Social Security Payment Equity Act of 1994

Summary: Social Security Payment Equity Act of 1994 - Amends title II (Old-Age, Survivors and Disability Insurance) (OASDI) to set limits on payment of OASDI benefits during any year, based on the work record of an individual with higher levels of income for such year, if total payments of such benefits have exceeded prior contributions plus interest.  Specifies schedules of benefit reductions from ten percent to 100 percent for single and for married individuals. 
Requires the Commissioner of Social Security to provide annual social security account statements to eligible individuals with respect to such benefit limitations. 
Adjusts the gradual increase in retirement age from 65 to 68 so as to commence with calendar year 1996 and reach age 68 for those who would attain age 65 in or after calendar year 2031.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security Payment Equity Act 
of 1994''.

SEC. 2. LIMITATION ON PAYMENT OF CERTAIN BENEFITS IN EXCESS OF 
              CONTRIBUTIONS DURING YEARS OF HIGHER INCOME.

    (a) In General.--Section 202 of the Social Security Act (42 U.S.C. 
402) is amended by adding at the end the following new subsection:

``Limitation on Payment of Certain Benefits in Excess of Contributions 
                     During Years of Higher Income

    ``(y)(1) Notwithstanding any other provision of this title, if, 
with respect to any year of higher income for an individual--
            ``(A) the total amount of the adjusted values of all 
        benefits under subsections (a), (b), and (c) paid in months 
        prior to such year based on the wages and self-employment 
        income of such individual exceed
            ``(B) the total amount of the adjusted values of all OASDI 
        taxes paid with respect to the wages and self-employment income 
        of such individual, determined as of the beginning of such year 
        of higher income,
then the monthly benefits under subsections (a), (b), and (c) based on 
the wages and self-employment income of such individual paid for any 
month in such year shall be reduced (after all other deductions and 
reductions applicable under this title) by the percentage reduction 
specified under paragraph (2). Benefits, as reduced under this 
paragraph, if not a multiple of $1, shall be increased to the next 
higher multiple of $1.
    ``(2)(A) In the case of an individual who is not married as of the 
beginning of such individual's taxable year, the percentage reduction 
is the percentage specified in the following table:

``If such individual's adjusted               The percentage is:
        gross income for the 
        taxable year is:
    Over $50,000 but not over $52,000.............          10 percent.
    Over $52,000 but not over $54,000.............          20 percent.
    Over $54,000 but not over $56,000.............          30 percent.
    Over $56,000 but not over $58,000.............          40 percent.
    Over $58,000 but not over $60,000.............          50 percent.
    Over $60,000 but not over $62,000.............          60 percent.
    Over $62,000 but not over $64,000.............          70 percent.
    Over $64,000 but not over $66,000.............          80 percent.
    Over $66,000 but not over $68,000.............          90 percent.
    Over $68,000..................................         100 percent.
    ``(B) In the case of an individual who is married as of the 
beginning of such individual's taxable year, the percentage reduction 
is the percentage specified in the following table:

