An Act to amend the Social Security Act and the Internal Revenue Code of 1954 to strengthen the financing of the social security system, and for other purposes.
PL 95-216 (H.R.9346), enacted 12/20/1977

PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1509 
Public Law 95-216 
95th Congress 
An Act 
To amend the Social Security Act and the Internal Revenue Code of 1954 to 
Dec. 20, 197 7_ 
strengthen the financing of the social security system, and for other purposes. 
[H.R. 9346] 
Be it enacted 
hy the Senate 
and House 
of Representatives 
of 
the 
United 
States 
of America 
in Congress 
assembled^ 
T h a t this Act, with 
Social Security 
the following table of contents, m a y be cited as the "Social Security 
Amendments of 
A m e n d m e n t s of 1977". 
l o Trir i ^n^ 
TABLE OF CONTENTS 
^^ ^^^ ^"^"^ 
note. 
TITLE I—PROVISIONS RELATING TO THE FINANCING OF THE OLD-
AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM 
Sec. 101. Adjustments in tax rates. 
Sec. 102. Allocations to disability insurance trust fund. 
Sec. 103. Increases in earnings base. 
Sec. 104. Effective date. 
TITLE II—STABILIZATION OF REPLACEMENT RATES IN THE OLD-AGE, 
SURVIVORS, AND DISABILITY INSURANCE PROGRAM 
Sec. 201. Computation of primary insurance amount. 
Sec. 202. Maximvnn benefits. 
Sec. 203. Increase in old-age benefit amounts for delayed retirement. 
Sec. 204. Widow's and widower's insurance benefits in cases of delayed retire-
ment. 
Sec. 205. Conforming amendments. 
Sec. 206. Effective date. 
TITLE III—OTHER CHANGES IN PROVISIONS RELATING TO THE OLD-
AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM 
PART A—CHANGES IN EARNINGS TEST 
^ 
Sec. 301. Liberalization of earnings test for individuals age 65 and over. 
Sec. 302. Repeal of earnings limitation for individuals age 70 and over. 
Sec. 303. Elimination of monthly earnings test. 
PART B—COVERAGE 
Sec. 311. Study of universal coverage. 
Sec. 312. Coverage of nonprofit organizations which failed to file waiver 
certificates. 
Sec. 313. Exclusion from coverage of certain limited partnership income. 
Sec. 314. Employees of members of related groups of corporations. 
Sec. 315. Tax on employers of individuals who receive income from tips. 
Sec. 316. Revocation of exemption from coverage by clergymen. 
Sec. 317. International agreements with respect to social security benefits. 
Sec. 318. Modification of agreement with Illinois to provide coverage for certain 
policemen and firemen. 
Sec. 319. Coverage for policemen and firemen in Mississippi. 
Sec. 320. Coverage under divided retirement system for public employees in New 
Jersey. 
Sec. 321. Coverage of service under Wisconsin retirement system. 
PART C—BENEFIT AMOUNTS AND ELIGIBILITY 
Sec. 331. Actuarial reduction of benefit increases to be applied as of time of 
original entitlement. 
Sec. 332. Limitation on retroactive benefits. 
Sec. 333. Delivery of benefit checks. 
Sec. 334. Reduced benefits for spouses receiving Government pensions. 
91 STAT. 1510 
PUBLIC LAW 95-216—DEC. 20, 1977 
TABLE OF CONTENTS—Continued 
; 
PART C—BENEFIT AMOUNTS AND BLIGIBILITT—Continued 
Sec. 335. Substantial gainful activity in case of blind individuals. 
Sec. 336. Remarriage of widows and widowers. 
Sec. 337. Duration-of-marriage requirement. 
PART D—STUDY W I T H RESPECT TO GENDER-BASED DISTINCTIONS 
Sec. 341. Study of proposals to eliminate dependency and sex discrimination 
under the social security program. 
PART B—COMBINED SOCIAL SECURITY AND INCOME TAX ANNUAL REPORTING 
Subpart 1—Amendments to Title II of the Social Security Act 
Sec. 351. Annual crediting of quarters of coverage. 
Sec. 352. Adjustment in amount required for a quarter of coverage. 
Sec. 353. Technical and conforming amendments. 
Subpart 2—Amendments to the Internal Revenue Code of 1954 
Sec. 355. Deduction of tax from wages. 
Sec. 356. Technical and conforming amendments. 
Subpart 3—Conforming Amendment to the Railroad Retirement Act of 1974 
Sec. 358. Computation of employee annuities. 
PART F—^NATIONAL COMMISSION ON SOCIAL SECURITY 
Sec. 361. Establishment of Commission. 
PART G—MISCELLANEOUS PROVISIONS 
Sec. 371. Appointment of hearing examiners. 
Sec. 372. Report of Advisory Council on Social Security. 
TITLE IV—PROVISIONS RELATING TO CERTAIN STATE WELFARE 
AND 
SERVICE 
PROGRAMS 
RECEIVING 
FEDERAL 
FINANCIAL 
ASSISTANCE 
Sec. 401. Fiscal relief for States and political subdivisions with respect to costs 
of welfare programs. 
Sec. 402. Incentive adjustments for quality control in Federal financial partici-
pation in aid to families with dependent children programs. 
Sec. 403. Access to wage information. 
Sec. 404. State demonstration projects. 
Sec. 405. Reimbursement for erroneous State supplementary payments. 
TITLE V—MISCELLANEOUS 
Sec. 501. Coverage under medicare of certain power-operated wheelchairs. 
Sec. 502. Federal Election Campaign Act amendments. 
TITLE I—PROVISIONS RELATING TO THE FINANCING 
OF THE OLD-AGE, SURVIVORS, AND DISABILITY 
INSURANCE PROGRAM 
ADJUSTMENTS I N TAX RATES 
SEC. 101. (a) (1) Section 3101(a) of the Internal Revenue Code of 
26 use 3101. 
1954 (relating to rate of tax on employees for purposes of old-age, 
survivors, and disability insurance) is amended by striking out para-
graphs (1) and (2) and inserting in lieu thereof the following: 
" (1) with respect to wages received during the calendar years 
1974 through 1977, the rate shall be 4.95 percent; 
"(2) with respect to wages received during the calendar year 
1978, the rate shall be 5.05 percent; 
"(3) with respect to wages received during the calendar years 
1979 and 1980, the rate shall be 5.08 percent; 
"(4) with respect to wages received during the calendar year 
1981, the rate shall be 5.35 percent; 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1511 
"(5) with respect to wages received during the calendar years 
1982 through 1984, the rate shall be 5.40 percent; 
"(6) with respect to wages received during the calendar years 
1985 through 1989, the rate shall be 5.70 percent; and 
"(7) with respect to wages received ^fter December 31, 1989, 
the rate shall be 6.20 percent.". 
(2) Section 3111(a) of such Code (relating to rate of tax on Post, p. 1537. 
employers for purposes of old-age, survivors, and disability insur- 26 USC 3111,. 
ance) is amended by striking out paragraphs (1) and (2) and insert-
ing in lieu thereof the following: 
"(1) with respect to wages paid during the calendar years 
1974 through 1977, the rate shall be 4.95 percent; 
"(2) with respect to wages paid during the calendar year 1978, 
the rate shall be 5.05 percent; 
"(3) with respect to wages paid during the calendar years 
1979 and 1980, the rate shall be 5.08 percent; 
"(4) with respect to wages paid during the calendar year 1981, 
the rate shall be 5.35 percent; 
"(5) with respect to wages paid during the calendar years 
1982 through 1984, the rate shall be 5.40 percent; 
"(6) with respect to wages paid during the calendar years 
1985 through 1989, the rate shall be 5.70 percent; and 
"(7) with respect to wages paid after December 31, 1989, the 
rate shall be 6.20 percent.". 
(3) Section 1401(a) of such Code (relating to rate of tax on self- 26 USC 1401. 
employment income for purposes of old-age, survivors, and disability 
insurance) is amended by striking out "a tax" and all that follows and 
inserting in lieu thereof the following: "a tax as follows: 
"(1) in the case of any taxable year beginning before January 1, 
1978, the tax shall be equal to 7.0 percent of the amount of the 
self-employment income for such taxable year; 
"(2) in the case of any taxable year beginning after Decem-
ber 31,1977, and before January 1, 1979, the tax shall be equal to 
7.10 percent of the amount of the self-employment income for 
such taxable year ; 
"(3) in the case of any taxable year beginning after December 
31,1978, and before January 1,1981, the tax shall be equal to 7.05 
percent of the amount of the self-employment income for such 
taxable ^ear; 
"(4) m the case of any taxable year beginning after December 
31, 1980, and before January 1, 1982, the tax shall be equal to 
8.00 percent of the amount of the self-employment income for 
such taxable year; 
"(5) in the case of any taxable year beginning after December 
31, 1981, and before January 1, 1985, the tax shall be equal to 
8.05 percent of the amount of the self-employment income for 
such taxable year; 
"(6) in the case of any taxable year beginning after December 
31, 1984, and before January 1, 1990, the tax shall be equal to 
8.55 percent of the amount of the self-employment income for 
such taxable year; and 
"(7) in the case of any taxable year beginning after December 
31, 1989, the tax shall be equal to 9.30 percent of the amount of 
the self-employment income for such taxable year.", 
(b) (1) Section 3101(b) of such Code (relating to rate of tax on Hospital 
employees for purposes of hospital insurance) is amended by striking insurance. 
26 USC 3101. 
91 STAT. 1512 
PUBLIC LAW 95-216—DEC. 20, 1977 
out paragraphs (1) through (4) and inserting in lieu thereof the 
following: 
"(1) with respect to wages received during the calendar years 
1974 through 1977, the rate shall be 0.90 percent; 
" (2) with respect to wages received during the calendar year 
1978, the rate shall be 1.00 percent; 
.^ 
. 
"(3) with respect to wages received during the calendar years 
* 
' 
1979 and 1980, the rate shall be 1.05 percent; 
"(4) with respect to wages received during the calendar years 
1981 through 1984, the rate shall be 1.30 percent; 
"(5) with respect to wages received during the calendar year 
1985, the rate shall be 1.35 percent; and 
"(6) with respect to wages received after December 31, 1985, 
the rate shall be 1.45 percent.". 
26 use 3111. 
(2) Section 3111(b) of such Code (relating to rate of tax on 
employers for purposes of hospital insurance) is amended by striking 
out paragraphs (1) through (4) and inserting in lieu thereof the 
following: 
" (1) with respect to wages paid during the calendar years 1974 
through 1977, the rate shall be 0.90 percent; 
" (2) with respect to wages paid during the calendar year 1978, 
the rate shall be 1.00 percent; 
"(3) with respect to wages paid during the calendar years 1979 
and 1980, the rate shall be 1.05 percent; 
" (4) with respect to wages paid during the calendar years 1981 
throus^h 1984, the rate shall be 1.30 percent; 
" (5) with respect to wages paid during the calendar year 1985, 
the rate shall be 1.35 percent; and 
"(6) with respect to wages paid after December 31, 1985, the 
rate shall be 1.45 percent,". 
26 use 1401. 
(3) Section 1401(b) of such Code (relating to tax on self-employ-
ment income for purposes of hospital insurance) is amended by strik-
ina: out paragraphs (1) through (4) and inserting in lieu thereof the 
following: 
"(1) in the case of any taxable year beginning after Decem-
ber 31,1973, and before January 1, 1978, the tax shall be equal to 
0.90 percent of the amount of the self-employment income for 
such taxable year; 
"(2) in the case of any taxable year beginninflf aft«r Decem-
ber 31,1977, and before January 1,1979, the tax shall be equal to 
1,00 oercent of the amount of the self-employment income for such 
taxable year; 
"(3) in the case of any taxable year beginning after Decem-
ber 31, 1978, and before January 1,1981, the tax shall be equal to 
1.05 percent of the amount of the self-employment income for such 
taxable year; 
"(4) in the case of any taxable year beginning after Decem-
ber 31, 1980, and before January 1,1985, the tax shall be equal to 
1.30 percent of the amount of the self-employment income for such 
taxable year; 
"(5) in the case of any taxable year beginning after Decem-
ber 31, 1984, and before January 1, 1986, the tax shall be equal 
to 1.35 percent of the amount of the self-employment income for 
such taxable year; and 
"(6) in the case of any taxable year beginning after Decem-
ber 31, 1985, the tax shall be equal to 1.45 percent of the amount 
of the self-employment income for such taxable year.". 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1513 
ALLOCATIONS TO DISABILITY INSURANCE TRUST FUND 
SEC. 102. (a)(1) Section 201(b) (1) of the Social Security Act is 42 USC 401. 
amended by striking out clauses (G) through (J) and inserting in lieu 
thereof the following: "(G) 1.55 per centum of the wages (as so 
; 
defined) paid after December 31, 1977, and before January 1, 1979, 
and so reported, (H) 1.50 per centum of the wages (as so defined) paid 
after December 31, 1978, and before January 1, 1981, and so reported, 
(I) 1.65 per centum of the wages (as so defined) paid after Decem-
ber 31, 1980, and before January 1,1985, and so reported, (J) 1.90 per 
centum of the wages (as so defined) paid after December 31,1984, and 
before January 1, 1990, and so reported, and (K) 2.20 per centum of 
the wages (as so defined) paid after December 31, 1989, and so 
reported,". 
(2) Section 201 (b)(2) of such Act is amended by striking out clauses 
(G) through (J) and inserting in lieu thereof the following: "(G) 
1.090 per centum of the amount of self-employment income (as so 
defined) so reported for any taxable year begiiming after Decem-
ber 31,1977, and before January 1,1979, (H) 1.0400 per centum of the 
amount of self-employment income (as so defined) so reported for any 
taxable year beginning after December 31, 1978, and before Janu-
ary 1, 1981, (I) 1,2375 per centum of the amount of self-employment 
income (as so defined) so reported for any taxable year beginning 
after December 31, 1980, and before January 1, 1985, (J) 1.4250 per 
centum of the amount of self-employment income (as so defined) so 
reported for any taxable year beginning after December 31,1984, and 
before January 1, 1990, and (K) 1.650 per centum of the amount of 
self-employment income (as so defined) so reported for any taxable 
year beginning after December 31,1989,". 
INCREASES I N EARNINGS BASE 
SEC. 103. (a)(1) Section 230(a) of the Social Security Act is 42 U
S
C 430. 
amended by inserting "or (c)" after "determined under subsection 
; 2) Section 230 (b) of such Act is amended by striking out "shall be" 
in the matter preceding paragraph (1) and inserting m lieu thereof 
''shall (subject to subsection (c)) be". 
Infra. 
(b) Section 230 (c) of such Act is amended— 
Contribution and 
(1) by inserting "(1)" immediately before "the 'contribution benefit base, 
and benefit base' "; and 
(2) by striking out "section." and inserting in lieu thereof the 
following: 
"section, and (2) the 'contribution and benefit base' with respect to 
remuneration paid (and taxable years beginning)— 
" (A) in 1978 shall be $17,700, 
"(B) in 1979 shall be $22,900, 
"(C) in 1980 shall be $25,900, and 
"(D) in 1981 shall be $29,700. 
For purposes of determining under subsection (b) the 'contribution 
and benefit base' with respect to remuneration paid (and taxable years 
beginning) in 1982 and subsequent years, the dollar amounts specified 
in clause (2) of the preceding sentence shall be considered to have 
resulted from the application of such subsection (b) and to be the 
amount determined (with respect to the years involved) under that 
subsection. For purposes of determining employer tax liability under 
section 3221 (a) of the Internal Revenue Code of 1954, for purposes of 26 USC 3221. 
91 STAT. 1514 
PUBLIC LAW 95-216—DEC. 20, 1977 
determining the portion of the employee representative tax liability 
26 use 3211. 
under section 3211(a) of such Code which results from the applica-
tion of the 9.5 percent rate specified therein, and for purposes of com-
puting average monthly compensation undei; section 3(j) of the 
4'5 use 231b. 
Kailroad Eetirement xict of 1974, except with respect to annuity 
amounts determined under section 3(a) or (3) (f) (3) of such Act, 
clause (2) and the preceding sentence of this subsection shall be 
disregarded.". 
42 use 430. 
(c) (1) Section 230 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(d) Notwithstanding any other provision of law, the contribution 
and benefit base determined under this section for any calendar year 
after 1976 for purposes of section 4022(b)(3)(B) of Public Law 
29 use 1322. 
93-406, with respect to any plan, shall be the contribution and benefit 
base that would have been determined for such year if this section as 
in effect immediately prior to the enactment of the Social Security 
Amendments of 1977 had remained in effect without change.". 
Effective date. 
(2) The amendment made by paragraph (1) shall apply with 
42 use 430 note, respect to plan terminations occurring after the date of the enactment 
of this Act. 
(d)(1) The second sentence of section 215(i) (2) (D) (v) of such 
42 use 415. 
Act is amended by striking out "is equal to one-twelfth of the new 
contribution and benefit base" and inserting in lieu thereof "is equal 
to, or exceeds by less than $5, one-twelfth of the new contribution and 
benefit base". 
(2) The third sentence of section 215(i) (2) (D) (v) of such Act 
is amended by striking out all that follows "clause (iv)" and insert-
ing in lieu thereof "plus 20 percent of the excess of the second figure 
in the last line of column III as extended under the preceding sen-
tence over such second figure for the calendar year in which the table 
of benefits is revised.". 
EFFECTIVE DATE 
26 use 1401 
SEC. 104. The amendments made by this title shall apply with respect 
"''*^- 
to remuneration paid or received, and taxable years beginning, after 
1977. 
TITLE II—STABILIZATION OF KEPLACEMENT RATES IN 
THE OLD-AGE, SURVIVORS, AND DISABILITY INSUR-
ANCE PROGRAM 
COMPUTATION OF PRIMARY INSURANCE AMOUNT 
42 use 415. 
SEC 201. (a) Section 215(a) of the Social Security Act is amended 
to read as follows: 
"(a) (1) (A) The primary insurance amount of an individual shall 
(except as otherwise provided in this section) be equal to the sum 
of— 
"(i) 90 percent of the individual's average indexed monthly 
earnings (determined under subsection (b)) to the extent that 
such earnings do not exceed the amount established for purposes 
of this clause by subparagraph (B), 
"(ii) 32 percent of the individual's average indexed monthly 
earnings to the extent that such earnings exceed the amount estab-
lished for purposes of clause (i) but do not exceed the amount 
established for purposes of this clause by subparagraph (B), and 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1515 
"(iii) 15 percent of the individual's average indexed monthly 
earnings to the extent that such earnings exceed the amount 
established for purposes of clause (ii), 
rounded in accordance with subsection (g), and thereafter increased 
as provided in subsection (i). 
"(B) (i) For individuals who initially become eligible for old-age 
or disability insurance benefits, or who die (before becoming eligible 
of such benefits), in the calendar year 1979, the amount established 
for purposes of clause (i) and (ii) of subparagraph (A) shall be $180 
and $1,085, respectively. 
