An Act to amend the Social Security Act and the Internal Revenue Code so as to extend coverage under the old-age and survivors insurance program, increase the benefits payable thereunder, preserve the insurance rights of disabled individuals, and increase the am
PL 83-761 (H.R.9366), enacted 09/01/1954

1052 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 ST AT. 
September 1, 1954 
[H. R. 9366] 
Public Law 761 
CHAPTER 1206 
AN ACT 
To amend the Social Security Act and the Internal Revenue Code so as to extend 
coverage under the old-age and survivors insurance program, increase the 
benefits payable thereunder, preserve the insurance rights of disabled indi-
viduals, and increase the amount of earnings permitted without loss of bene-
fits, and for other purposes. 
S o c i al Security 
A m e n d m e n t s of 
1954. 
64 Stat, 493. 
42 u s e 409. 
42 u s e 410. 
46 Stat. 1550. 
12 u s e 1141j(g). 
65 Stat. 119. 
7 u s e 1461-1468. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That this Act may 
be cited as the "Social Security Amendments of 1954". 
TITLE I—AMENDMENTS TO TITLE II OF T H E SOCIAL 
SECURITY ACT 
EXTENSION OF COVERAGE 
DOMESTIC SERVICE, SERVICE NOT IN COURSE OF EMPLOYER'S BUSINESS, AND 
AGRICULTURAL LABOR 
SEC. 101. (a) (1) Paragraph (2) of section 209 (g) of the Social 
Security Act is amended to read as follows: 
"(2) Cash remuneration paid by an employer in any calendar 
quarter to an employee for domestic service in a private home 
of the employer, if the cash remuneration paid in such quarter 
by the employer to the employee for such service is less than $50. 
As used in this paragraph, the term 'domestic service in a private 
home of the employer' does not include service described in section 
210 (f) (5) ;". 
(2) Section 209 (g) of such Act is amended by adding at the end 
thereof the following new paragraph: 
"(3) Cash remuneration paid by an employer in any calendar 
quarter to an employee for service not in the course of the 
employer's trade or business, if the cash remuneration paid in 
such quarter by the employer to the employee for such service is 
less than $50. As used in this paragraph, the term 'service not in 
the course of the employer's trade or business' does not include 
domestic service in a private home of the employer and does not 
include service described in section 210 (f) (5) ;". 
(3) Section 209 (h) of such Act is amended by inserting "(1)" 
after " ( h ) " and by adding at the end thereof the following new 
paragraph: 
"(2) Cash remuneration paid by an employer in any calendar 
year to an employee for agricultural labor, if the cash remunera-
tion paid in such year by the employer to the employee for such 
labor is less than $100;". 
(4) Section 210 (a) (1) of such Act is amended to read as follows: 
"(1) (A) Service performed in connection with the production 
or harvesting of any commodity defined as an agricultural com-
modity in section 15 (g) of the Agricultural Marketing Act, as 
amended; 
"(B) Service performed by foreign agricultural 
workers 
(i) under contracts entered into in accordance with title V of the 
Agricultural Act of 1949, as amended, or (ii) lawfully admitted 
to the United States from the Bahamas, Jamaica, and the other 
British West Indies on a temporary basis to perform agricultural 
labor;". 
(5) Section 210 (a) of such Act is amended by striking out para-
graph (3) and redesignating paragraphs (4), (5), (6), (7), (8), (9), 
(10), (11), (12), (13), and (14), and any references thereto contained 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1053 
in such Act, as paragraphs (3), (4), (5), (6), (7), (8), (9), (10), 
(11), (12), and (13), respectively. 
(6) The second sentence of section 218 (c) (5) of such Act is 
42 use 4i8. 
amended by inserting before the period at the end thereof "and service 
the remuneration for which is excluded from wages by paragraph (2) 
of section 209 (h)". 
Ante, p. 1052. 
AMERICAN CITIZENS EMPLOYED BY AMERICAN EMPLOYERS ON FOREIGN-FLAG 
VESSELS 
(b) The paragraph of section 210 (a) of the Social Security Act 
herein redesignated as paragraph (4) is amended by striking out "if 
supra. 
the individual is employed on and in connection with such vessel or 
aircraft when outside the United States" and inserting in lieu thereof: 
"if (A) the individual is employed on and in connection with such 
vessel or aircraft when outside the United States and (B) (i) such 
individual is not a citizen of the United States or (ii) the employer is 
not an American employer". 
CERTAIN FEDERAL EMPLOYEES 
(c) (1) Subparagraph (B) of the paragraph of section 210 (a) 
of the Social Security Act herein redesignated as paragraph (6) is 
^"P'^-
amended— 
(A) by inserting "by an individual" after "Service performed", 
and by inserting "and if such service is covered by a retirement 
system established by such instrumentality;" after "December 
31,1950,"; 
(B) by striking out "or" at the end of clause (iii), by adding 
"or" at the end of clause (iv), and by adding at the end of the 
subparagraph the following new clause: 
"(v) service performed by a civilian employee, not com-
pensated from funds appropriated by the Congress, in the 
Coast Guard Exchanges or other activities, conducted by an 
instrumentality of the United States subject to the jurisdic-
tion of the Secretary of the Treasury, at installations of the 
Coast Guard for the comfort, pleasure, contentment, and 
mental and physical improvement of personnel of the Coast 
Guard;". 
(2) Subparagraph (C) of such paragraph is amended to read as 
follows: 
"(C) Service performed in the employ of the United States or 
in the employ of any instrumentality of the United States, if such 
service is performed— 
" (i) as the President or Vice President of the United States 
or as a Member, Delegate, or Resident Commissioner of or to 
the Congress; 
"(ii) in the legislative branch; 
"(iii) in a penal institution of the United States by an 
inmate thereof; 
"(iv) by any individual as an employee included under 
section 2 of the Act of August 4, 1947 (relating to certain 
interns, student nurses, and other student employees of hos-
pitals of the Federal Government; 5 U. S. C , sec. 1052); 
"(v) by any individual as an employee serving on a tem-
porary basis in case of fire, storm, earthquake, flood, or other 
similar emergency; or 
"(vi) by any individual to whom the Civil Service Retire-
ment Act of 1930 does not apply because such individual is 
s^utc^egf not.-
subject to another retirement system;". 
61 Stat. 727. 
1054 
PUBLIC LAW 761~SEPT. 1, 1954 
[68 S T A T . 
42 use 405. 
(3) Section 205 (p) (3) of such Act is amended by adding at the 
end thereof the following new sentence: "The provisions of para-
s' .^:. > 
graphs (1) and (2) shall be applicable also in the case of service 
performed by a civilian employee, not compensated from funds appro-
priated by the Congress, in the Coast Guard Exchanges or other activi-
ityt r . rr.,1 
ties, conducted by an instrumentality of the United States subject to 
the jurisdiction of the Secretary of the Treasury, at installations of the 
Coast Guard for the comfort, pleasure, contentment, and mental and 
physical improvement of personnel of the Coast Guard; and for pur-
poses of paragraphs (1) and (2) the Secretary of the Treasury shall 
be deemed to be the head of such instrumentality." 
MINISTERS AND CHRISTIAN SCIENCE PRACTITIONERS 
42 use 411. 
^^^ (^i^ Paragraph (2) of subsection (c) of section 211 of the Social 
Security Act is amended by inserting "and other than service described 
in paragraph (4) of this subsection" after "eighteen". 
(2) Such subsection is further amended by adding at the end thereof 
the following new sentences: "The provisions of paragraph (4) shall 
not apply to service (other than service performed by a member of a 
religious order who has taken a vow of poverty as a member of such 
order) performed by an individual during the period for which a 
f
j
; n 
certificate filed by such individual under section 1402 (e) of the 
Post, p. 1088. 
Internal Revenue Code of 1954 is in effect. The provisions of para-
Post, p. 1055. 
graph (5) shall not apply to service performed by an individual in the 
exercise of his profession as a Christian Science practitioner during 
the period for which a certificate filed by him under section 1402 (e) 
of the Internal Revenue Code of 1954 is in effect." 
Post, p. 1055. 
^3^ Section 211 (a) of the Social Security Act is amended— 
(A) by striking out the period at the end of paragraph (6) (as 
renumbered by subsection (g) (1) of this section) and inserting 
n 
in lieu thereof a semicolon, and 
(B) by inserting after such paragraph (6) thereof a new para-
graph as follows: 
"(7) An individual who is— 
"(A) a duly ordained, commissioned, or licensed minister of a 
church or a member of a religious order; and 
"(B) 
a citizen of the United States performing service 
described in subsection (c) (4) as an employee of an American 
42 use 410. 
employer (as defined in section 210 (e)) 
shall compute his net earnings from self-employment derived from 
the performance of service described in subsection (c) (4) without 
regard to section 911 (relating to earned income from sources with-
^^6^8A Stat. 289, 
Q^^ ^J^^ United States) and section 931 (relating to income from 
sources within possessions of the United States) of the Internal 
.
- Revenue Code of 1954." 
FISHING AND RELATED SERVICE 
42 use 410. 
^g^ Section 210 (a) of the Social Security Act is further amended 
by striking out paragraph (15) and redesignating paragraphs (16) 
and (17), and any references thereto contained in such Act, as para-
.ti' .J s ;. 
graphs (14) and (15), respectively. 
HOMEWORKERS 
42 u s e 410. 
(f) Subparagraph (C) of section 210 (k) (3) of the Social Security 
Act is amended by striking out ", if the performance of such services 
is subject to licensing requirements under the laws of the State in 
which such services are performed". 
iii-i-f,..-4j^ 
.utSiiJc: 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1055 
FARMERS AND PROFESSIONAL 
SELF-EMPLOYED 
(g) (1) Subsection (a) of section 211 of the Social Security Act is 
^2 use 4ii. 
amended by striking out paragraph (2) and redesignating paragraphs 
(3), (4), (5), (6), and (7), and any references thereto contained in 
such Act, as paragraphs (2), (3), (4), (5), and (6), respectively, 
and by adding at the end of such subsection the following new sen-
tence : "In the case of any trade or business which is carried on by an 
individual who reports his income on a cash receipts and disbursements 
basis, and in which, if it were carried on exclusively by employees, 
the major portion of the services would constitute agricultural labor 
as defined in section 210 (f), (i) if the gross income derived from such 
'•^ ^^^ '*^°-
trade or business by such individual is not more than $1,800, the net 
earnings from self-employment derived by him therefrom may, at his 
option, be deemed to be 50 per centum of such gross income in lieu 
of his net earnings from self-employment from such trade or business 
computed as provided under the preceding provisions of this sub-
section, or (ii) if the gross income derived from such trade or business 
by such individual is more than $1,800 and the net earnings from 
self-employment derived by him therefrom, as computed under the 
preceding provisions of this subsection, are less than $900, such net 
earnings may instead, at the option of such individual, be deemed to 
be $900. For the purpose of the preceding sentence, gross income 
derived from such trade or business shall mean the gross receipts from 
such trade or business reduced by the cost or other basis of property 
which was purchased and sold in carrying on such trade or business, 
adjusted (after such reduction) in accordance with the preceding 
provisions of this subsection." 
(2) Paragraph (1) of such section 211 (a) is amended to read as 
follows: 
"(1) There shall be excluded rentals from real estate and from 
personal property leased with the real estate (including such 
rentals paid in crop shares), together with the deductions attribu-
table thereto, unless such rentals are received in the course of a 
trade or business as a real estate dealer;". 
(3) The paragraph of such section 211 (a) herein redesignated as 
^°^^' P- ^°^^-
paragraph (3) is amended by striking out "cutting or disposal of 
timber" and inserting in lieu thereof "cutting of timber, or the dis-
posal of timber or coal,". 
(4) Section 211 (c) (5) of such Act is amended to read as follows: 
"(5) The performance of service by an individual in the exercise 
of his profession as a physician, lawyer, dentist, osteopath, veteri-
narian, chiropractor, naturopath, optometrist, or 
Christian 
Science practitioner; or the performance of such service by 
a partnership." 
EMPLOYEES COVERED BY STATE OR LOCAL RETIREMENT 
SYSTEMS 
42 u s e 418. 
(h) (1) (A) Section 218 (d) of such Act is amended by striking out 
"Exclusion of" in the heading, by inserting "(1)" after "(d)", and 
by adding at the end thereof the following sentence: "The preceding 
sentence shall not be applicable to any service performed by an 
employee as a member of any coverage group in a position (other 
than a position excluded by paragraph (5) (A)) covered by a retire- 
^°*'' P- ^°5^-
ment system on the date an agreement is made applicable to such 
coverage group if, on such date (or, if later, the date on which such 
individual first occupies such position), such individual is ineligible 
to be a member of such system." 
(B) Such section 218 (d) is amended by striking out "on the date 
such agreement is made applicable to such coverage group" and insert-
1056 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
ing in lieu thereof "either (A) on the date such agreement is made 
applicable to such coverage group, or (B) on the date of enactment 
of the succeeding paragraph of this subsection (except in the case 
of positions which are, by reason of action by such State or political 
subdivision thereof, as may be appropriate, taken prior to the date of 
enactment of such succeeding paragraph, no longer covered by a 
retirement system on the date referred to in clause (A), and except 
Post, p. 1057. 
jn the case of positions excluded by paragraph (5) (A))". 
42 use 418. 
(2) Such section 218 (d) is further amended by adding at the 
end thereof the following new paragraphs: 
" (2) It is hereby declared to be the policy of the Congress in enact-
ing the succeeding paragraphs of this subsection that the protection 
afforded employees in positions covered by a retirement system on 
the date an agreement under this section is made applicable to serv-
ice performed in such positions, or receiving periodic benefits under 
such retirement system at such time, will not be impaired as a result 
of making the agreement so applicable or as a result of legislative 
enactment in anticipation thereof, 
a'V'ei'm^en"wuh 
"(^) Notwithstanding paragraph (1), an agreement with a State 
state. 
may be made applicable (either in the original agreement or by any 
modification thereof) to service performed by employees in positions 
covered by a retirement system (including positions specified in para-
graph (4) but not including positions excluded by or pursuant to 
paragraph (5)), if the governor of the State certifies to the Secretary 
of Health, Education, and Welfare that the following conditions have 
been met: 
"(A) A referendum by secret written ballot was held on the 
question of whether service in positions covered by such retire-
ment system should be excluded from or included under an agree-
ment under this section; 
"(B) An opportunity to vote in such referendum was given 
(and was limited) to eligible employees; 
"(C) Not less than ninety days'notice of such referendum was 
given to all such employees; 
.!:>:; 5 .uio-' 
"(D) Such referendum was conducted under the supervision 
of the governor or an agency or individual designated by him; 
and 
"(E) A majority of the eligible employees voted in favor of 
including service in such positions under an agreement under this 
section, 
pil'^i!'^'^*'^* *"" -^^ employee shall be deemed an 'eligible employee' for purposes of 
any referendum with respect to any retirement system if, at the time 
such referendum was held, he was in a position covered by such retire-
ment system and was a member of such system, and if he was in such 
a position at the time notice of such referendum was given as required 
by clause (C) of the preceding sentence; except that he shall not be 
deemed an 'eligible employee' if, at the time the referendum w^as held, 
1' 
he was in a position to which the State agreement already applied, 
or if he was in a position excluded by or pursuant to paragraph (5). 
No referendum with respect to a retirement system shall be valid for 
purposes of this paragraph unless held within the two-year period 
which ends on the date of execution of the agreement or modification 
.«. 
,
: 
which extends the insurance system established by this title to such 
retirement system, nor shall any referendum with respect to a retire-
ment system be valid for purposes of this paragraph if held less than 
one year after the last previous referendum held with respect to such 
retirement system. 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1057 
"(4) For the purposes of subsection (c) of this section, the following 
employees shall be deemed to be a separate coverage group— 
"(A) all employees in positions which were covered by the same 
retirement system on the date the agreement was made applicable 
to such system (other than employees to whose services the agree-
ment already applied on such date); 
"(B) all employees in positions which became covered by such 
system at any time after such date; and 
"(C) all employees in positions which were covered by such 
system at any time before such date and to whose services the 
insurance system established by this title has not been extended 
before such date because the positions were covered by such retire-
ment system (including employees to whose services the agree-
ment was not applicable on such date because such services were 
excluded pursuant to subsection (c) (3) (C)). 
"(5) (A) Nothing in paragraph (3) of this subsection shall author-
ize the extension of the insurance system established by this title to 
service in any policeman's or fireman's position. 
"(B) At the request of the State, any class or classes of positions 
covered by a retirement system which may be excluded from the 
agreement pursuant to paragraph (3) or (5) of subsection (c), and to 
which the agreement does not already apply, may be excluded from 
the agreement at the time it is made applicable to such retirement 
system; except that, notwithstanding the provisions of paragraph (3) 
(C) of such subsection, such exclusion may not include any services 
to w^hich such paragraph (3) (C) is applicable. 
In the case of any 
such exclusion, each such class so excluded shall, for purposes of this 
subsection, constitute a separate retirement system in case of any 
modification of the agreement thereafter agreed to. 
"(6) If a retirement system covers positions of employees of the 
State and positions of employees of one or more political subdivisions 
of the State, or covers positions of employees of two or more political 
subdivisions of the State, then, for purposes of the preceding para-
graphs of this subsection, there shall, if the State so desires, be 
deemed to be a separate retirement system with respect to any one or 
more of the political subdivisions concerned and, where the retirement 
system covers positions of employees of the State, a separate retire-
ment system with respect to the State or w^ith respect to the State and 
any one or more of the political subdivisions concerned. 
If a retire-
ment system covers positions of employees of one or more institutions 
of higher learning, then, for purposes of such preceding paragraphs, 
there shall, if the State so desires, be deemed to be a separate retirement 
system for the employees of each such institution of higher learning. 
For the purposes of this paragraph, the term 'institutions of higher 
learning' includes junior colleges and teachers' colleges." 
(3) Paragraph (3) of section 218 (c) is amended to read as follows: 
"(3) Such agreement shall, if the State requests it, exclude (in the 
case of any coverage group) any one or more of the following: 
"(A) Any service of an emergency nature; 
"(B) All services in any class or classes of (i) elective posi-
tions, (ii) part-time positions, or (iii) positions the compensation 
for which is on a fee basis; 
"(C) All services performed by individuals as members of a 
coverage group in positions covered by a retirement system on 
the date such agreement is made applicable to such coverage 
group, but only in the case of individuals who, on such date (or, 
if later, the date on which they first occupy such positions), are 
not eligible to become members of such system and whose services 
Separate 
age group. 
In Ira, 
Policemen 
firemen. 
Ante, p. 1056. 
In fra; 
1053. 
Infra. 
an te, 
p. 
"Institutions o 1
: 
higher learning." 
Exclusions. 
39777 O—55—pt. 1 
69 
1058 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
Ante, p. 1056. 
42 u s e 418. 
Ante, 
p. 1057. 
Ante, p. 1056. 
Ante, p. 1057. 
Ante, p. 1056. 
Ante, p. 1056. 
Supra. 
in such positions have not already been included under such 
agreement pursuant to subsection (d) (3)." 
(4) Paragraph (4) of such section 218 (c) is amended hj adding 
at the end thereof the following new sentence: "A modification of an 
agreement pursuant to clause (B) of the preceding sentence may apply 
to individuals to whom paragraph (3) (C) is applicable (whether or 
not the previous exclusion of the service of such individuals was pur-
suant to such paragraph), but only if such individuals are, on the effec-
tive date specified in such modification, ineligible to be members of any 
retirement system or if the modification with respect to such individ-
uals is pursuant to subsection (d) (3)." 