``If the total adjusted gross                 The percentage is:
        income of such individual 
        and such individual's 
        spouse for the taxable year 
        is:
    Over $100,000 but not over $104,000...........          10 percent.
    Over $104,000 but not over $108,000...........          20 percent.
    Over $108,000 but not over $112,000...........          30 percent.
    Over $112,000 but not over $116,000...........          40 percent.
    Over $116,000 but not over $120,000...........          50 percent.
    Over $120,000 but not over $124,000...........          60 percent.
    Over $124,000 but not over $128,000...........          70 percent.
    Over $128,000 but not over $132,000...........          80 percent.
    Over $132,000 but not over $136,000...........          90 percent.
    Over $136,000.................................         100 percent.
    ``(3) For purposes of this subsection:
            ``(A) The term `year of higher income' for an individual 
        means any taxable year--
                    ``(I) if, in the case of an individual who is not 
                married as of the beginning of such taxable year, the 
                adjusted gross income of such individual for such 
                taxable year exceeds $50,000, or
                    ``(II) if, in the case of an individual who is 
                married as of the beginning of such taxable year, the 
                total adjusted gross income of such individual and such 
                individual's spouse for such taxable year exceeds 
                $100,000.
            ``(B) The term `adjusted gross income' has the meaning 
        provided in section 62 of the Internal Revenue Code of 1986.
            ``(C) The term `adjusted value' of an amount means such 
        amount, plus interest on such amount computed at a rate equal 
        to 2 percent, compounded annually.
            ``(D) The term `OASDI taxes' means the taxes imposed under 
        sections 1401(a), 3101(a), and 3111(a) of the Internal Revenue 
        Code of 1986.
    ``(4) The Commissioner of Social Security shall provide by 
regulation for the maintenance of such records, relating to individuals 
on the basis of whose wages and self-employment income benefits under 
subsection (a), (b), and (c) are otherwise payable under this section, 
of total benefits paid and OASDI taxes paid, as is necessary to 
preclude, to the maximum extent practicable, overpayments and 
underpayments of benefits resulting from the operation of this 
subsection. The Commissioner and the Secretary of the Treasury shall 
enter into such arrangements as are necessary to ensure that such 
records maintained by the Commissioner are currently accurate at all 
times.
    ``(5)(A) In any case in which a taxable year of an individual is a 
year of higher income for such individual, if a benefit under 
subsection (a), (b), or (c) has been paid for any month in such year on 
the basis of such individual's wages and self-employment income, such 
individual (or the individual who is in receipt of such benefit on his 
behalf) shall make a report to the Commissioner of Social Security of 
his adjusted gross income, and (if he is married) the adjusted gross 
income of his spouse, for such taxable year. Such report shall be made 
on or before the fifteenth day of the fourth month following the close 
of such year, and shall contain such information and be made in such 
manner as the Commissioner may by regulations prescribe. The 
Commissioner may grant a reasonable extension of time for making such 
report if he finds that there is valid reason for a delay, but in no 
case may the period be extended more than three months.
    ``(B) If an individual fails to make a report required under 
subparagraph (A), within the time prescribed by or in accordance with 
such subparagraph, for any taxable year and a benefit based on such 
individual's wages and self-employment income is paid for any month in 
such taxable year or the next following taxable year which is in excess 
of the amount payable by reason of this subsection, he shall be deemed 
to have been overpaid for such month an additional amount as follows:
            ``(i) in the case of the first such month for which a 
        benefit is paid in excess of the amount payable by reason of 
        this subsection, the additional amount shall be equal to the 
        amount of such excess;
            ``(ii) in the case of the second such month for which a 
        benefit is paid in excess of the amount payable by reason of 
        this subsection, the additional amount shall be equal to two 
        times the amount of such excess; and
            ``(iii) in the case of the third or a subsequent such month 
        for which a benefit is paid in excess of the amount payable by 
        reason of this subsection, the additional amount shall be equal 
        to three times the amount of such excess;
except that additional amounts of overpayment determined under this 
paragraph shall be determined only for months for which the benefit in 
excess of the amount payable was received and accepted.
    ``(C)(i)(I) If the Commissioner of Social Security determines, on 
the basis of information obtained by or submitted to him, that it may 
reasonably be expected that benefits under subsection (a), (b), or (c) 
based on an individual's wages and self-employment income will not be 
payable (in whole or in part) for any month in a taxable year of such 
individual by reason of this subsection, the Commissioner may, before 
the close of such taxable year, suspend the payment (in whole or in 
part) for each month in such year (or for only such months as the 
Commissioner may specify) of such benefits. Such suspension shall 
remain in effect with respect to the benefits for any month until the 
Commissioner has determined the extent to which benefits are payable 
under this subsection.
    ``(II) The Commissioner of Social Security may, before the close of 
the taxable year of an individual on whose wages and self-employment 
income benefits are otherwise payable during such year, request of such 
individual that he make, at such time or times as the Commissioner may 
specify, a declaration of his estimated adjusted gross income (or the 
estimated total adjusted gross income for him and his spouse) for the 
taxable year and that he furnish to the Commissioner such other 
information with respect to such income as the Commissioner may 
specify. A failure by such individual to comply with any such request 
shall in itself constitute justification for a determination under 
subclause (I) that it may reasonably be expected that such benefits are 
not payable (in whole or in part) by reason of this subsection.
    ``(III) If the payment of benefits under subsection (a), (b), or 
(c) based on the wages and self-employment income of an individual have 
been suspended (in whole or in part) for all months in any taxable year 
of such individual under subclause (I), no payment of such unpaid 
benefits shall be made for any such month in such taxable year after 
the expiration of the period of three years, three months, and fifteen 
days following the close of such taxable year unless within such period 
the individual, or some other person entitled to benefits under this 
title on the basis of the same wages and self-employment income, files 
with the Commissioner of Social Security information showing that the 
unpaid portion of a benefit for such month is payable to such 
individual.
    ``(ii) If, after the close of a taxable year of an individual on 
whose wages and self-employment income benefits under subsection (a), 
(b), or (c) were otherwise payable for months in such year, the 
Commissioner of Social Security requests such individual to furnish a 
report of his adjusted gross income (or the total adjusted gross income 
of him and his spouse) for such taxable year or any other information 
with respect to such income which the Commissioner may specify, and the 
individual fails to comply with such request, such failure shall in 
itself constitute justification for a determination that such benefits 
were not payable (in whole or in part) for each month in such taxable 
year (or only for such months thereof as the Commissioner may specify) 
by reason of this subsection.
    ``(D) The Commissioner of Social Security shall develop and 
implement procedures in accordance with this paragraph to avoid paying 
more than the correct amount of benefits under subsection (a), (b), or 
(c) as a result of the failure of the individual on whose wages and 
self-employment income such benefits are based to file a correct report 
or estimate of adjusted gross income. Such procedures may include 
identifying categories of individuals on the basis of whose wages and 
self-employment income benefits which are not payable (in whole or in 
part) under this subsection are likely to be paid and requesting that 
they estimate their adjusted gross income (or the total adjusted gross 
income of them and their spouses) more frequently than other persons 
subject to this subsection.
    ``(6) Benefits which would, but for the provisions of paragraph 
(1), be payable under this title, on the basis of the wages and self-
employment income of the individual referred to in paragraph (1), to 
any other individual (other than the individuals to whom benefits based 
on such wages and self-employment income are not payable by reason of 
paragraph (1)) shall be payable as though such individuals were 
receiving such benefits.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to benefits otherwise payable in taxable years 
ending after December 31, 1995.