"(ii) For individuals who initially become eligible for old-age or 
disability insurance benefits, or who die (before becoming eligible for 
such benefits), in any calendar year after 1979, each of the amounts so 
established shall equal the product of the corresponding amount estab-
lished with respect to the calendar year 1979 under clause (i) of this 
subparagraph and the quotient obtained by dividing— 
"(I) the average of the total wages (as defined in regulations 
of the Secretary and computed without regard to the limitations 
specified in section 209 (a)) reported to the Secretary of the Treas- 42 U
S
C 409. 
ury or his delegate for the second calendar year preceding the 
calendar year for which the determination is made, by 
"(II) the average of the total wages (as so defined and com-
puted) reported to the Secretary of the Treasury or his delegate 
for the calendar year 1977. 
"(iii) Each amount established under clause (ii) for any calendar 
year shall be rounded to the nearest $1, except that any amounts so 
established which is a multiple of $0.50 but not of $1 shall be rounded 
to the next higher $1. 
"(C) (i) No primary insurance amount computed under subpara-
graph (A) may be less than— 
"(I) the dollar amount set forth on the first line of column IV 
in the table of benefits contained in (or deemed to be contained in) 
this subsection as in effect in December 1978, rounded (if not a 
multiple of $1) to the next higher multiple of $1, or 
"(II) an amount equal to $11.50 multiplied by the individual's 
years of coverage in excess of 10, or the increased amount deter-
mined for purposes of this subdivision under subsection (i), 
whichever is greater. No increase under subsection (i), except as pro-
vided in subsection (i)(2)(A), shall apply to the dollar amount 
specified in subdivision (I) of this clause. 
"(ii) For purposes of clause (i) (II), the term 'years of coverage' "Years of 
with respect to any individual means the number (not exceeding 30) coverage." 
equal to the sum of (I) the number (not exceeding 14 and disregarding 
any fraction) determined by dividing (a) the total of the wages 
credited to such individual (mcludin^ wages deemed to be paid prior 
to 1951 to such individual under section 217, compensation under the Post, p. 1529. 
Railroad Retirement Act of 1937 prior to 1951 which is creditable to 45 USC 228a. 
such individual pursuant to this title, and wages deemed to be paid 
prior to 1951 to such individual under section 231) for years after 
42 USC 431. 
1936 and before 1951 by (b) $900, plus (II) the number equal to 
the number of years after 1950 each of which is a computation base 
year (within the meaning of subsection (b) (2) (B) (ii)) and in each 
of which he is credited with wages (including wages deemed to be paid 
to such individual under section 217, compensation under the Railroad 
Retirement Act of 1937 or 1974 which is creditable to such individual 45 USC 228a, 
pursuant to this title, and wages deemed to be paid to such individual 231. 
under section 229) and self-employment income of not less than 25 Post, p. 1554. 
91 STAT. 1516 
PUBLIC LAW 95-216—DEC. 20, 1977 
Ante, p. 
Post, p. 
1513, 
1554. 
Publication in 
Federal Register. 
Publication in 
Federal Register. 
percent of the maximum amount which, pursuant to subsection (e), 
may be counted for such year, or of not less than 25 percent of the 
maximum amount which could be so counted for such year (in the case 
of a year after 1977) if section 230 as in effect immediately prior to the 
enactment of the Social Security Amendments of 1977 had remained 
in effect without change. 
"(D) In each calendar year after 1978 the Secretary shall publish 
in the Federal Register, on or before November 1, the formula for 
computing benefits under this paragraph and for adjusting wages and 
self-employment income under subsection (b) (8) in the case of an 
individual who becomes eligible for an old-age insurance benefit, or 
(if earlier) becomes eligible for a disability insurance benefit or dies, 
in the following year, and the average of the total wages (as described 
in subparagraph (B) (ii) (I)) on which that formula is based. With 
the initial publication required by this subparagraph, the Secretary 
shall also publish in the Federal Register the average of the total 
wages (as so described) for each calendar year after 1950. 
"(2) (A) A year shall not be counted as the year of an individual's 
death or eligibility for purposes of this subsection or subsection (i) 
in any case where such individual was entitled to a disability insur-
ance benefit for any of the 12 months immediately preceding the month 
of such death or eligibility (but there shall be counted instead the year 
of the individual's eligibility for the disability insurance benefit or 
benefits to which he was entitled during such 12 months). 
"(B) In the case of an individual who was entitled to a disability 
insurance benefit for any of the 12 months before the month in which 
he became entitled to an old-age insurance benefit, became reentitled to 
a disability insurance benefit, or died, the primary insurance amount 
for determining any benefit attributable to that entitlement, reentitle-
ment, or death is the greater of— 
"(i) the primary insurance amount upon which such disability 
insurance benefit was based, increased by the amount of each gen-
eral benefit increase (as defined in subsection (i)(3)), and each 
increase provided under subsection (i)(2), that would have 
applied to such primary insurance amount had the individual 
remained entitled to such disability insurance benefit until the 
month in which he became so entitled or reentitled or died, or 
"(ii) the amount computed under paragraph (1)(C). 
"(C) In the case of an individual who was entitled to a disability 
insurance benefit for any month, and with respect to whom a primary 
insurance amount is required to be computed at any time after the 
close of the period of the individual's disability (whether because of 
such individual's subsequent entitlement to old-age insurance benefits 
or to a disability insurance benefit based upon a subsequent period of 
disability, or because of such individual's death), the primary insur-
ance amount so computed may in no case be less than the primary 
insurance amount with respect to which such former disability insur-
ance benefit was most recently determined. 
"(8) (A) Paragraph (1) applies only to an individual who was not 
eligible for an old-age insurance benefit prior to January 1979 and 
who in that or any succeeding month— 
" (i) becomes eligible for such a benefit, 
"(ii) becomes eligible for a disability insurance benefit, or 
"(iii) dies, 
and (except for subparagraph (C)(i)(II) thereof) it applies to every 
such individual except to the extent otherwise provided by paragraph 
(4). 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1517 
42 use 416. 
Limitations. 
"(B) For purposes of this title, an individual is deemed to be Eligibility, 
eligible— 
"(i) for old-age insurance benefits, for months beginning with 
the month in which he attains age 62, or 
"(ii) for disability insurance benefits, for months beginning 
with the month in which his period of disability began as pro-
vided under section 216(i) (2) (C), 
except as provided in paragraph (2) (A) in cases where fewer than 12 
months have elapsed since the termination of a prior period of 
disability. 
"(4) Paragraph (1) (except for subparagraph (C) (i) (II) thereof) 
does not apply to the computation or recomputation of a primary 
insurance amount for— 
"(A) an individual who was eligible for a disability insurance 
benefit for a month prior to January 1979 unless, prior to the 
month in which occurs the event described in clause (i), (ii), or 
(iii) of paragraph (3) (A), there occurs a period of at least 12 
consecutive months for which he was not entitled to a disability 
insurance benefit, or 
"(B) an individual who had wages or self-employment income 
credited for one or more years prior to 1979, and who was not eligible; 
for an old-age or disability insurance benefit, and did not die, prior 
to January 1979, if in the year for which the computation or recom-
mendation would be made the individual's primary insurance amount 
would be greater if computed or recomputed— 
"(i) tinder section 215(a) as in effect in December 1978, for 
purposes of old-age insurance benefits in the case of an individual 
who becomes eligible for such benefits prior to 1984, or 
" (ii) as provided by section 215 (d), in the case of an individual 
to whom such section applies. 
In determining whether an individual's primary insurance amount 
would be greater if computed or recomputed as provided in subpara-
graph (B), (I) the table of benefits in effect in December 1978 shall 
be applied without regard to any increases in that table which may' 
become effective (in accordance with subsection (i) (4)) for years after 
1978 (subject to clause (iii) of subsection (i) (2) (A) but without 
regard to clauses (iv) and (v) thereof) and (II) such individual's 
average monthly wage shall be computed as provided by sub-
section (b)(4). 
"(5) For purposes of computinsr the primary insurance amount 
(after December 1978) of an individual to whom paragraph (1) does 
not applv (other than an individual described in paragraph (4) (B)), 
this section as in effect in December 1978 shall remain in effect, except 
that, effective for January 1979, the dollar amount specified in para-
graph (3) of subsection (a) shall be increased to $11.50, The table 
for determining primary insurance amounts and maximum family 
benefits contained in this section in December 1978 shall be revised as 
provided bv subsection (i) for each year after 1978.". 
(b) Section 215(b) of such Act is amended to read as follows: 
42 USC 415. 
"Average Indexed Monthly Earnings; Average Monthly "Wage 
"(b) (1) An individual's average indexed monthly earnings shall be 
equal to the ouotient obtained bv dividing— 
"(A) the total (after adjustment under paragraph (3)) of his 
wages paid in and self-employment income credited to his bene-
fit computation years (determined under paragraph (2)), by 
"(B) the number of months in those years. 
Post, pp. 1519. 
1520. 
91 STAT. 1518 
PUBLIC LAW 95-216—DEC. 20, 1977 
"(2) (A) The number of an individual's benefit computation years 
equals the number of elapsed years, reduced by five, except that the 
number of an individual's benefit computation years may not be less 
than two. 
Definitions. 
"(B) For purposes of this subsection with respect to any 
individual— 
" (i) the term 'benefit computation years' means those computa-
tion base years, equal in number to the number determined under 
subparagraph (A), for which the total of such individual's wages 
and self-employment income, after adjustment under paragraph 
(3), is the largest; 
"(ii) the term 'computation base years' means the calendar 
years after 1950 and before— 
"(I) in the case of an individual entitled to old-age insur-
ance benefits, the year in which occurred (whether by reason 
Post, p. 1542. 
of section 202 (j) (1) or otherwise) the first month of that 
entitlement; or 
"(II) in the case of an individual who has died (without 
having become entitled to old-age insurance benefits), the 
year succeeding the year of his death; 
except that such term excludes any calendar year entirely 
included in a period of disability; and 
"(iii) the term 'number of elapsed years' means (except as 
otherwise provided by section 104(j)(2) of the Social Security 
42 use 414 note. 
Amendments of 1972) the number of calendar years after 1950 
(or, if later, the year in which the individual attained age 21) and 
before the year in which the individual died, or, if it occurred 
earlier (but after 1960), the year in which he attained age 62; 
except that such term excludes any calendar year any part of 
which is included in a period of disability. 
" (3) (A) Except as provided by subparagraph (B), the wages paid 
in and self-employment income credited to each of an individual's com-
putation base years for purposes of the selection therefrom of benefit 
computation years under paragraph (2) shall be deemed to be equal 
to the product of— 
" (i) the wages and self-employment income paid in or credited 
to such year (as determined without regard to this subparagraph), 
and 
" (ii) the quotient obtained by dividing— 
"(I) the average of the total wages (as defined in regula-
tions of the Secretary and computed without regard to the 
42 use 409. 
limitations specified in section 209 (a)) reported to the Secre-
tary of the Treasury or his delegate for the second calendar 
year (after 1976) preceding the earliest of the year of the 
individual's death, eligibility for an old-age insurance bene-
fit, or eligibility for a disability insurance benefit (except 
that the year in which the individual dies, or becomes eligible, 
shall not be considered as such year if the individual was 
entitled to disability insurance benefits for any month in 
the 12-month period immediately preceding such death or 
eligibility, but there shall be counted instead the year of the 
individual's eligibility for the disability insurance benefit to 
which he was entitled in such 12-month period), by 
"(II) the average of the total wages (as so defined and 
computed) reported to the Secretary of the Treasury or his 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1519 
delegate for the computation base year for which the deter-
mination is made. 
"(B) Wages paid in or self-employment income credited to an 
individual's computation base year which— 
" (i) occurs after the second calendar year specified in subpara-
graph (A)(ii) (I), or 
"(ii) is a year treated under subsection (f) (2) (C) as though 
it were the last year of the period specified in paragraph (2) 
(B)(ii), 
shall be available for use in determining an individual's benefit com-
putation years, but without applying subparagraph (A) of this 
paragraph. 
" (4) For purposes of determining the average monthly wage of an 
individual whose primary insurance amount is computed (after 1978) 
under section 215(a) or 215(d) as in eifect (except with respect to the 
table contained therein) in December 1978, by reason of subsection (a) 
(4) (B), this subsection as in effect in December 1978 shall remain in 
effect, except that paragraph (2) (C) (as then in effect) shall be 
deemed to provide that 'computation base years' include only calendar 
years in the period after 1950 (or 1936, if applicable) and prior to the 
year in which occurred the first month for which the individual was 
eligible (as defined in subsection (a) (3) (B) as in effect in January 
1979) for an old-age or disability insurance benefit, or, if earlier, the 
year in which he died. Any calendar year all of which is included in a 
period of disability shall not be included as a computation base year 
for such purposes.". 
(c) Section 215 (c) of such Act is amended to read as follows: 
"Application of Prior Provisions in Certain Cases 
"(c) This subsection as in effect in December 1978 shall remain in 
effect with respect to an individual to whom subsection (a) (1) does 
not apply by reason of the individual's eligibility for an old-age or dis-
ability insurance benefit, or the individual's death, prior to 1979.". 
(d) (1) The matter in the text of section 215(d) of such Act which 
precedes paragraph (1) (C) is amended to read as follows: 
"(d) (1) For purposes of column I of the table appearing in sub-
section (a), as that subsection was in effect in December 1977, an indi-
vidual's primary insurance benefit shall be computed as follows: 
"(A) The individual's average monthly wage shall be deter-
mined as provided in subsection (b), as in effect in December 1977 
(but without regard to paragraph (4) thereof), except that for 
purposes of paragraphs (2) (C) and (3) of that subsection (as so 
in effect) 1936 shall be used instead of 1950. 
"(B) For purposes of subparagraphs (B) and (C) of subsec-
tion (b) (2) (as so in effect)— 
"(i) the total wages prior to 1951 (as defined in subpara-
graph (C) of this paragraph) of an individual who attained 
age 21 after 1936 and prior to 1950 shall be divided by the 
number of years (hereinafter in this subparagraph referred 
to as the 'divisor') elapsing after the year in which the 
individual attained age 20 and prior to 1951; and 
"(ii) the total wages prior to 1951 (as defined in subpara-
graph (C) of this paragraph) of an individual who attained 
age 21 after 1949 shall be divided by the number of years 
(hereinafter in this subparagraph referred to as the 'divisor') 
elapsing after 1949 and prior to 1951. 
Ante, p. 1514, 
Post, p. 1520. 
42 use 415. 
Primary 
insurance benefit, 
computation. 
29-194 
0 - 8 0 
91 STAT. 1520 
PUBLIC LAW 95-216—DEC. 20, 1977 
The quotient so obtained shall be deemed to be the individual's 
wages credited to each of the years which were used in computing 
the amount of the divisor, except that— 
"(iii) if the quotient exceeds $3,000, only $3,000 shall be 
deemed to be the individual's wages for each of the years 
which were used in computing the amount of the divisor, and 
the remainder of the individual's total wages prior to 1951 
(I) if less than $3,000, shall be deemed credited to the year 
immediately preceding the earliest year used in computing 
the amount of the divisor, or (II) if $3,000 or more, shall be 
deemed credited, in $3,000 increments, to the year imme-
diately preceding the earliest year used in computing the 
amount of the divisor and to each year consecutively preced-
ing that year, with any remainder less than $3,000 being 
credited to the year immediately preceding the earliest year 
to which a full $3,000 increment was credited; and 
"(iv) no more than $42,000 may be taken into account, for 
purposes of this subparagraph, as total wages after 1936 and 
prior to 1951.". 
42 use 415. 
(2) Section 215(d) (1) (D) of such Act is amended to read as fol-
lows: 
"(D) The individual's primary insurance benefit shall be 40 
percent of the first $50 of his average monthly wage as computed 
under this subsection, plus 10 percent of the next $200 of his 
average monthly wage, increased by 1 percent for each increment 
year. The number of increment years is the number, not more than 
14 nor less than 4, that is equal to the individual's total wages prior 
to 1951 divided by $1,650 (disregarding any fraction).". 
(3) Section 215(d)(3) of such Act is amended (A) by striking 
out "in the case of an individual" and all that follows and inserting in 
lieu thereof the following "in the case of an individual who had a 
period of disability which began prior to 1951, but only if the primary 
insurance amount resulting therefrom is higher than the primary 
insurance amount resulting from the application of this section (as 
amended by the Social Security Amendments of 1967) and section 
42 use 420. 
220.". 
(4) Section 215(d) of such Act is further amended by adding at 
the end thereof the following new paragraph: 
"(4) The provisions of this subsection as in effect in December 1977 
shall be applicable to individuals who become eligible for old-age or 
disability insurance benefits or die prior to 1978.". 
(e) Section 215 (e) of such Act is amended—• 
(1) by striking out "average monthly wage" each place it 
appears and inserting in lieu thereof "average indexed monthly 
earnings or, in the case of an individual whose primary insurance 
42 use 415. 
amount is computed under section 215(a) as in effect prior to 
January 1979, average monthly wage," and 
(2) by inserting immediately before "of (A)" in paragraph (1) 
the following: "(before the application, in the case of average 
indexed monthly earnings, of subsection (b)(3)(A))". 
Recomputation. 
(f) (1) Section 215(f) (2) of this Act is amended to read as follows: 
"(2) (A) If an individual has wages or self-employment income for 
a year after 1978 for any part of which he is entitled to old-age or 
disability insurance benefits, the Secretary shall, at such time or times 
and within such period as he may by regulation prescribe, recompute 
the individual's primary insurance account for that year. 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1521 
(B) For the purpose of applying subparagraph (A) of subsection 
(a) (1) to the average indexed monthly earnings of an individual to 
whom that subsection applies and who receives a recomputation under 
this paragraph, there shall be used, in lieu of the amounts established 
by subsection (a) (1) (B) for purposes of clauses (i) and (ii) of 
subsection (a) (1) (A), the amounts so established that were (or, in 
the case of an individual described in subsection (a)(4)(B), would 
have been) used in the computation of such individual's primary insur-
ance amount prior to the application of this subsection. 
"(C) A recomputation of any individual's primary insurance amount 
under this paragraph shall be made as provided in subsection (a) (1) 
as though the year with respect to which it is made is the last year of 
the period specified in subsection (b) (2) (B) (ii); and subsection 
(b)(3)(A) shall apply with respect to any such recomputation as it 
applied in the computation of such individual's primary insurance 
amount prior to the application of this subsection. 
"(D) A recomputation under this paragraph with respect to any 
year shall be effective— 
"(i) in the case of an individual who did not die in that year, 
for monthly benefits beginning with benefits for January of the 
following year; or 
"(ii) in the case of an individual who died in that year, for 
monthly benefits beginning with benefits for the month in which 
he died.". 
(2) Section 215 (f) (3) of such Act is repealed. 
Repeal. 
(3) Section 215(f) (4) of such Act is amended to read as follows: 42 USC 415. 
" (4) A recomputation shall be effective under this subsection only 
if it increases the primary insurance amount by at least $1.". 