(5) Such section 218 (c) is further amended by adding at the end 
thereof the following new paragraph: 
"(7) No agreement may be made applicable (either in the original 
agreement or by any modification thereof) to service performed by any 
individual to whom paragraph (3) (C) is applicable unless such agree-
ment provides (in the case of each coverage group involved) either 
that the service of any individual to whom such paragraph is applica-
ble and who is a member of such coverage group shall continue to be 
covered by such agreement in case he thereafter becomes eligible to be 
a member of a retirement system, or that such service shall cease to be 
so covered when he becomes eligible to be a member of such a system 
(but only if the agreement is not already applicable to such system 
pursuant to subsection (d) (3)), whichever may be desired by the 
State." 
(6) Section 218 (f) of such Act is amended to read as follows: 
"(^f) Any agreement or modification of an agreement under this 
section shall be effective with respect to services performed after an 
effective date specified in such agreement or modification; except 
that— 
"(1) in the case of an agreement or modification agreed to 
prior to 1954, such date may not be earlier than December 31, 
1950; 
" (2) in the case of an agreement or modification agreed to after 
1954 but prior to 1958, such date may not be earlier than December 
31,1954; and 
" (3) in the case of an agreement or modification agreed to dur-
ing 1954 or after 1957, such date may not be earlier than the last 
day of the calendar year preceding the year in which such agree-
ment or modification, as the case may be, is agreed to by the Secre-
tary of Health, Education, and Welfare and the State." 
(7) Section 218 (m) (1) of such Act is amended by striking out 
"subsection (d)" and inserting in lieu thereof "paragraph (1) of sub-
section (d)". 
(8) Section 218 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"Certain Positions No Longer Covered By Retirement Systems 
"(n) Notwithstanding subsection (d), an agreement with any State 
entered into under this section prior to the date of the enactment of 
this subsection may, prior to January 1, 1958, be modified pursuant 
to subsection (c) (4) so as to apply to services performed by employees, 
as members of any coverage group to which such agreement already 
applies (and to which such agreement applied on such date of enact-
ment), in positions (1) to which such agreement does not already 
apply, (2) which were covered by a retirement system on the date such 
agreement was made applicable to such coverage group, and (3) which, 
by reason of action by such State or political subdivision thereof, as 
may be appropriate, taken prior to the date of the enactment of this 
68 
S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
10591 
subsection, are no longer covered by a retirement system on the date 
such agreement is made applicable to such services." 
(9) The amendments made by this subsection, other than paragraph 
(1) (B), shall take effect January 1,1955. 
Effective date. 
CIVILIAN EMPLOYEES OF STATE NATIONAL GUARD UNITS 
AND CERTAIN STATE INSPECTORS 
(i) (1) Effective as of January 1, 1951, paragraph (5) of section 
218 (b) of the Social Security Act is amended by adding at the end 
thereof the following new sentence: "Civilian employees of National 
Guard units of a State Avho are employed pursuant to section 90 of the 
National Defense Act of June 3, 1916 (32 U. S. C , sec. 42), and paid 
from funds allotted to such units by the Department of Defense, shall 
for purposes of this section be deemed to be employees of the State 
and (notwithstanding the preceding provisions of this paragraph), 
shall be deemed to be a separate coverage group." 
(2) Effective January 1, 1955, such paragraph is further amended 
by adding after the sentence added by paragraph (1) of this subsec-
tion the following new sentence: "For purposes of this section, indi-
viduals employed pursuant to an agreement, entered into pursuant to 
section 205 of the Agricultural Marketing Act of 1946 (7 U. S. C 1624) 
or section 14 of the Perishable Agricultural Commodities Act, 1930 
(7 U. S. C, 499n), between a State and the United States Department 
of Agriculture to perform services as inspectors of agricultural prod-
ucts may be deemed, at the option of the State, to be employees of the 
State and (notwithstanding the preceding provisions of this para-
graph) shall be deemed to be a separate coverage group." 
(3) In the case of any coverage group to which the amendment 
made by paragraph (1) is applicable, any agreement or modification 
of an agreement agreed to prior to January 1, 1956, may, notwith-
standing section 218 (f) of the Social Security Act, be made effective 
with respect to services performed by employees as members of such 
coverage group after any effective date specified therein, but in no 
case may such effective date be earlier than December 31, 1950. 
42 u s e 418. 
39 Stat. 205. 
60 Stat. 1090. 
46 Stat. 537. 
Ante, p. 1058. 
CERTAIN EMPLOYEES OF THE STATE OF UTAH 
(j) Effective as of January 1, 1951, section 218 of the Social Secu-
rity Act is amended by adding after subsection (n) (added by sub-
section (h) (8) of this section) the following new subsection: 
"Certain Employees of the State of Utah 
"(o) Notwithstanding the provisions of subsection (d), the agree-
ment with the State of Utah entered into pursuant to this section may 
be modified pursuant to subsection (c) (4) so as to apply to services 
performed for any of the following, the employees performing serv-
ices for each of which shall constitute a separate coverage group: 
Weber Junior College, Carbon Junior College, Dixie Junior College, 
Central Utah Vocational School, Salt Lake Area Vocational School, 
Center for the Adult Blind, Union High School (Roosevelt, Utah), 
Utah High School Activities Association, State Industrial School, 
State Training School, State Board of Education, and Utah School 
Employees Retirement Board. Any modification agreed to prior to 
January 1, 1955, may be made effective with respect to services per-
formed by employees as members of any of such coverage groups after 
an effective date specified therein, except that in no case may any such 
date be earlier than December 31, 1950." 
42 use 418. 
Ante, p. 1058. 
An te, pp. 1055, 
1056. 
Ante, p. 1058. 
1060 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 STAT. 
ivv 
ARIZONA T E A C H E R S ' RETIREMENT SYSTEM 
(k) If, prior to January 1, 1956, the agreement with the State of 
Arizona entered into pursuant to section 218 of the Social Security 
Ante. p. 1056. 
A.ct is modified pursuant to subsection (d) (3) of such section so as 
to apply to service performed by employees in positions covered by the 
Arizona Teachers' Ketirement System the modification may, notwith-
Ante, p. 1058. 
standing section 218 (f) of the Social Security Act, be made effective 
with respect to service performed in such positions after an effective 
date specified in the modification, but in no case may such effective 
date be earlier than December 31, 1950. For the purposes of any 
such modification, all employees in positions covered by the Arizona 
Teachers' Retirement System shall be deemed, notwithstanding the 
Ante. p. 1057. 
provisious of scctiou 218 (d) (6) of such Act, to constitute a separate 
coverage group. 
PRESUMED WORK DEDUCTIONS I N CASE OF CERTAIN RETROACTIVE STATE 
AGREEMENTS 
(1) (1) In the case of any services performed prior to 1955 to 
anL " ^.'^i 053' "^^'^^ich an agreement under section 218 of the Social Security Act Avas 
1055-1059.' 
' made applicable, deductions which— 
1073^107^^' ^°^°' 
(A) were not imposed under section 203 of such Act with 
42 use 403. 
respect to such services performed prior to the date the agree-
ment was agreed to or, if the original agreement was not appli-
cable to such services, performed prior to the date the modifica-
tion making such agreement applicable to such services was 
agreed to, and 
(B) would have been imposed under such section 203 had such 
agreement, or modification, as the case may be, been agreed to on 
the date it became effective, 
shall be deemed to have been imposed, but only for purposes of sec-
1068*"' ^^' ^°^^' ^^^^ ^^^ (^) (^) (^) ^^ section 215 (f) (4) (A) of such Act as in 
effect prior to the enactment of this Act. An individual with respect 
to whose services the preceding sentence is applicable, or in the case 
of his death, his survivors entitled to monthly benefits under section 
42^usc 402^_^^ 
202 of the Social Security Act on the basis of his wages and self-
1079^lo'ss, loss! employment income, shall be entitled to a recomputation of his 
primary insurance amount under such section 215 (f) (2) (A) or 
section 215 (f) (4) (A), as the case may be, if the conditions specified 
therein are met and if, with respect to a recomputation under such 
section 215 (f) (2) (A), such individual files the application referred 
to in such section after August 1954 and prior to January 1956 or, 
with respect to a recomputation under such section 215 (f) (4) (A), 
such individual died prior to January 1956 and any of such survivors 
entitled to monthly benefits files an application, in addition to the 
application filed for such monthly benefits, for a recomputation under 
such section 215 (f) (4) (A). 
(2) For purposes of a recomputation made by reason of paragraph 
(1) of this subsection, the primary insurance amount of the indi-
vidual who performed the services referred to in such paragraph shall 
Post. p. 1062. 
be computed under subsection (a) (2) of section 215 of the Social 
Security Act, as amended by this Act (but, for such purposes, without 
Post, p. 1065. 
application of subsection (d) (4) of such section, as in effect prior to 
the enactment of this Act or as amended by this Act) and as though 
he became entitled to old-age insurance benefits in whichever of the 
following months yields the highest primary insurance amount: 
(A) the month following the last month for which deductions 
are deemed, pursuant to paragraph (1) of this subsection, to have 
been made: or 
68 ST AT.1 
PUBLIC LAW 761-SEPT. 1, 1954 
1061 
(B) the first month after the month determined under sub-
paragraph (A) (and prior to September 1954) in which his 
benefits under section 202 (a) of the Social Security Act were no 
'^^ u s c 202; 
longer subject to deductions under section 203 (b) of such Act; or fay's.' ^^' 
(C) the first month after the last month (and prior to Septem-
ber 1954) in which his benefits under section 202 (a) of the Social 
Security Act were subject to deductions under section 203 (b) 
of such Act; or 
(D) the month in which such individual filed his application 
for recomputation referred to in paragraph (1) of this subsection 
or, if he died without filing such application and prior to January 
1, 1956, the month in which he died, and in any such case (but, if 
the individual is deceased, only if death occurred after August 
1954) the amendments made by subsections (b) ( l ) , ( e ) (1) and 
(e) (3) (B) of section 102 of this Act shall be applicable. 
lo^r'ioe?^." ^°"' 
Such recomputation shall be effective for and after the month in which 
the application required by paragraph (1) of this subsection is filed. 
The provisions of this subsection shall not be applicable in the case of 
any individual if his primary insurance amount has been recomputed 
under section 215 (f) (2) of the Social Security Act on the basis of an 
Poat, p. loee. 
application filed prior to September 1954. 
(3) If any recomputation under section 215 (f) of the Social Secu- 
'*2 use 415. 
rity Act is made by reason of deductions deemed pursuant to para-
graph (1) of this subsection to have been imposed with respect to 
^j^*""' P- ^°^^ 
benefits based on the wages and self-employment income of any indi-
vidual, the total of the benefits based on such wages and self-employ-
ment income for months for which such deductions are so deemed 
to have been imposed shall be recovered by making, in addition to 
any other deductions under section 203 of such Act, deductions from 
'•2 u s c 2 0 3; 
any increase in benefits, based on such wages and self-employment ?073-i078.* 
income, resulting from such recomputation. 
SERVICE BY AMERICAN CITIZENS FOR FOREIGN SUBSIDIARY OF DOMESTIC 
CORPORATION 
(m) Clause (B) of so much of section 210 (a) of the Social Secu- 
42 use 4io. 
rity Act as precedes paragraph (1) thereof is amended to read as fol-
lows : "(B) outside the United States by a citizen of the United States 
as an employee (i) of an American employer (as defined in subsec-
tion (e)), or (ii) of a foreign subsidiary (as defined in section 3121 
(1) of the Internal Revenue Code of 1954) of a domestic corporation 
Poat. p. 1094. 
(as determined in accordance with section 7701 of the Internal Rev-
enue Code of 1954) during any period for which there is in effect 
esA stat. 911. 
an agreement, entered into pursuant to section 3121 (1) of the Inter-
nal Revenue Code of 1954, with respect to such subsidiary;". 
EFFECTIVE DATES 
(n) The amendment made by paragraph (3) of subsection (g) shall 
^"'e, p. loss. 
be applicable only with respect to taxable years beginning after 1950. 
The amendments made by paragraphs (1), (2), and (4) of such sub-
section and by subsection (d) shall, except for purposes of section 42'*uscf'203- ^VaV 
203 of the Social Security Act, be applicable only with respect to PP. 1070, 10*73-
Ante, p. 1054. 
1062 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 STAT. 
taxable years ending after 1954. The amendments made by para-
Ante. p. 1052. 
graphs (1), (2), and (3) of subsection (a) sliall be applicable only 
with respect to remuneration paid after 1954. The amendments made 
by paragraphs (4), (5), and (6) of subsection (a) shall be applicable 
only with respect to services (whether performed after 1954 or prior 
to 1955) for which the remuneration is paid after 1954. The amend-
ment made by paragraph (3) of subsection (c) shall become effective 
January 1,1955. The other amendments made by this section (other 
than the amendments made by subsections (h), (i), (j) and (m) shall 
be applicable only with respect to services performed after 1954. 
For purposes of section 203 of the Social Security Act, the amendments 
made by paragraphs (1), (2),, and (4) of subsection (g) and by sub-
section (d) shall be effective with respect to net earnings from self-
employment derived after 1954. The amount of net earnings from 
''*^'' 
self-employment derived during any taxable year ending in, and not 
with the close of, 1955 shall be credited equally to the calendar quarter 
in which such taxable year ends and to each of the three or fewer 
preceding quarters any part of which is in such taxable year; and, for 
purposes of the precedmg sentence of this subsection, net earnings 
.tifiii 
1 .,; 
from self-employment so credited to calendar quarters in 1955 shall be 
deemed to have been derived after 1954. 
INCREASE IN BENEFIT AMOUNTS 
42 use 415. 
gEc. 102. (a) Subsection (a) of section 215 of the Social Security Act 
is amended to read as follows: 
"PRIMARY INSURANCE AMOUNT 
"(a) (1) The primary insurance amount of any individual (i) who 
42 use 402. 
(jogg J^Q|. become eligible for benefits under section 202 (a) until after 
August 1954, or who dies after such month and without becoming 
eligible for benefits under such section 202 (a), and (ii) with respect 
to whom not less than six of the quarters elapsing after 1950 are 
quarters of coverage, and the primary insurance amount of any indi-
j! 
j
f
e 
vidual with respect to whom not less than six of the quarters elapsing 
after June 30, 1953, are quarters of coverage, shall be whichever of 
the following amounts is the larger: 
"(A) Fifty-five per centum of the first $110 of his average 
monthly wage, plus 20 per centum of the next $240; or 
Post, p. 1063. 
"(B) The amount determined under subsection (c). 
An individual shall, for purposes of this paragraph, be deemed eligible 
.. ! .
5
s 
for benefits under section 202 (a) for any month if he was or would 
have been, upon filing application therefor in such month, entitled to 
such benefits for such month. 
"(2) The primary insurance amount of any other individual shall 
Post. p. 1063. 
ijg ^l^g amount determined under subsection (c)." 
(b) (1) Paragraphs (1), (2), and (3) of subsection (b) of such 
section are amended to read as follows: 
Average monthly 
"(^^ ^ ^ individual's 'average monthly wage' shall be the quotient 
^^^''' 
obtained by dividing the total of his wages and self-employment 
income after his starting date (determined under paragraph (2)) and 
prior to his closing date (determined under paragraph (3)), by the 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1063 
number of months elapsing after such starting date and prior to such 
closing date, excluding from such elapsed months any month in any 
year prior to the year in which he attained the age of twenty-two if 
less than two quarters of such prior year w^ere quarters of coverage, 
except that when the number of such elapsed months thus computed 
(including a computation after the application of paragraph (4)) is 
less than eighteeUj it shall be increased to eighteen. 
"(2) An individual's 'starting date' shall be— 
"(A) December 31, 1950, or 
"(B) if later, the last day of the year in which he attains the 
age of twenty-one, 
whichever results in the higher primary insurance amount. 
"(3) An individual's 'closing date' shall be whichever of the fol-
lowing results in the higher primary insurance amount: 
"(A) the first day of the year in which he died or became 
entitled to old-age insurance benefits, whichever first occurred; or 
"(B) the first day of the first year in which he both was fully 
insured and had attained retirement age; 
except that if the Secretary determines, on the basis of the evidence 
available to him at the time of the computation of the individual's 
primary insurance amount with respect to which such closing date is 
applicable, that it would result in a higher primary insurance amount 
for such individual, his closing date sliall be the first day of the year 
following the year referred to in subparagraph (A)." 
(2) Paragraph (4) of such subsection (b) is amended to read as 
follows: 
"(4) In the case of any individual, the Secretary shall determine 
the four or fewer full calendar years after his starting date and prior 
to his closing date which, if the months of such years and his wages and 
self-employment income for such years were excluded in computing his 
average monthly wage, would produce the highest primary insurance 
amount. Such months and such wages and self-employment income 
shall be excluded for purposes of computing such individual's average 
monthly wage. The maximum number of calendar years determined 
under the first sentence of this paragraph shall be five instead of four 
in the case of any individual who has not less than twenty quarters of 
coverage." 
(c) Subsection (c) of such section is amended to read as follows: 
"Determinations Made by Use of the Conversion Table 
"(c) (1) Except as provided in paragraph (2) of this subsection, 
the amount referred to in paragraphs (1) (B) and (2) of subsection 
(a) for an individual shall be either the amount appearing in column 
I I I of the following table on the line on which in column I appears his 
primary insurance benefit (as determined under subsection (d)), or 
the amount appearing in column I I I of the following table on the 
line on which in column II appears his primary insurance amount 
(determined as provided in subsection (d)), whichever produces the 
higher amount; and his average monthly wage shall, for purposes of 
Infra. 
Starting date. 
Closing date. 
Ante, 
p, 1062. 
Post, 
p. 1065. 
1064 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 ST A T , 
PosV^^ "^^^loTo section 203 (a), be the amount appearing in column IV on the line on 
1073-1078.' 
' which, in column III, appears such higher amount. 
42 use 415. 
" I 
'If the primary insurance benefit (as determined under 
subsection (d)) is— 
$10.... 
- 
-
$11 
$12 
$13 
-
$14 
$15 
- 
-
$16 
$17 
- 
-
$18 
$19 
$20 
$21 
. 
$22 
-
$23 
- 
-
$24 
$25 
$26 
$27 
$28 
$29 
$30 
$31 
$32 
$33... 
$34 
$35 
$36 
$37 
$38 
$39 
$40 
$41 
. 
