To amend title II of the Social Security Act to provide that a monthly insurance benefit thereunder shall be paid for the month in which the recipient dies, subject to a reduction of 50 percent if the recipient dies during the first 15 days of such month, and to increase the lump sum death payment to reflect changes in the cost of living.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security Fairness Act of 
2005''.

SEC. 2. COMPUTATION AND PAYMENT OF LAST MONTHLY PAYMENT.

    (a) Old-Age and Survivors Insurance Benefits.--Section 202 of the 
Social Security Act (42 U.S.C. 402) is amended by adding at the end the 
following new subsection:

    ``Last Payment of Monthly Insurance Benefit Terminated by Death

    ``(z)(1) In any case in which an individual dies during the first 
15 days of a calendar month, the amount of such individual's monthly 
insurance benefit under this section paid for such month shall be an 
amount equal to 50 percent of the amount of such benefit (as determined 
without regard to this subsection), rounded, if not a multiple of $1, 
to the next higher multiple of $1. This subsection shall apply with 
respect to such benefit after all other adjustments with respect to 
such benefit provided by this title have been made.
    ``(2) Any payment of an individual's benefit under this section for 
the month in which such individual dies shall be made in accordance 
with section 204(d).''.
    (b) Disability Insurance Benefits.--Section 223 of such Act (42 
U.S.C. 423) is amended--
            (1) by redesignating subsection (j) as subsection (k); and
            (2) by inserting after subsection (i) the following new 
        subsection:

             ``Last Payment of Benefit Terminated by Death

    ``(j)(1) In any case in which an individual dies during the first 
15 days of a calendar month, the amount of such individual's monthly 
insurance benefit under this section paid for such month shall be an 
amount equal to 50 percent of the amount of such benefit (as determined 
without regard to this subsection), rounded, if not a multiple of $1, 
to the next higher multiple of $1. This subsection shall apply with 
respect to such benefit after all other adjustments with respect to 
such benefit provided by this title have been made.
    ``(2) Any payment of an individual's benefit under this section for 
the month in which such individual dies shall be made in accordance 
with section 204(d).''.
    (c) Benefits at Age 72 for Certain Uninsured Individuals.--Section 
228 of such Act (42 U.S.C. 428) is amended by adding at the end the 
following new subsection:

             ``Last Payment of Benefit Terminated by Death

    ``(i)(1) In any case in which an individual dies during the first 
15 days of a calendar month, the amount of such individual's monthly 
insurance benefit under this section paid for such month shall be an 
amount equal to 50 percent of the amount of such benefit (as determined 
without regard to this subsection), rounded, if not a multiple of $1, 
to the next higher multiple of $1. This subsection shall apply with 
respect to such benefit after all other adjustments with respect to 
such benefit provided by this title have been made.
    ``(2) Any payment of an individual's benefit under this section for 
the month in which such individual dies shall be made in accordance 
with section 204(d).''.
    (d) Conforming Amendments Regarding Payment of Benefits for Month 
of Recipient's Death.--
            (1) Old-age insurance benefits.--Section 202(a) of the 
        Social Security Act (42 U.S.C. 402(a)) is amended by striking 
        ``the month preceding'' in the matter following subparagraph 
        (B).
            (2) Wife's insurance benefits.--
                    (A) In general.--Section 202(b)(1) of such Act (42 
                U.S.C. 402(b)(1)) is amended--
                            (i) by striking ``and ending with the 
                        month'' in the matter immediately following 
                        clause (ii) and inserting ``and ending with the 
                        month in which she dies or (if earlier) with 
                        the month'';
                            (ii) by striking subparagraph (E); and
                            (iii) by redesignating subparagraphs (F) 
                        through (K) as subparagraphs (E) through (J), 
                        respectively.
                    (B) Conforming amendment.--Section 202(b)(4)(B) of 
                such Act (42 U.S.C. 402(b)(4)(B)) is amended by 
                striking ``(E), (F), (H), or (J)'' and inserting ``(E), 
                (G), or (I)''.
            (3) Husband's insurance benefits.--
                    (A) In general.--Section 202(c)(1) of such Act (42 
                U.S.C. 402(c)(1)) is amended--
                            (i) by striking ``and ending with the 
                        month'' in the matter immediately following 
                        clause (ii) and inserting ``and ending with the 
                        month in which he dies or (if earlier) with the 
                        month'';
                            (ii) by striking subparagraph (E); and
                            (iii) by redesignating subparagraphs (F) 
                        through (K) as subparagraphs (E) through (J), 
                        respectively.
                    (B) Conforming amendment.--Section 202(c)(4)(B) of 
                such Act (42 U.S.C. 402(c)(4)(B)) is amended by 
                striking ``(E), (F), (H), or (J)'' and inserting ``(E), 
                (G), or (I)''.
            (4) Child's insurance benefits.--Section 202(d)(1) of such 
        Act (42 U.S.C. 402(d)(1)) is amended--
                    (A) by striking ``and ending with the month'' in 
                the matter immediately preceding subparagraph (D) and 
                inserting ``and ending with the month in which such 
                child dies or (if earlier) with the month''; and
                    (B) by striking ``dies, or'' in subparagraph (D).
            (5) Widow's insurance benefits.--Section 202(e)(1) of such 
        Act (42 U.S.C. 402(e)(1)) is amended by striking ``ending with 
        the month preceding the first month in which any of the 
        following occurs: she remarries, dies,'' in the matter 
        following subparagraph (F) and inserting ``ending with the 
        month in which she dies or (if earlier) with the month 
        preceding the first month in which any of the following occurs: 
        she remarries, or''.
            (6) Widower's insurance benefits.--Section 202(f)(1) of 
        such Act (42 U.S.C. 402(f)(1)) is amended by striking ``ending 
        with the month preceding the first month in which any of the 
        following occurs: he remarries, dies,'' in the matter following 
        subparagraph (F) and inserting ``ending with the month in which 
        he dies or (if earlier) with the month preceding the first 
        month in which any of the following occurs: he remarries,''.
            (7) Mother's and father's insurance benefits.--Section 
        202(g)(1) of such Act (42 U.S.C. 402(g)(1)) is amended--
                    (A) by inserting ``with the month in which he or 
                she dies or (if earlier)'' after ``and ending'' in the 
                matter following subparagraph (F); and
                    (B) by striking ``he or she remarries, or he or she 
                dies'' and inserting ``or he or she remarries''.
            (8) Parent's insurance benefits.--Section 202(h)(1) of such 
        Act (42 U.S.C. 402(h)(1)) is amended by striking ``ending with 
        the month preceding the first month in which any of the 
        following occurs: such parent dies, marries,'' in the matter 
        following subparagraph (E) and inserting ``ending with the 
        month in which such parent dies or (if earlier) with the month 
        preceding the first month in which any of the following occurs: 
        such parent marries,''.
            (9) Disability insurance benefits.--Section 223(a)(1) of 
        such Act (42 U.S.C. 423(a)(1)) is amended by striking ``ending 
        with the month preceding whichever of the following months is 
        the earliest: the month in which he dies,'' in the matter 
        following subparagraph (D) and inserting the following: 
        ``ending with the month in which he dies or (if earlier) with 
        whichever of the following months is the earliest:''.
            (10) Benefits at age 72 for certain uninsured 
        individuals.--Section 228(a) of such Act (42 U.S.C. 428(a)) is 
        amended by striking ``the month preceding'' in the matter 
        following paragraph (4).
            (11) Exemption from maximum benefit cap.--Section 203 of 
        such Act (42 U.S.C. 403 is amended by adding at the end the 
        following new subsection:

                  ``Exemption From Maximum Benefit Cap

    ``(m) Notwithstanding any other provision of this section, the 
application of this section shall be made without regard to any benefit 
of an individual under section 202, 223, or 228 for the month in which 
such individual dies.''.

SEC. 3. INCREASE IN LUMP-SUM DEATH PAYMENTS.

    Section 202(i) of the Social Security Act (42 U.S.C. 402(i)) is 
amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) in subparagraph (B) (as redesignated), by striking 
        ``paragraph (1)'' and inserting ``subparagraph (A)'';
            (3) by inserting ``(1)'' after ''(i)'';
            (4) by striking ``three times'' and all that follows 
        through ``smaller,'' and inserting ``the applicable dollar 
        amount for the calendar year in which the death occurs 
        (determined under paragraph (2))''; and
            (5) by adding at the end the following new paragraph:
    ``(2)(A) Except as otherwise provided in subparagraph (B), the 
applicable dollar amount for any calendar year is $970.
    ``(B) In each calendar year after 2005, the Commissioner of Social 
Security shall determine and publish in the Federal Register, on or 
before November 1 of such calendar year, the applicable dollar amount 
for the next calendar year. Such dollar amount shall be equal to the 
product derived by multiplying--
            ``(i) $970, by
            ``(ii) the ratio of--
                    ``(I) the national average wage index (as defined 
                in section 209(k)(1)) for the calendar year before the 
                calendar year in which the determination is made, to
                    ``(II) the national average wage index (as so 
                defined) for calendar year 2004.
If such product is not a multiple of $5.00, such product shall be 
rounded to the next higher multiple of $5.00 in any case in which such 
product is a multiple of $2.50 but not of $5.00, and to the nearest 
multiple of $5.00 in any other case.''.

SEC. 4. EFFECTIVE DATE.

    The amendments made by this Act shall apply with respect to deaths 
occurring after 90 days after the date of the enactment of this Act.

Summary: Social Security Fairness Act of 2005 - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to: (1) provide that, if an OASDI recipient dies during the first 15 days of a month, the last payment of the monthly benefit for that month shall be half the usual benefit amount; and (2) provide for an increase in lump-sum death payments.