenues received in the 10 Treasury attributable to the application of sec- 11 tions 86 and 871(a)(3) of such Code to pay- 12 ments from such payor fund made in taxable 13 years beginning during calendar year 2019; and 14 (B) the denominator of which is the total 15 revenue from taxation of social security bene- 16 fits. 17 (3) TRANSFERS.—The amounts appropriated 18 by paragraph (2) to any payor fund shall be trans- 19 ferred from time to time (but not less frequently 20 than quarterly) from the general fund of the Treas- 21 ury on the basis of estimates made by the Secretary 22 of the Treasury of the amounts referred to in such 23 paragraph. Any such quarterly payment shall be 24 made on the first day of such quarter and shall take 25 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 4986 IS into account social security benefits estimated to be 1 received during such quarter. Proper adjustments 2 shall be made in the amounts subsequently trans- 3 ferred to the extent prior estimates were in excess 4 of or less than the amounts required to be trans- 5 ferred. 6 (4) DEFINITIONS.—For purposes of this sub- 7 section— 8 (A) TOTAL REVENUE FROM TAXATION OF 9 SOCIAL SECURITY BENEFITS.—The term ‘‘total 10 revenue from taxation of social security bene- 11 fit’’s means the amount equivalent to the net 12 revenues received in the Treasury attributable 13 to the application of sections 86 and 871(a)(3) 14 of the Internal Revenue Code of 1986 to pay- 15 ments from any payor fund made in taxable 16 years beginning during calendar year 2019. 17 (B) PAYOR FUND.—The term ‘‘payor 18 fund’’ means any trust fund or account from 19 which payments of social security benefits are 20 made. 21 (C) SOCIAL SECURITY BENEFITS.—The 22 term ‘‘social security benefits’’ has the meaning 23 given such term by section 86(d)(1) of the In- 24 ternal Revenue Code of 1986. 25 VerDate Sep 11 2014 23:52 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4986.IS S4986 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 4986 IS (5) CONFORMING RULE.—Section 121(e) of the 1 Social Security Amendments of 1983 (42 U.S.C. 2 401 note) shall not apply with respect to net reve- 3 nues received in the Treasury attributable to the ap- 4 [Text truncated for display. 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