SEC. 3. INFORMATION RELATING TO BENEFIT LIMITATIONS PROVIDED IN SOCIAL 
              SECURITY ACCOUNT STATEMENTS.

    (a) In General.--Section 1143 of the Social Security Act (42 U.S.C. 
1320b-13) is amended--
            (1) in the heading for subsection (a), by striking ``Upon 
        Request'' and inserting ``of Annual Statements'';
            (2) in subsection (a)(1), by striking ``Beginning'' and all 
        that follows and inserting the following: ``Not later than 
        October 1 of each year, the Commissioner of Social Security 
        shall provide an annual social security account statement 
        (hereinafter in this section referred to as the `statement') to 
        each eligible individual for whom a mailing address can be 
        determined through such methods as the Commissioner determines 
        to be appropriate.'';
            (3) in subsection (a)(2)(A), by striking ``at the date of 
        the request'';
            (4) in subsection (a)(2)(B), by striking ``on the date of 
        the request'';
            (5) in subsection (a)(2)(C), by striking ``on the date of 
        the request'' and by striking ``and'' at the end;
            (6) in subsection (a)(2)(D), by inserting ``in the case of 
        individuals not receiving benefits,'' after ``(D)'', and by 
        striking ``title XVIII.'' and inserting ``title XVIII; and'';
            (7) by adding after subparagraph (D) the following:
            ``(E) a table setting forth an estimate, in relation to 
        1980 and every 10th year thereafter through 2030, of the 
        following information:
                    ``(i) the total amount of the adjusted values of 
                all employee, employer, and self-employment 
                contributions made with respect to the wages and self-
                employment income of the average earner retiring at 
                retirement age in each such year;
                    ``(ii) the total amount of the adjusted values of 
                the monthly benefits paid under subsections (a), (b), 
                and (c) of section 202, as of the date of the 
                statement, on the basis of the wages and self-
                employment income of the average earner retiring at 
                retirement age in each such year; and
                    ``(iii) the total amount of the adjusted values of 
                the monthly benefits which will have been paid under 
                such subsections, as of the time of the death of the 
                average earner retiring at retirement age in each such 
                year, on the basis of his or her wages and self-
                employment income, determined under generally accepted 
                actuarial assumptions.
        For purposes of subparagraph (E), the term `adjusted value' of 
        an amount means such amount, plus interest on such amount 
        computed at a rate equal to 2 percent, compounded annually.'';
            (8) by striking subsection (b);
            (9) in subsection (c)--
                    (A) by striking the heading and inserting the 
                following:

                  ``Required Estimates of Benefits'';

                    (B) by striking ``(c)(1) By not later'' and all 
                that follows through ``With respect to'' in paragraph 
                (2) and inserting ``(b) With respect to''; and
                    (C) by adding at the end the following new 
                sentence: ``The Commissioner shall provide such 
                estimates of retirement benefit amounts to eligible 
                individuals who have not attained age 50 upon 
                request.''; and
            (10) by adding at the end the following new subsection:

       ``Inclusion of Statements to Retirees with Other Mailings

    ``(c) The Commissioner of Social Security shall ensure that 
statements provided to eligible individuals who are receiving benefits 
under title II are included to the maximum extent practicable with 
mailings otherwise made to such individuals. The Commissioner shall 
consult with the Secretary of the Treasury in carrying out the 
requirement of this subsection and such Secretary shall provide such 
appropriate assistance to the Commissioner as is necessary to carry out 
such requirements.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to statements provided on or after October 1, 1995.

SEC. 4. GRADUAL INCREASE IN RETIREMENT AGE COMMENCING WITH CALENDAR 
              YEAR 1996 AND REACHING AGE 68 FOR THOSE ATTAINING AGE 65 
              IN OR AFTER CALENDAR YEAR 2031.

    (a) In General.--Section 216(l)(1) of the Social Security Act (42 
U.S.C. 416(l)(1)) is amended by striking subparagraphs (A) through (E) 
and inserting the following:
            ``(A) with respect to an individual who attains early 
        retirement age (as defined in paragraph (2)) before January 1, 
        1993, 65 years of age;
            ``(B) with respect to an individual who attains early 
        retirement age after December 31, 1992, and before January 1, 
        2028, 65 years of age plus the number of months in the age 
        increase factor (as determined under paragraph (3)) for the 
        calendar year in which such individual attains early retirement 
        age; and
            ``(C) with respect to an individual who attains early 
        retirement age after December 31, 2027, 68 years of age.''.
    (b) Conforming Amendment.--Section 216(l)(3) of such Act (42 U.S.C. 
416(l)(3)) is amended to read as follows:
    ``(3) The age increase factor for any individual who attains early 
retirement age in the 35-year period consisting of calendar years 1993 
through 2027 shall be equal to \1/12\ of the number of months in the 
period beginning with January 1993 and ending with the last month of 
the calendar year in which the individual attains early retirement 
age.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply with respect to benefits for months after the date of the 
        enactment of this Act.
            (2) Transition rule.--In any case in which an individual is 
        entitled to a benefit under title II of the Social Security Act 
        for the month in which this Act is enacted, the amount of any 
        benefit of such individual under such title II for any 
        subsequent month (based on the primary insurance amount of the 
        individual on whose primary insurance amount such benefit for 
        the month in which this Act is enacted is based) shall not be 
        reduced, solely by reason of the amendments made by this 
        section, below the amount of such benefit for the month in 
        which this Act is enacted.
                                 
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