An act to amend the Social Security Act with respect to the retirement tests, to reduce spending under title II of the Social Security Act, and for other purposes.
PL 96-473 (H.R.5295), enacted 10/19/1980

PUBLIC LAW 96-473—OCT. 19, 1980 
94 STAT. 2263 
Public Law 96-
96th Congress 
•473 
An Act 
To amend the Social Security Act with respect to the retirement test, to reduce 
spending under title II of the Social Security Act, and for other purposes. 
Oct. 19, 1980 
[H.R. 5295] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
Social Security 
Act, 
amendment. 
PROVISION RELATING TO AVAILABILITY OF MONTHLY EARNINGS TEST 
SECTION 1. (a)(1) Section 203(f)(1) of the Social Security Act is 42 use 403. 
amended— 
(A) by striking out "or" immediately before clause (E), and 
(B) by inserting before the period at the end thereof the 
following: ", or (F) in which such individual did not engage in self-
employment and did not render services for wages (determined 
as provided in paragraph (5) of this subsection) of more than the 
applicable exempt amount as determined under paragraph (8), in 
the case of an individual entitled to benefits under section 2020?) 42 use 402. 
(but only by reason of having a child in her care within the 
meaning of paragraph (1)(B) of that subsection) or under section 
202 (d) or (g), if such month is in a year in which such entitlement 
ends for a reason other than the death of such individual, and 
such individual is not entitled to any benefits under this title for 
the month following the month during which such entitlement 
under section 202 (b), (d), or (g) ended". 
(2) Section 203(f)(2) of such Act is amended by striking out "(D), and 
(E)" and inserting in lieu thereof "(D), (E), and (F)". 
O
t
>
) The amendments made by subsection (a) shall apply with 42 use 403 note. 
respect to monthly benefits payable for months after December 1977. 
MEDICARE ENTITLEMENT 
SEC. 2. (a) Section 226(a)(2) of the Social Security Act is amended by 42 use 426. 
inserting after "section 202" the following: ", or would be entitled to 
those benefits except that he has not filed an application therefor (or 
application has not been made for a benefit the entitlement to which 
for any individual is a condition of entitlement therefor) and, in 
conformity with regulations of the Secretary, files an application for 
hospital insurance benefits under part A of title XVIII,". 
42 use 1395c. 
(b) Section 1811(1) of such Act is amended by striking out "are 42 use I395c. 
entitled to" and inserting in lieu thereof "are eligible for". 
(c) For purposes of section 226 of such Act as amended by subsection 42 use 426 note, 
(a) of this section, an individual who filed an application for monthly 
insurance benefits under section 202 of such Act prior to the effective 42 use 402. 
date of the amendment made by subsection (a) shall be deemed to 
have filed an application for hospital insurance benefits under part A 
of title XVIII of such Act, at the time he applied for such benefits 
under section 202 regardless of the continuing status or effect of the 
application for benefits under section 202, if he would have been 
94 STAT. 2264 
PUBLIC LAW 96-473—OCT. 19, 1980 
entitled to benefits under that section had such application remained 
in effect. 
42 use 426 note. 
(d) The amendments made by subsections (a) and (b) shall be 
effective after the second month beginning after the date on which 
this Act is enacted. 
INCOME NOT ATTRIBUTABLE TO SERVICES PERFORMED AFTER 
ENTITLEMENT 
42 use 403. 
SEC. 3. (a) Section 203(f)(5)(D) of the Social Security Act is amended 
to read as follows: 
"(D) In the case of— 
"(i) an individual who has attained the age of 65 on or 
before the last day of the teixable year, and who shows to the 
satisfaction of the Secretary that he or she is receiving 
royalties attributable to a copyright or patent obtained 
before the taxable year in which he or she attained such age 
and that the property to which the cop3rright or patent 
relates w£is created by his or her own personal efforts, or 
"(ii) an individual who has become entitled to insurance 
benefits under this title, other than benefits under section 
42 use 423, 402. 