$42.._ 
$43 
$44 
$45 
$46 
') 
• 
. . ' 
• 
I I 
Or the primary 
insurance 
amount (as 
determined 
under subsec-
tion (d)) is— 
$25.00 
27.00 
29.00 
31.00 
33.00 
35.00 
36.70 
38.20 
39.50 
40.70 
42.00 
43.50 
45.30 
47.50 
50.10 
52.40 
54.40 
56.30 
58.00 
59.40 
60.80 
62.00 
63.30 
64.40 
65.50 
66.60 
67.80 
68.90 
70.00 
71.00 
72.00 
73.10 
74.10 
75.10 
76.10 
77.10 
77.10 
77.20 
77.30 
77.40 
77.50 
78.00 
79.00 
80.10 
81.00 
82.00 
83.10 
84.00 
85.00 
I I I 
The amount 
referred to in 
paragraphs (1) 
(B) and (2) of 
subsection (a) 
shall be— 
$30.00 
32.00 
34.00 
36.00 
38.00 
40.00 
41.70 
43.20 
44.50 
45.70 
47.00 
48.50 
50.30 
52.50 
55.10 
57.40 
59.40 
61.30 
63.00 
64.40 
66.30 
67.90 
69.50 
71.10 
72.50 
73.90 
75.50 
77.10 
78.50 
79.90 
81.10 
82.70 
83.90 
85.30 
86.70 
88.50 
88.50 
88.50 
88.50 
88.50 
88.50 
89.10 
90.50 
91.90 
93.10 
94.50 
95.90 
97.10 
98.50 
I V 
And the average 
monthly wage 
for purposes of 
computing max-
imum benefits 
shall be— 
$55.00 
58.00 
62.00 
65.00 
69.00 
73.00 
76.00 
79.00 
81.00 
83.00 
85.00 
88.00 
91.00 
95.00 
100.00 
104.00 
108.00 
114.00 
123.00 
130.00 
139.00 
147.00 
155.00 
163.00 
170.00 
177.00 
185.00 
193.00 
200.00 
207.00 
213.00 
221.00 
227.00 
234.00 
241.00 
250.00 
250.00 
250.00 
250.00 
250.00 
250.00 
253.00 
260.00 
267.00 
273.00 
280.00 
287.00 
293.00 
300.00 
Post, p. 1065. 
Ante, p. 1062. 
"(2) (A) In case the primary insurance benefit (determined as 
provided in subsection (d)) of an individual falls between the amounts 
on any two consecutive lines in column I of the table, the amount 
referred to in paragraphs (1) (b) and (2) of subsection (a) for such 
individual shall be the amount determined (i) by applying the for-
mula in subsection (a) (1) to the average monthly wage which would 
be determined for such individual under paragraph (4) of this sub-
section as in effect prior to the enactment of the Social Security 
Amendments of 1954, (ii) by increasing the amount determined under 
clause (i), if it is not a multiple of $0.10, to the next higher multiple 
of $0.10, and (iii) by further increasing such amount to the extent, 
if any, it is less than $5 greater than the primary insurance amount 
which would be determined for him by use of his primary insurance 
benefit under paragraph (2) of this subsection as in effect prior to 
the enactment of the Social Security Amendments of 1954. 
"(b) In case the jjrimary insurance amount (determined under sub-
section (d)) of an individual falls between the amounts on any two 
consecutive lines in column I I of the table, the amount referred to in 
paragraphs (1) (B) and (2) of subsection (a) for such individual 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1065 
shall be the amount determined under subparagraph (A) of this 
paragraph for an individual whose primary insurance benefit would 
(under paragraph (2) of this subsection as in effect prior to the enact-
ment of the Social Security Amendments of 1954) produce such pri-
mary insurance amount; except that, if there is no primary insur-
ance benefit which would (under such paragraph (2)) produce such 
primary insurance amount or if such primary insurance amount is 
higher than $77.10, the amount referred to in paragraphs (1) (B) 
and (2) of subsection (a) for such individual shall be the amount 
determined (i) by applying the formula in subsection (a) (1) to 
the average monthly wage from which such primary insurance 
amount was determined, (li) by increasing the amount determined 
under clause (i), if it is not a multiple of $0,10, to the next higher 
multiple of $0.10, and (iii) by further increasing such amount to the 
extent, if any, it is less than $5 greater than such primary insurance 
amount. 
"(C) If the provisions of subparagraphs (A) and (B) of this para-
graph are both applicable to an individual, the amount referred to in 
paragraphs (1) (B) and (2) of subsection (a) for such individual 
shall be the larger of the amounts determined under such sub-
paragraphs. 
"(3) For the purpose of facilitating the use of the conversion table 
in computing any insurance benefit under section 202, the Secretary 
is authorized to assume that the primary insurance benefit from which 
such benefit under section 202 is determined is one cent or two cents 
more or less than its actual amount. 
"(4) For purposes of section 203 (a), the average monthly wage 
of an individual whose primary insurance amount is determined under 
paragraph (2) of this subsection shall be a sum equal to the average 
monthly wage which would result in such primary insurance amount 
upon the application of the provisions of subsection (a) (1) (A) of 
this section and without the application of subsection (e) (2) or (g) 
of this section; except that, if such sum is not a multiple of $1, it shall 
be rounded to the nearest multiple of $1 (or to the next higher multiple 
of $1 if it is a multiple of $0.50)." 
(d) (1) The heading of subsection (d) of such section is amended 
to read "Primary Insurance Benefit and Primary Insurance Amount 
For Purposes of Conversion Table". 
(2) So much of such subsection (d) as precedes paragraph (1^ 
thereof is amended by inserting "and the primary insurance amounts ' 
after "primary insurance benefits". 
(3) So much of paragraph (4) of such subsection (d) as precedes 
subparagraph (A) is amended by inserting "(except an individual 
who attained age twenty-two after 1950 and with respect to wliom not 
less than six of the quarters elapsing after 1950 are quarters of 
coverage)" after "individual". 
(4) Such subsection (d) is amended by adding after paragraph 
(5), added by section 106 of this Act, the following new paragraph: 
"(6) The primary insurance amount of any individual shall be 
computed as provided in this section as in effect prior to the enact-
ment of this paragraph, except that the amendments made by sections 
102 (b) (other than paragraph (2) thereof), 104, and 106 of the Social 
Security Amendments of 1954 (relating, respectively, to increase 
in benefit amounts, increase in earnings counted, and periods of dis-
ability) shall, to the extent provided by such sections, be applicable 
to such computation." 
(e) (1) Section 215 (e) of such Act is amended by striking out 
"and" at the end of paragraph (1), by changing the period at the 
end of paragraph (2) to a semicolon, and by adding after such para-
graph (2) the following new paragraph: 
Ante, p. 1062. 
42 u s e 402; posf, 
pp. 107 3 , 1 0 7 9, 
1083, 1085. 
42 u s e 403; post, 
pp. 
107 0, 
1 0 7 : J -
1078. 
Post, 
p. 1079. 
Ante, 
p. 
post, 
pp. 
1079. 
10 6 2; 
1 0 7 8 , 
PoBt, 
1080. 
pp. 1078, 
1066 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 ST A T . 
Post, 
p. 1067. 
Poat, p. 1079. 
Post, 
pp. 
1071. 
"(3) if an individual's closing date is determined under para-
Ante, p. 1063. 
graph (3) (A) of subsection (b) and he has self-employment 
income in a taxable year which begins prior to such closing date 
and ends after the last day of the month preceding the month in 
which he becomes entitled to old-age insurance benefits, there shall 
not be counted, in determining his average monthly wage, his 
self-employment income in such taxable year, except as provided 
in section 215 (f) (3) (C); and". 
(2) Section 215 (f) (2) of such Act is amended to read as follows: 
"(2) (A) Upon application filed after 1954 by an individual 
entitled to old-age insurance benefits, the Secretary shall recompute his 
primary insurance amount if— 
"(i) he has not less than six quarters of coverage in the period 
after 1950 and prior to the quarter in which such application is 
r 
filed, 
"(ii) he has wages and self-employment income of more than 
$1,200 in a calendar year which occurs after 1963 (not taking into 
account any year prior to the calendar year in which the last 
previous recomputation, if any, of his primary insurance amount 
was effective) and after the year in which he became (without the 
application of section 202 (j) (1)) entitled to old-age insurance 
benefits or filed an application for recomputation (to which he is 
1069. 
entitled) under section 102 (e) (5) (B) or 102 (f) (2) (B) of 
the Social Security Amendments of 1954, whichever of such events 
is the latest, and 
"(iii) he filed such application no earlier than six months after 
such calendar year referred to in clause (ii) in which he had such 
wages and self-employment income. 
Such recomputation shall be effective for and after the twelfth month 
before the month in which he filed such application for recomputation 
but in no event earlier than the month following such calendar year 
referred to in clause (ii). For the purposes of this subparagraph an 
individual's self-employment income shall be allocated to calendar 
quarters in accordance with section 212. 
"(B) A recomputation pursuant to subparagraph (A) shall be 
made as provided in subsection (a) of this section and as though the 
individual first became entitled to old-age insurance benefits in the 
month in which he filed the application for such recomputation, but 
only if the provisions of subsection (b) (4) were not applicable to the 
last previous computation of his primary insurance amount. If the 
provisions of subsection (b) (4) were applicable to such previous 
computation, the recomputation under subparagraph (A) of this 
paragraph shall be made only as provided in subsection (a) (1) (other 
than subparagraph (B) thereof) and for such purposes his average 
monthly wage shall be determined as though he became entitled to 
old-age insurance benefits in the month in which he filed the applica-
tion for recomputation under subparagraph (A), except that, of the 
provisions of paragraph (3) of subsection (b), only the provisions of 
subparagraph (A) thereof shall be applicable." 
(3) (A) Section 215 (f) (3) of such Act is amended to read as 
follows: 
"(3) (A) Upon application by an individual— 
"(i) who became (without the application of section 202 (j) 
(1)) entitled to old-age insurance benefits under section 202 (a; 
after August 1954, or 
"(ii) whose primary insurance amount was recomputed under 
pp. 1068, 
section 102 (e) (5) or 102 (f) (2) (B) of the Social Security 
Amendments of 1954, or 
42 u s e 412. 
Ante, p. 1063. 
Ante, p. 1062. 
Ante, p. 1063. 
Poat, p. 1079. 
42 u s e 402. 
Poat, 
1071. 
!lli;|il>-vii*j !J, 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
10(37 
" (iii) whose primary insurance amount was recomputed as pro-
vided in the first sentence of paragraph (2) (B) of this subsection 
on the basis of an application filed after August, 1954, 
the Secretary shall recompute his primary insurance amount if such 
application is filed after the year in which he became entitled to old-
age insurance benefits or in which he filed his application for the last 
recomputation (to which he was entitled) of his primary insurance 
amount under any provision of law referred to in clause (ii) or (iii) 
of this sentence, whichever is the later. 
Such recomputation under 
this subparagraph shall be made in the manner provided in the preced-
ing subsections of this section for computation of his primary insurance 
amount, except that his closing date for purposes of subsection (b) 
shall be the first day of the year following the year in which he became 
entitled to old-age insurance benefits or in which he filed his application 
for the last recomputation (to which he was entitled) of his primary 
insurance amount under any provision of law referred to in clause 
(ii) or (iii) of the preceding sentence, whichever is the later. 
Such re-
computation under this subparagraph shall be effective for and after 
the first month for which his last previous computation of his primary 
insurance amount was effective, but in no event for any month prior to 
the twenty-fourth month before the month in which the application 
for such recomputation is filed. 
"(B) In the case of an individual who dies after August 1954— 
"(i) who, at the time of death, was not entitled to old-age insur-
ance benefits under section 202 (a), or who became entitled to 
old-age insurance benefits under section 202 (a) after August 
1954, or whose primary insurance amount was recomputed under 
paragraph (2) or (4) of this subsection, or section 102 (e) (5) 
or section 102 (f) (2) (B) of the Social Security Amendments of 
1954, on the basis of an application filed after August 1954; and 
"(ii) with respect to whom the last previous computation or 
recomputation of his primary insurance amount was based upon 
a closing date determined under subparagraph (A) or (B) of 
subsection (b) (3) of this section, 
the Secretary shall recompute his primary insurance amount upon the 
filing of an application by a person entitled to monthly benefits or a 
lump-sum death payment on the basis of his wages and self-employ-
ment income. 
Such recomputation shall be made in the manner pro-
vided in the preceding subsections of this section for computation of 
such amount, except that his closing date for purposes of subsection 
(b) shall be the day following the year of death in case he died without 
becoming entitled to old-age insurance benefits, or, in case he was 
entitled to old-age insurance benefits, the day following the year in 
which was filed the application for the last previous computation of 
his primary insurance amount or in which the individual died, which-
ever first occurred. In the case of monthly benefits, such recompu-
tation shall be effective for and after the month in which the person 
entitled to such monthly benefits became so entitled, but in no event 
for any month prior to the twenty-fourth month before the month in 
which the application for such recomputation is filed." 
(B) Such section 215 (f) (3) is further amended by adding after 
subparagraph (B) (added by subparagraph (A) of this paragraph) 
the following neAv subparagraph: 
"(C) If an individual's closing date is determined under paragraph 
(3) (A) of subsection (b) of this section and he has self-employment 
income in a taxable year which begins prior to such closing date and 
ends after the last day of the month preceding the month in which he 
became entitled to old-age insurance benefits, the Secretary shall recom-
pute his primary insurance amount after the close of such taxable year. 
R e c o m putation 
of primary insur-
ance amount. 
42 u s e 402. 
Post, 
1071. 
pp. 1068, 
Ante, p. 1063. 
Ante, p. 1063. 
1068 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
42 u s e 412. 
Death after 1954. 
Ante, p. 1066. 
42 u s e 405. 
42 u s e 405. 
42 u s e 415. 
Ante, p. 1066. 
Ante, p. 1062. 
Ante, p. 1065. 
Ante, p. 1062. 
taking into account only such self-employment income in such taxable 
year as is, pursuant to section 212, allocated to calendar quarters prior 
to such closing date. Such recomputation shall be effective for and 
after the first month in which he became entitled to old-age insurance 
benefits." 
(4) Section215 (f) (4) of such Act is amended to read as follows: 
"(4) Upon the death after 1954 of an individual entitled to old-
age insurance benefits, if any person is entitled to monthly benefits, or 
to a lump-sum death payment, on the basis of the wages and self-
employment income of such individual, the Secretary shall recompute 
the decedent's primary insurance amount, but only if— 
"(A) the decedent would have been entitled to a recomputation 
under paragraph (2) (A) (without the application of clause (iii) 
thereof) if he had filed application therefor in the month in which 
he died; or 
"(B) the decedent during his lifetime was paid compensation 
which was treated under section 205 (o) as remuneration for 
employment. 
If the recomputation is permitted by subparagraph (A) the recompu-
tation shall be made (if at all) as though he had filed application for 
a recomputation under paragraph (2) (A) in the month in which he 
died, except that such recom])utation shall include any compensation 
(described in section 205 (o)) paid to him prior to the closing date 
which would have been applicable under such paragraph. If recom-
putation is permitted by subparagraph (R) the recomputation shall 
take into account only the wages and self-employment income which 
were taken into account in the last previous com])utation of his primary 
insurance amount and the compensation (described in section 205 (o)) 
paid to him prior to the closing date applicable to such computation. If 
both of the preceding sentences are applicable to an individual, only 
the recomputation which results in the larger primary insurance 
amount shall be made." 
(5) (A) In the case of any individual who, upon filing application 
therefor before September 1954, would (but for the provisions of 
section 215 (f) (6) of the Social Security Act) have been entitled to a 
recomputation under subparagraph (A) or (B) of section 215 (f) (2) 
of such Act as in effect prior to the enactment of this Act, the Secretary 
shall recompute such individual's primary insurance amount, but only 
if he files an application therefor or, in case he died before filing such 
application, an application for monthly benefits or a lump-sum death 
payment on the basis of his wages and self-employment income is filed. 
Such recomputation shall be made only as provided in subsection 
(a) (2) of section 215 of the Social Security Act, as amended by this 
Act, through the use of a primary insurance amount determined under 
subsection (d) (6) of such section in the same manner as for an indi-
vidual to whom subsection (a) (1) of such section, as in effect prior to 
the enactment of this Act, is applicable; and such recomputation shall 
take into account only such wages and self-employment income as 
would be taken into account under section 215 (b) of the Social 
Security Act if the month in which the application for recomputation 
is filed, or if the individual died without filing the application for 
recomputation, the month in which he died, were deemed to be the 
month in which he became entitled to old-age insurance benefits. 
In 
the case of monthly benefits, such recomputation shall be effective for 
and after the month in which such application for recomputation is 
filed or, if the individual has died without filing the application, for 
and after the month in which the person filing the application for 
monthly survivor benefits becomes entitled to such benefits. 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
10(39 
(B) In the case of— 
(i) any individual who is entitled to a recomputation under 
subparagraph (A) of section 215 (f) (2) of the Social Security 
Act as in effect prior to the enactment of this Act on the basis 
of an application filed after August 1954, or who died after such 
month leaving any survivors entitled to a recomputation under 
section 215 (f) (4) of the Social Security Act as in effect prior to 
the enactment of this Act on the basis of his wages and self-
employment income, and whose sixth quarter of coverage after 
1950 was acquired after August 1954 or with respect to whom the 
twelfth month referred to in such subparagraph (A) occurred 
after such month, and 
(ii) any individual who is entitled to a recomputation under 
section 215 (f) (2) (B) of the Social Security Act as in effect 
prior to the enactment of this Act on the basis of an application 
filed after August 1954, or who died after August 1954 leaving 
any survivors entitled to a recomputation under section 215 (f) 
(4) of the Social Security Act as in effect prior to the enactment 
of this Act on the basis of his wages and self-employment income, 
and whose sixth quarter of coverage after 1950 was acquired after 
August 1954 or who did not attain the age of seventy-five prior 
to September 1954, 
the recomputation of his primary insurance amount shall be made 
in the manner provided in section 215 of the Social Security Act, as 
amended by this Act, for computation of such amount, except that his 
closing date, for purposes of subsection (b) of such section 215, shall 
be determined as though he became entitled to old-age insurance 
benefits in the month in which he filed such application for or, if be 
has died, in the month in which he died. 
In the case of monthly bene-
fits, such recomputation shall be effective for and after the month in 
which such application for recomputation is filed or, if the individual 
has died without filing the application, for and after the month in 
which the person filing the application for monthly survivors benefits 
becomes entitled to such benefits. 
(C) An individual or, in case of his death, his survivors entitled to 
a lump-sum death payment or to monthly benefits under section 202 
of the Social Security Act on the basis of his wages and self-employ-
ment income shall be entitled to a recomputation of his primary 
insurance amount under section 215 (f) (2) or section 215 (f) (4) of 
the Social Security Act as in effect prior to the date of enactment of 
this Act only if (i) he had not less than six quarters of coverage in 
the period after 1950 and prior to January 1, 1955, and (ii) either 
the twelfth month referred to in subparagraph (A) of such section 
215 (f) (2) occurred prior to January 1, 1955, or he attained the 
age of 75 prior to 1955, and (iii) he meets the other conditions of 
entitlement to such a recomputation. 
No individual shall be entitled 
to a recomputation under subparagraph (A) or (B) of this para-
graph if his primary insurance amount has previously been recom-
puted under either of such subparagraphs. 
(6) In the case of an individual who died or became (without the 
application of section 202 (j) (1) of the Social Security Act) entitled 
to old-age insurance benefits in 1956 and with respect to whom not 
less than six of the quarters elapsing after 1954 and prior to the quar-
ter following the quarter in which he died or became entitled to old-
age insurance benefits, whichever first occurred, are quarters of cov-
erage, his primary insurance amount shall be computed under section 
215 (a) (1) (A) of such Act, as amended by this Act, with a start-
ing date of December 31, 1954, and a closing date of July 1, 1956, but 
only if it would result in a higher primary insurance amount. 
For 
Ante, p. 1066. 
Ante, p. 1068. 
Ante, p. 1066. 
Ante, p, 1068. 
4 2 u s e 
4 1 5 ; 
ante, 
pp. 10 6 2, 
10 63, 1065-1068; 
post, 
pp, 10 78-
1080. 
4 2 u s e 
40 2; 
pos 
t, pp. 
10 7 3, 
1079, 1083, 1085. 
Ante, 
pp. 1065, 
1068. 
Post, 
p. 1079. 
Ante, p. 1062. 
