Notch Fairness Act of 2015

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. 1. Short title This Act may be cited as the Notch Fairness Act of 2015 2. New guaranteed minimum primary insurance amount where eligibility arises during transitional period (a) In General Section 215(a) of the Social Security Act (1) in paragraph (4)(B), by inserting (with or without the application of paragraph (8)) would be made 1984 1989 (2) by adding at the end the following: (8) (A) In the case of an individual described in paragraph (4)(B) (subject to subparagraphs (F) and (G) of this paragraph), the amount of the individual’s primary insurance amount as computed or recomputed under paragraph (1) shall be deemed equal to the sum of— (i) such amount, and (ii) the applicable transitional increase amount (if any). (B) For purposes of subparagraph (A)(ii), the term applicable transitional increase amount (i) the excess under former law, by (ii) the applicable percentage in relation to the year in which the individual becomes eligible for old-age insurance benefits, as determined by the following table: 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 excess under former law (i) the applicable former law primary insurance amount, over (ii) the amount which would be such individual’s primary insurance amount if computed or recomputed under this section without regard to this paragraph and paragraphs (4), (5), and (6). (D) For purposes of subparagraph (C)(i), the term applicable former law primary insurance amount (i) computed or recomputed (pursuant to paragraph (4)(B)(i)) under section 215(a) as in effect in December 1978, or (ii) computed or recomputed (pursuant to paragraph (4)(B)(ii)) as provided by subsection (d), (as applicable) and modified as provided by subparagraph (E). (E) In determining the amount which would be an individual’s primary insurance amount as provided in subparagraph (D)— (i) subsection (b)(4) shall not apply; (ii) section 215(b) as in effect in December 1978 shall apply, except that section 215(b)(2)(C) (as then in effect) shall be deemed to provide that an individual’s computation base years (iii) subdivision (I) in the last sentence of paragraph (4) shall be applied as though the words without regard to any increases in that table including any increases in that table (F) This paragraph shall apply in the case of any individual only if such application results in a primary insurance amount for such individual that is greater than it would be if computed or recomputed under paragraph (4)(B) without regard to this paragraph. (G) (i) This paragraph shall apply in the case of any individual subject to any timely election to receive lump sum payments under this subparagraph. (ii) A written election to receive lump sum payments under this subparagraph, in lieu of the application of this paragraph to the computation of the primary insurance amount of an individual described in paragraph (4)(B), may be filed with the Commissioner of Social Security in such form and manner as shall be prescribed in regulations of the Commissioner. Any such election may be filed by such individual or, in the event of such individual’s death before any such election is filed by such individual, by any other beneficiary entitled to benefits under section 202 on the basis of such individual’s wages and self-employment income. Any such election filed after December 31, 2015, shall be null and void and of no effect. (iii) Upon receipt by the Commissioner of a timely election filed by the individual described in paragraph (4)(B) in accordance with clause (ii)— (I) the Commissioner shall certify receipt of such election to the Secretary of the Treasury, and the Secretary of the Treasury, after receipt of such certification, shall pay such individual, from amounts in the Federal Old-Age and Survivors Insurance Trust Fund, a total amount equal to $5,000, in 4 annual lump sum installments of $1,250, the first of which shall be made during fiscal year 2016 not later than July 1, 2016, and (II) subparagraph (A) shall not apply in determining such individual’s primary insurance amount. (iv) Upon receipt by the Commissioner as of December 31, 2015, of a timely election filed in accordance with clause (ii) by at least one beneficiary entitled to benefits on the basis of the wages and self-employment income of a deceased individual described in paragraph (4)(B), if such deceased individual has filed no timely election in accordance with clause (ii)— (I) the Commissioner shall certify receipt of all such elections received as of such date to the Secretary of the Treasury, and the Secretary of the Treasury, after receipt of such certification, shall pay each beneficiary filing such a timely election, from amounts in the Federal Old-Age and Survivors Insurance Trust Fund, a total amount equal to $5,000 (or, in the case of 2 or more such beneficiaries, such amount distributed evenly among such beneficiaries), in 4 equal annual lump sum installments, the first of which shall be made during fiscal year 2016 not later than July 1, 2016, and (II) solely for purposes of determining the amount of such beneficiary’s benefits, subparagraph (A) shall be deemed not to apply in determining the deceased individual’s primary insurance amount. . (b) Effective Date and Related Rules (1) Applicability of amendments (A) In general Except as provided in paragraph (2), the amendments made by this Act shall be effective as though they had been included or reflected in section 201 of the Social Security Amendments of 1977. (B) Applicability No monthly benefit or primary insurance amount under title II of the Social Security Act (2) Recomputation to reflect benefit increases In any case in which an individual is entitled to monthly insurance benefits under title II of the Social Security Act (A) under section 215 of such Act as in effect (by reason of the Social Security Amendments of 1977) after December 1978, or (B) under section 215 of such Act as in effect prior to January 1979 by reason of subsection (a)(4)(B) of such section (as amended by the Social Security Amendments of 1977), the Commissioner of Social Security (notwithstanding section 215(f)(1) of the Social Security Act) shall recompute such primary insurance amount so as to take into account the amendments made by this Act.

Summary: Notch Fairness Act of 2015 Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to revise the formula for the computation of minimum Old Age Insurance benefits for individuals who reached age 65 in or after 1979, and to whom applies the 15-year transition period for the changes in benefit computation rules enacted in the Social Security Amendments of 1977. ("Notch" refers to birth in the United States between 1917 and 1921, as a result of which a retiree born between those years received lower cost-of-living increases in Social Security than others after Congress readjusted Social Security benefits in 1977.) Sets forth a schedule of additional benefit increases for such beneficiaries (and related beneficiaries), with percentages declining from 55% to 5% and keyed to the year an individual became eligible for such benefits between 1979 and 1988. Allows such beneficiaries, in the alternative, to receive lump sum payments over four years totaling $5,000.