(4) Section 215 (f) of such Act is further amended by adding at the 
end thereof the following new para^aphs: 
"(7) This subsection as in effect m December 1978 shall continue to 
apply to the recomputation of a primary insurance amount computed 
under subsection (a) or (d) as in effect (without regard to the table 
in subsection (a)) in that month, and, where appropriate, under sub-
section (d) as in effect in December 1977. For purposes of recomputing 
a primary insurance amount determined under subsection (a) or (d) 
(as so in effect) in the case of an individual to whom those subsections 
apply by reason of subsection (a) (4) (B) as in effect after Decem-
ber 1978, no remuneration shall be taken into account for the year in 
which the individual initially became eligible for an old-age or dis-
ability insurance benefit or died, or for any year thereafter. 
"C8) The Secretary shall recompute the primary insurance amounts 
applicable to beneficiaries whose benefits are based on a primary insur-
ance amount which was computed under subsection (a) (3) effective 
prior to January 1979, or would have been so computed if the dollar 
amount specified therein were $11.50. Such recomputation shall be 
effective January 1979, and shall include the effect of the increase in 
the dollar amount provided by subsection (a) (1) (C) (i) (II). Such 
primary insurance amount shall be deemed to be provided under such 
section for purposes of subsection (i).". 
(g) (1) Section 215 (i) (2) (A) (ii) of such Act is amended to read as Cost-of-living 
follows: 
computation 
"(ii) If the Secretary determines that the base quarter in any year quarter, 
is a cost-of-living computation quarter, he shall, effective with the 
month of June of that year as provided in subparagraph (B), 
increase— 
91 STAT. 1522 
PUBLIC LAW 95-216—DEC. 20, 1977 
"(I) the benefit amount to which individuals are entitled for 
42 use 427, 
that month under section 227 or 228, 
4'28. 
"(II) the primary insurance amount of each other individual 
on which benefit entitlement is based under this title (including 
a primary insurance amount determined under subsection (a) 
( l ) ( C H i ) ( I ) , but subject to the provisions of such subsection (a) 
(l)(C)(i) and clauses (iv) and (v) of this subparagraph), and 
"(III) the amount of total monthly benefits based on any pri-
Post, p. 1524. 
mary insurance amount which is permitted under section 203 
(and such total shall be increased, unless otherwise so increased 
under another provision of this title, at the same time as such 
primary insurance amount) or, in the case of a primary insurance 
amount computed under subsection (a) as in effect (without 
regard to the table contained therein) prior to January 1979, the 
amount to which the beneficiaries may be entitled under section 
203 as in effect in December 1978, except as provided by section 
Post, pp. 1526, 
203(a) (6) and (7) as in effect after December 1978. 
1527, 
The increase shall be derived by multiplying each of the amounts 
described in subdivisions (I), (II), and (III) (including each of 
those amounts as previously increased under this subparagraph) by 
the same percentage (rounded to the nearest one-tenth of 1 percent) 
as the percentage by which the Consumer Price Index for that cost-of-
living computation quarter exceeds such index for the most recent 
prior calendar quarter which was a base quarter under paragraph 
(1) (A) (ii) or, if later, the most recent cost-of-living computation 
(Quarter under paragraph (1) (B) ; and any amount so increased that 
is not a multiple of $0.10 shall be increased to the next higher multiple 
of $0.10. Any increase under this subsection in a primary insurance 
amount determined under subparagraph (C) (i) (II) of subsection 
(a) (1) shall be applied after the initial determination of such pri-
mary insurance amount under that subparagraph (with the amount of 
such increase, in the case of an individual who becomes eligible for 
old-age or disability insurance benefits or dies in a calendar year after 
1979, being determined from the range of possible primary insurance 
amounts published by the Secretary under the last sentence of sub-
paragraph (D)).". 
42 use 415. 
(2) Section 215 (i) (2) (A) of such Act is amended by adding at the 
end thereof the following new clauses: 
"(iii) In the case of an individual who becomes eligible for an old-
age or disability insurance benefit, or who dies prior to becoming so 
eligible, in a year in which there occurs an increase provided under 
clause (ii), the individual's primary insurance amount (without 
regard to the time of entitlement to that benefit) shall be increased 
(unless otherwise so increased under another provision of this title and, 
with respect to a primary insurance amount determined under subsec-
Ante, p. 1514. 
tion (a) (1) (C) (i) (T), subiect to the provisions of subsection (a) (1) 
(C) (i) and clauses (iv) and (v) of this subparagraph) by the amount 
of that increase and subsequent applicable increases, but only with 
respect to benefits payable for months after May of that year. 
" (iv) (I) In the case of an individual who is entitled to an old-age 
insurance benefit that is based on a primary insurance amount deter-
mined under subsection (a) (1) (C) (i) (I), such primary insurance 
amount shall not be increased under this subsection for any year before 
the year in which occurs the first month with respect to which there is 
payable to such individual all or some part of such benefit after 
application of the provisions of section 203 relating to deductions on 
account of work, or, if earlier, the year in which he attains age 65. 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1523 
"(II) In the case of an individual who is entitled to an insurance 
benefit under subsection (e) or (f) of section 202 that is based on 
a primary insurance amount determined under subsection (a) (1) (C) 
(i) (I), such primary insurance amount shall not be increased under 
this subsection for any year (except as provided in subdivision (III)) 
before the year in which occurs the first month with respect to which 
there is payable to such individual all or some part of such benefit 
after application of the provisions of section 203 relating to deduc-
tions on account of work, or, if earlier, the year in which he attains 
age 65. 
"(Ill) Any increase under this subsection which would otherwise 
be applied to a primary insurance amount except for the provisions 
of subdivision (IT) of this clause, shall apply to such primary insur-
ance amount if, during any month of the year in which the increase 
occurs, any individual is entitled to a benefit under subsection (d), 
(g), or (h) of section 202 based on such primary insurance amount, 
and such primary insurance amount is based upon the wages and self-
employment income of a deceased individual. 
"(IV) No primary insurance amount determined under subsection 
(a) (1) (C) (i) (I) shall be increased under this subsection for any year 
during which no individual was entitled to any benefit based thereon 
under section 202 or 223 for any month of such year. 
"(V) In any case in which an increase under this subsection which 
occurs during any year applies to a primary insurance amount deter-
mined under subsection (a)(l)(C)(i)(I), and such an increase occur-
ring in a later year does not apply to such primary insurance amount 
on account of the provisions of this clause, any such increase which 
occurs in a later year which is applicable to such primary insurance 
amount shall be based upon such primary insurance amount as pre-
viously increased under this subsection. 
"(v) Notwithstanding clause (iv), no primary insurance amount 
shall be less than that provided under section 215(a)(1) without 
regard to subparagraph (C) (i) (I) thereof, as subsequently increased 
by applicable increases under this section.". 
(3) Section 215(i)(2)(D) of such Act (as amended by section 
103(d) of this Act) is further amended by striking out all that fol-
lows the first sentence and inserting in lieu thereof the following: "He 
shall also publish in the Federal Register at that time (i) a revision 
of the range of the primary insurance amounts which are possible 
after the application of this subsection based on the dollar amount 
specified in subparagraph (C) (i) (II) of subsection (a) (1) (with such 
revised primary insurance amounts constituting the increased amounts 
determined for purposes of such subparagraph (C) (i) (II) under this 
subsection), or specified in subsection (a) (3) as in effect prior to 1979, 
and (ii) a revision of the range of maximum family benefits which 
correspond to such primary insurance amounts (with such maximum 
benefits being effective notwithstanding section 203(a) except for 
paragraph (3) (B) thereof (or paragraph (2) thereof as in effect prior 
to 1979)).''. 
(4) Section 215 (i) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
"(4) This subsection as in effect in December 1978 shall continue to 
apply to subsections (a) and (d), as then in effect, for purposes of 
computing the primary insurance amount of an individual to whom 
subsection (a), as in effect after December 1978, does not apply 
(including an individual to whom subsection (a) does not apply in 
any year by reason of paragraph (4) (B) of that subsection (but the 
42 u s e 402. 
Ante, p. 1514. 
Post, p. 1524. 
Post, pp. 1544, 
1547. 
Primary 
insurance 
amounts, 
revision. 
Ante, p. 1514. 
Publication in 
Federal Register. 
91 STAT. 1524 
PUBLIC LAW 95-216—DEC. 20, 1977 
Publication in 
Federal Register. 
application of this subsection in such cases shall be modified by the 
application of subdivision (I) in the last sentence of paragraph (4) 
oi that subsection)). For purposes of computing primary insurance 
amounts and maximum family benefits (other than primary insurance 
amounts and maximum family benefits for individuals to whom such 
paragraph (4) (B) applies), the Secretary shall publish in the Federal 
Register revisions of the table of benefits contained in subsection (a), 
as m effect in December 1978, as required by paragraph (2) (D) of 
this subsection as then in effect.". 
MAXIMUM BENEFITS 
42 use 403. 
SEC. 202. The text of section 203(a) of the Social Security Act is 
amended to read as follows: 
"(a)(1) In the case of an individual whose primary insurance 
Ante, p. 1514. 
amount has been computed or recomputed under section 215(a) (1) 
Ante, p. 1519. 
or (4), or section 215(d), as in effect after December 1978, the total 
monthly benefits to which beneficiaries may be entitled under section 
Post, pp. 1544, 
202 or 223 for a month on the basis of the wages and self-employment 
1547. 
income of such individual shall, except as provided by paragraph (3) 
(but prior to an^ increases resulting from the application of para-
Ante, p. 1521. 
graph (2) (A) (ii) (III) of section 215(i)), be reduced as necessary 
so as not to exceed— 
"(A) 150 percent of such individual's primary insurance 
amount to the extent that it does not exceed the amount estab-
lished with respect to this subparagraph by paragraph (2), 
"(B) 272 percent of such individual's primary insurance 
amount to the extent that it exceeds the amount established with 
respect to subparagraph (A) but does not exceed the amount 
established with respect to this subparagraph by paragraph (2), 
"(C) 134 percent of such individual's primary insurance 
amount to the extent that it exceeds the amount established with 
respect to subparagraph (B) but does not exceed the amount 
established with respect to this subparagraph by paragraph (2), 
and 
"(D) 175 percent of such individual's primary insurance 
amount to the extent that it exceeds the amount established with 
respect to subparagraph (C). 
Any such amount that is not a multiple of $0.10 shall be increased to 
the next higher multiple of $0.10. 
"(2) (A) For individuals who initially become eligible for old-age 
or disability insurance benefits, or who die (before becoming so eligible 
for such benefits), in the calendar year 1979, the amounts established 
with respect to subparagraphs (A), (B),and (C) of paragraph (1) 
shall be $230, $332, and $433, respectively. 
"(B) For individuals who initially become eligible for old-age or 
disability insurance benefits, or who die (before becoming so eligible 
for such benefits), in any calendar year after 1979, each of the amounts 
so established shall equal the product of the corresponding amount 
established for the calendar year 1979 by subparagraph (A) of this 
paragraph and the quotient obtained under subparagraph (B) (ii) of 
Ante, p. 1514. 
section 215(a)(1), with such product being rounded in the manner 
prescribed by section 215(a) (1) (B) (iii). 
Publication in 
"(C) In each calendar year after 1978 the Secretary shall publish 
Federal Register, in the Federal Register, on or before November 1, the formula which 
Ante, p. 1523. 
(except as provided in section 215 (i) (2) (D)) is to be applicable under 
this paragraph to individuals who become eligible for old-age or dis-
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1525 
ability insurance benefits, or who die (before becoming eligible for 
such benefits), in the following calendar year. 
" (P) A year shall not be counted as the year of an individual's death 
or eligibility for purposes of this paragraph or paragraph (7) in any 
case where such individual was entitled to a disability insurance bene-
fit for any of the 12 months immediately preceding the month of such 
death or eligibility (but there shall be counted instead the year of the 
individual's eligibility for the disability insurance benefits to which he 
was entitled during such 12 months). 
"(3) (A) When an individual who is entitled to benefits on the basis 
of the wages and self-employment income of any insured individual 
and to whom this subsection applies would (but for the provisions of 
section 202(k) (2) (A)) be entitled to child's insurance benefits for a 42 USC 402. 
month on the basis of the wages and self-employment income of one 
or more other insured individuals, the total monthly benefits to which 
all beneficiaries are entitled on the bases of such wages and self-
employment income shall not be reduced under this subsection to less 
than the smaller of— 
"(i) the sum of the maximum amounts of benefits payable on 
the basis of the wages and self-employment income of all such 
insured individuals, or 
"(ii) an amount equal to the product of 1.75 and the primary 
insurance amount that would be computed under section 215(a) 
(1) for that month with respect to average indexed monthly Jnte, p. 1514. 
earnings equal to one-twelfth of the contribution and benefit base 
determined for that year under section 230. 
Ante, p. 1513, 
"(B) When two or more persons were entitled (without the appli- Post, p. 1554. 
cation of section 202(j) (1) and section 223(b)) to monthly benefits Post, p. 1542. 
under section 202 or 22«3 for January 1971 or any prior month on the 42 USC 423. 
basis of the wages and self-employment income of such insured indi-
vidual and the provisions of this subsection as in effect for any such 
month were applicable in determining the benefit amount of any per-
sons on the basis of such wages and self-employment income, the total 
of benefits for any month after January 1971 shall not be reduced to 
less than the largest of— 
"(i) the amount determined under this subsection without 
regard to this subparagraph, 
"(ii) the largest amount which has been determined for any 
month under this subsection for persons entitled to monthly 
^ 
benefits on the basis of such insured individual's wages and self-
employment income, or 
"(iii) if any persons are entitled to benefits on the basis of such 
wages and self-employment income for the month before the effec-
tive month (after September 1972) of a general benefit increase 
under this title (as defined in section 215 (i) (3)) or a benefit 42 U
S
C 415. 
increase under the provisions of section 215 (i), an amount equal Ante, pp. 1514, 
to the sum of amounts derived by multiplying the benefit amount 1521. 
: determined under this title (excluding any part thereof deter-
mined under section 202(w)) for the month before such effective Post, pp. 1527, 
month (including this subsection, but without the application of 1529. 
section 222(b), section 202(q), and subsections (b), (c), and (d) 42 USC 422. 
of this section), for each such person for such month, by a per- P^^^' P- 1541. 
centage equal to the percentage of the increase provided under 
such benefit increase (with any such increased amount which is 
not a multiple of $0.10 being rounded to the next higher multiple 
of $0.10); 
91 STAT. 1526 
PUBLIC LAW 95-216—DEC. 20, 1977 
but in any such case (I) subparagraph (A) of this paragraph shall not 
be applied to such total of benefits after the application of clause (ii) 
42 use 402. 
or (iii), and (II) if section 202(k) (2) (A) was applicable in the case 
of any such benefits for a month, and ceases to apply for a month after 
such month, the provisions of clause (ii) or (iii) shall be applied, for 
and after the month in which section 202(k) (2) (A) ceases to apply, 
as though subparagraph (A) of this paragraph had not been appli-
cable to such total of benefits for the last month for which clause 
(ii) or (iii) was applicable. 
"(C) When any of such individuals is entitled to monthly benefits as 
a divorced spouse under section 202 (b) or (c) or as a surviving 
divorced spouse under section 202 (e) or (f) for any month, the bene-
fit to which he or she is entitled on the basis of the wages and self-
employment income of such insured individual for such month shall 
be determined without regard to this subsection, and the benefits of all 
other individuals who are entitled for such month to monthly benefits 
under section 202 on the wages and self-employment income of such 
insured individual shall be determined as if no such divorced spouse 
or surviving divorced spouse were entitled to benefits for such month. 
" (4) In any case in which benefits are reduced pursuant to the pre-
ceding provisions of this subsection, the reduction shall be made after 
any deductions under this section and after any deductions under sec-
42 use 422. 
tion 222(b). Whenever a reduction is made under this subsection in 
the total of monthly benefits to which individuals are entitled for any 
month on the basis of the wages and self-employment income of an 
insured individual, each such benefit other than the old-age or dis-
ability insurance benefit shall be proportionately decreased. 
" (5) Notwithstanding any other provision of law, when— 
" (A) two or more persons are entitled to monthly benefits for a 
particular month on the basis of the wages and self-employment 
income of an insured individual and (for such particular month) 
the provisions of this subsection are applicable to such monthly 
benefits, and 
"(B) such individual's primary insurance amount is increased 
for the following month under any provision of this title, 
then the total of monthly benefits for all persons on the basis of such 
wages and self-employment income for such particular month, as 
determined under the provisions of this subsection, shall for purposes 
of determining the total monthly benefits for all persons on the basis 
of such wages and self-employment income for months subsequent to 
such particular month be considered to have been increased by the 
smallest amount that would have been required in order to assure that 
the total of monthly benefits payable on the basis of such wages and 
self-employment income for any such subsequent month will not be 
less (after the application of the other provisions of this subsection 
Posf, p. 1541. 
and section 202(q)) than the total of monthly benefits (after the 
application of the other provisions of this subsection and section 202 
(q)) payable on the basis of such wages and self-employment income 
for such particular month. 
"(6) In the case of any individual who is entitled for any month 
to benefits based upon the primary insurance amounts of two or more 
insured individuals, one or more of which primary insurance amounts 
Ante, pp. 1514, 
were determined under section 215(a) or 215(d) as in effect (without 
1519. 
regard to the table contained therein) prior to January 1979 and one 
or more of which primary insurance amounts were determined under 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1527 
section 215(a) (1) or (4), or section 215(d), as in effect after Decern- Ante, pp. 1514, 
ber 1978, the total benefits payable to that individual and all other 1520. 
individuals entitled to benefits for that month based upon those pri-
mary insurance amounts shall be reduced to an amount equal to the 
product of 1.75 and the primary insurance amount that would be com-
puted under section 215(a) (1) for that month with respect to average 
indexed monthly earnings equal to one-twelfth of the contribution 
and benefits base determined under section 230 for the year in which Ante, p. 1513, 
that month occurs. 
^°^^' P- 1^54. 
"(7) Subject to paragraph (6), this subsection as in effect in Decem-
ber 1978 shall remain in effect with respect to a primary insurance 
amount computed under section 215 (a) or (d), as in effect (without 
regard to the table contained therein) in December 1978, except that a 
primary insurance amount so computed with respect to an individual 
who first becomes eligible for an old-age or disability insurance benefit, 
or dies (before becoming eligible for such a benefit), after December 
1978, shall instead be governed by this section as in effect after Decem-
ber 1978.". 
INCREASE I N OLD-AGE BENEFIT AMOUNTS FOR DELAYED RETIREMENT 
SEC. 203. Section 202 (w) (1) of Social Security Act is amended— 42 USC 402. 
(1) by striking out "If the first month" and all that follows 
down through "to such individual" in the matter preceding sub-
paragraph (A) and inserting in lieu thereof "The amount of an 
old-age insurance benefit (other than a benefit based on a primary 
insurance amount determined under section 215(a) (3)) which is Ante, p. 1514. 
payable without regard to this subsection to an individual"; and 
(2) by inserting after "such amount," in subparagraph (A) the 
following: "or, in the case of an individual who first becomes eli-
gible for an old-age insurance benefit after December 1978, one-
quarter of 1 percent of such amount,". 