1070 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
Ante, p. 1067. 
tliB pupposes of sectioii 215 (f) (3) (C) of such Act, the determina-
tion of an individual's closing date under the preceding sentence shall 
be considered as a determination of the individual's closing date under 
Ante, p. 1063. 
sectiou 215 (b) (3) (A) of such Act, and the recomputation provided 
for by such section 215 (f) (3) (C) shall be made using July 1, 1956, 
as the closing date, but only if it would result in a higher primary 
insurance amount. 
In any such computation on the basis of a July 
1, 1956 closing date, the total of his wages and self-employment 
income after December 31, 1955, shall, if it is in excess of $2,100, be 
reduced to such amount. 
42 use 403. 
(7^ Section 203 (a) of such Act is amended to read as follows: 
"(a) Whenever the total of monthly benefits to which individuals 
ost" ^ *^io7 3' ^^^ entitled under section 202 for a month on the basis of the wages 
1079,' 1083, 1085.' and self-employment income of an insured individual is more than $50 
and exceeds (1) 80 per centum of his average monthly wage, or (2) 
one and one-half times his primary insurance amount, whichever is 
the greater, such total of benefits shall, after any deductions under this 
section, be reduced to 80 per centum of his average monthly wage or 
to one and one-half times his primary insurance amount, whichever 
is the greater, but in no case to less than $50; except that when any of 
such individuals so entitled would (but for the provisions of section 
42 use 402. 
202 (k) (2) (A)) be entitled to child's insurance benefits on the basis 
of the wages and self-employment income of one or more other insured 
individuals, such total of benefits, after any deductions under this 
section, shall not be reduced to less than 80 per centum of the sum of 
the average monthly wages of all such insured individuals. In any 
case in which the total of the benefits referred to in the preceding 
sentence, after reduction (if any) thereunder, is more than $200, such 
total shall, notwithstanding the provisions of such sentence, be reduced 
to $200. Whenever a reduction is made under this subsection, each 
benefit, except the old-age insurance benefit, shall be proportionately 
decreased." 
(8) In the case of an individual who became (without the appli-
^l^^'gP-4^079. 
cation of section 202 (j) (1)) entitled to old-age insurance benefits or 
died prior to September 1954, the provisions of section 215 (f) (3) as 
in effect prior to the enactment of this Act shall be applicable as 
though this Act had not been enacted. 
Appiicabuity. 
^
f
^ (j^ xiie amendments made by the preceding subsections, other 
than subsection (b) and paragraphs (1), (2), (3), and (4) of sub-
section (e), shall (subject to the provisions of paragraph (2) and 
42 use 415. 
notwithstanding the provisions of section 215 (f) (1) of the Social 
Security Act) apply in the case of lump-sum death payments under 
ost ^ ^ ^1073' section 202 of such Act with respect to deaths occurring after, and in 
?07^9,'i083, 1085.' the case of monthly benefits under such section for months after, 
August 1954. 
(2) (A) The amendment made by subsection (b) (2) shall be appli-
cable only in the case of monthly benefits for months after August 
1954, and the lump-sum death payment in the case of death after 
August 1954, based on the wages and self-employment income of an 
individual (i) who does not become eligible for benefits under sec-
42 use 402. 
tion 202 (a) of the Social Security Act until after August 1954, or 
(ii) who dies after August 1954, and without becoming eligible for 
benefits under such section 202 (a), or (iii) who is or has been entitled 
to have his primary insurance amount recomputed under section 215 
Ante, p. 1066. 
(f) (2) of the Social Security Act, as amended by subsection (e) (2) 
Ante, p. 1069. 
Qf I\^[Q sectiou, or under subsection (e) (5) (B) of this section, or 
(iv) with respect to whom not less than six of the quarters elapsing 
after June 1953 are quarters of coverage (as defined in such Act), or 
(v) who files an application for a disability determination which is 
42 u s e 402. 
68 S T A T . ] 
PUBLIC LAW 76 1 - S E P T . 1, 1954 
1071 
accepted as an application for purposes of section 216 (i) of such Act, 
^°^*' P- ^O^O. 
or (vi) who dies after August 1954, and whose survivors are (or 
would, but for the provisions of section 215 (f) (6) of such Act, be) 
^^ "^^ '*^^-
entitled to a recomputation of his primary insurance amount under 
section 215 (f) (4) (A) of such Act, as amended by this Act. For 
^"*^' P- ^O^S-
purposes of the preceding sentence an individual shall be deemed 
eligible for benefits under section 202 (a) of the Social Security Act 
for any month if he was, or would upon filing application therefor in 
such month have been, entitled to such benefits for such month. 
(B) In the case of any individual entitled to old-age insurance 
benefits under section 202 (a) of the Social Security Act who was or, 
upon filing application therefor, would have been entitled to such 
benefits for August 1954, to whom subparagraph (A) is inapplicable, 
and with respect to whom not less than six of the quarters elapsing 
after June 30,1953, are quarters of coverage, the Secretary of Health, 
Education, and Welfare shall, notwithstanding the provisions of sec-
tion 215 (f) (1) of the Social Security Act, recompute the primary 
42 use 415. 
insurance amount of such individual but only upon the filing of an 
application, after August 1954, by him or, if he dies without filing 
such an application, by any person entitled to monthly survivors 
benefits under section 202 of such Act on the basis of such individual's ^^^ "pp*^io 73! 
wages and self-employment income. 
Such recomputation shall be 1079/losi, loss.' 
made in the manner provided in section 215 of the Social Security p p.^ "i^(f6*2,^'foes'. 
Act for computation of such individual's primary insurance amount, ^^^^Qy^{Q^^^^' 
except that the provisions of subsection (f) of such section (other 
than paragraph (3) (C) thereof) shall not be applicable for purposes 
of such computation, and except that his closing date, for purposes of 
subsection (b) of such section, shall be determined as though he 
became entitled to old-age insurance benefits in the month in which 
he filed such application for recomputation or, if he died without 
filing such application, the month in which he died. 
Such recompu-
tation shall be effective (i) if the application is filed by such individ-
ual, for and after the twelfth month before the bond in which the 
application therefor was filed by such individual but in no case before 
the first month of the quarter which is such individual's sixth quarter 
of coverage acquired after June 30, 1953, or (ii) if such application 
was filed by a person entitled to monthly survivors benefits under 
section 202 of the Social Security Act on the basis of such individual's 
wages and self-employment income, for and after the first month for 
which such person was entitled to such survivors benefits. 
No such 
recomputation of an individual's primary insurance amount shall be 
effective unless it results in a higher primary insurance amount for 
him; nor shall any such recomputation of an individual's primary 
insurance amount be effective if such amount has previously been 
recomputed under this subsection. 
(3) The amendments made by subsections (b) (1), (e) (1), and ^^A*^' ^^' ^°^^' 
(e) (3) (B) shall be applicable only in the case of monthly benefits 
based on the wages and self-employment income of an individual who 
does not become entitled to old-age insurance benefits under section 
202 (a) of the Social Security Act until after August 1954, or who 
42 use 402. 
dies after August 1954 without becoming entitled to such benefits, or 
who files an application after August 1954 and is entitled to a recom-
putation under paragraph (2) or (4) of section 215 (f) of the Social lo'es**' ^^' ^°^*' 
Security Act, as amended by this Act, or who is entitled to a recompu-
tation under paragraph (2) (B) of this subsection, or who is entitled 
to a recomputation under paragraph (5) of subsection (e). 
"*"**' P- ^O^^-
(4) The amendments made by subsection (e) (2) shall be applicable 
•*"'*' P- ^^^^* 
only in the case of applications for recomputation filed after 1954. 
The amendment made by subsection (e) (4) shall be applicable only 
-*"**' P* ^°®8-
in the case of deaths after 1954. 
1072 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
Ante, 
p. 1066. 
42 u s e 
4 1 5 ; 
ante, 
p p . 10 6 2, 
10 6 3 , 1065-1068; 
post, 
p p . 10 7 8-
1080. 
66 Stat. 769. 
42 u s e 
4 1 5 
notes. 
42 u s e 
4 0 1-
421. 
Post, 
p. 1079. 
Ante, 
p. 1070. 
42 u s e 
4 1 5 
notes. 
Post, 
p. 1079. 
42 u s e 
4 0 1-
421. 
Ante, 
p. 1070. 
(5) The amendments made by subparagraph (A) of subsection (e) 
(3) shall be applicable only in the case of applications for recomputa-
tion filed, or deaths occurring, after August 1954. 
(6) No increase in any benefit by reason of the amendments made 
by this section (other than subsection (e)) or by reason of subpara-
graph (B) of paragraph (2) of this subsection shall be regarded as a 
recomputation for purposes of section 215 (f) of the Social Security 
Act. 
(g) Effective September 1,1954, section 2 (c) (2) (B) of the Social 
Security Act Amendments of 1952 is amended to read as follows: 
"(B) The provisions of subparagraph (A) shall cease to apply to 
the benefit of any individual under title II of the Social Security 
Act for any month after August 1954." 
(h) (1) W h e r e -
i
n A) an individual was entitled (without the application of 
section 202 (j) (1) of the Social Security Act) to an old-age 
insurance benefit under title II of such Act for August 1954; 
(B) one or more other persons were entitled (without the appli-
cation of such section 202 (j) (1)) to monthly benefits under such 
title for such month on the basis of the wages and self-employ-
ment income of such individual; and 
(C) the total of the benefits to which all persons are entitled 
under such title on the basis of such individual's wages and self-
employment income for any subsequent month for which he is 
entitled to an old-age insurance benefit under such title, would 
(but for the provisions of this paragraph) be reduced by reason 
of the application of section 203 (a) of the Social Security Act, 
as amended by this Act, 
then the total of benefits referred to in clause (C) for such subsequent 
month shall be reduced to whichever of the following is the larger— 
(D) the amount determined pursuant to section 203 (a) of the 
Social Security Act, as amended by this Act; or 
(E) the amount determined pursuant to such section, as in 
effect prior to the enactment of this Act, for August 1954 plus the 
excess of (i) the amount of his old-age insurance benefit for such 
month computed as if the amendments made by the preceding 
subsections of this section had been applicable in the case of such 
benefit for such month over (ii) the amount of his old-age in-
surance benefit for such month, or 
(F) the amount determined pursuant to section 2 (d) (1) of 
the Social Security Act Amendments of 1952 for August 1954 jilus 
the excess of (i) the amount of his old-age insurance benefit for 
such month computed as if the amendments made by the preced-
ing subsections of this section had been applicable in the case 
of such benefit for such month over (ii) the amount of his old-
age insurance benefit for such month. 
(2) Where— 
(A) two or more persons were entitled (without the applica-
tion of section 202 (j) (1) of the Social Security Act) to monthly 
benefits under title I I of such Act for August 1954 on the 
basis of the wages and self-employment income of a deceased in-
dividual; and 
(B) the total of the benefits to which all such persons are en-
titled on the basis of such deceased individual's wages and self-
employment income for any subsequent month would (but for 
the provisions of this paragraph) be reduced by reason of the 
application of the first sentence of section 203 (a) 
of the Social 
Security Act, as amended by this Act, 
then, notwithstanding any other provision in title I I of the Social 
Security Act, such deceased individual's average monthly w^age shall, 
68 S T A T . ] 
PUBLIC LAW 76 1 - S E P T . 1, 1954 
1073 
for purposes of such section 203 (a), be whichever of the following 
is the larger: 
(C) his average monthly wage determined pursuant to section 
215 of such Act, as amended by this Act; or 
^ ^^^^ \%?i o 11'. 
(D) his average monthly wage determined under such section loei, loes-ioea! 
215, as in effect prior to the enactment of this Act, plus $7. 
^xoio.' ^^* 
(i) (1) Section 202 of such Act is amended by inserting after ^^^^j^, ^^p^^j^o^; 
subsection (1) the following new subsection: 
losa/ioss. 
"Minimum Survivor's or Dependent's Benefit 
"(m) In any case in which the benefit of any individual for any 
month under this section (other than subsection (a)) is, prior to 
reduction under subsection (k) (3), less than $30 and no other indi-
vidual is (without the application of section 202 (j) (1)) entitled to 
^°«'' P- ^O^^-
a benefit under this section for such month on the basis of the same 
wages and self-employment income, such benefit for such month shall, 
prior to reduction under such subsection (k) (3), be increased to $30." 
(2) The first sentence of subsection (i) of such section 202 is amended 
by inserting ", or an amount equal to $255, whichever is the smaller" 
after "primary insurance amount". 
AMENDMENTS RELATING TO DEDUCTIONS FROM BENEFITS 
SEC. 103. (a) (1) Section 203 (b) of the Social Security Act is ^^t? p" ^o^s."*°^' 
iimended by striking out paragraphs (1) and (2) and inserting in lieu 
thereof the following new paragraph: 
"(1) in which such individual is under the age of seventy-two 
and for whicli month he is charged with any earnings under the 
provisions of subsection (e) of this section; or". 
(2) Such section 203 (b) is amended by inserting after paragraph 
(1) (inserted by paragraph (1) of this subsection) the following new 
paragraph: 
"(2) in whicli such individual is under the age of seventy-two 
and on seven or more different calendar days of which he engaged 
in noncovered remunerative activity outside the United States; 
or", 
(b) (1) Section 203 (c) of such Act is amended by striking out 
^°*'' P- ^°^®-
paragraphs (1) and (2) and inserting in lieu thereof the following 
new paragraph: 
"(1) in which the individual, on the basis of whose wages and 
self-employment income such benefit was payable, is under the age 
of seventy-two and for which month he is charged with any earn-
ings under the provisions of subsection (e) of this section; or". 
(2) Such section 203 (c) is amended by inserting after pa.ragraph 
(1) (inserted by paragraph (1) of this subsection) the following new 
paragraph: 
"(2) in which the individual referred to in paragraph (1) is 
under the age of seventy-two and on seven or more different cal-
endar days of Avhich he engaged in noncovered remunerative 
activity outside tlie United States." 
(c) The second sentence of section 203 (d) of such Act is amended 
to read as follows: "The charging of earnings to any month shall be 
treated as an event occurring in such month." 
(d) (1) The heading of section 203 (e) of such Act is amended to 
^°^^' P- ^O^*-
read "Months to Which Earnings Are Charged". 
(2) Paragraphs (1) and (2) of such section 203 (e) are amended to 
read as follows: 
"(1) If an individual's earnings for a taxable year of twelve 
months are not more than $1,200, no month in such year shall be 
39777 O—55—pt. 1 
70 
1074 
PUBLIC LAW 76l-SEPT. 1, 1954 
[68 S T A T . 
charged with any earnings. If an individual's earnings for a tax-
able year of less than twelve months are not more than the prod-
uct of $100 times the number of months in such year, no month 
in such year shall be charged with any earnings. 
"(2) If an individual's earnings for a taxable year of twelve 
months are in excess of $1,200, the amount of his earnings in 
excess of $1,200 shall be charged to months as follows: The first 
$80 of such excess shall be charged to the last month of such tax-
able year, and the balance, if any, of such excess shall be charged 
at the rate of $80 per month to each preceding month in such 
year to which such charging is not prohibited by the last sentence 
of this paragraph, until all of such balance has been applied. 
If an individual's earnings for a taxable year of less than twelve 
months are more than the product of $100 times the number of 
months in such year, the amount of such earnings in excess of 
such product shall be charged to months as follows: The first 
$80 of such excess shall be charged to the last month of such 
taxable year, and the balance, if any, shall be charged at the rate 
of $80 per month to each preceding month in such year to Avhich 
such charging is not prohibited by the last sentence of this para-
graph, until all of such balance has been applied. 
Notwith-
standing the preceding provisions of this paragraph, no part of 
the excess referred to in such provisions shall be charged to any 
month (A) for which the individual whose earnings are involved 
was not entitled to a benefit under this title, (B) in which an 
p^VoiS'^ilaT*^'. 
event described in paragraph (2), (3), (4), or (5) of subsection 
1078. ' 
' 
• 
(b) occurred, (C) in which such individual was age seventy-
two or over, or (D) in which such individual did not engage in 
self-employment and did not render services for wages (deter-
mined as provided in paragraph (4) of this subsection) of more 
than $80." 
(3) Paragraph (3) (B) of such section 203 (e) is amended to read 
as follows: 
"(B) For purposes of clause (D) of paragraph (2)— 
"(i) An individual will be presumed, with respect to any 
month, to have been engaged in self-employment in such month 
, 
until it is shown to the satisfaction of the Secretary that such 
individual rendered no substantial services in such month with 
respect to any trade or business the net income or loss of which is 
'"''•^- 
includible in computing (as provided in paragraph (4) of this 
subsection) his net earnings or net loss from self-employment for 
any taxable year. 
The Secretary shall by regulations prescribe 
the methods and criteria for determining whether or not an 
individual has rendered substantial services with respect to any 
trade or business. 
"(ii) An individual will be presumed, with respect to any 
month, to have rendered services for wages (determined as pro-
vided in paragraph (4) of this subsection) of more than $80 until 
it is shown to the satisfaction of the Secretary that such individual 
did not render such services in such month for more than such 
amount." 
(4) Such section 203 (e) is further amended by adding at the end 
thereof the following new paragraphs: 
"(4) (A) An individual's earnings for a taxable year shall be 
(i) the sum of his wages for services rendered in such year and his 
net earnings from self-employment for such year, minus (ii) any 
net loss from self-employment for such year. 
"(B) In determining an individual's net earnings from self-
employment and his net loss from self-employment for purposes 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1075 
of subparagraph (A) of this paragraph and subparagraph (B) 
of paragraph (3), the provisions of section 211, other than para- 
an^e.^p^^ioll'. 
graphs (1), (4), and (5) of subsection (c), shall be applicable; \^yf^'' P°®'' P' 
and any excess of income over deductions resulting from such a 
computation shall be his net earnings from self-employment and 
any excess of deductions over income so resulting shall be his net 
loss from self-employment. 
"(C) For purposes of this subsection, an individual's wages 
shall be computed without regard to the limitations as to amounts 
of remuneration specified in subsections (a), (g) (2), (g) (3), 
(h) (2), and (j) of section 209; and in making such computation ^ ^^ J^ ^pp losl-
services which do not constitute employment as defined in section post. p. io78. 
210, performed within the United States by the individual as an ant^e.^pp.^io5 2
^ 
employee, shall be deemed to be employment as so defined if the 1054/1061. 
remuneration for such services is not includible in computing his 
net earnings or net loss from self-employment. 
"(5) For purposes of this subsection, wages (determined as 
provided in paragraph (4) (C)) which, according to reports 
received by the Secretary, are paid to an individual during a tax-
able year shall be presumed to have been paid to him for services 
performed in such year until it is shown to the satisfaction of 
the Secretary that they were paid for services performed in an-
other taxable year. 
If such reports with respect to an individual 
show his wages for a calendar year, such individual's taxable 
year shall be presumed to be a calendar year for purposes of this 
subsection until it is shown to the satisfaction of the Secretary 
that his taxable year is not a calendar year." 
(e) Section 203 (f) of such Act is amended to read as follows: 
^^ ^sc 403. 
"Penalty for Failure To Report Certain Events 
"(f) Any individual in receipt of benefits subject to deduction 
under subsection (b) or (c), (or who is in receipt of such benefits 
on behalf of another individual), because of the occurrence of an 
event specified therein (other than an event specified in subsection (b) 
(1) or (c) (1)), who fails to report such occurrence to the Secretary 
prior to the receipt and acceptance of an insurance benefit for the 
second month following the month in which such event occurred, 
shall suffer an additional deduction equal to that imposed under sub-
section (b) or (c), except that the first additional deduction imposed 
by this subsection in the case of any individual shall not exceed an 
amount equal to one month's benefit even though the failure to report 
is with respect to more than one month." 