223 or benefits payable under section 202(d) by reason of 
being under a disability, and who shows to the satisfaction of 
the Secretary that he or she is receiving, in a year after his 
or her initial year of entitlement to such benefits, any other 
income not attributable to services performed after the 
month in which he or she initially became entitled to such 
benefits, 
there shall be excluded from gross income any such royalties or 
other income.". 
42 use 403 note. 
(b) The amendment made by subsection (a) shall apply with respect 
to taxable years ending after December 31, 1977, but only with 
respect to benefits payable for months after December 1977. 
RETROSPECTIVE EFFECT OF E U M I N A T I O N OF MONTHLY EARNINGS TEST 
42 use 403. 
SEC. 4. (a) Section 203(f)(1) of the Social Security Act is amended by 
striking out "the first month" in clause (E) and inserting in lieu 
thereof "the first month after December 1977". 
42 use 403 note. 
(b) The amendment made by subsection (a) shall apply with respect 
to monthly benefits payable for months after December 1977. 
BENEFITS FOR CERTAIN PRISONERS 
42 use 423. 
SEC 5. (aXD Section 223(d) of the Social Security Act is amended by 
adding at the end thereof the following new paragraph: 
"(6XA) Notwithstanding any other provision of this title, any 
physical or mental impairment which arises in connection with the 
commission by an individual (after the date of the enactment of this 
paragraph) of an offense which constitutes a felony under applicable 
law and for which such individusil is subsequently convicted, or 
which is aggravated in connection with such an offense Ot)ut only to 
the extent so aggravated), shall not be considered in determining 
whether an individual is under a disability. 
"(B) Notwithstanding any other provision of this title, any physical 
or mental impairment which arises in connection with an individ-
ual's confinement in a jail, prison, or other penal institution or 
correctional facility pursuant to such individual's conviction of an 
PUBLIC LAW 96-473—OCT. 19, 1980 
94 STAT. 2265 
"Fulltime 
student." 
42 u s e 402. 
offense (committed after the date of the enactment of this paragraph) 
constituting a felony under applicable law, or which is aggravated in 
connection with such a confinement (but only to the extent so 
aggravated), shall not be considered in determining whether such 
individual is under a disability for purposes of benefits payable for 
any month during which such individual is so confined.". 
(2) The third sentence of section 216(i)(l) of such Act is amended bv 42 USC 416 
striking out "and (5)" and inserting in lieu thereof "(5), and (6) . 
(b) Section 202(d)(7)(A) of such Act is amended by adding at the end 
thereof the following: "An individual shall not be considered a 'full-
time student' for the purpose of this section while that individual is 
confined in a jail, prison, or other penal institution or correctional 
facility, pursuant to his conviction of an offense (committed after the 
date of the enactment of this paragraph) which constituted a felony 
under applicable law.". 
(c) Section 223 of such Act is amended by adding at the end thereof 42 usc 423. 
the following new subsection: 
"Suspension of Benefits for Inmates of Penal Institutions 
"(f)(1) Notwithstanding any other provision of this title, no monthly 
benefits shall be paid under this section, or under section 202(d) by 
reason of being under a disability, to any individual for any month 
during which such individual is confined in a jail, prison, or other 
penal institution or correctional facility, pursuant to his conviction of 
an offense which constituted a felony under applicable law, unless 
such individual is actively and satisfactorily participating in a 
rehabilitation program which has been specifically approved for such 
individual by a court of law and, as determined by the Secretary, is 
expected to result in such individual being able to engage in substan-
tial gainful activity upon release and within a reasonable time. 
"(2) Benefits which would be payable to any individual (other than 
a confined individual to whom benefits are not payable by reason of 
paragraph (1)) under this title on the basis of the wages and self-
employment income of such a confined individual but for the provi-
sions of paragraph (1), shall be payable as though such confined 
individual were receiving such benefits under this section.". 