WIDOW'S AND WIDOWER'S INSURANCE BENEFITS IN CASES OF 
DELAYED RETIREMENT 
SEC. 204. (a) Section 202(e) (2) (A) of the Social Security Act is Post, p. 1545. 
amended (1) by inserting "(as determined after application of the 
following sentence)" after "primary insurance amount", and (2) by 
adding at the end thereof the following new sentence: "If such deceased 
individual was (or upon application would have been) entitled to an 
old-age insurance benefit which was increased (or subject to being 
increased) on account of delayed retirement under the provisions of 
subsection (w), then, for purposes of this subsection, such individual's Supra. 
primary insurance amount, if less than the old-age insurance benefit 
(increased, where applicable, under section 215(f) (5) or (6) and 42 USC 415. 
under section 215 (i) as if such individual were still alive in the case of Ante, pp. 1514, 
an individual who has died) which he was receiving (or would upon 1^21. 
application have received) for the month prior to the month in which 
he died, shall be deemed to be equal to such old-age insurance benefit, 
and (notwithstanding the provisions of paragraph (3) of such sub-
section (w) the number of increment months shall include any month 
in the months of the calendar year in which he died, prior to the 
month in which he died, which satisfy the conditions in paragraph 
(2) of such subsection (w).". 
91 STAT. 1528 
PUBLIC LAW 95-216—DEC. 20, 1977 
42 use 402. 
(b) Section 202(e) (2) (B) (i) of such Act is amended by inserting 
42 use 415. 
"and section 215(f) (5) or (6) were applied, where applicable," after 
"living". 
Post, pp. 1546, 
(c) Section 202(f) (3) (A) of such Act is amended (1) by inserting 
42 use 402 
"^^? determined after application of the following sentence)" after 
"primary insurance amount", and (2) by adding at the end thereof 
the following new sentence: "If such deceased individual was (or upon 
application would have been) entitled to an old-age insurance benefit 
which was increased (or subject to being increased) on account of 
delayed retirement under the provisions of subsection (w), then, for 
purposes of this subsection, such individual's primary insurance 
amount, if less than the old-age insurance benefit (increased, where 
42 use 415. 
applicable, under section 215(f) (5) or (6) and under section 215(i) 
f ro^i ^P' ^^^^' 
as if such individual were still alive in the case of an individual who 
has died) which she was receiving (or would upon application have 
received) for the month prior to the month in which she died, shall be 
deemed to be equal to such old-age insurance benefit, and (notwith-
standing the provisions of paragraph (3) of such subsection (w)) the 
number of increment months shall include any month in the months 
of the calendar year in which she died, prior to the month in which 
she died, which satisfy the conditions in paragraph (2) of such sub-
section (w).". 
42 use 402. 
(d) Section 202 (f) (3) (B) (i) of such Act is amended by inserting 
"and section 215(f) (5) or (6) were applied, where applicable," after 
"living". 
(e) Section 203(a) of such Act (as amended by section 202 of this 
Ante, p. 1524. 
Act) is further amended by adding at the end thereof the following 
new paragraph: 
"(8) When— 
"(A) one or more persons were entitled (without the applica-
Post, p. 1542. 
tion of section 202(j) (1)) to monthly benefits under section 202 
for May 1978 on the basis of the wages and self-employment 
income of an individual, 
"(B) the benefit of at least one such person for June 1978 is 
increased by reason of the amendments made by section 204 of 
the Social Security Amendments of 1977; and 
"(C) the total amount of benefits to which all such persons are 
42 use 402. 
entitled under such section 202 are reduced under the provisions 
of this subsection (or would be so reduced except for the first 
Ante, p. 1526. 
sentence of section 203 (a) (4)), 
then the amount of the benefit to which each such person is entitled 
for months after May 1978 shall be increased (after such reductions 
are made under this subsection) to the amount such benefits would 
have been if the benefit of the person or persons referred to in subpara-
Supra. 
graph (B) had not been so increased.". 
CONFORMING AMENDMENTS 
42 use 402. 
SEC. 205. (a) Section 202(m)(l) of the Social Security Act is 
amended to read as follows: 
"(1) In any case in which an individual is entitled to a monthly 
benefit under this section on the basis of a primary insurance amount 
Ante, pp. 1514, 
computed under section 215 (a) or (d), as in effect after December 
^^20. 
1978, on the basis of the wages and self-employment income of a 
deceased individual for any month and no other person is (without 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1529 
the application of subsection (j)(l)) entitled to a monthly benefit Post, p. 1542. 
under this section for that month on the basis of such wages and 
self-employment income, the individual's benefit amount for that 
month, prior to reduction under subsection (k) (3), shall not be less 
than that provided by subparagraph (C) (i) (I) of section 215(a) (1) 
and increased under section 215 (i) for months after May of the year 
in which the insured individual died as though such benefit were a 
primary insurance amount.". 
(b) Section 202 (w) of such Act (as amended by section 203 of this 
Act) is further amended— 
Ante, p. 1527. 
(1) by inserting after "section 215(a)(3)" in paragraph (1) 
(in the matter preceding subparagraph (A)) the following: "as 
in effect in December 1978 or section 215(a) (1) (C) (i) (II) as in Ante, p. 1514. 
effect thereafter"; 
(2) by inserting "as in effect in December 1978, or section 215 
(a) (i) (C) (i) (II) as in effect thereafter," after "paragraph (3) 
of section 215 (a)" in paragraph (5); and 
(3) by inserting " (whether before, in, or after December 1978)" 
after "determined under section 215(a)" in paragraph (5). 
(c) Section 217 (b) (1) of such Act is amended by inserting "as in 42 USC 417. 
effect in December 1978" after "section 215(c)" each place it appears, 
and after "section 215 (d)". 
(d) Section 224(a) of such Act is amended by inserting "(deter- Post, p. 1553. 
mined under section 215 (b) as in effect prior to January 1979)" after 
42 USC 424a. 
"(A) the average monthly wage" in the sentence immediately follow-
ing paragraph (8). 
(e) Section 1839(c)(3)(B) of such Act is amended to read as 42 USC 1395r. 
follows: 
"(B) the monthly premium rate most recently promulgated by 
the Secretary under this paragraph, increased by a percentage 
determined as follows: The Secretary shall ascertain the primary 
insurance amount computed under section 215(a) (1), based upon 
average indexed monthly earnings of $900, that applied to indi-
viduals who became eligible for and entitled to old-age insurance 
benefits on May 1 of the year of the promulgation. He shall 
increase the monthly premium rate by the same percentage by 
which that primary insurance amount is increased when, by reason 
of the law in effect at the time the promulgation is made, it is so 
computed to apply to those individuals on the following May 1.". 
EFFECTrVE DATE 
SEC. 206. The amendments made by the provisions of this title other 42 USC 402 note, 
than sections 201(d), 204, and 205(a) shall be effective with respect to 
monthly benefits under title II of the Social Security Act payable for 42 USC 401. 
months after December 1978 and with respect to lump-sum death pay-
ments with respect to deaths occurring after such month. The amend-
ments made by section 201 (d) shall be effective with respect to monthly 
benefits of an individual who becomes eligible for an old-age or dis-
ability insurance benefit, or dies, after December 1977. The amend-
ments made by section 204 shall be effective with respect to monthly 
benefits for months after May 1978. The amendment made by section 
205(a) shall be effective with respect to monthly benefits payable for 
months after December 1978 based on the wages and self-employment 
income of individuals who die after December 1978. 
91 STAT. 1530 
PUBLIC LAW 95-216—DEC. 20, 1977 
TITLE III—OTHER CHANGES IN PROVISIONS RELATING 
TO THE OLD-AGE, SURVIVORS, AND DISABILITY IN-
SURANCE PROGRAM 
PART A—CHANGES IN EARNINGS TEST 
LIBERALIZATION OF EARNINGS TEST FOR INDIVIDUALS AGE 6 5 AND OVER 
42 use 403. 
SEC. 301. (a) Section 203(f) (8) (A) of the Social Security Act is 
amended by striking out "a new exempt amount which shall be effective 
(unless such new exempt amount is prevented from becoming effective 
by subparagraph (C) of this paragraph) with respect to any individ-
ual's taxable year which ends after the calendar year" and inserting 
in lieu thereof "the new exempt amounts (separately stated for indi-
viduals described in subparagraph (D) and for other individuals) 
which are to be applicable (unless prevented from becoming effective 
by subparagraph (C)) with respect to taxable years ending in (or 
with the close of) the calendar year after the calendar year". 
(b) (1) Section 203(f) (8) (B) of such Act is amended by striking 
out "The exempt amount for each month of a particular taxable year 
shall be" in the matter preceding clause (i) and inserting in lieu thereof 
"Except as otherwise provided in subparagraph (D), the exempt 
amount which is applicable to individuals described in such subpara-
graph and the exempt amount which is applicable to other individ-
uals, for each month of a particular taxable year, shall each be". 
Post, p. 1552. 
(2) Section 203(f) (8) (B) (i) of such Act is amended by striking 
out "the exempt amount" and inserting in lieu thereof "the corre-
sponding exempt amount". 
(3) The last sentence of section 203(f)(8)(B) of such Act is 
amended by striking out "the exempt amount" and inserting in lieu 
thereof "an exempt amount". 
(c) (1) Section 203(f) (8) of such Act is further amended by add-
ing ait the end thereof the following new subparagraph: 
"(D) Notwithstanding any other provision of this subsection, 
the exempt amount which is applicable to an individual who has 
attained age 65 before the close of the taxable year involved— 
" (i) shall be $333,331/^ for each month of any taxable year 
ending after 1977 and before 1979, 
"(ii) shall be $375 for each month of any taxable year 
ending after 1978 and before 1980, 
" (iii) shall be $416.66% for each month of any taxable year 
ending after 1979 and before 1981, 
" (iv) shall be $458,331/^ for each month of any taxable year 
ending after 1980 and before 1982, and 
" (v) shall be $500 for each month of any taxable year end-
ing after 1981 and before 1983.". 
42 use 403 note. 
(2) No notification with respect to an increased exempt amount for 
individuals described in section 203(f) (8) (D) of the Social Security 
Supra. 
Act (as added by paragraph (1) of this subsection) shall be required 
under the last sentence of section 203(f) (8) (B) of such Act in 1977, 
1978,1979,1980, or 1981; and section 203(f) (8) (C) of such Act shall 
not prevent the new exempt amount determined and published under 
section 203(f) (8) (A) in 1977 from becoming effective to the extent 
that such new exempt amount applies to individuals other than those 
described in section 203(f) (8) (D) of such Act (as so added). 
(d) Subsections (f)(1), (f)(3), (f) (4) (B), and (h)(1)(A) of 
section 203 of such Act are each amended by striking out "$200 or the 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1531 
exempt amount" and inserting in lieu thereof "the applicable exempt 
amount". 
(e) The amendments made by this section shall apply with respect 
to taxable years ending after December 1977. 
Effective date. 
42 u s e 403 note. 
REPEAL o r EARNINGS LIMITATION EOR INDIVIDUALS AGE 70 AND OVER 
SEC. 302. (a) Subsections (c)(1), (d)(1), (f)(1)(B), and (j) of 
section 203 of the Social Security Act are each amended by striking 42 USC 403. 
out "seventy-two" and inserting in lieu thereof "seventy". 
(b) Subsection (f) (3) of section 203 of such Act is amended by 
striking out "age 72" and inserting in lieu thereof "age 70". 
(c) Subsection (h)(1)(A) of section 203 of such Act is amended by 
striking out "the age of 72" and "age 72" and inserting in lieu thereof 
in each instance "age 70". 
(d) The heading of subsection (j) of section 203 of such Act is 
amended by striking out "Seventy-two" and inserting in lieu thereof 
"Seventy". 
(e) The amendments made by this section shall apply only with 
respect to taxable years ending after December 31,1981. 
Effective date. 
42 USC 403 note. 
ELIMINATION OF MONTHLY EARNINGS TEST 
SEC. 303. (a) Clause (E) of the last sentence of section 203(f) (1^ 
of the Social Security Act (as amended by section 301 (d) of this Act) Ante, p. 1530. 
is further amended by inserting before the period at the end thereof 
the following: ", if such month is in the taxable year in which occurs 
the first month that is both (i) a month for which the individual is 
entitled to benefits under subsection (a), (b), (c), (d), (e), (f), (g), 
or (h) of section 202 (without having been entitled for the preceding 42 USC 402. 
month to a benefit under any other of such subsections), and (ii) a 
month in which the individual did not engage in self-employment and 
did not render services for wages (determined as provided in para-
graph (5)) of more than the applicable exempt amount as deter-
mined under paragraph (8)". 
(b) The amendment made by subsection (a) shall apply only with Effective date, 
respect to monthly benefits payable for months after December 1977. 42 U
S
C 403 note. 
PART B—COVERAGE 
STUDY OF UNIVERSAL COVERAGE 
SEC. 311. (a) The Secretary of Health, Education, and Welfare is 42 U
S
C 902 note, 
directed to undertake, as soon as possible after the date of the enact-
ment of this Act, a thorough study with respect to the extent of the cov-
erage under the old-age, survivors, and disability insurance programs 
and under the programs established by title XVIII of the Social 
Security Act. The study shall examine the feasibility and desirability 42 USC 1395. 
of covering, under such social security programs, Federal employees. 
State and local governmental employees, and employees of non-profit 
organizations who are not now covered. The study shall include alter-
native methods of accomplishing such coverage together with any 
appropriate alternatives to extending coverage to such employees. 
(b) With respect to each major alternative method or proposal 
included in the study described in subsection (a), such study shall also 
include an analysis of the changes which would be required in the pro-
grams established by the Social Security Act and in any other systems 42 USC 1305. 
or programs (such as retirement, survivorship, disability, and health 
91 STAT. 1532 
PUBLIC LAW 95-216—DEC. 20, 1977 
Consultation. 
Report to 
President and 
Congress. 
Legislative 
recommen-
dations. 
26 u s e 3121. 
programs) affecting the individuals who would be covered under such 
social security programs under such alternative method or proposal. 
Such analysis shall include the structural changes required in such 
programs, the financial impact of such changes, and the effect of such 
changes on the benefit rights and contribution liabilities of the affected 
individuals. 
(c) In conducting the study required by subsection (a), the Secre-
tary of Health, Education, and Welfare snail consult, as appropriate, 
with the Secretary of the Treasury, the Director of the Office of Man-
agement and Budget, and the Chairman of Civil Service Commission, 
and those officials shall provide him with such information and assist-
ance as he may require. The Secretary shall also solicit the views of 
other appropriate officials and organizations. 
(d) The Secretary of Health, Education, and Welfare shall submit 
to the President and the Congress, not later than 2 years after the date 
of the enactment of this Act, a report of the findings of the study 
required by subsection (a) together with his recommendations for any 
appropriate legislative changes. 
COVERAGE OF NONPROFIT ORGANIZATIONS W H I C H FAILED TO FILE WAIVER 
CERTIFICATES 
SEC. 312. (a) (1) Section 3121 (k) (5) of the Internal Revenue Code 
of 1954 (relating to constructive filing of certificate where refund or 
credit has been made and new certificate is not filed) is amended— 
(A) by striking out "prior to the expiration of 180 days after 
the date of the enactment of this paragraph," in subparagraph 
(B) and inserting in lieu thereof "prior to April 1, 1978,"; and 
(B) by striking out "the 181st day after the date of the enact-
ment of this paragraph," and "such 181st day" in the matter 
following subparagraph (B) and inserting in lieu thereof in 
each instance "April 1,1978,". 
(2) Section 3121 (k) (7) of such Code (relating to payment of both 
employee and employer taxes for retroactive period by organization 
in cases of constructive filing) is amended— 
(A) by striking out "prior to the expiration of 180 days after 
the date of the enactment of this paragraph" and inserting in lieu 
thereof "prior to April 1,1978,"; 
(B) by striking out "the 181st day after such date," and 
inserting in lieu thereof "April 1, 1978,"; and 
(C) by striking out "prior to the first day of the calendar 
quarter in which such 181st day occurs" and inserting in lieu 
thereof "prior to that date". 
(3) Section 3121 (k) (8) of such Code (relating to extended period 
for payment of taxes for retroactive coverage) is amended— 
(A) by striking out "by the end of the 180-day period follow-
ing the date of the enactment of this paragraph" and inserting 
in lieu thereof "prior to April 1,1978,"; 
(B) by striking out "within that period" and inserting in lieu 
thereof "prior to April 1,1978"; and 
(C) by striking out "on the 181st day following that date" 
and inserting in lieu thereof "on that date". 
(b) (1) Section 3121 (k) (4) of such Code (relating to constructive 
filing of certificate where no refund or credit of taxes has been made) 
is amended by adding at the end thereof the following new sub-
paragraph : 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1533 
"(C) In the case of any organization which is deemed under Waiver 
this paragraph to have filed a valid waiver certificate under certificate, filing, 
paragraph (1), if— 
"(i) the period with respect to which the taxes imposed 
by sections 3101 and 3111 were paid by such organization Ante, p. 1510, 
(as described in subparagraph (A) (ii)) terminated prior to ^ost, p. 1540. 
October 1, 1976, or 
^«^«' P- \\12, 
"(ii) the taxes imposed by sections 3101 and 3111 were jg^j^PP* ^ "
* ' 
not paid during the period referred to in clause (i) 
(whether such period has terminated or not) with respect 
to remuneration paid by such organization to individuals 
f 
who became its employees after the close of the calendar 
quarter in which such period began, 
taxes under sections 3101 and 3111— 
"(iii) in the case of an organization which meets the 
requirements of this subparagraph by reason of clause 
(i), with respect to remuneration paid by such organization 
' 
after the termination of the period referred to in clause (i) 
. 
and prior to July 1,1977; or 
"(iv) in the case of an organization which meets the 
requirements of this subparagraph by reason of clause 
(ii), with respect to remuneration paid prior to July 1, 
1977, to individuals who became its employees after the 
close of the calendar quarter in which the period referred 
to in clause (i) began, 
which remain unpaid on the date of the enactment of this 
subparagraph, or which were paid after October 19, 1976, but 
prior to the date of the enactment of this subparagraph, shall 
not be due or payable (or, if paid, shall be refunded); and 
the certificate which such organization is deemed under this 
paragraph to have filed shall not apply to any service with respect 
to the remuneration for which the taxes imposed by sections 3101 
and 3111 (which remain unpaid on the date of the enactment of 
this subparagraph, or were paid after October 19,1976, but prior 
to the date of the enactment of this subparagraph) are not due 
and payable (or are refunded) by reason of the preceding 
provisions of this subparagraph. In applying this subparagraph 
for purposes of title I I of the Social Security Act, the period 42 USC 401. 
during which reports of wages subject to the taxes imposed by 
sections 3101 and 3111 were made by any organization may be 
conclusively treated as the period (described in subparagraph 
(A.) (ii)) during which the taxes imposed by such sections were 
paid bv such organization.". 
(2) Section 3121 (k) (4) (A) of such Code is amended by inserting 26 USC 3121. 
"(subject to subparagraph (C))" after "effective" in the matter fol-
lowing clause (ii). 
(3) Section 3121 (k) (6) of such Code (relating to application of 
certain provisions to cases of constructive filing) is amended by insert-
ing "(except as provided in paragraph (4)(C))" after "services 
involved" in the matter preceding subparagraph (A). 