(f) (1) The heading of section 203 (g) of such Act is amended to 
read "Report of Earnings to Secretary". 
(2) The first sentence of paragraph (1) of section 203 (g) of such 
Act is amended to read as follows: "If an individual is entitled to 
any monthly insurance benefit under section 202 during any taxable 
42 u s c 402; 
' ' . 
1 - 1 1 . 1 
• 
J . 1 
^ ^ 
a n t e, 
p. 
1073; 
year in which he has earnings or wages, as computed pursuant to post, pp. 1079, 
paragraph (4) of subsection (e), in excess of the product of $100 ^°inte!°p*.^074. 
times the number of months in such year, such individual (or the 
individual who is in receipt of such benefit on his behalf) shall make 
a report to the Secretary of his earnings (or wages) for such taxable 
year." 
(3) The third sentence of paragraph (1) of such section 203 (g) 
is amended by striking out "seventy-five" and inserting in lieu thereof 
"seventy-two". 
1076 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
42 u s e 
4 0 2; 
ante, 
p. 
1073; 
post, 
pp. 10 79, 
1083, 1085. 
4 2 u s e 
40 2; 
ante, 
p. 
1073; 
post, 
pp. 107 9, 
1083, 1085. 
42 u s e 
40 3; 
post, p. 1078. 
(4) Paragraph (2) of such section 203 (g) is amended to read 
as follows: 
"(2) If an individual fails to make a report required under para-
graph (1), within the time prescribed therein, for any taxable year 
and any deduction is imposed under subsection (b) (1) by reason of 
his earnings for such year, he shall suffer additional deductions as 
follows: 
"(A) if such failure is the first one with respect to which 
an additional deduction is imposed under this paragraph, such 
additional deduction shall be equal to his benefit or benefits for 
the last month of such year for which he was entitled to a benefit 
under section 202; 
"(B) if such failure is the second one for which an additional 
deduction is imposed under this paragraph, such additional 
deduction shall be equal to two times his benefit or benefits for 
the last month of such year for which he was entitled to a benefit 
under section 202; 
"(C) if such failure is the third or a subsequent one for which 
an additional deduction is imposed under this paragraph, such 
additional deduction shall be equal to three times his benefit or 
benefits for the last month of such year for which he was entitled 
to a benefit under section 202; 
except that the number of the additional deductions required by this 
paragraph with respect to a failure to report earnings for a taxable 
year shall not exceed the number of months in such year for which 
such individual received and accepted insurance benefits under section 
202 and for which deductions are imposed under subsection (b) (1) 
by reason of his earnings. In determining whether a failure to report 
earnings is the first or a subsequent failure for any individual, all 
taxable years ending prior to the imposition of the first additional 
deduction under this paragraph, other than the latest one of such 
years, shall be disregarded." 
(5) Paragraph (3) of such section 203 (g) is amended by striking 
out "subsection (b) (2)" each time it appears and inserting in lieu 
thereof "subsection (b) (1)"; by striking out "net earnings from self-
employment" each time it appears and inserting in lieu thereof "earn-
ings" ; by striking out "such net earnings" and inserting in lieu thereof 
"such earnings"; and by adding at the end of such paragraph the 
following new sentence: "If, after the close of a taxable year of an 
individual entitled to benefits under section 202 for such year, the 
Secretary requests such individual to furnish a report of his earnings 
(as computed pursuant to paragraph (4) of subsection (e)) for such 
taxable year or any other information with respect to such earnings 
which the Secretary may specify, and the individual fails to comply 
with such request, such failure shall in itself constitute justification 
for a determination that such individual's benefits are subject to 
deductions under svibsection (b) (1) for each month in such taxable 
year (or only for such months thereof as the Secretary may specify) 
by reason of his earnings for such year." 
(6) The heading of section 203 (j) of such Act is amended by 
striking out "Seventy-five" and inserting in lieu thereof "Seventy-
two" and such section is amended by striking out "seventy-five" and 
inserting in lieu thereof "seventy-two". 
(g) Section 203 of such Act is amended by adding at the end thereof 
the following new subsection: 
68 
S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1077 
"Noncovered Remunerative Activity Outside the United States 
"(k) An individual shall be considered to be engaged in noncov-
ered remunerative activity outside the United States if he performs 
services outside the United States as an employee and such services 
do not constitute employment as defined in section 210, or if he car-
ries on a trade or business outside the United States (other than the 
performance of service as an employee) the net income or loss of which 
(1) is not includible in computing his net earnings from self-employ-
ment for a taxable year and (2) would not be excluded from net 
earnings from self-employment, if carried on in the United States, 
by any of the numbered paragraphs of section 211 (a). When used 
in the preceding sentence with respect to a trade or business (other 
than the performance of service as an employee), the term 'United 
States' does not include Puerto Eico or the Virgin Islands in the 
case of an alien who is not a resident of the United States (including 
Puerto Rico and the Virgin Islands); and the term 'trade or busi-
ness' shall have the same meaning as when used in section 162 of the 
Internal Revenue Code of 1954." 
(h) Section 203 of such Act is further amended by adding after 
subsection (k) (added by subsection (g) of this section) the following 
new subsection: 
4 2 u s e 
4 1 0 ; 
ante, 
pp. 10 5 2-
1054, 1061. 
42 u s e 
4 1 1 ; 
ante, 
pp. 10 5 3, 
1054. 
68A Stat. 45. 
"Good Cause for Failure To Make Reports Required 
"(1) The failure of an individual to make any report required by 
subsection (f) or (g) within the time prescribed therein shall not 
be regarded as such a failure if it is shown to the satisfaction of the 
Secretary that he had good cause for failing to make such report 
within such time. The determination of what constitutes good cause 
for purposes of this subsection shall be made in accordance with regu-
lations of the Secretary." 
(i) (1) The amendments made by subsection (f) and by paragraph 
(1) of subsection (a) of this section shall be applicable in the case of 
monthly benefits under title I I of the Social Security xlct for months 
in any taxable year (of the individual entitled to such benefits) begin-
ning after December 1954. The amendments made by paragraph (1) 
of subsection (b) of this section shall be applicable in the case of 
monthly benefits under such title II for months in any taxable year (of 
the individual on the basis of whose wages and self-employment income 
such benefits are payable) beginning after December 1954. 
The 
amendments made by subsections (e) and (g), and by paragraph (2) 
of subsection (a) and paragraph (2) of subsection (b), shall be appli-
cable in the case of monthly benefits under such title I I for months 
after December 1954. The remaining amendments made by this sec-
tion (other than subsection (h)) shall be applicable, insofar as they 
are related to the monthly benefits of an individual which are based on 
his wages and self-employment income, in the case of monthly benefits 
under such title I I for months in any taxable year (of such individual) 
beginning after December 1954 and, insofar as they are related to the 
monthly benefits of an individual which are based on the wages and 
self-employment income of someone else, in the case of monthly bene-
fits under such title I I for months in any taxable year (of the individ-
ual on whose wages and self-employment income such benefits are 
based) beginning after December 1954. 
(2) No deduction shall be imposed on or after the date of the 
enactment of this Act under subsection (f) or (g) of section 203 
of the Social Security Act, as in effect prior to such date, on account 
of failure to file a report of an event described in subsection (b) (1), 
(b) (2), or (c) (1) of such section (as in effect prior to such date) ; 
Ante, 
pp. 1075, 
1076. 
Ante, p. 1070. 
42 u s e 401-421. 
Ante, p. 1073. 
Ante, 
pp. 1075, 
1076. 
Ante, 
p. 1 0 7 3; 
post, p. 1078. 
1078 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T AT. 
Ante, p. 1076. 
42 u s e 
40 3; 
ante, 
pp. 10 7 3, 
1074, 1076. 
42 use 409. 
42 use 411. 
42 use 413. 
Ante, p. 1065. 
42 use 412. 
and no such deduction imposed prior to such date shall be collected 
after such date. In determining whether, under section 203 (g) (2) 
of the Social Security Act, as amended by this Act, a failure to file a 
report is a first or subsequent failure, any failure with respect to a 
taxable year which began prior to January 1955 shall be disregarded. 
(3) Subsections (b) (1), (b) (2), (c), (e),and (j) of section 203 
of the Social Security Act as in effect prior to the enactment of this 
Act, to the extent they are in effect with respect to months after 1954, 
are each amended by striking out "seventy-five" and inserting in lieu 
thereof "seventy-two", but only with respect to such months after 
1954. 
INCREASE IN EARNINGS COUNTED 
SEC. 104. (a) Subsection (a) of section 209 of the Social Security 
Act is amended to read as follows: 
"(a) (1) That part of remuneration which, after remuneration 
(other than remuneration referred to in the succeeding subsections 
of this section) equal to $3,600 with respect to employment has 
been paid to an individual during any calendar year prior to 
1955, is paid to such individual during such calendar year; 
"(2) That part of remuneration which, after remuneration 
(other than remuneration referred to in the succeeding subsections 
of this section) equal to $4,200 with respect to employment has 
been paid to an individual during any calendar year after 1954, is 
paid to such individual during such calendar year;". 
(b) Paragraph (1) of subsection (b) of section 211 of such Act is 
amended to read as follows: 
" (1) That part of the net earnings from self-employment which 
is in excess of— 
" (A) For any taxable year ending prior to 1955, (i) $3,600, 
minus (ii) the amount of the wages paid to such individual 
during the taxable year; and 
"(B) For any taxable year ending after 1954, (i) $4,200, 
minus (ii) the amount of the wages paid to such individual 
during the taxable year; or". 
(c) Clauses (ii) and (iii) of section 213 (a) (2) (B) of such Act are 
amended to read as follows— 
"(ii) if the wages paid to any individual in any calendar year 
equal $3,600 in the case of a calendar year after 1950 and before 
1955, or $4,200 in the case of a calendar year after 1954, each 
quarter of such year shall (subject to clause (i)) be a quarter of 
coverage. 
"(iii) if an individual has self-employment income for a taxable 
year, and if the sum of such income and the wages paid to him 
during such year equals $3,600 in the case of a taxable year begin-
ning after 1950 and ending before 1955, or $4,200 in the case of a 
taxable year ending after 1954, each quarter any part of which 
falls in such year shall (subject to clause (i)) be a quarter of 
coverage;". 
(d) Paragraph (1) of section 215 (e) of such Act is amended to 
read as follows: 
"(1) in computing an individual's average monthly wage there 
shall not be counted the excess over $3,600 in the case of any cal-
endar year after 1950 and before 1955, and the excess over $4,200 
in the case of any calendar year after 1954, of (A) the wages paid 
to him in such year, plus (B) the self-employment income cred-
ited to such year (as determined under section 212);". 
68 S T A T . ] 
PUBLIC LAW 76 1 - S E P T . 1, 1954 
1079 
RETROACTIVE APPLICATIONS FOR BENEFITS 
SEC. 105. (a) Section 202 (j) (1) of the Social Security Act is 
42 use 402. 
amended by striking out "sixth" and inserting in lieu thereof "twelfth". 
(b) The amendment made by subsection (a) shall be applicable only 
in the case of applications for monthly benefits under section 202 of the 
Social Security Act filed after August 1954; except that no individual 
shall, by reason of such amendment, be entitled to any benefit for any 
month prior to February 1954. 
PRESERVATION OF INSURANCE RIGHTS OF INDIVIDUALS W I T H EXTENDED 
TOTAL DISABILITY 
SEC. 106. (a) (1) Section 213 (a) (2) (A) of the Social Security Act 
42 use 413. 
is amended to read as follows: 
"(A) The term 'quarter of coverage' means, in the case of any 
quarter occurring prior to 1951, a quarter in which the individual has 
been paid $50 or more in wages, except that no quarter any part of 
which was included in a period of disability (as defined in section 216 
(i)), other than the initial quarter of such period, shall be a quarter 
^o*'. P- loso. 
of coverage. 
In the case of an}' individual who has been paid, in a 
calendar year prior to 1951, $3,000 or more in wages, each quarter of 
such year following his first quarter of coverage shall be deemed a 
quarter of coverage, excepting any quarter in such year in which such 
individual died or became entitled to a primary insurance benefit and 
any quarter succeeding such quarter in which he died or became so 
entitled, and excepting any quarter any part of which was included in 
a period of disability, other than the initial quarter of such period." 
(2) Section 213 (a) (2) (B) (i) of such Act is amended to read as 
follows: 
"(i) no quarter after the quarter in which such individual died 
shall be a quarter of coverage, and no quarter any part of which 
was included in a period of disability (other than the initial 
quarter and the last quarter of such period) shall be a quarter of 
coverage;". 
(b) (1) Section 214 (a) (2) of the Social Security Act is amended 
42 use 4i4. 
by striking, out subparagraph (B) and inserting in lieu thereof the 
following: 
"(B) forty quarters of coverage, 
not counting as an elapsed quarter for purposes of subparagraph (A) 
any quarter any part of which was included in a period of disability 
(as defined in section 216 (i)) unless such quarter was a quarter of 
^°®'' P- ^°^°-
coverage." 
(2) Section 214 (b) of such Act is amended by striking out the 
period and inserting in lieu thereof: ", not counting as part of such 
thirteen-quarter period any quarter any part of which was included 
in a period of disability unless such quarter was a quarter of coverage." 
(c) (1) Section 215 (b) (1) of the Social Security Act (as amended 
^»te, p. io62. 
by section 102 (b) (1) of this Act) is amended by inserting after 
"quarters of coverage" the following: "and any month in any quarter 
any part of which was included in a period of disability (as defined in 
section 216 (i)) unless such quarter was a quarter of coverage". 
^°®'' "• ^°^°-
(2) Section 215 (d) of such Act is amended by adding at the end 
^"^e, p. loes. 
thereof the following new paragraph: 
"(5) In the case of any individual to whom paragraph (1), (2), 
or (4) of this subsection is applicable, his primary insurance benefit 
shall be computed as provided therein except that, for purposes of 
paragraphs (1) and (2) and subparagraph (C) of paragraph (4^, 
any quarter prior to 1951 any part of which was included in a period 
of disability shall be excluded from the elapsed quarters unless it was 
1080 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 
S T A T . 
Ante, p. 1065. 
42 use 416. 
'Blindness. 
"Period of dis-
ability. " 
a quarter of coverage, and any wages paid in any such quarter shall 
not be counted." 
(3) Section 215 (e) of such Act (as amended by section 102 (e) 
(1) of this Act) is amended by adding after paragraph (3) the fol-
lowing new paragraph: 
"(4) in computing an individual's average monthly wage, 
there shall not be taken into account (A) any wages paid such 
individual in any quarter any part of which was included in a 
period of disability unless such quarter was a quarter of coverage, 
or (B) any self-employment income of such individual for any 
taxable year all of which was included in a period of disability." 
(d) Section 216 of the Social Security Act is amended by adding 
after subsection (h) the following new subsection: 
"Disability; Period of Disability 
"(i) (1) The term 'disability' means (A) inability to engage in 
any substantial gainful activity by reason of any medically deter-
minable physical or mental impairment which can be expected to 
result in death or to be of long-continued and indefinite duration, or 
(B) blindness; and the term 'blindness' means central visual acuity 
of 5/200 or less in the better eye with the use of a correcting lens. An 
eye in which the visual field is reduced to five degrees or less concentric 
contraction shall be considered for the purpose of this paragraph as 
having a central visual acuity of 5/200 or less. An individual shall 
not be considered to be under a disability unless he furnishes such 
proof of the existence thereof as may be required. 
Nothing in this 
title shall be construed as authorizing the Secretary or any other officer 
or employee of the United States to interfere in any way with the 
practice of medicine or with relationships between practitioners of 
medicine and their patients, or to exercise any supervision or control 
over the administration or operation of any hospital. 
"(2) The term 'period of disability' means a continuous period of 
not less than six full calendar months (beginning and ending as here-
inafter provided in this subsection) during which an individual was 
under a disability (as defined in paragraph (1)). 
No such period 
shall begin as to any individual unless such individual, while under 
a disability, files an application for a disability determination with 
respect to such period; and no such period shall begin as to any in-
dividual after such individual attains retirement age. Except as pro-
vided in paragraph (4), a period of disability shall begin— 
"(A) if the individual satisfies the requirements of paragraph 
(3) on such day, 
"(i) on the day the disability began, or 
"(ii) on the first day of the one-year period which ends 
with the day before the day on which the individual files such 
application, 
whichever occurs later; 
"(B) if such individual does not satisfy the requirements of 
paragraph (3) on the day referred to in subparagraph (A), then 
on the first day of the first quarter thereafter in which he satisfies 
such requirements. 
A period of disability shall end with the close of the last day of 
the first month in which either the disability ceases or the individual 
attains retirement age. No application for a disability determination 
which is filed more than three months before the first day on which 
a period of disability can begin (as determined under this paragraph) 
shall be accepted as an application for purposes of this paragraph, 
and no such application which is filed prior to January 1, 1955, shall 
be accepted. 
68 STAT.1 
PUBLIC LAW 761-SEPT. 1, 1954 
1081 
"(3) The requirements referred to in clauses (A) and (B) of 
paragraphs (2) and (4) are satisfied by an individual with respect 
to any quarter only if he had not less than— 
"(A) six quarters of coverage (as defined in section 213 (a) lofelpo'sf'/'p. IOM'. 
(2)) during the thirteen-quarter period which ends with such 
quarter; and 
"(B) twenty quarters of coverage during the forty-quarter 
period which ends with such quarter, 
not counting as part of the thirteen-quarter period specified in clause 
(A), or the forty-quarter period specified in clause (B), any quarter 
any part of which was included in a prior period of disability unless 
such quarter was a quarter of coverage. 
"(4) If an individual files an application for a disability deter-
mination after December 1954, and before July 1957, with resjiect to a 
disability which began before July 1956, and continued without 
interruption until such application was filed, then the beginning day 
for the period of disability, if such individual does not die prior to 
July 1, 1955, shall be— 
"(A) the day such disability began, but only if he satisfies the 
requirements of paragraph (3) on such day; 
"(B) if he does not satisfy such requirements on such day, the 
first day of the first quarter thereafter in which he satisfies such 
requirements." 
(e) (1) The first sentence of section 217 (a) (1) of the Social 
42 use 417. 
Security Act is amended bv inserting "and for purposes of section 216 
(i) (3)," after "World War I I veteran,". 
^"'«' p- ^oso. 
(2) The first sentence of section 217 (e) (1) of such Act is 
amended by inserting "and for purposes of section 216 (i) (3)," after 
"veteran (as defined in paragraph (4)),". 
(3) Such section 217 (a) (1) and such section 217 (e) (1) of such 
Act are each amended by adding at the end thereof the following 
new sentence: "The provisions of clause (B) shall also not apply for 
purposes of section 216 (i) (3)." 
(f) Section 5 (k) of the Railroad Retirement Act of 1937, as 
^s use 228e. 
amended, is amended by striking out "and for the purposes of section 
203 of that Act" and inserting in lieu thereof "and for the purposes 
of sections 203 and 216 (i) (3) of that Act". 
(g) Title I I of the Social Security Act is amended by adding after 
section 219 the following new sections: 
'^^ ^^^ '*^^* 
a DISABILITY PROVISIOXS INAPPLICABLE IF BENEFIT RIGHTS IMPAIRED 
"SEC, 220. None of the provisions of this title relating to periods of 
disability shall apply in any case in which their application would 
result in the denial of monthly benefits or a lump-sum death payment 
which would otherwise be payable under this title; nor shall they 
apply in the case of any monthly benefit or lump-sum death payment 
under this title if such benefit or payment would be greater without 
their application. 