(d) The amendments made by this section shall be effective with 42 USC 402 note. 
respect to benefits payable for months beginning on or after October 
1,1980. 
TECHNICAL CORRECTIONS 
SEC. 6. (a) Section 202(eX2XBXi) of such Act is amended by striking 42 use 402. 
out the second comma following "where applicable". 
(bXD Section 203(aX3XA) of such Act is amended by striking out 42 use 403. 
"bases" and inserting in lieu thereof "basis". 
(2) Section 203(aX7) of such Act is amended by striking out "benefits ^«^«' P 442. 
base" and inserting in lieu thereof "benefit base". 
(c) Section 213(aX2XA) of such Act is amended by striking out 42 use 413. 
"quarters of coverage" and inserting in lieu thereof "quarter of 
coverage". 
(d) Section 215(a)(4XB) of such Act is amended by striking out 42 use 415. 
"computation or recommendation" and inserting in lieu thereof 
"computation or recomputation". 
(eXl) Section 303 of such Act is amended by redesignating the Ante, p. 468. 
second subsection (d) as subsection (e). 
(2) Section 304(aX2) of such Act is amended to read as follows: 42 use 504. 
94 STAT. 2266 
PUBLIC LAW 96-473—OCT. 19, 1980 
42 u s e 503. 
42 u s e 602. 
Ante, p. 466. 
42 u s e 1382a. 
Ante, p. 470. 
42 u s e 1395g. 
42 u s e 1395/. 
42 u s e 1396d. 
42 u s e 1397b. 
"(2) makes a finding with respect to a State under subsection 
(b), (c), (d), or (e) of section 303,". 
(f)(1) Section 402(a)(27) of such Act is amended by striking out 
"provide, that the State" and inserting in heu thereof "provide that 
the State". 
(2) Section 402(a)(29) of such Act is amended by striking out 
"provided" and inserting in lieu thereof "provide". 
(3) Section 402 of such Act is amended by redesignating the second 
subsection (d) as subsection (e). 
(g)(1) Section 1612(a)(1)(B) of such Act is amended by striking out 
"following subsection (a)(10)" and inserting in lieu thereof "following 
subsection (a)(ll)". 
(2) Section 1612(a)(1) of such Act is further amended— 
(A) by striking out "and" at the end of subparagraph (B); and 
(B) by redesignating the second subparagraph (C) as subpara-
graph (D). 
(3) Section 1612(b)(2)(B) of such Act is amended— 
(A) by striking out "Monthly" and inserting in lieu thereof 
"monthly"; and 
(B) by striking out the period at the end thereof and inserting 
in lieu thereof a semicolon. 
(h) Section 1631(b) of such Act is amended— 
(1) by striking out "(b)(l)(l)" and inserting in lieu thereof 
"(b)(1)"; and 
(2) by redesignating the second paragraph (2) as paragraph (3). 
(i) Section 1815(c) of such Act is amended by striking out "for on in 
connection with" and inserting in lieu thereof "for or in connection 
with". 
(j) Section 1833 of such Act is amended by redesignating the second 
subsection (g) as subsection (h). 
(k) Section 1905(c) of such Act is amended by striking out "under 
clauses (1)" and inserting in lieu thereof "under clause (1)". 
(1) Section 2003(e)(1) of such Act is amended by striking out "under 
subsection (g)" and inserting in lieu thereof "under subsection (d)". 
Approved October 19, 1980. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 96-537, Pts. 1 and 2 (eomm. on Ways and Means). 
SENATE REPORT No. 96-987 (eomm. on Finance). 
eONGRESSIONAL REOORD: 
Vol. 125 (1979): Dec. 19, considered and passed House. 
Vol. 126 (1980): Sept. 30, considered and passed Senate, amended. 
Oct. 1, House concurred in Senate amendments with an amend-
ment; Senate concurred in House amendment.