(4) Section 3121 (k) (4) of such Code is amended by striking out 
"date" in subparagraph (B) (ii) and inserting in lieu thereof "first 
day of the calendar quarter". 
(c) In any case where— 
26 USC 3121 
(1) an individual performed service, as an employee of an °°*®-
organization which is deemed under section 3121 (k) (4) of the 
91 STAT. 1534 
PUBLIC LAW 95-216—DEC. 20, 1977 
Ante, p. 1533, 
Post, p. 1535. 
26 u s e 3121. 
Post, p. 1549. 
Post, p. 1555. 
Ante, p. 1532. 
42 u s e 401. 
Ante, p. 1510, 
Post, p. 1540. 
Infra. 
Ante, p. 1511. 
Post, pp. 1537, 
1540. 
Ante, p. 1532. 
Remuneration. 
26 u s e 3121 
note. 
Internal Revenue Code of 1954 to have filed a waiver certificate 
under section 3121 (k) (1) of such Code, on or after the first day 
of the applicable period described in subparagraph (A) (ii) of 
such section 3121 (k) (4) and before July 1, 1977; and 
(2) the service so performed does not constitute employment 
(as defined in section 210(a) of the Social Security Act and sec-
tion 3121(b) of such Code) because the waiver certificate which 
the organization is deemed to have filed is made inapplicable to 
such service by section 3121 (k) (4) (C) of such Code, but would 
constitute employment (as so defined) in the absence of such sec-
tion 3121 (k) (4) (C), 
the remuneration paid for such service shall, upon the request of such 
individual (filed on or before April 15,1980, in such manner and form, 
and with such official, as may be prescribed by regulations made under 
title II of the Social Security Act) accompanied by full payment of 
all of the taxes which would have been paid under section 3101 of such 
Code with respect to such remuneration but for such section 3121 (k) 
(4) (C) (or by satisfactory evidence that appropriate arrangements 
have been made for the payment of such taxes in installments as pro-
vided in section 3121 (k) (8) of such Code), be deemed to constitute 
remuneration for employment as so defined. In any case where remu-
neration paid by an organization to an individual is deemed under 
the preceding sentence to constitute remuneration for employment, 
such organization shall be liable (notwithstanding any other provision 
of such Code) for payment of the taxes which it would have been 
required to pay under section 3111 of such Code with respect to such 
remuneration in the absence of such section 3121 (k) (4) (C). 
(d) Section 3121 (k) (8) of the Internal Revenue Code of 1954 
(relating to extended period for payment of taxes for retroactive 
coverage), as amended by subsection (a) (3) of this section, is amended 
to read as follows: 
"(8) 
EXTENDED PERIOD FOR PAYMENT or TAXES FOR RETROACTIVE 
COVERAGE.—Notwithstanding any other provision of this title, in 
any case where— 
"(A) an organization is deemed under paragraph (4) to 
have filed a valid waiver certificate under paragraph (1), 
but the applicable period described in paragraph (4) (A) (ii) 
has terminated and part or all of the taxes imposed by sec-
tions 3101 and 3111 with respect to remuneration paid by 
such organization to its employees after the close of such 
period remains payable notwithstanding paragraph (4) (C), 
or 
"(B) an organization described in paragraph (5) (A) files 
a valid waiver certificate under paragraph (1) by March 31, 
1978, as described in paragraph (5) (B), or (not having filed 
such a certificate by that date) is deemed under paragraph 
(5) to have filed such a certificate on April 1, 1978, or 
.. 
" (C) an individual files a request under section 3 of Public 
Law 94-563, or under section 312(c) of the Social Security 
Amendments of 1977, to have service treated as constituting 
remuneration for employment (as defined in section 3121(b) 
and in section 210Ca) of the Social Security Act), 
the taxes due under sections 3101 and 3111 with respect to services 
constituting employment by reason of such certificate for any 
period prior to the first day of the calendar quarter in which the 
date of such filing or constructive filing occurs, or with respect to 
service constituting employment by reason of such request, may 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1535 
26 use 3121 
note. 
be paid in installments over an appropriate period of time, as 
determined under regulations prescribed by the Secretary, rather 
than in a lump sum.". 
(e) The first sentence of section 3 of Public Law 94-563 (in the 
matter following paragraph (3)) is amended— 
(1) by inserting "on or before April 15,1980," after "filed"; and 
(2) by inserting "(or by satisfactory evidence that appropriate 
arrangements have been made for the repayment of such taxes in 
installments as provided in section 3121 (k) (8) of such Code)" Ante, p. 1534 
after "so refunded or credited". 
(f) Section 3121 (k) (4) (A) (i) of the Internal lievenue Code of 
1954 (relating to constructive filing of certificate where no refund or 26 U
S
C 3121 
credit of taxes has been made) is amended by striking out "or any 
subsequent date" and inserting in lieu thereof "(or, if later, as of the 
earliest date on which it satisfies clause (ii) of this subparagraph.)". 
(g) Section 3121 (k) (4) (B) of such Code (relating to constructive 
filing of certificate where no refund or credit of taxes has been made) is 
amended— 
(1) by striking out the period at the end of clause (ii) and 
inserting in lieu thereof ", or"; and 
(2) by adding after clause (ii) the following new clause: 
"(iii) the organization, prior to the end of the period 
referred to in clause (ii) of such subparagraph (and, in 
the case of an organization organized on or before Octo-
ber 9, 1969, prior to October 19, 1976), had applied for a 
ruling or determination letter acknowledging it to be exempt 
from income tax under section 501 (c) (3), and it subsequently 26 USC 501. 
received such ruling or determination letter and did not pay 
any taxes under sections 3101 and 3111 with respect to any 
employee with respect to any quarter ending after the twelfth 
month following the date of mailing of such ruling or deter-
mination letter and did not pay any such taxes with respect 
to any quarter beginning after the later of (I) December 
31, 1975 or (II) the date on which such ruling or determina-
tion letter was issued.", 
(h) The amendments made by subsections (a), (b), (d), (e), (f), 
and (g) of this section shall be effective as though they had been 
included as a part of the amendments made to section 3121 (k) of the 
Internal Kevenue Code of 1954 by the first section of Public Law 
94-563 (or, in the case of the amendments made by subsection (e), 
as a part of section 3 of such Public Law). 
EXCLUSION FROM COVERAGE OF CERTAIN LIMITED PARTNERSHIP INCOME 
SEC. 313. (a) Section 211 (a) of the Social Security Act is amended— 42 USC 411. 
(1) by striking out "and" at the end of paragraph (9) ; 
(2) by striking out the period at the end of paragraph (10) 
and inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (10) the following new 
paragraph: 
" (11) There shall be excluded the distributive share of any item 
of income or loss of a limited partner, as such, other than guar-
anteed payments described in section 707(c) of the Internal 
Kevenue Code of 1954 to that partner for services actually ren- 26 USC 707. 
dered to or on behalf of the partnership to the extent that those 
payments are established to be in the nature of remuneration for 
those services.". 
Ante, p. 1510, 
Post, p. 1540. 
Ante, p. 1511, 
Post, pp. 1537, 
1540. 
Effective date. 
26 USC 3121 
note. 
91 STAT. 1536 
PUBLIC LAW 95-216—DEC. 20, 1977 
26 use 1402, 
26 use 707. 
Effective date. 
42 u s e 411 note. 
(b) Section 1402(a) of the Internal Revenue Code of 1954 (relating 
to definition of net earnings from self-employment) is amended— 
(1) by striking out "and" ait the end of paragraph (10) ; 
(2) by striking out the period at the end of paragraph (11) and 
inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (11) the following new 
paragraph: 
" (12) there shall be excluded the distributive share of any item 
of income or loss of a limited partner, as such, other than guar-
anteed payments described in section 707(c) to that partner for 
services actually rendered to or on behalf of the partnership to 
the extent that those payments are established to be in the nature 
of remuneration for those services.". 
(c) The amendments made by this section shall apply with respect 
to taxable years beginning after December 31,1977. 
26 use 3121. 
26 use 
3101-3126. 
Post, p. 1555. 
Ante, p. 1511, 
Post, pp. 1537, 
1540. 
26 u s e 3306. 
26 u s e 3301, 
3302. 
Effective date. 
26 u s e 3121 
note. 
Supra. 
Post, p. 1555. 
EMPLOYEES OF MEMBERS OF RELATED GROUPS OF CORPORATIONS 
SEC. 314. (a) Section 3121 of the Internal Revenue Code of 1954 
(definitions for purposes of the Federal Insurance Contributions Act) 
is amended by adding at the end thereof the following new subsection: 
" (s) CONCURRENT EMPLOYMENT BY Two OR MORE EMPLOYERS.—For 
purposes of sections 3102, 3111, and 3121 (a) (1), if two or more related 
corporations concurrently employ the same individual and compen-
sate such individual through a common paymaster which is one of such 
corporations, each such corporation shall be considered to have paid 
as remuneration to such individual only the amounts actually dis-
bursed by it to such individual and shall not be considered to have 
paid as remuneration to such individual amounts actually disbursed 
to such individual by another of such corporations.". 
(b) Section 3306 of such Code (relating to definitions in respect of 
unemployment tax) is amended by adding aJt the end thereof the fol-
lowing new subsection: 
" (p) CONCURRENT EMPLOYMENT BY Two OR MORE EMPLOYERS.—For 
purposes of sections 3301, 3302, and 3306 (b) (1), if two or more related 
corporations concurrently employ the same individual and compensate 
such individual through a common paymaster which is one of such 
corporations, each such corporation shall be considered to have paid as 
remuneration to such individual only the amounts actually disbursed 
by it to such individual and shall not be considered to have paid as 
remuneration to such individual amounts actually disbursed to such 
individual by another of such corporations.". 
(c) The amendments made by this section shall apply with respect 
to wages paid after December 31,1978. 
TAX ON EMPLOYERS OF INDIVIDUALS WHO RECEIVE INCOME FROM TIPS 
SEC. 315. (a) Section 3121 of the Internal Revenue Code of 1954 
(definitions for purposes of the Federal Insurance Contributions Act) 
is amended by adding at the end thereof (after the new subsection 
added by section 314(a) of this Act) the following new subsection: 
"(t) 
SPECIAL RULE FOR DETERMINING WAGES SUBJECT TO EMPLOYER 
TAX IN CASE OF CERTAIN EMPLOYERS WHOSE EMPLOYEES RECEIVE 
INCOME FROM TIPS.—If the wages paid by an employer with respect to 
the employment during any month of an individual who (for services 
performed in connection with such employment) receives tips which 
constitute wages, and to which section 3102(a) applies, are less than 
the total amount which would be payable (with respect to such 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1537 
employment) at the minimum wage rate applicable to such individual 
under section 6(a)(1) of the Fair Labor Standards Act of 1938 Ante, p. 1245. 
(determined without regard to section 3 (m) of such Act), the wages so 29 USC 203. 
paid shall be deemed for purposes of section 3111 to be equal to such 
total amount.". 
(b) Section 3111 of such Code is amended by inserting "and (t)" Ante, pp. 1511, 
after "3121(a)" in subsections (a) and (b). 
1^12. 
(c) The amendments made by this section shall apply with respect Effective date, 
to wages paid with respect to employment performed in months after 
26 U
S
C 3111 
December 1977. 
"o*^-
REVOCATION OF EXEMPTION FROM COVERAGE BY CLERGYMEN 
SEC. 316. (a) Notwithstanding section 1402(e) (3) of the Internal 26 USC 1402 
Eevenue Code of 1954, any exemption which has been received under note, 
section 1402(e) (1) of such Code by a duly ordained, commissioned, or 26 USC 1402. 
licensed minister of a church or a Christian Science practitioner, and 
which is effective for the taxable year in which this Act is enacted, 
may be revoked by filing an application therefor (in such form and 
manner, and with such official, as may be prescribed in regulations 
made under chapter 2 of such Code), if such application is 
filed— 
26 USC 1401. 
(1) before the applicant becomes entitled to benefits under sec-
tion 202(a) or 223 of the Social Security Act (without regard to 42 USC 402, 
section 202(j) (1) or 223(b) of such Act), and 
423. 
(2) no later than the due date of the Federal income tax return ^^^^' P- 1^42. 
(including any extension thereof) for the applicant's first taxable 
year beginning after the date of the enactment of this Act. 
Any such revocation shall be effective (for purposes of chapter 2 of 
the Internal Revenue Code of 1954 and title II of the Social Security 
Act), as specified in the application, either with respect to the appli- 42 USC 401. 
cant's first taxable year ending on or after the date of the enactment 
of this Act or with respect to the applicant's first taxable year begin-
ning after such date, and for all succeeding taxable years; and the 
applicant for any such revocation may not thereafter again file appli-
cation for an exemption under such section 1402(e) (1). If the appli-
cation is filed on or after the due date of the applicant's first taxable 
year ending on or after the date of the enactment of this Act and is 
effective with respect to that taxable year, it shall include or be accom-
panied by payment in full of an amount equal to the total of the taxes 
that would have been imposed by section 1401 of the Internal Revenue 
Code of 1954 with respect to all of the applicant's income derived in 26 USC 1401. 
that taxable year which would have constituted net earnings from 
self-employment for purposes of chapter 2 of such Code (notwith-
standing section 1402(c) (4) or (c) (5) of such Code) except for the 
exemption under section 1402(e) (1) of such Code. 
(b) Subsection (a) shall apply with respect to service performed 
(to the extent specified in such subsection) in taxable years ending 
on or after the date of the enactment of this Act, and with respect to 
monthly insurance benefits payable under title II of the Social Secu-
rity Act on the basis of the wages and self-employment income of any 42 USC 401. 
individual for months in or after the calendar year in which such indi-
vidual's application for revocation (as described in such subsection) 
is filed (and lump-sum death payments payable under such title on 
the basis of such wages and self-employment income in the case of 
deaths occurring in or after such calendar year). 
91 STAT. 1538 
PUBLIC LAW 95-216—DEC. 20, 1977 
INTERNATIONAL AGREEMENTS WITH RESPECT TO SOCIAL SECURITY 
•
; 
BENEFITS 
SEC 317. (a) Title II of the Social Security Act is amended by 
adding at the end thereof the following new section: 
"INTERNATIONAL AGREEMENTS 
"Purpose of Agreement 
42 use 433. 
"SEC. 233. (a) The President is authorized (subject to the succeeding 
provisions of this section) to enter into agreements establishing totali-
zation arrangements between the social security system established 
by this title and the social security system of any foreign country, for 
the purposes of establishing entitlement to and the amount of old-
age, survivors, disability, or derivative benefits based on a combina-
tion of an individual's periods of coverage under the social security 
system established by this title and the social security system of such 
foreign country. 
"Definitions 
"(b) For the purposes of this section— 
"(1) the term 'social security system' means, with respect to a 
foreign country, a social insurance or pension system which is 
of general application in the country and under which periodic 
benefits, or the actuarial equivalent thereof, are paid on account 
of old age, death, or disability; and 
"(2) the term 'period of coverage' means a period of payment 
of contributions or a period of earnings based on wages for 
employment or on self-employment income, or any similar period 
' 
recognized as equivalent thereto under this title or under the 
social security system of a country which is a party to an agree-
ment entered into under this section. 
"Crediting Periods of Coverage; Conditions of Payment of Benefits 
"(c) (1) Any agreement establishing a totalization arrangement 
pursuant to this section shall provide—• 
"(A) that in the case of an individual who has at least 6 quar-
Post, pp. 1550, 
ters of coverage as defined in section 213 of this Act and periods of 
1552. 
coverage under the social security system of a foreign country 
which is a party to such agreement, periods of coverage of such 
individual under such social security system of such foreign coun-
try may be combined with periods of coverage under this title and 
otherwise considered for the purposes of establishing entitle-
ment to and the amount of old-age, survivors, and disability 
insurance benefits under this title; 
"(B) (i) that employment or self-employment, or any service 
which is recognized as equivalent to employment or self-employ-
ment under this title or the social security system of a foreign 
; 
coimtry which is a party to such agreement, shall, on or after the 
effective date of such agreement, result in a period of coverage 
under the system established under this title or under the system 
established under the laws of such foreign country, but not under 
both, and (ii) the methods and conditions for determining under 
which system employment, self-employment, or other service shall 
result in a period of coverage; and 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1539 
"(C) that where an individual's periods of covei-age are com-
bined, the benefit amount payable under this title shall be based 
on the proportion of such individual's periods of coverage which 
t 
was completed under this title. 
" (2) Any such agreement may provide that— 
"(A) an individual who is entitled to cash benefits under this 
title shall, notwithstanding the provisions of section 202 (t), 42 USC 402. 
receive such benefits while he resides in a foreign country whic;h is 
a party to such agreement; and 
"(B) the benefit paid by the United States to an individual who 
legally resides in the United States shall, if less when added to the 
benefit paid by such foreign country than the benefit amount 
which would be payable to an entitled individual based on the 
first figure in (or deemed to be in) column IV of the table in sec-
tion 215(a) in the case of an individual becoming eligible for ^nte, p. 1514. 
such benefit before January 1, 1979, or based on a primary insur-
ance amount determined under section 215(a) (1) (C) (i) (I) in 
the case of an individual becoming eligible for such benefit on or 
after that date, be incieased so that the total of the two benefits 
is equal to the benefit amount which would be so payable. 
"(3) Section 226 shall not apply in the case of any individual to Post, pp. 1543, 
whom it would not be applicable but for this section or any agreement l^'*^-
or regulation under this section. 
"(4) Any such agreement may contain other jDrovisions which are 
not inconsistent with the other provisions of this title and which the 
Pi'esident deems appropriate to carry out the purposes of this section. 
"Kegulations 
"(d) The Secretary of Health, Education, and Welfare shall make 
rules and regulations and establish procedures which are reasonable 
and necessary to implement ami administer any agreement which has 
been entered into in accordance with this section. 
"Keports to Congress; P^ffective Date of Agreements 
"(e)(1) Any agreement to establish a totalization arrangement 
entered into pursuant to this section shall be transmitted by the Presi-
dent to the Congress together with a report on the estimated numbei' 
of individuals wno will be affected by the agreement and the effect of 
the agreement on the estimated income and expenditures of the pro-
grams established by this Act. 
"(2) Such an agreement shall become effective on any date, 
provided in the agreement, which occurs after the expiration of the 
period (following the date on which the agreement is transmitted in 
accordance with paragraph (1)) during which each House of the Con-
gress has been in session on each of 90 days; except that such agree-
ment shall not become effective if, during such period, either House of 
the Congress adopts a resolution of disapproval of the agreement.". 
(b)(1) Section 1401 of the Internal Revenue Code of 1954 26 USC 1401. 
is amended by adding at the end thereof the following new subsection : 
"(c) 
RELIEF FROM TAXES IN CASES COVERED BY CERTAIN INTERNA-
TIONAL AGREEMENTS.—During any period in which there is in effect an 
agreement entered into pursuant to section 233 of the Social Security 
Act with any foreign country, the self-employment income of an Ante, p. 1538. 
individual shall be exempt from the taxes imposed by this section to the 
extent that such self-employment income is subject under such agree-
91 STAT. 1540 
PUBLIC LAW 95-216—DEC. 20, 1977 
ment to taxes or contributions for similar purposes under the social 
security system of such foreign country.". 