" D I S A B I L I T Y DETERMINATIONS 
"SEC. 221. (a) In the case of any individual, the determination of 
whether or not he is under a disability (as defined in section 216 (i)) 
'*"'®' P- ^'^^°-
and of the day such disability began, and the determination of the day 
on which such disability ceases, shall, except as provided in subsection 
(g), be made by a State agency pursuant to an agreement entered into 
under subsection (b). Except as provided in subsections (c) and (d), 
1082 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 STAT, 
any such determination shall be the determination of the Secretary 
for purposes of this title, 
state's.^*"^"*^ ^'^^ 
".(b) The Secretary shall enter into an agreement with each State 
which is willing to make such an agreement under which the State 
agency or agencies administering the State plan approved under the 
29 u?c 4
K
^
* 
Vocational Rehabilitation Act, or any other appropriate State agency 
or agencies, or both, will make the determinations referred to in sub-
section (a) with respect to all individuals in such State, or with respect 
to such class or classes of individuals in the State as may be designated 
in the agreement at the State's request. 
"(c) The Secretary may on his own motion review a determination, 
made by a State agency pursuant to an agreement under this section, 
that an individual is under a disability and, as a result of such review, 
may determine that such individual is not under a disability or that 
such disability began on a day later than that determined by such 
agency, or that such disability ceased on a day earlier than that deter-
mined by such agency. 
"(d) Any individual dissatisfied with any determination under 
subsection (a), (c), or (g) shall be entitled to a hearing thereon by 
42 use 405. 
^j^g Secretary to the same extent as is provided in section 205 (b) with 
respect to decisions of the Secretary, and to judicial review of the 
Secretary's final decision after such hearing as is provided in section 
205 (g). 
"(e) Each State which has an agreement with the Secretary under 
this section shall be entitled to receive from the Trust Fund, in ad-
vance or by way of reimbursement, as may be mutually agreed upon, 
the cost to the State of carrying out the agreement under this sec-
tion. The Secretary shall from time to time certify such amount 
as is necessary for this purpose to the Managing Trustee, reduced 
or increased, as the case may be, by any sum (for which adjustment 
hereunder has not previously been made) by which the amount cer-
tified for any prior period was greater or less than the amount which 
should have been paid to the state under this subsection for such 
period; and the Managing Trustee, prior to audit or settlement by 
the General Accounting Office, shall make payment from the Trust 
Fund at the time or times fixed by the Secretary, in accordance with 
such certification. 
"(f) All money paid to a State under this section shall be used 
solely for the purposes for which it is paid; and any money so paid 
which is not used for such purposes shall be returned to the Treasury 
of the United States for deposit in the Trust Fund. 
"(g) In the case of individuals in a State which has no agreement 
under subsection (b), in the case of individuals outside the United 
States, and in the case of any class or classes of individuals not in-
cluded in an agreement under subsection (b), the determinations 
referred to in subsection (a) shall be made by the Secretary in ac-
cordance with regulations prescribed by him. 
a REFERRAL FOR REHABILITATION SERVICES 
"SEC. 222. It is hereby declared to be the policy of the Congress in 
enacting the preceding section that disabled individuals applying 
for a determination of disability shall be promptly referred to the 
State agency or agencies administering or supervising the adminis-
tration of the State plan approved under the Vocational Rehabilita-
57 stat^. ^379. 
tiou Act for uccessary vocational rehabilitation services, to the end 
that the maximum number of disabled individuals may be restored 
to productive activity." 
. 
29 u s e 41. 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1083 
(h) Notwithstanding the provisions of section 215 (f) (1) of the 
'*^ "^^ '*^^-
Social Security Act, the amendments made by subsections (a), (b), 
(c), (d), (e), and (f) of this section shall apply with respect to 
monthly benefits under title I I of the Social Security Act for months 
'*^ "^^ 401-421. 
after June 1955, and with respect to lump-sum death payments under 
such title in the case of deaths occurring after June 1955; but no re-
computation of benefits by reason of such amendments shall be re-
garded as a recomputation for purposes of section 215 (f) of the lo'es/*'' ^^' ^°^^ 
Social Security Act. 
TERMINATION Or BENEFITS UPON DEPORTATION 
SEC. 107. Section 202 of the Social Security Act is amended by add- anVe.^pp.'^io 73! 
ing after subsection (m) thereof (added by section 102 (i) of this io79;'post,'p.io85! 
Act) the following new subsection: 
"Termination of Benefits Upon Deportation of Primary Beneficiary 
"(n) (1) If any individual is (after the date of enactment of this 
subsection) deported under paragraph (1), (2), (4), (5), (6), (7), 
(10), (11), (12), (14), (15), (16), (17), or (18) of section 241 (a) 
of the Immigration and Nationality Act, then, notwithstanding any 
f^ufc^iisY' 
other provisions of this title— 
"(A) no monthly benefit under this section shall be paid to such 
individual, on the basis of his wages and self-employment income, 
for any month occurring (i) after the month in which the Secre-
tary is notified by the Attorney General that such individual has 
been so deported, and (ii) before the month in w^hich such 
individual is thereafter lawfully admitted to the United States 
for permanent residence, 
"(B) if no benefit could be paid to such individual (or if no 
benefit could be paid to him if he were alive) for any month by 
reason of subparagraph (A), no monthly benefit under this section 
shall be paid, on the basis of his wages and self-employment 
income, for such month to any other person who is not a citizen 
of the United States and is outside the United States for any part 
of such month, and 
"(C) no lump-sum death payment shall be made on the basis 
of such individual's wages and self-employment income if he dies 
(i) in or after the month in which such notice is received, and 
(ii) before the month in which he is thereafter lawfully admitted 
to the United States for permanent residence. 
Section 203 (b) and (c) of this Act shall not apply with respect to ,„^^'«' PP- 1073, 
any such individual for any month for which no monthly benefit may 
be paid to him by reason of this paragraph. 
"(2) As soon as practicable after the deportation of any individual 
under any of the paragraphs of section 241 (a) of the Immigration 
and Nationality Act enumerated in paragraph (1) in this subsection, 
the Attorney General shall notify the Secretary of such deportation." 
INSURED STATUS 
SEC. 108. (a) Section 214 (a) of the Social Security Act is amended 
42 u s e 414 
by redesignating paragraph (3) as paragraph (4) and inserting after 
paragraph (2) the following new paragraph: 
" (3) In the case of any individual who did not die prior to January 
1,1955, the term 'fully insured individual' means any individual who 
meets the requirements of paragraph (2) and, in addition, any individ-
ual with respect to whom all of the quarters elapsing after 1954 and 
prior to (i) July 1, 1956, or (ii) if later, the quarter in which he 
1078. 
ante, p. 1079. 
1084 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 ST A T . 
Ante, 
pp 
10 79. 
attained retirement age or died, whichever first occurred, are quarters, 
but only if there are not fewer than six of such quarters so elapsing." 
1078, 
(b) Subparagraph (B) of section 213 (a) (2) of such Act is 
amended by inserting "(except wages for agricultural labor paid after 
1954)" after "$50 or more in wages" in that part of such subparagraph 
which precedes clause (i), and by striking out clause (iv) and insert-
ing in lieu thereof the following: 
"(iv) if an individual is paid wages for agricultural labor in a 
calendar year after 1954, then, subject to clause (i), (a) the last 
quarter of such year which can be but is not otherwise a quarter 
of coverage shall be a quarter of coverage if such wages are less 
than $200; (b) the last two quarters of such year which can be 
but are not otherwise quarters of coverage shall be quarters of 
coverage if such wages equal or exceed $200 but are less than 
$300; (c) the last three quarters of such year which can be but 
are not otherwise quarters of coverage shall be quarters of cover-
age if such wages equal or exceed $300 but are less than $400; and 
(d) each quarter of such year which is not otherwise a quarter 
of coverage shall be a quarter of coverage if such wages are $400 
or more; and 
" (v) no quarter shall be counted as a quarter of coverage prior 
to the beginning of such quarter. 
If, in the case of any individual who has attained retirement age or 
died or is under a disability and who has been paid wages for agricul-
tural labor in a calendar year after 1954, the requirements for insured 
status in subsection (a) or (b) of section 214, the requirements for 
entitlement to a computation or recomputation of his primary 
insurance amount, or the requirements of paragraph (3) of section 
Ante, p. 1080. 
216 (1) are not met after assignment of quarters of coverage to quarters 
in such year as provided in clause (iv) of the preceding sentence, but 
would be met if such quarters of coverage were assigned to different 
quarters in such year, then such quarters of coverage shall instead be 
assigned, for purposes only of determining compliance with such 
requirements, to such different quarters." 
Ante, 
pp. 1079, 
1083. 
42 u s e 401-421. 
Post, p. 1085 
Ante, p. 1062 
42 u s e 415. 
Ante, 
pp 
1079, 1083; pos t. 
p. 1085. 
Ante, p. 1065 
BENEFITS IN CERTAIN CASES OF DEATHS BEFORE SEPTEMBER 1950 
SEC. 109. (a) In the case of any individual— 
(1) who died prior to September 1, 1950, and was not a fully 
insured individual (under title I I of the Social Security Act), 
when he died, and 
(2) who had not less than six quarters of coverage (as defined 
in such title), 
such individual shall, except for purposes of determining entitlement 
of a former wife divorced to benefits under section 202 (g) of the 
Social Security Act, be deemed to have died a fully insured individual. 
Such individual's primary insurance amount shall be computed under 
subsection (a) (2) of section 215 of such Act. For the purpose of 
such computation, the provisions of section 215 (d) (3) of such Act 
shall apply if such individual died a currently insured individual 
(under title I I of such Act) and any other person was entitled on the 
basis of his wages to monthly benefits or a lump-sum death payment 
1073, under section 202 of such Act; in all other cases the provisions of 
section 215 (d) (4) shall be applicable, except that such individual's 
closing date shall be the first day of the quarter in which he died. In 
the case of any such individual, the requirement in subsection (h) 
of section 202 of such Act that proof of support be filed within two 
years of the date of his death shall not apply if such proof is filed 
before September 1956. 
68 S T A T . ] 
PUBLIC LAW 76 1 - S E P T . 1, 1954 
1085 
(b) The provisions of subsection (a) shall be applicable only in 
the case of monthly benefits under section 202 of the Social Security an/e,^pp.^io7 3,' 
Act for months after August 1954, on the basis of applications filed 1079/losi 
after such month. 
ELIMINATION or REQUIRMENT OF FILING APPLICATION 
IN CERTAIN CASES 
SEC. 110. (a) Section 202 (e) (1) (C) of the Social Security Act 
« use 402. 
is amended to read as follows: 
"(C) (i) has filed application for widow's insurance benefits 
or was entitled, after attainment of retirement age, to wife's 
insurance benefits, on the basis of the wages and self-employment 
income of such individual, for the month preceding the month 
' " 
in which he died, or 
"(ii) was entitled, on the basis of such wages and self-employ-
ment income, to mother's insurance benefits for the month pre-
ceding the month in which she attained retirement age,". 
(b) Section 202 (g) (1) (D) of such Act is amended to read as 
follows: 
"(D) has filed application for mother's insurance benefits, or 
was entitled to wife's insurance benefits on the basis of the wages 
and self-employment income of such individual for the month 
preceding the month in which he died,". 
(c) The third sentence of section 202 (i) of such Act is amended by 
inserting immediately before the period at the end thereof the follow-
ing : ", or unless such person was entitled to wife's or husband's insur-
ance benefits, on the basis of the wages and self-employment income 
of such insured individual, for the month preceding the month in 
which such individual died". 
TECHNICAL AMENDMENTS 
42 use 404. 
SEC. 111. (a) The second sentence of section 204 (a) of the Social 
Security Act is amended by inserting "and self-employment income" 
after "wages". 
(b) Section 208 of the Social Security Act is amended by insert- 
'*^ ^^^ '*°^-
ing ", or as to the amount of net earnings from self-employment 
derived or the period during which derived" after "as to the amount 
of any wages paid or received or the period during which earned or 
paid". 
REPEAL OF REQUIREMENT OF CERTAIN DEDUCTIONS 
SEC. 112. (a) No deductions shall be made pursuant to subsection 
(i) of section 203 of the Social Security Act from any benefits for 
'^^ "^^ '*°^-
any month after August 1954; and, effective September 1, 1954, such 
subsection is repealed. 
(b) No deductions shall be made pursuant to section 907 of the Social 
Security Act Amendments of 1939 (53 Stat. 1360, 1402), with respect 26usei4oonote. 
to wages for services performed in 1939, from any benefits for any 
month after August 1954; and, effective September 1, 1954, such sec-
tion is amended by striking out "1 per centum of any wages paid him 
for services performed in 1939, and subsequent to his attaining age 
sixty-five, and". 
1086 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
PROOF OF SUPPORT BY HUSBAND OR WIDOWER IN CERTAIN CASES 
SEC. 113. (a) For the purpose of determining the entitlement of 
any individual to husband's insurance benefits under subsection (c) of 
42 use 402. 
section 202 of the Social Security Act on the basis of his wife's wages 
and self-employment income, the requirements of paragraph (1) (D) 
of such subsection shall be deemed to be met if— 
(1) such individual was receiving at least one-half of his sup-
port, as determined in accordance with regulations prescribed by 
the Secretary of Health, Education, and Welfare, from his wife 
on the first day of the first month (A) for which she was entitled 
to a monthly benefit under subsection (a) of such section 202, and 
(B) in which an event described in paragraph (1) or (2) of sec-
1078'*' ^^* ^°^^' 
^^^^ ^^^ ^'^^ ^^ ^^^^ '^^^ (^^ ^^ effect before or after the enact-
ment of this Act) did not occur, 
(2) such individual has filed proof of such support within two 
years after such first month, and 
(3) such wife was, without the application of subsection (j) 
Ante. p. 1079. 
(1) of such sectiou 202, entitled to a primary insurance benefit 
under such Act for August 1950. 
(b) For the purpose of determining the entitlement of any individual 
42 use 402. 
to widower's insurance benefits under subsection (f) of section 202 
of the Social Security Act on the basis of his deceased wife's wages 
and self-employment income, the requirements of paragraph (1) (E) 
(ii) of such subsection shall be deemed to be met if— 
(1) such individual was receiving at least one-half of his sup-
port, as determined in accordance with regulations prescribed by 
the Secretary of Health, Education, and Welfare, from his wife, 
and she was a currently insured individual, on the first day of 
the first month (A) for which she was entitled to a monthly bene-
fit under subsection (a) of such section 202, and (B) in which an 
1078.**' ^^* ^°^^' 
event described in paragraph (1) or (2) of section 203 (b) of 
such Act (as in effect before or after the enactment of this Act) 
did not occur, 
(2) such individual has filed proof of such support within two 
years after such first month, and 
(3) such wife was, without the application of subsection (j) 
Ante, p. 1079. 
(1) of such scctiou 202, entitled to a primary insurance benefit 
under such Act for August 1950. 
(c) For purposes of subsection (b) (1) of this section, and for 
42 use 402. 
purposes of section 202 (c) (1) of the Social Security Act in cases 
to which subsection (a) of this section is applicable, the wife of an 
individual shall be deemed a currently insured individual if she had 
not less than six quarters of coverage (as determined under section 
lo^g/fos^^* ^°^^' 213 of the Social Security Act) during the thirteen-quarter period 
ending with the calendar quarter in which occurs the first month 
(1) for which such wife was entitled to a monthly benefit under 
42 use 402. 
section 202 (a) of such Act, and (2) in which an event described in 
lo^s.'*' ^^' ^°^^' paragraph (1) or (2) of section 203 (b) of such Act (as in effect 
before or after the enactment of this Act) did not occur. 
(d) This section shall apply only with respect to husband's insur-
ance benefits under section 202 (c) of the Social Security Act, and 
widower's insurance benefits under section 202 (f) of such Act, for 
months after August 1954, and only with respect to benefits based 
on applications filed after such month. 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
108T 
42 u s e 401-421. 
DEFINITION 
SEC. 114. As used in the provisions of the Social Security Act 
amended by this title, the term "Secretary" means the Secretary of 
Health, Education, and Welfare. 
COVERED EMPLOYMENT NOT COUNTED UNDER OTHER FEDERAL 
RETIREMENT SYSTEMS 
SEC. 115. Notwithstanding any other provision of law, in deter-
mining eligibility for or the amount of any benefit (other than a 
benefit under title I I of the Social Security Act or under the Railroad 
Retirement Act of 1937, as amended) under any retirement system 22 8y;anS.p?ioVi; 
established by the United States or any instrumentality thereof, there pos't, pp. io9 7i 
shall not be taken into account any service which, by reason of the 
amendments to section 210 (a) of the Social Security Act made by 
"*"'^' P- ^°53. 
section 101 (c) of this Act, constitutes employment as defined in such 
section 210 (a). 
TITLE II—AMENDMENTS TO INTERNAL REVENUE 
CODES OF 1939 AND 1954 
AMENDMENTS TO DEFINITIONS OF SELF-EMPLOYMENT INCOME AND 
RELATED DEFINITIONS 
SEC. 201. (a) (1) Paragraph (1) of section 1402 (a) of the Internal 
Revenue Code of 1954 is amended to read as follows: 
"(1) there shall be excluded rentals from real estate and from 
personal property leased with the real estate (including such 
rentals paid in crop shares) together with the deductions attribut-
able thereto, unless such rentals are received in the course of a 
trade or business as a real estate dealer;". 
(2) Subsection (a) of section 1402 of the Internal Revenue Code 
of 1954 is amended by striking out paragraph (2) and redesignating 
paragraphs (3), (4), (5), (6), (7), and (8), and any references 
thereto contained in such code, as paragraphs (2), (3), (4), (5), (6), 
and (7), respectively, and by adding at the end of such subsection 
the following new sentence: "In the case of any trade or business 
which is carried on by an individual who reports his income on a 
cash receipts and disbursements basis, and in which, if it were carried 
on exclusively by employees, the major portion of the services would 
constitute agricultural labor as defined in section 3121 (g), (i) if the 
gross income derived from such trade or business by such individual 
is not more than $1,800, the net earnings from self-employment 
derived by him therefrom may, at his option, be deemed to be 50 
percent of such gross income in lieu of his net earnings from self-
employment from such trade or business computed as provided under 
the preceding provisions of this subsection, or (ii) if the gross income 
derived from such trade or business by such individual is more than 
$1,800 and the net earnings from self-employment derived by him 
therefrom, as computed under the preceding provisions of this sub-
section, are less than $900, such net earnings may instead, at the option 
of such individual, be deemed to be $900. For the purpose of the 
preceding sentence, gross income derived from such trade or business 
shall mean the gross receipts from such trade or business reduced by 
the cost or other basis of property which was purchased and sold in 
carrying on such trade or business, adjusted (after such reduction) 
in accordance with the preceding provisions of this subsection." 
68A Stat. 3 53. 
Poat, p. 1089. 
68A Stat. 4 24. 
1088 
PUBLIC LAW 761~SEPT. 1, 1954 
[68 STAT. 
68A Stat. 354. 
(b) (1) Paragraph (1) of section 1402 (b) of the Internal Revenue 
Code of 1954 is amended to read as follows: 
" (1) that part of the net earnings from self-employment which 
is in excess of— 
"(A) for any taxable year ending prior to 1955, (i) 
$3,600, minus (ii) the amount of the wages paid to such 
individual during the taxable year; and 
"(B) for any taxable year ending after 1954, (i) $4,200, 
minus (ii) the amount of the wages paid to such individual 
during the taxable year; or". 
