I
103D CONGRESS
2D SESSION
H. R. 5308
To amend title II of the Social Security Act to provide for a limitation
on payment during any year of old-age, wife’s, and husband’s insurance
benefits, 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, and to adjust the gradual increase
in retirement age so as to commence with calendar year 1996 and
to reach age 68 for those who would attain age 65 in or after calendar
year 2031.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 29, 1994
Mr. SMITH of Michigan 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 provide
for a limitation on payment during any year of old-
age, wife’s, and husband’s insurance benefits, 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, and to
adjust the gradual increase in retirement age so as to
commence with calendar year 1996 and to reach age
68 for those who would attain age 65 in or after calendar
year 2031.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Social Security Pay-
ment 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, deter-
mined as of the beginning of such year of higher in-
come,
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 applica-
ble 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 mar-
ried 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
gross income for the tax-
able year is:
The percentage 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 per-
centage reduction is the percentage specified in the follow-
ing table:
‘‘If the total adjusted gross
income of such individual
and 
such 
individual’s
spouse for the taxable
year is:
The percentage is:
Over $100,000 but not over $104,000 ....................................
10 percent.
‘‘If the total adjusted gross
income of such individual
and 
such 
individual’s
spouse for the taxable
year is:
The percentage is:
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 individ-
ual 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 in-
dividual 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 Reve-
nue 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 pro-
vide 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, overpay-
ments and underpayments of benefits resulting from the
operation of this subsection. The Commissioner and the
Secretary of the Treasury shall enter into such arrange-
ments as are necessary to ensure that such records main-
tained 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 individ-
ual’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 mar-
ried) 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 ex-
tension 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 tax-
able 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 pay-
able 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 pay-
able 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 deter-
mined under this paragraph shall be determined only for
months for which the benefit in excess of the amount pay-
able was received and accepted.
‘‘(C)(i)(I) If the Commissioner of Social Security de-
termines, on the basis of information obtained by or sub-
mitted to him, that it may reasonably be expected that
benefits under subsection (a), (b), or (c) based on an indi-
vidual’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 re-
main 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, be-
fore 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 in-
come (or the estimated total adjusted gross income for
him and his spouse) for the taxable year and that he fur-
nish to the Commissioner such other information with re-
spect to such income as the Commissioner may specify.
A failure by such individual to comply with any such re-
quest shall in itself constitute justification for a deter-
mination 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 individ-
ual under subclause (I), no payment of such unpaid bene-
fits 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 tax-
able 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 individ-
ual 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 Secu-
rity requests such individual to furnish a report of his ad-
justed 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 Com-
missioner 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 Com-
missioner may specify) by reason of this subsection.
‘‘(D) The Commissioner of Social Security shall de-
velop 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 cor-
rect report or estimate of adjusted gross income. Such
procedures may include identifying categories of individ-
uals on the basis of whose wages and self-employment in-
come 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 sub-
section.
‘‘(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 Secu-
rity Act (42 U.S.C. 1320b–13) is amended—
(1) in the heading for subsection (a), by strik-
ing ‘‘Upon Request’’ and inserting ‘‘of Annual
Statements’’;
(2) in subsection (a)(1), by striking ‘‘Begin-
ning’’ and all that follows and inserting the follow-
ing: ‘‘Not later than October 1 of each year, the
Commissioner of Social Security shall provide an an-
nual 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 Commis-
sioner 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 fol-
lowing:
‘‘(E) a table setting forth an estimate, in rela-
tion to 1980 and every 10th year thereafter through
2030, of the following information:
‘‘(i) the total amount of the adjusted val-
ues of all employee, employer, and self-employ-
ment contributions made with respect to the
wages and self-employment income of the aver-
age earner retiring at retirement age in each
such year;
‘‘(ii) the total amount of the adjusted val-
ues of the monthly benefits paid under sub-
sections (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 aver-
age earner retiring at retirement age in each
such year; and
‘‘(iii) the total amount of the adjusted val-
ues 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 ‘ad-
justed 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 eligi-
ble 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 en-
sure 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 require-
ment of this subsection and such Secretary shall provide
such appropriate assistance to the Commissioner as is nec-
essary to carry out such requirements.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply with respect to statements pro-
vided on or after October 1, 1995.
SEC. 4. GRADUAL INCREASE IN RETIREMENT AGE COM-
MENCING 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 Se-
curity Act (42 U.S.C. 416(l)(1)) is amended by striking
subparagraphs (A) through (E) and inserting the follow-
ing:
‘‘(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 de-
termined 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 consist-
ing 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 retire-
ment 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 subse-
quent month (based on the primary insurance
amount of the individual on whose primary insur-
ance 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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HR 5308 IH——2