26 use 3101, 
(2) Sections 3101 and 3111 of such Code are each amended by add-
3111- 
ing at the end thereof the following new subsection: 
"(c) RELIEF FROM TAXES IN CASES COVERED BY CERTAIN INTERNA-
TIONAL AGREEMENTS.—During any period in which there is in effect an 
agreement entered into pursuant to section 233 of the Social Security 
Ante, p. 1538. 
Act with any foreign country, wages received by or paid to an individ-
ual shall be exempt from the taxes imposed by this section to the 
extent that such wages are subject under such agreement to taxes or 
contributions for similar purposes under the social security system 
of such foreign country.". 
26 use 6051. 
(3) Section 6051(a) of such Code is amended by adding at the end 
thereof the following new sentence: "The amounts required to be 
shown by paragraph (5) shall not include wages which are exempted 
Supra. 
pursuant to sections 3101(c) and 3111(c) from the taxes imposed by 
sections 3101 and 3111.". 
26 use 1401 
(4) Notwithstanding any other provision of law, taxes paid by any 
note. 
individual to any foreign country with respect to any period of 
employment or self-employment which is covered under the social secu-
rity system of such foreign country in accordance with the terms of 
an agreement entered into pursuant to section 233 of the Social Security 
Act shall not, under the income tax laws of the United States, be 
deductible by, or creditable against the income tax of, any such 
individual. 
MODIFICATION 
OF AGREEMENT WITH 
ILLINOIS TO PROVIDE 
COVERAGE 
FOR CERTAIN POLICEMEN AND FIREMEN 
42 use418 note. 
SEC. 318. (a) Notwithstanding the provisions of subsection (d) (5) 
42 use 418. 
(A) of section 218 of the Social Security Act and the references thereto 
in subsections (d) (1) and (d) (3) of such section 218, the agreement 
with the State of Illinois heretofore entered into pursuant to such 
section 218 may, at any time prior to January 1, 1979, be modified 
pursuant to subsection (c) (4) of such section 218 so as to apply to 
services performed in policemen's or firemen's positions covered by 
the Illinois Municipal Retirement Fund on the date of the enactment 
of this Act if the State of Illinois has at any time prior to the date of 
the enactment of this Act paid to the Secretary of the Treasury, with 
respect to any of the services performed in such positions, the sums 
prescribed pursuant to subsection (e)(1) of such section 218. For 
purposes of this section, a retirement system which covers positions 
of policemen or firemen shall, if the State of Illinois so desires, be 
deemed to be a separate retirement system with respect to the positions 
of such policemen or firemen, as the case may be. 
(b) Notwithstanding the provisions of subsection (f) of section 
218 of the Social Security Act, any modification in the agreement with 
the State of Illinois under subsection (a) of this section, to the extent 
... 
that it involves services performed by a policeman or fireman in posi-
tions covered under the Illinois Municipal Retirement Fund, shall be 
made effective with respect to— 
(1) all services performed by policemen or firemen, in positions 
to which the modification relates, on or after the date of the 
enactment of this Act; and 
(2) all services performed by such individuals in such positions 
, 
before such date of enactment with respect to which the State of 
Illinois has paid to the Secretary of the Treasury the sums pre-
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1541 
scribed pursuant to subsection (e) (1) of such section 218 at the 42 USC 418. 
time or times established pursuant to such subsection (e) (1), if 
and to the extent that— 
(A) no refund of the sums so paid has been obtained, or 
(B) a refund of part or all of the sums so paid has been 
obtained but the State of Illinois repays to the Secretary of 
the Treasury the amount of such refund within 90 days after 
the date that the modification is agreed to by the State and 
the Secretary of Health, Education, and Welfare. 
COVERAGE FOR POLICEMEN AND FIREMEN IN MISSISSIPPI 
SEC. 319. Section 218 (p) (1) of the Social Security Act is amended 42 USC 418. 
by inserting "Mississippi," after "Maryland,". 
COVERAGE U N D E R DIVIDFJJ RETIREMENT SYSTEM FOR PUBLIC EMPLOYEES I N 
NEW JERSEY 
SEC. 320. Section 218(d)(6)(C) of the Social Security Act is 
amended by inserting "NeAv Jersey," after "Nevada,". 
COVERAGE OP SERVICE UNDER WISCONSIN RETIREMENT SYSTEM 
SEC. 321. Section 218 (m) (1) of the Social Security Act is amended 
by inserting after "Wisconsin retirement fund" the following: "or any 
successor system". 
PART C—BENEFIT AMOUNTS AND ELIGIBILITY 
ACTUARIAL REDUCTION OF BENEFIT INCREASES TO BE APPLIED AS OF TIME 
OF ORIGINAL ENTITLEMENT 
SEC. 331. (a) Section 202 (q) (4) of the Social Security Act is 42 USC 402. 
amended by striking out all that follows subparagraph (B) and 
inserting in lieu thereof the following: 
"then the amount of the reduction of such benefit (after the applica-
tion of any adjustment under paragraph (7)) for each month begin-
ning with the month of such increase in the primary insurance amount 
shall be computed under paragraph (1) or (3), wnichever applies, as 
though the increased primary insurance amount had been in effect for 
and after the month for which the individual first became entitled to 
such monthly benefit reduced under such paragraph (1) or (3).". 
L 
(b) Section 202 (q) of such Act is further amended by adding at the 
end thereof the following new paragraphs : 
"(10) For purposes of applying paragraph (4), with respect to 
monthly benefits payable for any month after December 1977 to an 
individual who was entitled to a monthly benefit as reduced under 
paragraph (1) or (3) prior to January 1978, the amount of reduction 
in such benefit for the first month for which such benefit is increased 
hj reason of an increase in the primary insurance amount of the indi-
vidual on whose wages and self-employment income such benefit is 
based and for all subsequent months (and similarly for all subsequent 
increases) shall be increased by a percentage equal to the percentage 
increase in such primary insurance amount (such increase being made 
in accordance with the provisions of paragraph (8)). In the case of 
an individual whose reduced benefit under this section is increased as a 
result of the use of an adjusted reduction period or an additional 
91 STAT. 1542 
PUBLIC LAW 95-216—DEC. 20, 1977 
adjusted reduction period (in accordance with paragraphs (1) and (3) 
of this subsection), then for the first month for which such increase is 
effective, and for all subsequent months, the amount of such reduction 
(after the application of the previous sentence, if applicable) shall be 
determined— 
"(A) in the case of old-age, wife's, and husband's insurance 
benefits, by multiplying such amount by the ratio of (i) the num-
ber of months in the adjusted reduction period to (ii) the number 
of months in the reduction period, 
"(B) in the case of widow's and widower's insurance benefits 
for the month in which such individual attains age 62, by multi-
plying such amount by the ratio of (i) the number of months in 
the reduction period beginning with age 62 multiplied by i%o 
of 1 percent, plus the number of months in the adjusted reduction 
period prior to age 62 multiplied by i%o of 1 percent, plus the 
number of months in the adjusted additional reduction period 
multiplied by 4%4o of 1 percent to (ii) the number of months 
in the reduction period multiplied by i%o of 1 percent, plus the 
number of months in the additional reduction period multiplied 
by 4%4Q of 1 percent, and 
"(C) in the case of widow's and widower's insurance benefits 
for the month in which such individual attains age 65, by multi-
plying such amount by the ratio of (i) the number of months in 
the adjusted reduction period multiplied by i%o of 1 percent, 
plus the number of months in the adjusted additional reduction 
period multiplied by 4%4o of 1 percent to (ii) the number of 
months in the reduction period beginning with age 62 multiplied 
by ^%o of 1 j)ercent, plus the number of months in the adjusted 
reduction period prior to age 62 multiplied by i%o of 1 percent, 
plus the number of months in the adjusted additional reduction 
period multiplied by 4%4o of 1 percent, 
such determination being made in accordance with the provisions of 
paragraph (8). 
"(11) When an individual is entitled to more than one monthly 
benefit under this title and one or more of such benefits are reduced 
under this subsection, paragraph (10) shall apply separately to each 
such benefit reduced under this subsection before the application of 
subsection (k) (pertaining to the method by which monthly benefits 
are offset when an individual is entitled to more than one kind of bene-
fit) and the application of this paragraph shall operate in conjunction 
with paragraph (3).". 
42 use 402. 
(c) (1) Section 202(q) (7) (C) of such Act is amended by striking 
out "because" and all that follows and inserting in lieu thereof 
"because of the occurrence of an event that terminated her or his 
entitlement to such benefits,". 
(2) Section 202 (q) (3) (H) of such Act is amended by inserting "for 
that month or" after "first entitled". 
Effective date. 
(d) The amendments made by this section shall be effective with 
42 use 402 note, respect to monthly benefits payable for months after December 1977. 
LIMITATION ON RETROACTIVE BENEFITS 
SEC. 332. (a)(1) The first sentence of section 202(j)(l) of the 
Social Security Act is amended by striking out "An individual" 
and inserting in lieu thereof "Subject to the limitations contained in 
paragraph (4), an individual". 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1543 
(2) Section 202(j) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
"(4) (A) Except as provided in subparagraph (B), no individual 
shall be entitled to a monthly benefit under subsection (a), (b), (c), 
(e), or (f) for any month prior to the month in which he or she files 
an application for benefits under that subsection if the effect of entitle-
ment to such benefit would be to reduce, pursuant to subsection (q), 
the amount of the monthly benefit to which such individual would 
otherwise be entitled for the month in which such application is filed. 
" (B) (i) If the individual applying for retroactive benefits is apply-
ing for such benefits under subsection (a), and there are one or more 
other persons who would (except for subparagraph (A)) be entitled 
for any month, on the basis of the wages and self-employment income 
of such individual and because of such individual's entitlement to 
such retroactive benefits, to retroactive benefits under subsection (b), 
(c), or (d) not subject to reduction under subsection (q), then sub-
paragraph (A) shall not apply with respect to such month or any 
subsequent month. 
"(ii) If the individual applying for retroactive benefits is a widow, 
surviving divorced wife, or widower and is under a disability (as 
defined in section 223(d)), and such individual would, except for sub-
paragraph (A), be entitled to retroactive benefits as a disabled widow 
or widower or disabled surviving divorced wife for any month before 
attaining the age of 60, then subparagraph (A) shall not apply with 
respect to such month or any subsequent month, 
"(iii) If the individual applying for retroactive benefits has excess 
earnings (as defined in section 203(f)) in the year in which he or she 
files an application for such benefits which could, except for subpara-
graph (A), be charged to months in such year prior to the month of 
application, then subparagraph (A) shall not apply to so many of 
such months immediately preceding the month of application as are 
required to charge such excess earnings to the maximum extent 
possible. 
"(iv) As used in this subparagraph, the term 'retroactive benefits' 
means benefits to which an individual becomes entitled for a month 
prior to the month in which application for such benefits is filed.". 
(3) Section 226(h) of such Act is amended by adding at the end 
thereof the following new paragraph: 
"(4) For purposes of determining entitlement to hospital insur-
ance benefits under subsection (b) in the case of an individual 
described in clause (iii) of subsection (b)(2)(A), the entitlement of 
such individual to widow's or widow^er's insurance benefits under sec-
tion 202 (e) or (f) by reason of a disability shall be deemed to be the 
entitlement to such benefits that would result if such entitlement were 
determined without regard to the provisions of section 202(j) (4).". 
(b) The amendments made by subsection (a) shall be effective with 
respect to monthly insurance benefits under title II of the Social 
Security Act to which an individual becomes entitled on the basis of 
an application filed on or after January 1,1978. 
42 use 402. 
42 use 423. 
42 use 403. 
"Retroactive 
benefits." 
42 use 426. 
42 use 402. 
Effective date. 
42 use 402 note. 
42 use 401. 
DELIVERY o r BENEFIT CHECKS 
SEC. 333. (a) Title VII of the Social Security Act is amended by 
adding at the end thereof the following new section: 
91 STAT. 1544 
PUBLIC LAW 95-216—DEC. 20, 1977 
a. 
42 use 909. 
42 use 401, 
1381. 
42 use 404, 
1383. 
Effective date. 
42 use 909 note. 
DELIVERY OP BENEFIT CHECKS 
"SEC. 708. (a) If the day re^larly designated for the delivery of 
benefit checks under title II or title XVI falls on a Saturday, Sunday, 
or legal public holiday (as defined in section 6103 of title 5, United 
States Code) in any month, the benefit checks which would otherwise 
be delivered on such day shall be mailed for delivery on the first day 
preceding such day which is not a Saturday, Sunday, or legal public 
holiday (as so defined), without regard to whether the delivery of 
such checks would as a result have to be made before the end of the 
month for which such checks are issued. 
" (b) If more than the correct amount of payment under title II or 
XVI is made to any individual as a result of the receipt of a benefit 
check pursuant to subsection (a) before the end of the month for 
which such check is issued, no action shall be taken (under section 
204 or 1631(b) or otherwise) to recover such payment or the incor-
rect portion thereof.". 
(b) The amendment made by subsection (a) of this section shall 
apply with respect to benefit checks the regularly designated day for 
delivery of which occurs on or after the thirtieth day after the date 
of the enactment of this Act. 
42 use 402. 
42 use 418. 
42 use 410. 
"Periodic 
benefit." 
42 use 402. 
REDUCED BENEFITS FOR SPOUSES RECEIVING GOVERNMENT PENSIONS 
SEC. 334. (a)(1) Section 202(b)(2) of the Social Security Act is 
amended by inserting after "subsection (q)" the following: "and para-
graph (4) of this subsection". 
(2) Section 202(b) of such Act is further amended by adding at 
the end thereof the following new paragraph: 
"(4) (A) The amount of a wife's insurance benefit for each month 
as determined after application of the provisions of subsections (q) 
and (k) shall be reduced (but not below zero) by an amount equal to 
the amount of any monthly periodic benefit payable to such wife (or 
divorced wife) for such month which is based upon her earnings while 
in the service of the Federal Government or any State (or political 
subdivision thereof, as defined in section 218(b) (2)) if, on the last 
day she was employed by such entity, such service did not constitute 
'employment' as defined in section 210. 
"(B) For purposes of this paragraph, any periodic benefit which 
otherwise meets the requirements of subparagraph (A), but which 
is paid on other than a monthly basis, shall be allocated on a basis 
equivalent to a monthly benefit (as determined by the Secretary) and 
such equivalent monthly benefit shall constitute a monthly periodic 
benefit for purposes of subparagraph (A). For purposes of this sub-
paragraph, the term 'periodic benefit' includes a benefit payable in a 
lump sum if it is a commutation of, or a substitute for, periodic pay-
ments.". 
(b)(1) Section 202 (c) (1) of such Act is amended— 
(A) by striking out subparagraph (C); 
^B) by adding "and" at the end of subparagraph (B) ; and 
(C) by redesignating subparagraph (D) as subparagraph (C). 
(2) Section 202(c)(2) of such Act is amended to read as follows: 
"(2) (A) The amount of a husband's insurance benefit for each 
month as determined after application of the provisions of subsec-
tions (q) and (k) shall be reduced (but not below zero) by an amount 
equal to the amount of any monthly periodic benefit payable to such 
husband for such month which is based upon his earnings while in 
the service of the Federal Government or any State (or political sub-
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1545 
Post, p. 1549. 
"Periodic 
benefit." 
division thereof, as defined in section 218 (b) (2)) if, on the last day 42 USC 418. 
he was employed by such entity, such service did not constitute 
'employment' as defined in section 210. 
"(B) For purposes of this paragraph, any periodic benefit which 
otherwise meets the requirements of subparagraph (A), but which 
is paid on other than a monthly basis, shall be allocated on a basis 
equivalent to a monthly benefit (as determined by the Secretary) and 
such equivalent montKly benefit shall constitute a monthly periodic 
benefit for purposes of subparagraph (A). For purposes of this sub-
paragraph, the term 'periodic benefit' includes a benefit payable in a 
lump sum if it is a commutation of, or a substitute for, periodic 
payments.''. 
(3) Section 202(c) (3) of such Act is amended by inserting after 42 USC 402. 
"subsection (q)" the following: "and paragraph (2) of this subsec-
tion". 
(c) (1) Section 202(e) (2) (A) of such Act (as amended by section 
204(a) of this Act) is amended by striking out "paragraph (4)" in the 
first sentence and inserting in lieu thereof "paragraphs (4) and (8)". 
(2) Section 202(e) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
"(8) (A) The amount of a widow's insurance benefit for each month 
as determined (after application of the provisions of subsections (q) 
and (k), paragraph (2)(B), and paragraph (4)) shall be reduced 
(but not below zero) by an amount equal to the amount of any monthly 
periodic benefit payable to such widow (or surviving divorced wife) 
for such month which is based upon her earnings while in the service 
of the Federal Government or any State (or any political subdivision 
thereof, as defined in section 218(b) (2)) if, on the last day she was 
employed by such entity, such service did not constitute 'employment' 
as defined in section 210. 
"(B) For purposes of this paragraph, any periodic benefit which 
otherwise meets the requirements of subparagraph (A), but which is 
paid on other than a monthly basis, shall be allocated on a basis equiva-
lent to a monthly benefit (as determined by the Secretary) and such 
equivalent monthly benefit shall constitute a monthly periodic benefit 
for purposes of subparagraph (A). For purposes of this subparagraph, 
the term 'periodic benefit' includes a benefit payable in a lump sum 
if it is a commutation of, or a substitute for, periodic payments.". 
(d) (1) Section 202(f) (1) of such Act is amended— 
(A) by striking out subparagraph (D) ; and 
(B) by redesignating subparagraphs (E), (F), and (G) as 
subparagraphs (D), (E),and (F),respectively. 
(2) Section 202(f) (2) of such Act is amended to read as follows: 
"(2) (A) The amount of a widower's insurance benefit for each 
month (as determined after application of the provisions of subsec-
tions (k) and (q), paragraph (3)(B), and paragraph (5)) shall be 
reduced (but not below zero) by an amount equal to the amount of 
any monthly periodic benefit payable to such widower for such month 
which is based upon his earnings while in the service of the Federal 
Government or any State (or any political subdivision thereof, as 
defined in section 218(b) (2)) if, on the last day he was employed by 
such entity, such service did not constitute 'employment' as defined in 
section 210. 
"(B)^ For purposes of this paragraph, any periodic benefit which 
otherwise meets the requirements of subparagraph (A), but which is 
paid on other than a monthly basis, shall be allocated on a basis equiv-
alent to a monthly benefit (as determined by the Secretary) and such 
"Periodic 
benefit." 
42 USC 402. 
91 STAT. 1546 
PUBLIC LAW 95-216—DEC. 20, 1977 
"Periodic 
benefit." 
Ante, p. 1528. 
42 use 426. 
42 use 418. 
Post, p. 1549. 
"Periodic 
benefit." 
Effective date. 
42 use 402 note. 
42 use 401. 
Effective date. 