(2) Section 1402 (b) of the Internal Revenue Code of 1954 is 
amended by inserting after "employees)" the following: ", or under 
an agreement entered into pursuant to the provisions of section 3121 
Post. p. 1094. 
^j^ (relating to coverage of citizens of the United States who are em-
ployees of foreign subsidiaries of domestic corporations),". 
(c) (1) Section 1402 (c) (2) of the Internal Revenue Code of 
1954 is amended by inserting after "18" the following: "and other 
than service described in paragraph (4) of this subsection". 
(2) Section 1402 (c) of the Internal Revenue Code of 1954 is 
amended by adding at the end thereof the following new sentences: 
"The provisions ot paragraph (4) shall not apply to service (other 
than service performed by a member of a religious order who has 
taken a vow of poverty as a member of such order) performed by an 
individual during the period for which a certificate filed by such in-
'"'"• 
dividual under subsection (e) is in effect. 
The provisions of para-
graph (5) shall not apply to service performed by an individual in the 
exercise of his profession as a Christian Science practitioner during 
the period for which a certificate filed by him under subsection (e) 
is in effect," 
(3) Section 1402 of the Internal Revenue Code of 1954 is amended 
by adding at the end thereof the following new subsection: 
"(e) 
MINISTERS, MEMBERS OF RELIGIOUS ORDERS, AND CHRISTIAN 
SCIENCE PRACTITIONERS.— 
"(1) WAIVER CERTIFICATE.—Any individual who is (A) a duly 
ordained, commissioned, or licensed minister of a church or a 
member of a religious order (other than a member of a religious 
order who has taken a vow of poverty as a member of such order) 
or (B) a Christian Science practitioner may file a certificate (in 
such form and manner, and with such official, as may be prescribed 
by regulations made under this chapter) certifying that he elects 
42 use 401-421. 
|.Q have the insurance system established by title I I of the Social 
Security Act extended to service described in subsection (c) (4), 
or service described in subsection (c) (5) insofar as it relates to 
the performance of service by an individual in the exercise of his 
profession as a Christian Science practitioner, as the case may 
be, performed by him. 
" (2) TIME FOR FILING CERTIFICATE.—Any individual who desires 
to file a certificate pursuant to paragraph (1) must file such cer-
tificate on or before the due date of the return (including any 
extension thereof) for his second taxable year ending after 1954 
for which he has net earnings from self-employment (computed, 
in the case of an individual referred to in paragraph (1) (A), 
without regard to subsection (c) (4), and, in the case of an 
individual referred to in paragraph (1) (B), without regard to 
subsection (c) (5) insofar as it relates to the performance of 
service by an individual in the exercise of his profession as a 
Christian Science practitioner) of $400 or more, any part of which 
was derived from the performance of service described in subsec-
tion (c) (4), or from the performance of service described in sub-
section (c) (5) insofar as it relates to the performance of service 
68 S T A T . ] 
PUBLIC LAW 76 1 - S E P T . 1, 1954 
1089 
by an individual in the exercise of his profession as a Christian 
Science practitioner, as the case may be. 
" (3) EFFECTIVE DATE OF CERTIFICATE.—A certificate filed pursuant 
to this subsection shall be effective for the first taxable year with 
respect to which it is filed (but in no case shall the certificate be 
effective for a taxable year with respect to which the period for 
filing a return has expired, or for a taxable year ending prior to 
1955) and all succeeding taxable years. An election made pur-
suant to this subsection shall be irrevocable." 
(4) Section 1402 (a) of the Internal Kevenue Code of 1954 is 
^"'«' P- ^O^^. 
amended— 
(A) by striking out the period at the end of paragraph (7) 
(as renumbered by subsection (a) (2) of this section) and insert-
ing in lieu thereof a semicolon, and 
(B) by inserting after such paragraph (7) thereof a new para-
graph as follows: 
"(8) an individual who is— 
"(A) a duly ordained, commissioned, or licensed minister 
of a church or a member of a religious order; and 
"(B) a citizen of the United States performing service 
described in subsection (c) (4) as an employee of an Amer-
ican employer (as defined in section 3121 (h)) 
^^^ stat. 425. 
shall compute his net earnings from self-employment derived from 
the performance of service described in subsection (c) (4) with-
out regard to section 911 (relating to earned income from sources 39^*^ ^*^*' ^^^' 
without the United States) and section 931 (relating to income 
from sources within possessions of the United States)." 
(5) Section 1402 (c) (5) of the Internal Revenue Code of 1954 is 
^^^ stat. 355. 
amended to read as follows: 
"(5) the performance of service by an individual in the exer-
cise of his profession as a physician, lawyer, dentist, osteopath, 
veterinarian, chiropractor, naturopath, optometrist, or Christian 
Science practitioner; or the performance of such service by a 
partnership." 
(d) The amendments made by subsections (a), (b), and (c) of this 
section shall be applicable only with respect to taxable years ending 
after 1954. 
REFUND OF CERTAIN TAXES DEDUCTED FROM WAGES 
SEC. 202. (a) (1) The first sentence of section 6413 (c) (1) of the 
^SA stat. 797. 
Internal Revenue Code of 1954 is amended to read as follows: '*If by 
reason of an employee receiving wages from more than one employer 
during a calendar year after the calendar year 1950 and prior to the 
calendar year 1955, the wages received by him during such year 
exceed $3,600, the employee shall be entitled (subject to the provi-
sions of section 31 (b)) to a credit or refund of any amount of tax, 
^^A stat. i3. 
with respect to such wages, imposed by section 1400 of the Internal ^j^^-^ ^*^*- ^^^' 
Revenue Code of 1939 and deducted from the employee's wages 
(whether or not paid to the Secretary or his delegate), which exceeds 
the tax with respect to the first $3,600 of such wages received; or if by 
reason of an employee receiving wages from more than one employer 
during any calendar year after the calendar year 1954, the wages 
received by him during such year exceed $4,200, the employee shall 
be entitled (subject to the provisions of section 31 (b)) to a credit or 
refund of any amount of tax, with respect to such wages, imposed by 
section 3101 and deducted from the employee's wages (whether or not 
^°*'' P- ^O^"*-
paid to the Secretary or his delegate), which exceeds the tax with 
respect to the first $4,200 of such wages received." 
39777 O—55—pt. 1 
71 
1090 
PUBLIC LAW 76l-SEPT. 1, 1954 
[68 STAT. 
^
^
6
^
8
A Stat. 938. 
(3) Sectloii 1401 (d) (3) of the Internal Kevenue Code of 1939 is 
amended by striking out the period at the end of the second sentence 
and inserting in lieu thereof "or, in the case of any agreement (or 
1055-1059^' ^°^^' modification thereof) pursuant to section 218 of the Social Security 
Act which is effective as of a date more than two years prior to the 
date such agreement (or modification) was agreed to, within two 
years after the calendar year in which such agreement (or modifica-
tion) was agreed to by the State and the Secretary of Health, Educa-
tion, and Welfare." 
68A Stat. 797. 
(b) (1) The heading of section 6413 (c) (2) of the Internal Revenue 
Code of 1954 is amended to read as follows: "AppLicABrLiTy IN CASB 
OF FEDERAL AND STATE EMPLOYEES AND EMPLOYEES OF CERTAIN FOREIGN 
CORPORATIONS.—" 
(2) Section 6413 (c) (2) (A) of the Internal Revenue Code of 
1954 is amended by striking out "$3,600," and inserting in lieu thereof 
"$3,600 for the calendar year 1951, 1952, 1953, or 1954, or $4,200 for 
any calendar year after 1954,". 
(3) Section 6413 (c) (2) of the Internal Revenue Code of 1954 
is amended by adding at the end thereof the following new sub-
paragraph : 
"(C) Employees Of Certain Foreign Corporations.—For 
purposes of paragraph (1) of this subsection, the term 'wages' 
includes such remuneration for services covered by an agree-
Poat, p. 1094. 
ment made pursuant to section 3121 (1) as would be wages if 
such services constituted employment; the term 'employer' 
includes any domestic corporation which has entered into an 
agreement pursuant to section 3121 (1); the term 'tax' or 'tax 
Post, p. 1094. 
imposed by section 3101,' includes, in the case of services cov-
ered by an agreement entered into pursuant to section 3121 (1), 
an amount equivalent to the tax which would be imposed by 
section 3101, if such services constituted employment as 
Post, pp. 1091- 
defined in section 3121; and the provisions of paragraph 
(1) of this subsection shall apply whether or not any amount 
deducted from the employee's remuneration as a result of the 
agreement entered into pursuant to section 3121 (1) has been 
paid to the Secretary or his delegate," 
68A Stat. 428. 
^(,^ ^]^g sccoiid seutcuce of section 3122 of the Internal Revenue 
Code of 1954 is amended by striking out "$3,600" and inserting in lieu 
thereof "$4,200". 
(d) The amendments made by subsections (a) (1), (b),and (c) shall 
be applicable only with respect to remuneration paid after 1954. The 
amendment made by subsection (a) (2) shall be effective as if it had 
64 Stat. 525. 
j^ggj^ euacted as a j)art of section 203 (c) of the Social Security Act 
Amendments of 1950 which added section 1401 (d) (3) to the Internal 
Revenue Code of 1939. 
COLLECTION AND PAYMENT or TAXES W I T H RESPECT TO COAST 
GUARD EXCHANGES 
68Ast.t. 428. 
SEC. 203. (a) Section 3122 of the Internal Revenue Code of 1954 
is amended by adding at the end thereof the following new sentence: 
"The provisions of this subsection shall be applicable also in the case 
of service performed by a civilian employee, not compensated from 
funds appropriated by the Congress, in the Coast Guard Exchanges 
or other activities, conducted by an instrumentality of the United 
States subject to the jurisdiction of the Secretary, at installations of 
the Coast Guard for the comfort, pleasure, contentment, and mental 
and physical improvement of personnel of the Coast Guard; and for 
purposes of. this subsection the Secretary shall be deemed to be the 
head of such instrumentality." 
1094 
68 S T A T . ] 
PUBLIC LAW 76 1 - S E P T . 1, 1954 
1091 
(b) The amendment made by subsection (a) shall become effective 
January 1, 1955. 
AMENDMENTS TO DEFINITION OF WAGES 
SEC. 204. (a) Paragraph (1) of section 3121 (a) of the Internal 
esAstat. 417. 
Kevenue Code of 1954 is amended by striking out "$3,600" wherever 
it appears therein and inserting in lieu thereof "$4,200". 
(b) (1) Subparagraph (B) of section 3121 (a) (7) of the Internal 
^SA stat. 4i8. 
Revenue Code of 1954 is amended to read as follows: 
"(B) cash remuneration paid by an employer in any calendar .^Domestic serv-
quarter to an employee for domestic service in a private home of 
the employer, if the cash remuneration paid in such quarter by 
the employer to the employee for such service is less than $50. 
As used in this subparagraph, the term 'domestic service in a 
private home of the employer' does not include service described 
in subsection (g) (5) ;". 
(2) Section 3121 (a) (7) of the Internal Revenue Code of 1954 
is amended by adding at the end thereof the following new sub-
paragraph : 
"(C) cash remuneration paid by an employer in any calendar empr^yer's"°rade" 
quarter to an employee for service not in the course of the em- ^t^. 
ployer's trade or business, if the cash remuneration paid in such 
quarter by the employer to the employee for such service is less 
than $50. As used in this subparagraph, the term 'service not in 
the course of the employer's trade or business' does not include 
domestic service in a private home of the employer and does not 
include service described in subsection (g) (5) ;". 
(3) Section 3121 (a) (8) of the Internal Revenue Code of 1954 
esA stat. 4i8. 
is amended by inserting " ( A ) " after "(8)" and by adding at the end 
thereof the following new subparagraph: 
"(B) cash remuneration paid by an employer in any calendar 
A g r i c u l t u r a l 
labor. 
year to an employee for agricultural labor, if the cash remunera-
tion paid in such vear by the employer to the employee for such 
labor is less than $100;". 
(c) The amendments made by subsections (a) and (b) shall b^ 
Applicability, 
applicable only with respect to remuneration paid after 1954. 
AMENDMENTS TO DEFINITION OF EMPLOYMENT 
SEC. 205. (a) Section 3121 (b) (1) of the Internal Revenue Code 
^^^ stat. 419. 
of 1954 is amended to read as follows: 
"(1) (A) service performed in connection with the production 
or harvesting of any commodity defined as an agricultural com-
modity in section 15 (g) of the Agricultural Marketing Act, as 
amended (46 Stat. 1550 § 3; 12 U. S. C 1141J); 
"(B) service performed by foreign agricultural workers (i) 
under contracts entered into in accordance with title V of the 
- 
,^, , .a 
Agricultural Act of 1949, as amended (65 Stat. 119; 7 U. S. C. 
1461-1468), or (ii) lawfully admitted to the United States from 
the Bahamas, Jamaica, and the other British West Indies on a 
A 
temporary basis to perform agricultural labor;". 
(b) Section 3121 (b) of the Internal Revenue Code of 1954 is 
amended by striking out paragraph (3) and redesignating para-
graphs (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), and (14), 
and any references thereto contained in such code, as paragraphs (3), 
(4), (5), (6), (7), (8), (9), (10), (11), (12), and (13), respectively. 
(c) The paragraph of section 3121 (b) of the Internal Revenue 
Code of 1954 herein redesignated as paragraph (4) is amended by 
1092 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
68A Stat. 419. 
61 Stat. 727. 
46 Stat. 468. 
5 u s e 691 note. 
68A Stat. 422. 
^plicability. 
striking out "if the individual is employed on and in connection with 
such vessel or aircraft when outside the United States" and inserting 
in lieu thereof: "if (A) the individual is employed on and in connec-
tion with such vessel or aircraft, when outside the United States and 
(B) (i) such individual is not a citizen of the United States or (ii) 
the employer is not an American employer". 
(d) (1) Subparagraph (B) of the paragraph of section 3121 (b) 
of the Internal Kevenue Code of 1954 herein redesignated as paragraph 
(6) is amended— 
(A) by inserting "by an individual" after "service performed," 
and by inserting "and if such service is covered by a retirement 
system established by such instrumentality;" after "December 
31,1950,"; 
(B) by striking out "or" at the end of clause (iii), by adding 
"or" at the end of clause (iv), and by adding at the end of the 
subparagraph the following new clause: 
"(v) service performed by a civilian employee, not 
compensated from funds appropriated by the Congress, 
in the Coast Guard Exchanges or other activities, con-
ducted by an instrumentality of the United States subject 
to the jurisdiction of the Secretary of the Treasury, at 
installations of the Coast Guard for the comfort, pleasure, 
contentment, and mental and physical improvement of 
personnel of the Coast Guard;". 
(2) Subparagraph (C) of such paragraph is amended to read as 
follows: 
"(C) service performed in the employ of the United States 
or in the employ of any instrumentality of the United States, 
if such service is performed— 
"(i) as the President or Vice President of the United 
States or as a Member, Delegate, or Resident Commis-
sioner of or to the Congress; 
"(ii) in the legislative branch; 
" (iii) in a penal institution of the United States by an 
inmate thereof; 
" (iv) by any individual as an employee included under 
section 2 of the Act of August 4,1947 (relating to certain 
interns, student nurses, and other student employees of 
hospitals of the Federal Government; 5 U. S. C , sec. 
1052); 
"(v) by any individual as an employee serving on a 
temporary basis in case of fire, storm, earthquake, flood, 
or other similar emergency; or 
"(vi) by any individual to whom the Civil Service 
Retirement Act of 1930 does not apply because such indi-
vidual is subject to another retirement system;". 
(e) Section 3121 (b) of the Internal Revenue Code of 1954 is further 
amended by striking out paragraph (15) and redesignating para-
graphs (16) and (17), and any references thereto contained in such 
code, as paragraphs (14) and (15), respectively. 
(f) The amendments made by subsections (c), (d), and (e) shall 
be applicable only with respect to services performed after 1954. The 
amendments made by subsections (a) and (b) shall be applicable 
only with respect to services (whether performed after 1954 or prior 
to 1955) for which the remuneration is paid after 1954. 
68 S T A T . ] 
PUBLIC LAW 761-SEPT. 1, 1954 
1093 
AMENDMENT RELATING TO COLLECTION OF EMPLOYEE TAX 
SEO. 205 A. Section 3102 (a) of the Internal Revenue Code of 1954 ^^^ stat, 4i5. 
is amended by adding at the end thereof the following new sentence: 
"An employer who in any calendar quarter pays to an employee cash 
remuneration to which paragraph (7) (B) or (C) or (10) of section 
3121 (a) is applicable may deduct an amount equivalent to such tax 68A"stat.''4i8?^^' 
from any such payment of remuneration, even though at the time of 
payment the total amount of such remuneration paid to the employee 
by the employer in the calendar quarter is less than $50; and an 
employer who in any calendar year pays to an employee cash remu-
neration to which paragraph (8) (B) of section 3121 (a) is applicable 
may deduct an amount equivalent to such tax from any such payment 
of remuneration, even though at the time of payment the total amount 
of such remuneration paid to the employee by the employer in the 
calendar year is less than $100." 
Anto, p. 1091. 
68A Stat. 424. 
68A Stat. 427. 
AMENDMENT TO DEFINITION OF EMFIX)YEE 
SEC. 206. (a) Subparagraph (C) of section 3121 (d) (3) of the 
Internal Revenue Code of 1954 is amended by striking out ", if the 
performance of such services is subject to licensing requirements 
under the laws of the State in which such services are performed". 
(b) The amendment made by subsection (a) shall be applicable 
only with respect to services performed after 1954. 
FILING OF SUPPLEMENTAL LISTS OF EMPLOYEES BY CERTAIN 
NONPROFIT ORGANIZATIONS 
SEC. 207. (a) Paragraph (1) of section 3121 (k) of the Internal 
Revenue Code of 1954 is amended by striking out the third sentence 
thereof and inserting in lieu thereof the following: "Such list may 
be amended at any time prior to the expiration of the twenty-fourth 
month following the first calendar quarter for which the certificate 
is in effect, by filing with the prescribed official a supplemental list 
or lists containing the signature, address, and social security account 
number (if any) of each additional employee who concurs in the 
filing of the certificate." 
(b) Paragraph (1) of such section 3121 (k) is further amended 
by striking out the period at the end of the fifth sentence thereof and 
inserting in lieu thereof the following: ", except that, in the case of 
service performed by an individual whose name appears on a supple-
mental list filed after the first month following the first calendar 
quarter for which the certificate is in effect, the certificate shall be 
in effect, for purposes of such subsection (b) (8) and for purposes 
of section 210 (a) (8) of the Social Security Act, only with respect '•^ use 4io. 
to service performed by such individual after the calendar quarter 
in which such supplemental list is filed." 
CHANGES IN TAX SCHEDULES 
SEC. 208. (a) Section 1401 of the Internal Revenue Code of 1954 ^^ stat. 353. 
is amended by striking out paragraph (4) and inserting in lieu there-
of the following: 
"(4) in the case of any taxable year begining after Decem-
ber 31, 1969, and before January 1, 1975, the tax shall be equal to 
5^4 percent of the amount of the self-employment income for 
such taxable year; 
1094 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
"(5) in the case of any taxable year beginning after Decem-
ber 31,1974, the tax shall be equal to 6 percent of the amount of 
the self-employment income for such taxable year." 
68A Stat. 415. 