42 use 402 note. 
equivalent monthly benefit shall constitute a monthly periodic benefit 
for purposes of subparagraph (A). For purposes of this subpara-
graph, the term 'periodic benefit' includes a benefit payable in a lump 
sum if it is a commutation of, or a substitute for, periodic payments.". 
(3) Section 202(f) (3) (A) of such Act (as amended by section 204 
(c) of this Act) is amended by striking out "paragraph (5)" in the 
first sentence and inserting in lieu thereof "paragraphs (2) and (5)". 
(4) (A) Section 202(f) (7) of such Act is amended by striking out 
"paragraph (1)(G)" and inserting in lieu thereof "paragraph (1) 
(F)". 
(B) Section 226(h) (1) (B) of such Act is amended by striking out 
"subparagraph (G) of section 202(f) (1)" and inserting in lieu thereof 
"subparagraph (F) of section 202(f) (1)". 
(5) Section 202(p) (1) of such Act is amended by striking out "sub-
paragraph (C) of subsection (c)(1), clause (i) or (ii) of subpara-
graph (D) of subsection (f) (l),or". 
(6) Section 202(s) (3) of such Act is amended by striking out 
"Subsections" and all that follows down through "so much" and 
inserting in lieu thereof "So much". 
(e) (1) Section 202(g) (2) of such Act is amended by striking out 
"Such" and inserting in lieu thereof "Except as provided in paragraph 
(4) of this subsection, such". 
(2) Section 202(g) of such Act is further amended by adding at 
the end thereof the following new paragraph: 
"(4) (A) The amount of a mother's insurance benefit for each 
month to which any individual is entitled under this subsection (as 
determined after application of subsection (k)) shall be reduced (but 
not below zero) by an amount equal to the amount of any monthly 
periodic benefit payable to such individual for such month which is 
based upon such individual's earnings while in the service of the Fed-
eral Government or any State (or political subdivision thereof, as 
defined in section 218(b) (2)) if, on the last day such individual was 
employed by such entity, such service did not constitute 'employment' 
as defined in section 210. 
"(B) For purposes of this paragraph, any periodic benefit which 
otherwise meets the requirements of subparagraph (A), but which is 
paid on other than a monthly basis, shall be allocated on a basis equiv-
alent to a monthly benefit (as determined by the Secretary) and such 
equivalent monthly benefit shall constitute a monthly periodic benefit 
for purposes of subparagraph (A). For purposes of this subpara-
graph, the term 'periodic benefit' includes a benefit pavable in a lump 
sum if it is a commutation of, or a substitute for, periodic payments.". 
(f) The amendments made by this section shall applv with respect to 
monthly insurance benefits payable under title IT of the Social Secu-
rity Act for months beq-inning with the month in which this Act is 
enacted, on the basis of applications filed in or after the month in 
which this A ct is enacted. 
(g) (1) The amendments made by the preceding provisions of this 
section shall not apply with respect to any monthly insurance benefit 
payable, under subsection (b), (c), (e), (f), or (g) (as the case may 
be) of section 202 of the Social Security Act, to an individual— 
(A) to whom there is payable for any month within the 
60-month period beginning with the month in which this Act is 
enacted (or who is eligible in any such month for) a monthly peri-
odic benefit (wnthin the meaning of such provisions) based upon 
such individual's earnings while in the service of the Federal 
Government or any State (or political subdivision thereof, as 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1547 
defined in section 218(b) (2) of the Social Security Act); and 42 USC 418. 
(B) who at time of application for or initial entitlement to 
such monthly insurance benefit under such subsection (b), (c), 
(e), (f), or (^) meets the requirements of that subsection as it 
was in effect and bein^ administered in January 1977. 
(2) For purposes of paragraph (1)(A), an individual is eligible Eligibility, 
for a monthly periodic benefit for any month if such benefit would be 
payable to such individual for that month if such individual were not 
employed during that month and had made proper application for 
such benefit. 
(3) If any provision of this subsection, or the application thereof Separability, 
to any person or circumstance, is held invalid, the remainder of this 
section shall not be affected thereby, but the application of this sub-
section to any other persons or circumstances shall also be considered 
invalid. 
SUBSTANTIAL GAINFUL ACTIVITY I N CASE OF BLIND INDIVIDUALS 
SEC. 335. Section 223(d) (4) of the Social Security Act is amended 42 USC 423. 
by inserting after the first sentence the following new sentence: "No 
individual who is blind shall be regarded as having demonstrated an 
ability to engage in substantial gainful activity on the basis of earn-
ings that do not exceed the exempt amount under section 203(f) (8) 
which is applicable to individuals described in subparagraph (D) 
thereof.". 
Ante, p. 1530. 
REMARRIAGE OF WIDOWS AND WIDOWERS 
SEC. 336. (a) (1) Section 202(e) (2) (A) of the Social Security Act 
(as amended by sections 204(a) and 334(c) (1) of this Act) is amended 
by striking out "paragraphs (4) and (8)" and inserting in lieu thereof 
"paragraph (8)". 
(2) Section 202(e) (3) of such Act is amended by striking out "In 
the case of a widow or surviving divorced wife who marries" in the 
matter preceding subparagraph (A) and inserting in lieu thereof "If 
a widow, before attaining age 60, or a surviving divorced wife, mar-
ries". 
(3) Section 202(e) (4) of such Act is amended to read as follows: 
"(4) If a widow, after attaining age 60, marries, such marriage 
shall, for purposes of paragraph (1), be deemed not to have occurred.". 
(b) (1) Section 202(f) (3) (A) of such Act (as amended by sections 
204(c) and 334(d) (3) of this Act) is further amended by striking out 
"paragraphs (2) and (5)" and inserting in lieu thereof "paragraph 
(2) . 
(2) Section 202(f) (4) of such Act is amended by striking out "In 
the case of a widower who remarries" in the matter preceding sub-
paragraph (A) and inserting in lieu thereof "If a widower, before 
attaining age 60, remarries". 
(3) Section 202(f) (5) of such Act is amended to read as follows: 
"(5) If a widower, after attaining age 60, marries, such marriage 
shall, for purposes of paragraph (1), be deemed not to have occurred." 
(c) (1) The amendments made by this section shall apply only with 
respect to monthly benefits payable under title I I of the Social Secu-
rity Act for months after December 1978, and, in the case of individ-
uals who are not entitled to benefits of the type involved for December 
1978, only on the basis of applications filed on or after January 1, 
1979. 
Ante, pp. 1527, 
1544. 
42 USC 402. 
Ante, pp. 1528, 
1546. 
Effective date. 
42 USC 402 note. 
42 USC 401. 
91 STAT. 1548 
PUBLIC LAW 95-216—DEC. 20, 1977 
(2) In the case of an individual who was entitled for the month of 
December 1978 to monthly insurance benefits under subsection (e) or 
Ante, pp. 1545, 
(f) of section 202 of the Social Security Act to which the provisions of 
1547. 
subsection (e) (4) or (f) (5) applied, the Secretary shall, if such 
^rete, pp. 1528, 
benefits would be increased by the amendments made by this section, 
redetermine the amount of such benefits for months after Decem-
ber 1978 as if such amendments had been in effect for the first month 
for which the provisions of section 202(e) (4) or 202(f) (5) became 
applicable. 
42 use402 note. 
(d) Where— 
(1) two or more persons are entitled to monthly benefits under 
42 use 402. 
section 202 of the Social Security Act for December 1978 on the 
basis of the wages and self-employment income of a deceased 
individual, and one or more of such persons is so entitled under 
subsection (e) or (f) of such section 202, and 
(2) one or more of such persons is entitled on the basis of such 
wages and self-employment income to monthly benefits under 
subsection (e) or (f) of such section 202 (as amended by this 
section) for January 1979, and 
(3) the total of benefits to which all persons are entitled under 
section 202 of such Act on the basis of such wages and self-employ-
ment income for January 1979 is reduced by reason of section 
Ante, p. 1524. 
203(a) of such Act as amended by this Act (or would, but 
for the first sentence of section 203(a) (4), be so reduced), 
then the amount of the benefit to which each such person referred to in 
paragraph (1) is entitled for months after December 1978 shall in no 
case be less after the application of this section and such section 
203(a) than the amount it would have been without the application 
of this section. 
DURATION-Or-MARRIAGE REQUIREMENT 
42 use 416. 
SEC. 337. (a) Section 216(d) of the Social Security Act is amended 
by striking out "20 years" in paragraphs (1) and (2) and inserting 
in lieu thereof in each instance "10 years". 
(b) Section 202(b) (1) (G) of such Act is amended by striking out 
"20 years" and inserting in lieu thereof "lOyears". 
Effective date. 
(c) The amendments made by this section shall apply with respect 
42 use 402 note, to monthly benefits payable under title II of the Social Security Act 
42 use 401. 
fQj. months after December 1978, and, in the case of individuals who 
are not entitled to benefits of the type involved for December 1978, 
only on the basis of applications filed on or after January 1, 1979. 
PART D—STUDY WITH RESPECT TO GENDER-BASED DISTINCTIONS 
STUDY OF P R O P O S A L S TO ELIMINATE DEPENDENCY AND SEX DISCRIMINATION 
UNDER THE SOCIAL SECURITY PROGRAM 
42 use 902 note. 
SEC. 341. (a) The Secretary of Health, Education, and Welfare, 
in consultation with the Task Force on Sex Discrimination in the 
Department of Justice, shall make a detailed study, within the Depart-
ment of Health, Education, and Welfare and the Social Security 
Administration, of proposals to eliminate dependency as a factor in 
the determination of entitlement to spouse's benefits under the pro-
gram established under title II of the Social Security Act, and of 
proposals to bring about equal treatment for men and women in any 
and all respects under such program, taking into account the practi-
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1549 
cal effects (particularly the effect upon women's entitlement to such 
benefits) of factors such as— 
(1) changes in the nature and extent of women's participation 
in the labor f 
orce^ 
(2^ the increasing divorce rate, and 
(3) the economic value of women's work in the home. 
The study shall include appropriate cost analyses. 
(b) The Secretary shall submit to the Congress within six months Report to 
after the date of the enactment of this Act a fiiU and complete report Congress. 
on the study carried out under subsection (a). 
PART E—COMBINED SOCIAL SECURITY AND INCOME TAX 
ANNUAL REPORTING 
Subpart 1—Amendments to Title II of the Social Security Act 
ANNUAL CREDITING OF QUARTERS OF COVERAGE 
SEC. 351. (a) (1) Sections 209(g) (3), 209(j), 210(a) (17) (A), and 
210(f) (4) (B) of the Social Security Act are each amended by strik- 42 USC 409, 
ing out "quarter" wherever it appears and inserting in lieu thereof 410. 
"year". 
(2) Sections 209(g)(3) and 209(j) of such Act are each further 
amended by striking out "$50" and inserting in lieu thereof "$100". 
(3) (A) Section 209 of such Act is amended by striking out "or" at 
the end of subsection (n), by striking out the period at the end of 
subsection (o) and inserting in lieu thereof "; or", and by inserting 
after subsection (o) the following new subsection: 
"(p) Remuneration paid by an organization exempt from income 
tax under section 501 of the Internal Revenue Code of 1954 in any 26 USC 501. 
calendar year to an employee for service rendered in the employ of 
such organization, if the remuneration paid in such year by the orga-
nization to the employee for such service is less than $100.". 
(B) Section 210(a) (10) of such Act is amended by striking out 
"(10) (A)" and all that follows down through "(B) Service" and 
inserting in lieu thereof "(10) Service", and by redesignating clauses 
(i) and (ii) as subparagraphs (A) and (B), respectively. 
(b) Section 212 of such Act is amended to read as follows: 
42 USC 412. 
"CREDITING OF S E L F - E M P L O Y M E N T I N C O M E TO CALENDAR YEARS 
"SEC. 212. (a) For the purposes of determining average monthly 
wage and quarters of coverage the amount of self-employment income 
derived during any taxable year which begins before 1978 shall— 
"(1) in the case of a taxable year which is a calendar year, be 
credited equally to each quarter of such calendar year; and 
"(2) in the case of any other taxable year, be credited equally 
to the calendar quarter in which such taxable year ends and to 
each of the next three or fewer preceding quarters any part of 
which is in such taxable year. 
"(b) For the purposes oi determining average indexed monthly 
earnings, average monthly wage, and quarters of coverage the amount 
of self-employment income derived during any taxable year which 
begins after 1977 shall— 
"(1) in the case of a taxable year which is a calendar year or 
wliich begins with or during a calendar year and ends with or 
during such year, be credited to such calendar year; and 
91 STAT. 1550 
PUBLIC LAW 95-216—DEC. 20, 1977 
"(2) in the case of any other taxable year, be allocated pro-
portionately to the two calendar years, portions of which are 
included within such taxable year, on the basis of the number of 
months in each such calendar year which are included completely 
within the taxable year. 
For purposes of clause (2), the calendar month in which a taxable 
year ends shall be treated as included completely wnthin that taxable 
year.". 
"Quarters of 
(c) Section 213(a) (2) of such Act is amended to read as follows: 
coverage." 
" (2) (A) The term 'quarters of coverage' means— 
42 use 413. 
ii^^^ £(jj. calendar years before 1978, and subject to the provi-
sions of subparagraph (B), a quarter in which an individual has 
been paid $50 or more in wages (except wages for agricultural 
labor paid after 1954) or for which he has been credited (as 
Ante, p. 1549. 
determined under section 212) with $100 or more of self-
employment income; and 
"(ii) for calendar years after 1977, and subject to the provi-
sions of subparagraph (B), each portion of the total of the 
wages paid and the self-employment income credited (pursuant 
to section 212) to an individual in a calendar year which equals 
$250, with such quarter of coverage being assigned to a specific 
calendar quarter in such calendar year only if necessary in the 
case of any individual who has attained age 62 or died or is under 
a disability and the requirements for insured status in subsection 
42 use 414. 
(a) or (b) of section 214, the requirements for entitlement to a 
computation or recomputation of his primary insurance amount, 
42 use 416. 
or the requirements of paragraph (3) of section 216(i) would 
not otherwise be met. 
"(B) Notwithstanding the provisions of subparagraph (A) — 
"(i) no quarter after the quarter in which an individual dies 
shall be a quarter of coverage, and no quarter any part of which 
is included in a period of disability (other than the initial quarter 
and the last quarter of such period) shall be a quarter of coverage; 
"(ii) if the wages paid to an individual in any calendar year 
equal to $3,000 in the case of a calendar year before 1951, or 
$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 and before 1959, 
or $4,800 in the case of a calendar year after 1958 and before 1966, 
or $6,600 in the case of a calendar year after 1965 and before 1968, 
or $7,800 in the case of a calendar year after 1967 and before 1972, 
or $9,000 in the case of the calendar year 1972, or $10,800 in the 
case of the calendar year 1973, or $13,200 in the case of the 
calendar year 1974, or an amount equal to the contribution and 
Ante, p. 1513, 
benefit base (as determined under section 230) in the case of any 
Post, p. 1554. 
calendar year after 1974 and before 1978 with respect to which 
such contribution and benefit base is effective, each quarter of 
such year shall (subject to clauses (i) and (v)) 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 and before 1959, or $4,800 in the 
case of a taxable year ending after 1958 and before 1966, or $6,600 
in the case of a taxable year ending after 1965 and before 1968, or 
$7,800 in the case of a taxable year ending after 1967 and before 
1972, or $9,000 in the case of a taxable year beginning after 1971 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1551 
and before 1973, or $10,800 in the case of a taxable year beginning 
after 1972 and before 1974, or $13,200 in the case of a taxable year 
beginning after 1973 and before 1975, or an amount equal to the 
contribution and benefit base (as determined under section 230) Ante, p. 1513, 
which is effective for the calendar year in the case of any taxable ^c^(> P- 1554. 
year beginning in any calendar year after 1974 and before 1978, 
each quarter any part of which falls in such year shall (subject to 
clauses (i) and (v)) be a quarter of coverage; 
"(iv) if an individual is paid wages for agricultural labor in a 
calendar year after 1954 and before 1978, then, subject to clauses 
(i) and (v), (I) 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 equal or exceed $100 but are less than $200; (II) 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; (III) the last three 
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 $300 but are less than $400; and (IV) 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; 
"(v) no quarter shall be counted as a quarter of coverage prior 
to the beginning of such quarter; 
" (vi) not more than one quarter of coverage may be credited to 
a calendar quarter; and 
"(vii) no more than four quarters of coverage may be credited 
to any calendar year after 1977. 
If in the case of an individual who has attained age 62 or died or is 
under a disability and who has been paid wages for agricultural labor 
in a calendar year after 1954 and before 1978, the requirements for 
insured status in subsection (a) or (b) of section 214, the requirements 42 USC 414. 
for entitlement to a computation or recomputation of his primary 
insurance amount, or the requirements of paragraph (3) of section 
216 (i) are not met after assignment of quarters of coverage to quar-
ters in such year as provided in clause (iv) of the preceding sentence, 
but would be met if such quarters of coverage were assigned to differ-
ent 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. If, in the case of an individual 
who did not die prior to January 1, 1955, and who attained age 62 
(if a woman) or age 65 (if a man) or died before July 1, 1957, the 
requirements for insured status in section 214(a)(3) are not met 
because of his having too few quarters of coverage but would be met 
if his quarters of coverage in the first calendar year in which he had 
any covered employment had been determined on the basis of the 
period during which wages were earned rather than on the basis of 
the period during which wages were paid (any such wages paid that 
1 
are reallocated on an earned basis shall not be used in determining 
quarters of coverage for subsequent calendar years), then upon appli-
cation filed by the individual or his survivors and satisfactory proof 
of his record of wages earned being furnished by such individual 
or his survivors, the quarters of coverage in such calendar year may 
be determined on the basis of the periods during which wages were 
earned.". 
(d) The amendments made by subsection (a) shall apply with Effective dates, 
respect to remuneration paid and services rendered after December 31, 42 USC 409 note. 
29-191+ 0 - 80 - 
100 
91 STAT. 1552 
PUBLIC LAW 95-216—DEC. 20, 1977 
Ante, p. 1549. 
Publication in 
Federal Register. 
42 u s e 409. 
Ante, p. 1514. 
Effective date. 
42 u s e 413 note. 
1977. The amendments made by subsections (b) and (c) shall be 
effective January 1,1978. 
ADJUSTMENT I N AMOUNT REQtTIRED FOR A QUARTER OP COVERAGE 
SEC. 352. (a) Section 213(a) (2) (A) (ii) of the Social Security Act, 
as amended by section 351(c) of this Act, is amended by striking out 
"$250" and inserting in lieu thereof "the amount required for a quar-
ter of coverage in that calendar year (as determined under subsection 
(^}>"-. 
. 
. 
. 
, 
(b) Section 213 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"Amount Required for a Quarter of Coverage 
"(d) (1) The amount of wages and self-employment income which 
an individual must have in order to be credited with a quarter of 
coverage in any year under subsection (a)(2)(A)(ii) 
shall be 
$250 in the calendar year 1978 and the amount determined under 
paragraph (2) of this subsection for years after 1978. 