(jj) Sectiou 3101 of the Internal Revenue Code of 1954 is amended 
by striking out paragraph (4) and inserting in lieu thereof the fol-
lowing : 
" (4) with respect to wages received during the calendar years 
1970 to 1974, both inclusive, the rate shall be 3l^ percent; 
"(5) with respect to wages received after December 31, 1974, 
the rate shall be 4 percent." 
68A Stat, 416. 
(g) Scction 3111 of the Internal Revenue Code of 1954 is amended 
by striking out paragraph (4) and inserting in lieu thereof the fol-
lowing : 
"(4) with respect to wages paid during the calendar years 1970 
to 1974, both inclusive, the rate shall be 3i/2 percent; 
"(5) with respect to wages paid after December 31, 1974, the 
rate shall be 4 percent." 
FOREIGN SUBSIDIARIES OF DOMESTIC CORPORATION 
68A Stat. 417. 
SEC. 209. Sectjou 3121 of the Internal Revenue Code of 1954 is 
amended by adding at the end thereof the following new subsection: 
"(1) 
AGREEMENTS ENTERED INTO BY DOMESTIC CORPORATIONS W I T H 
RESPECT TO FOREIGN SUBSIDIARIES.— 
"(1) 
AGREEMENT WITH RESPECT TO CERTAIN EMPLOYEES OF 
FOREIGN SUBSIDIARIES.—The Secretary or his delegate shall, at the 
request of any domestic corporation, enter into an agreement (in 
such form and manner as may be prescribed by the Secretary or 
his delegate) with any such corporation which desires to have 
42 use 401-421. 
the iiisurauce system established by title I I of the Social Secu-
rity Act extended to service performed outside the United States 
in the employ of any one or more of its foreign subsidiaries 
Post, p. 1096. 
^^g (Jefined in paragraph (8)) by all employees who are citizens 
of the United States, except that the agreement shall not be ap-
plicable to any service performed by, or remuneration paid to, 
an employee if such service or remuneration would be excluded 
from the term 'employment' or 'wages', as defined in this section, 
had the service been performed in the United States. 
Such agree-
ment may be amended at any time so as to be made applicable, in 
the same manner and under the same conditions, with respect to 
any other foreign subsidiary of such domestic corporation. Such 
agreement shall be applicable with respect to citizens of the 
United States who, on or after the effective date of the agreement, 
are employees of and perform services outside the United States 
for any foreign subsidiary specified in the agreement. 
Such 
agreement shall provide— 
"(A) that the domestic corporation shall pay to the Sec-
retary or his delegate, at such time or times as the Secretary 
or his delegate may by regulations prescribe, amounts equiv-
alent to the sum of the taxes which would be imposed by sec-
supra. 
tions 3101 and 3111 (including amounts equivalent to the in-
terest, additions to the taxes, additional amounts, and penal-
ties which would be applicable) with respect to the remunera-
tion which would be wages if the services covered by the 
agreement constituted employment as defined in this section; 
and 
"(B) that the domestic corporation will comply with such 
regulations relating to payments and reports as the Secre-
tary or his delegate may prescribe to carry out the purposes 
of this subsection. 
68 S T A T . ] 
PUBLIC LAW 76 1 - S E P T . 1, 1954 
109f 
"(2) EFFECTIVE PERIOD OF AGREEMENT.—An agreement entered 
into pursuant to paragraph (1) shall be in effect for the period 
beginning with the first day of the calendar quarter in which such 
agreement is entered into or the first day of the succeeding calen-
dar quarter, as may be specified in the agreement, but in no case 
prior to January 1, 1955; except that in case such agreement is 
amended to include the services performed for any other sub-
sidiary and such amendment is executed after the first month 
following the first calendar quarter for which the agreement is in 
effect, the agreement shall be in effect with respect to service 
performed for such other subsidiary only after the calendar 
quarter in which such amendment is executed, 
"(3) TERMINATION OF PERIOD BE A DOMESTIC CORPORATION.—The 
period for which an agreement entered into pursuant to para-
graph (1) of this subsection is effective may be terminated with 
respect to any one or more of its foreign subsidiaries by the 
domestic corporation, effective at the end of a calendar quarter, 
upon giving two years' advance notice in writing, but only if, at 
the time of the receipt of such notice, the agreement has been in 
effect for a period of not less than eight years. The notice of 
termination may be revoked by the domestic corporation by giv-
ing, prior to the close of the calendar quarter specified in the 
notice of termination, a written notice of such revocation. 
Notice 
of termination or revocation thereof shall be filed in such form 
and manner as may be prescribed by regulations. 
Notwithstand-
ing any other provision of this subsection, the period for which 
any such agreement is effective with respect to any foreign corpo-
ration shall terminate at the end of any calendar quarter in which 
the foreign corporation, at any time in such quarter, ceases to be 
a foreign subsidiary as defined in paragraph (8). 
^ost, p. io96. 
" (4) TERMINATION OF PERIOD BY SECRETARY.—If the Secretary or 
his delegate finds that any domestic corporation which entered 
into an agreement pursuant to this subsection has failed to comply 
^ 
substantially with the terms of such agreement, the Secretary or 
his delegate shall give such domestic corporation not less than 
sixty days' advance notice in writing that the period covered by 
such agreement will terminate at the end of the calendar quarter 
specified in such notice. 
Such notice of termination may be 
revoked by the Secretary or his delegate by giving, prior to the 
close of the calendar quarter specified in the notice of termination, 
written notice of such revocation to the domestic corporation. 
No notice of termination or of revocation thereof shall be given 
under this paragraph to a domestic corporation without the prior 
concurrence of the Secretary of Health, Education, and Welfare. 
"(5) No RENEWAL OF AGREEMENT.—^If any agreement entered 
into pursuant to paragraph (1) of this subsection is terminated 
in its entirety (A) by a notice of termination filed by the 
domestic corporation pursuant to paragraph (3), or (B) by a 
notice of termination given by the Secretary or his delegate 
. 
.v, 
pursuant to paragraph (4), the domestic corporation may not 
again enter into an agreement pursuant to paragraph (1). If 
any such agreement is terminated with respect to any foreign 
subsidiary, such agreement may not thereafter be amended so as 
again to make it applicable with respect to such subsidiary. 
"(6) DEPOSITS IN TRUST FUND.—For purposes of section 201 of 
the Social Security Act, relating to appropriations to the Federal 
^2 use 4oi. 
Old-Age and Survivors Insurance Trust Fund, such remuner-
ation— 
1096 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 STAT. 
Ante, 
pp. 1052-
1054, 1061. 
"(A) paid for services covered by an agreement entered 
into pursuant to paragraph (1) as would be wages if the 
services constituted employment, and 
"(B) as is reported to the Secretary or his delegate pursu-
ant to the provisions of such agreement or of the regulations 
issued under this subsection, 
shall be considered wages subject to the taxes imposed by this 
chapter. 
"(7) 
OVERPAYMENTS AND UNDERPAYMENTS.— 
"(A) If more or less than the correct amount due under 
an agreement entered into pursuant to this subsection is paid 
with respect to any payment of remuneration, proper ad-
justments with respect to the amounts due under such agree-
ment shall be made, without interest, in such manner and at 
such times as may be required by regulations prescribed by 
the Secretary or his delegate. 
"(B) If an overpayment cannot be adjusted under sub-
paragraph (A), the amount thereof shall be paid by the Sec-
retary or his delegate, through the Fiscal Service of the 
Treasury Department, but only if a claim for such overpay-
ment is filed with the Secretary or his delegate within two 
years from the time such overpayment was made. 
"(8) DEFINITION OF FOREIGN SUBSIDIARY.—For purposes of this 
subsection and section 210 (a) of the Social Security Act, a foreign 
subsidiary of a domestic corporation is— 
" (A) a foreign corporation more than 50 percent of the vot-
ing stock of which is owned by such domestic corporation; or 
"(B) a foreign corporation more than 50 percent of the 
voting stock of which is owned by the foreign corporation 
described in subparagraph (A). 
"(9) DOMESTIC CORPORATION AS SEPARATE ENTITY.—Each domes-
tic corporation which enters into an agreement pursuant to para-
graph (1) of this subsection shall, for purposes of this subsection 
and section 6413 (c) (2) (C), relating to special refunds in the 
case of employees of certain foreign corporations, be considered 
an employer in its capacity as a party to such agreement separate 
and distinct from its identity as a person employing individuals 
on its own account. 
"(10) EEGULATIONS.—Regulations of the Secretary or his dele-
gate to carry out the purposes of this subsection shall be designed 
to make the requirements imposed on domestic corporations with 
respect to services covered by an agreement entered into pursuant 
to this subsection the same, so far as practicable, as those imposed 
upon employers pursuant to this title with respect to the taxes 
imposed by this chapter." 
DEDUCTIONS FROM GROSS INCOME FOR PAYMENTS W I T H RESPECT TO 
EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS 
SEC. 210. (a) The Internal Revenue Code of 1954 is amended by 
inserting after section 175 thereof the following new section: 
"SEC. 176. PAYMENTS WITH RESPECT TO EMPLOYEES OF CERTAIN 
FOREIGN CORPORATIONS. 
"In the case of a domestic corporation, there shall be allowed as a 
deduction amounts (to the extent not compensated for) paid or 
Ante, p. 1094. 
incurred pursuant to an agreement entered into under section 3121 (1) 
with respect to services performed by United States citizens employed 
by foreign subsidiary corporations. 
Any reimbursement of any 
Ante, p. 1090. 
68A Stat. 67. 
68A Stat. 45. 
68 S T A T . ] 
PUBLIC LAW 7 6 1 - S E P T . 1, 1954 
1097 
amount previously allowed as a deduction under this section shall be 
included in gross income for the taxable year in which received." 
(b) The table of sections to part VI of subchapter B of chapter 1 
of subtitle A of the Internal Revenue Code of 1954 is amended by 
adding at the end thereof the following: 
"SEC. 176. Payments with respect to employees of certain foreign 
corjwrations." 
TITLE III—PROVISIONS RELATING TO PUBLIC 
ASSISTANCE 
TEMPORARY EXTENSION OF 1952 MATCHING FORMULA 
SEC. 301. Section 8 (e) of the Social Security Act Amendments of 
H^scaolnote. 
1952 (Public Law 590, Eighty-second Congress) is amended by strik-
ing out "September 30,1954" and inserting in lieu thereof "September 
30, 1956". 
TEMPORARY EXTENSION OF SPECIAL PROVISION RELATING TO STATE 
PLANS FOR AID TO THE BLIND 
SEC. 302. Section 344 (M of the Social Security Act Amendments 
^^2%^s "1'202a 
of 1950 (Public Law 734, Eighty-first Congress) is amended by strik- note, 
ing out "June 30, 1955" and inserting in lieu thereof "June 30, 1957". 
TECHNICAL AMENDMENTS 
SEC. 303. (a) Sections 3 (b) (1), 403 (b) (1), and 1003 (b) (1) 
of the Social Security Act are each amended by striking out "one- goV 1203 ^ ^°^' 
half" and inserting in lieu thereof "the State's proportionate share". 
(b) Section 3 (b) of such Act is amended (1) by striking out 
"clause (1) of subsection (a)" wherever it appears and inserting in 
lieu thereof "subsection (a)", (2) by striking out "such clause" in 
paragraph (1) and inserting "such subsection" in lieu thereof, and 
(3) by striking out "increased by five per centum" immediately be-
fore the period at the end of paragraph (3). 
TITLE IV—MISCELLANEOUS PROVISIONS 
AMENDMENTS PRESERVING RELATIONSHIP BETWEEN 
RAILROAD 
RETIREMENT AND OLD-AGE AND SURVIVORS INSURANCE 
SEC. 401. (a) Section 1 (q) of the Railroad Retirement Act of 1937, 
66 stat, 777. 
as amended, is amended by striking out "1952" and inserting in lieu 
^^ ^^^ ^^^^' 
thereof "1954". 
(b) Section 2 (c) of the Railroad Retirement Act of 1937, as 
45 use 228b. 
amended, is amended by striking out "six" and inserting in lieu 
thereof "twelve"; and subsection (5) (j) of such Act, as amended, 
45 use 228e. 
is amended by striking out "sixth" and inserting in lieu thereof 
"twelfth". 
The amendments made by this subsection shall be appli-
cable only in the case of applications for annuities under the Railroad 
Retirement Act filed after August 1954; except that no individual 
shall, by reason of such amendment, be entitled to any annuity for 
any month prior to February 1954. 
(c) Section 5 (1) (9) of the Railroad Retirement Act of 1937, 
as amended, is amended by striking out "$3,600" the second time it 
appears and inserting in lieu thereof "$4,200". 
1098 
PUBLIC LAW 761-SEPT. 1, 1954 
[68 S T A T . 
60 Stat. 729. 
45 u s e 228e. 
Ante, 
pp. 1073, 
1074, 1082. 
Ante, p. 1077. 
Ante, p. 1076. 
Ante, 
pp. 1073, 
1079, 1083, 1085. 
(d) Section 5 (i) (1) (ii) of the Railroad Retirement Act of 
1937, as amended, is amended to read as follows: 
"(ii) will have been under the age of seventy-two and for 
which month he is charged with any earnings under section 
203 (e) of the Social Security Act or in which month he engaged 
on seven or more different calendar days in noncovered remuner-
ative activity outside the United States (as defined in section 203 
(k) of the Social Security Act) ; and for purposes of this sub-
division the Board shall have the authority to make such determi-
nations and such suspensions of payment of benefits in the manner 
and to the extent that the Secretary of Health, Education, and 
Welfare would be authorized to do so under section 203 (g) (3) 
of the Social Security Act if the individuals to whom this sub-
division applies were entitled to benefits under section 202 of 
such Act:". 
CROSS REFERENCES TO REDESIGNATED PROVISIONS 
2 6 USC; 6 8 A 
Stat.; 45 u s e 228a-
228y. 
SEC. 402. References in the Internal Revenue Code of 1939, the 
Internal Revenue Code of 1954, the Railroad Retirement Act of 1937, 
as amended, or any other law of the United States to any section or 
subdivision of a section of the Social Security Act redesignated by 
this Act shall be deemed to refer to such section or subdivision of a 
section as so redesignated. 
SERVICE FOR CERTAIN TAX-EXEMPT ORGANIZATIONS PRIOR TO 
E N A C T M E N T OF T H I S A C T 
68A S t a t . 
163. 
932, 
68A S t a t . 938; 
ante, p. 1094. 
4 2 U S C 4 1 0 ; 
ante, 
pp. 10 5 2-
1054, 1061. 
68A S t a t . 938; 
ante, 
pp. 1 0 9 1, 
1092. 
68A S t a t . 938, 
415, 416; ante, p. 
1094. 
68A S t a t . 938; 
ante, p. 1094. 
SEC. 403. (a) In any casein which— 
(1) an individual has been employed, at any time subsequent 
to 1950 and prior to the enactment of this Act, by an organization 
which is exempt from income tax under section 101 (6) of the 
Internal Revenue Code of 1939 but which has failed to file prior 
to the enactment of this Act a waiver certificate under section 1426 
(1) (1) of the Internal Revenue Code of 1939; 
(2) the service performed by such individual as an employee 
of such organization during the period subsequent to 1950 and 
prior to 1955 would have constituted employment (as defined in 
section 210 of the Social Security Act and section 1426 (b) of the 
Internal Revenue Code of 1939) if such organization had filed 
prior to the performance of such service such a certificate accom-
panied by a list of the signatures of employees who concurred in 
the filing of such certificate and such individual's signature had 
appeared on such list; 
(3) the taxes imposed by sections 1400 and 1410 of the Internal 
Revenue Code of 1939 have been paid with respect to any part 
of the remuneration paid to such individual by such organization 
for such service; 
(4) part of such taxes have been paid prior to the enactment 
of this Act: 
(5) so much of such taxes as have been paid prior to the 
enactment of this Act have been paid by such organization in 
good faith and upon the assumption that a waiver certificate had 
been filed by it under section 1426 (1) (1) of the Internal Revenue 
Code of 1939; and 
(6) no refund of such taxes has been obtained, 
the amount of such remuneration with respect to which such taxes 
have been paid shall, upon the request of such individual (filed in such 
form and manner, and with such official, as may be prescribed by 
68 
S T A T . ] 
PUBLIC LAW 762-SEPT. 1, 1954 
1099 
regulations made under subchapter A of Chapter 9 of the Internal 
Revenue Code of 1939), be deemed to constitute remuneration for 
employment as defined in section 210 of the Social Security Act and 
section 1426 (b) of the Internal Eevenue Code of 1939. 
(b) In any case in which— 
(1) an individual has been employed, at any time subsequent 
to 1950 and prior to the enactment of this Act, by an organiza-
tion which has filed a waiver certificate under section 1426 (1) 
(1) of the Internal Revenue Code of 1939; 
(2) the service performed by such individual during the time 
he was so employed would have constituted employment (as 
defined in section 210 of the Social Security Act and section 1426 
(b) of the Internal Revenue Code of 1939) if such individual's 
signature had appeared on the list of signatures of employees 
who concurred in th« filing of such certificate; 
(3) the taxes imposed by sections 1400 and 1410 of the Inter-
nal Revenue Code of 1939 have been paid prior to the enactment 
of this Act with respect to any part of the remuneration paid to 
such individual by such organization for such service; and 
(4) no refund of such taxes has been obtained, 
the amount of such remuneration with respect to which such taxes have 
been paid shall, upon the request of such individual (filed on or before 
January 1, 1957, and in such form and manner, and with such official, 
as may be prescribed by regulations made under subchapter A of 
chapter 9 of the Internal Revenue Code of 1939), be deemed to con-
stitute remuneration for employment as defined in section 210 of the 
Social Security Act and section 1426 (b) of the Internal Revenue Code 
of 1939, and such individual shall be deemed to have concurred in the 
filing of the waiver certificate filed by such organization under section 
1426 (1) (1) of the Internal Revenue Code of 1939. 
26 u s e 
1 4 0 0 -
1432. 
68A S t a t . 
938, 
415. 
42 u s e 
410; 
ante, 
pp. 10 5 2-
1054, 1061. 
STUDY or FEASIBILITY OF PROVIDING INCREASED MINIMUM BENEFITS 
UNDER TITLE II 
SEC. 404. (a) The Secretary of Health, Education, and Welfare 
shall conduct a full and complete study with a view to determining 
the feasibility of increasing the minimum old-age insurance benefit 
under title II of the Social Security Act to (1) $55 per month, (2) $60 
per month, and (3) $75 per month. 
(b) Such study shall include (1) a detailed analysis of the estimated 
increase in cost, if any, involved in increasing such minimum benefit 
to each of the above referred to amounts, (2) estimates of the financial 
impact such increase would have upon the Old Age and Survivors 
Insurance Trust Fund, and (3) an estimate of the amount, if any, by 
which Federal grants to the States for public assistance would be 
reduced by reason of such increase in minimum old-age insurance 
benefits. 
(c) The Secretary shall report to the Congress at the earliest practi-
cable date the results of the study provided for by this section. 
Approved September 1, 1954. 
Study by HEW. 
42 u s e 401-421. 
Report to e o n -
gress. 
Public Law 762 
CHAPTER 1207 
^^ 
- ^ ^ T 
September 1, 1954 
To provide for the termination of Federal supervision over tlie property of cer- 
[S. 2670] 
tain tribes, bands, and colonies of Indians in the State of Utah and the indi-
vidual members thereof, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress a^semhled^ That the purpose of 
P aiute 
Utah 
Indians, 
T e r mination o I 
F e d e r a l super-
vision.