"(2) The Secretary shall, on or before November 1 of 1978 and of 
every year thereafter, determine and publish in the Federal Register 
the amount of wages and self-employment income which an individual 
must have in order to be credited with a quarter of coverage in the 
succeeding calendar year. The amount required for a quarter of cov-
erage shall be the larger of— 
"(A) the amount in effect in the calendar year in which the 
determination under this subsection is made, or 
"(B) the product of the amount prescribed in paragraph (1) 
which is required for a quarter of coverage in 1978 and the ratio 
of the average of the total wages (as defined in regulations of the 
Secretary and computed without regard to the limitations speci-
fied in section 209(a)) reported to the Secretary of the Treasury 
or his delegate for the calendar year before the year in which the 
determination under this paragraph is made to the average of the 
total wages (as so defined and computed) reported to the Secre-
tary of the Treasury or his delegate for 1976 (as published in the 
Federal Register in accordance with section 215(a)(1)(D)), 
with such product, if not a multiple of $10, being rounded to the next 
higher multiple of $10 where such amount is a multiple of $5 but not 
of $10 and to the nearest multiple of $10 in any other case.". 
(c) The amendments made by this section shall be effective Janu-
ary 1,1978. 
TECHNICAL AND CONFORMING 
AMENDMENTS 
SEC. 353. (a)(1) Section 203(f) (8) (B) (i) of the Social Security 
42 use 403. 
Act is amended by striking out "was" wherever it appears and insert-
ing in lieu thereof "is". 
(2) Section 203(f) (8) (B) (ii) of such Act is amended to read as 
follows: 
"(ii) the product of the exempt amount described in clause 
(i) and the ratio of (I) the average of the total wages (as defined 
in regulations of the Secretary and computed without regard 
to the limitations specified in section 209(a)) reported to the Sec-
retary of the Treasury or his delegate for the calendar year before 
the calendar year in which the determination under subparagraph 
(A) is made to (II) the average of the total wages (as so defined 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1553 
and computed) reported to the Secretary of the Treasury or his 
delegate for the calendar year before tne most recent calendar 
year in which an increase in the exempt amount was enacted or a 
determination resulting in such an increase was made under sub-
paragraph (A), with such product, if not a multiple of $10, being 
rounded to the next higher multiple of $10 where such product is 
a multiple of $5 but not of $10 and to the nearest multiple of $10 
in any other case.". 
(b)(1) The first sentence of section 218(c)(8) of such Act is 42 USC 418. 
amended by striking out "quarter" wherever it appears and inserting in 
lieu thereof "year", and by striking out "$50" and inserting in lieu 
thereof "$100". 
(2) Section 218(g)(1) of such Act is amended by striking out 
"quarter" and inserting in lieu thereof "year". 
(3) Section 218(q) (4) (B) of such Act is amended by striking out 
"any calendar quarters" and inserting in lieu thereof "a calendar year" 
and by striking out "such calendar quarters" and inserting in lieu 
thereof "such calendar year". 
(4) Section 218(q) (6; (B) of such Act is amended by striking out 
"calendar quarters designated by the State in such wage reports as 
the" and inserting in lieu thereof "period or periods designated by the 
State in such wage reports as the period or". 
(5) Section 218 (r) (1) of such Act is amended— 
(A) by striking out "quarter" in the matter before clause (A) 
and inserting in lieu thereof "year", 
(B) by striking out "in which occurred the calendar quarter" 
in clause (A), and 
(C) by striking out "quarter" in clause (B) and inserting in 
lieu thereof "year". 
(c) (1) Effective with respect to estimates for calendar years begin-
ning after December 31, 1977, section 224(a) of such Act is amended ^nte, p. 1529. 
by striking out the last sentence. 
(2) Section 224(f) (2) of such Act is amended to read as follows: 
"(2) In making the redetermination required by paragraph (1), 
the individual's average current earnings (as defined in subsection 
(a)) shall be deemed to be the product of— 
"(A) his average current earnings as initially determined 
under subsection (a); 
" (B) the ratio of (i) the average of the total wages (as defined 
in regulations of the Secretary and computed without regard to 
the limitations specified in section 209 (a)) reported to the Secre- 42 USC 409. 
tary of the Treasury or his delegate for the calendar year before 
the year in which such redetermination is made to (ii) the average 
of the total wages (as so defined and computed) reported to the 
Secretary of the Treasury or his delegate for calendar year 1977 
or, if later, the calendar year before the year in which the reduc-
tion was first computed (but not counting any reduction made in 
benefits for a previous period of disability); and 
"(C) in any case in which the reduction was first computed 
before 1978, the ratio of (i) the average of the taxable wages 
reported to the Secretary for the first calendar quarter of 1977 to 
(ii) the average of the taxable wages reported to the Secretary 
for the first calendar quarter of the calendar year before the year 
in which the reduction was first computed (but not coimtinsr any 
reduction made in berK^firs for a previous period of disability). 
91 STAT. 1554 
PUBLIC LAW 95-216—DEC. 20, 1977 
Any amount determined under this paragraph which is not a multiple 
of $1 shall be reduced to the next lower multiple of $1.". 
42 use 429. 
(d) Section 229 (a) of such Act is amended— 
(1) by striking out "shall be deemed to have been paid, in each 
calendar quarter occurring after 1956 in which he" and inserting 
in lieu thereof ", if he", and 
(2) by striking out "wages (in addition to the wages actually 
paid to" him for such service) of $300." at the end thereof and 
inserting in lieu thereof the following: "shall be deemed to have 
been paid— 
"(1) in each calendar quarter occurring after 1956 and before 
1978 in which he was paid such wages, additional wages of $300, 
and 
"(2) in each calendar year occurring after 1977 in which he 
was paid such wages, additional wages of $100 for each $300 of 
such wages, up to a maximum of $1,200 of additional wages for 
any calendar year.". 
42 use 430. 
(e) (1) Section 230(b) of such Act is amended by striking out the 
last sentence. 
(2) Section 230(b) (1) of such Act is amended to read as follows: 
"(1) the contribution and benefit base which is in effect with 
respect to remuneration paid in (and taxable years beginning in) 
the calendar year in which the determination under subsection 
(a) is made, and". 
(3) Section 230(b) (2) of such Act is amended to read as follows: 
"(2) the ratio of (A) the average of the total wages (as 
defined in regulations of the Secretary and computed without 
42 use 409. 
regard to the limitations specified in section 209(a)) reported to 
the Secretary of the Treasury or his delegate for the calendar 
year before the calendar year in which the determination under 
subsection (a) is made to (B) the average of the total wages (as 
so defined and computed) reported to the Secretary of the Treas-
ury or his delegate for the calendar year before the most recent 
calendar year in which an increase in the contribution and benefit 
base was enacted or a determination resulting in such an increase 
was made under subsection (a),". 
(f) (1) Effective with respect to convictions after December 31,1977, 
42 use 402. 
section 202(u) (1) (C) of such Act is amended by striking out "quar-
ter" wherever it appears and inserting in lieu thereof "year". 
42 use 405. 
(2) (A) Section 205(c) (1) of such Act is amended by striking out 
" (as defined in section 211 (e))". 
"Period." 
(B) Section 205(c) (1) of such Act is further amended by adding 
at the end thereof the following new subparagraph: 
"(D) The term 'period' when used with respect to self-employ-
ment income means a taxable year and when used with respect 
to wages means— 
"(i) a quarter if wages were reported or should have been 
reported on a quarterly basis on tax returns filed with the 
Secretary of the Treasury or his delegate under section 6011 
26 use 6011. 
of the Internal Revenue Code of 1954 or regulations there-
42 use 418. 
under (or on reports filed by a State under section 218(e) or 
regulations thereunder), 
"(ii) a year if wages were reported or should have been 
reported on a yearly basis on such tax returns or reports, or 
"(iii) the half year beginning January 1 or July 1 in the 
case of wages which were reported or should have been 
reported for calendar year 1937.". 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1555 
(C) Section 205 (o) of such Act is amended by inserting "before 42 USC 405. 
1978" after "calendar year". 
(g) The amendments made by subsection (b) of this section shall Effective dates, 
apply with respect to remuneration paid after December 31, 1977, 42 USC 418 note, 
except that the amendment made by subsection (b) (2) shall apply 
with respect to notices submitted by the States to the Secretary after 
the date of the enactment of this Act. The amendments made by 
subsections (d) and (f) (2) shall be effective January 1, 1978. Except 
as otherwise specifically provided, the remaining amendments made 
by this section shall be effective January 1,1979. 
Subpart 2—^Amendments to the Internal Eevenue Code of 1954 
DEDUCTIOlSr OF TAX FROM WAGES 
SEC. 355. (a) Section 3102(a) of the Internal Revenue Code of 1954 26 USC 3102. 
is amended by striking out "or (C) or (10)", and by inserting after 
"is less than $50;" the following: "and an employer who in any cal-
endar year pays to an employee cash remuneration to which para-
graph'(7) (C) or (10) of section 3121(a) is applicable may deduct Infra. 
an amount equivalent to such tax from any such payment of remunera-
tion, even though at the time of payment the total amount of such 
i 
remuneration paid to the employee by the employer in the calendar 
year is less than $100;". 
(b)(1) Paragraphs (1) and (2) of section 3102(c) of such Code 
are each amended by striking out "quarter" wherever it appears and 
by inserting in lieu thereof "year". 
(2) Paragraph (3) of section 3102(c) of such Code is amended— 
(A) by striking out "quarter of the" in subparagraph (A); 
and 
(B) by striking out "quarter" wherever it appears in subpara-
graphs (B) and (C) and inserting in lieu thereof "year". 
(c) The amendments made by this section shall apply with respect 
to remuneration paid and to tips received after December 31, 1977. 
Effective date. 
26 USC 3102 
note. 
TECHNICAL AND CONFORMING AMENDMENTS 
SEC. 356. (a) Sections 3121(a) (7) (C) and 3121(a) (10) of the In-
ternal Revenue Code of 1954 are each amended by striking out "quar-
ter" wherever it appears and inserting in lieu thereof "year", and by 
striking out "$50" and inserting in lieu thereof "$100". 
(b) Section 3121(a) of such Code is amended by striking out "or" 
at the end of paragraph (14), by striking out the period at the end 
of paragraph (15) and inserting in lieu thereof "; or", and by adding 
after paragraph (15) the following new paragraph: 
"(16) remuneration paid by an organization exempt from 
income tax under section 501(a) (other than an organization 
described in section 401 (a)) or under section 521 in any calendar 
year to an employee for service rendered in the employ of such 
organization, if the remuneration paid in such year by the orga-
nization to the employee for such service is less than $100.". 
(c) Section 3121(b) (10) of such Code is amended by striking out 
*'(10)(A)" and all that follows down through "(B)" service" and 
inserting in lieu thereof "(10) service", and redesignating clauses (i) 
and (ii) as subparagraphs (A) and (B), respectively. 
(d) Sections 3121(b) (17) (A) and 3121(g) (4) (B) of such Code are 
each amended by striking out "quarter" and inserting in lieu thereof 
"year". 
26 USC 3121. 
26 USC 501. 
26 USC 401, 
521. 
91 STAT. 1556 
PUBLIC LAW 95-216—DEC. 20, 1977 
Effective date. 
26 use 3121 
(e) The amendments made by this section shall apply with respect 
note. 
to remuneration paid and services rendered after December 31, 1977. 
Subparts—Conforming Amendment to the Railroad Eetirement Act 
of 1974 
COMPUTATION OF EMPLOYEE ANNUITIES 
45 use 231b. 
Effective date. 
45 use 231b 
note. 
SEC. 358. (a) The last sentence of section 3 (f) (1) of the Eailroad 
Retirement Act of 1974 is amended— 
(1) by inserting "paid before 1978" after "in the case of wages", 
and 
(2) by inserting "and in the case of wages paid after 1977" 
before the period at the end thereof. 
(b) The amendments made by this section shall be effective Janu-
ary 1,1978. 
PART F—NATIONAL. COMMISSISON ON SOCIAL SECURITY 
ESTABLISHMENT OF COMMISSION 
42 use 907a. 
SEC. 361. (a) (1) There is hereby established a commission to be 
known as the National Commission on Social Security (hereinafter 
referred to as the "Commission"). 
Membership. 
(2) (A) The Commission shall consist of— 
(i) five members to be appointed by the President, by and with 
the advice and consent of the Senate, one of whom shall, at the 
time of appointment, be designated as Chairman of the Commis-
sion ; 
(ii) two members to be appointed by the Speaker of the House 
of Representatives; and 
(iii) two members to be appointed by the President pro tem-
pore of the Senate. 
Appointment. 
(B) At no time shall more than three of the members appointed by 
the President, one of the members appointed by the Speaker of the 
House of Representatives, or one of the members appointed by the 
President pro tempore of the Senate be members of the same political 
party. 
Membership 
(C) The membership of the Commission shall consist of individuals 
qualifications. 
who are of recognized standing and distinction and who possess the 
demonstrated capacity to discharge the duties imposed on the Com-
mission, and shall include representatives of the private insurance 
industry and of recipients and potential recipients of benefits under 
the programs involved as well as individuals whose capacity is based 
on a special knowledge or expertise in those programs. No individual 
who is otherwise an officer or full-time employee of the United States 
shall serve as a member of the Commission, 
ehairman. 
(D) The Chairman of the Commission shall designate a member of 
the Commission to act as Vice Chairman of the Commission. 
Quorum. 
(E) A majority of the members of the Commission shall constitute 
a quorum, but a lesser number may conduct hearings. 
Term. 
(F) Members of the Commission shall be appointed for a term of 
two years. 
Vacancy. 
(C) A vacancy in the Commission shall not affect its powers, but 
shall be filled in the same manner as that herein provided for the 
appointment of the member first appointed to the vacant position. 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1557 
Study, 
investigation and 
review of 
programs. 
42 use 401. 
42 use 1395. 
(3) Members of the Commission shall receive $138 per diem while Compensation, 
engaged in the actual perforaiance of the duties vested in the Com-
mission, plus reimbursement for travel, subsistence, and other neces-
sary expenses incurred in the performance of such duties. 
(4) The Commission shall meet at the call of the Chairman, or at the Meetings, 
call of a majority of the members of the Commission; but meetings of 
the Commission shall be held not less frequently than once in each 
calendar month which begins after a majority of the authorized mem-
bership of the Commission has first been appointed. 
(b) (1) It shall be the duty and function of the Commission to con-
duct a continuing study, investigation, and review of— 
(A) the Federal old-age, survivors, and disability insurance 
program established by title II of the Social Security Act; and 
(B) the health insurance programs established by title XVIII 
of such Act. 
(2) Such study, investigation, and review of such programs shall eontents. 
include (but not be limited to) — 
(A) the fiscal status of the trust funds established for the 
financing of such programs and the adequacy of such trust 
funds to meet the immediate and long-range financing needs of 
such programs; 
(B) the scope of coverage, the adequacy of benefits including 
the measurement of an adequate retirement income, and the con-
ditions of qualification for benefits provided by such programs 
including the application of the retirement income test to 
unearned as well as earned income; 
(C) the impact of such programs on, and their relation to, 
public assistance programs, nongovernmental retirement and 
annuity programs, medical service delivery systems, and national 
employment practices; 
(D) any inequities (whether attributable to provisions of law 
relating to the establishment and operation of such programs, to 
rules and regulations promulgated in connection with the admin-
istration of such programs, or to administrative practices and 
procedures employed in the carrying out of such programs) 
which affect substantial numbers of individuals who are insured 
or otherwise eligible for benefits under such programs, including 
inequities and inequalities arising out of marital status, sex, or 
similar classifications or categories; 
(E) possible alternatives to the current Federal programs or 
particular aspects thereof, including but not limited to (i) a 
phasing out of the payroll tax with the financing of such programs 
being accomplished in some other manner (including general 
revenue funding and the retirement bond), (ii) the establishment 
of a system providing for mandatory participation in any or all 
of the Federal programs, (iii) the integration of such current 
Federal programs with private retirement programs, and (iv) 
the establishment of a system permitting covered individuals a 
choice of public or private programs or both; 
(F) the need to develop a special Consumer Price Index for 
the elderly, including the financial impact that such an index 
would have on the costs of the programs established under the 
Social Security Act; and 
(G) methods for effectively implementing the recommendations 
of the Commission. 
(3) In order to provide an effective opportunity for the general 
public to participate fully in the study, investigation, and review under 
42 use 1305. 
91 STAT. 1558 
PUBLIC LAW 95-216—DEC. 20, 1977 
Report to 
President and 
Congress. 
Reports to 
President and 
Congress; 
recommen-
dations. 
Executive 
Director, 
appointment and 
compensation. 
5 u s e 5316. 
5 u s e 5101 et 
seq., 5331. 
Hearings. 
Support services. 
Appropriation 
authorization. 
Notice of 
meetings. 
42 u s e 1395dd. 
this section, the Commission, in conducting such study, investigation, 
and review, shall hold public hearings in as many different geographi-
cal areas of the country as possible. The residents of each area where 
such a hearing is to be held shall be given reasonable advance notice 
of the hearing and an adequate opportunity to appear and express 
their views on the matters under consideration. 
(c) (1) No later than four months after the date on which a majority 
of the authorized membership of the Commission is initially appointed,, 
the Commission shall submit to the President and the Congress a 
special report describing the Commission's plans for conducting the 
study, investigation, and review under subsection (b), with particular 
reference to the scope of such study, investigation, and review and 
the methods proposed to be used in conducting it. 
(2) At or before the close of each of the first two years after the date 
on which a majority of the authorized membership of the Commission 
is initially appointed, the Commission shall submit to the President 
and the Congress an annual report on the study, investigation, and 
review under subsection (b), together with its recommendations with 
respect to the programs involved. The second such report shall con-
stitute the final report of the Commission on such study, investigation, 
and review, and shall include its final recommendations; and upon the 
submission of such final report the Commission shall cease to exist. 
(d) (1) The Commission shall appoint an Executive Director of the 
Commission who shall be compensated at a rate fixed by the Commis-
sion, but which shall not exceed the rate established for level V of 
the Executive Schedule by title 5, United States Code. 
(2) In addition to the Executive Director, the Commission shall 
have the power to appoint and fix the compensation of such personnel 
as it deems advisable, in accordance with the provisions of title 5, 
United States Code, governing appointments to the competitive serv-
ice, and the provisions of chapter 51 and subchapter III of chapter 53 
of such title, relating to classification and General Schedule pay rates. 
(e) In carrying out its duties under this section, the Commission, 
or any duly authorized committee thereof, is authorized to hold such 
hearings, sit and act at such times and places, and take such testimony, 
with respect to matters with respect to which it has a responsibility 
under this section, as the Commission or such committee may deem 
advisable. The Chairman of the Commission or any member authorized 
by him may administer oaths or affirmations to witnesses appearing 
before the Commission or before any committee thereof. 
(f) The Commission may secure directly from any department or 
agency of the United States such data and information as may be 
necessary to enable it to carry out its duties under this section. Upon 
request of the Chairman of the Commission, any such department or 
agency shall furnish any such data or information to the Commission. 
(g) The General Services Administration shall provide to the Com-
mission, on a reimbursable basis such administrative support services 
as the Commission may request. 
(h) There are hereby authorized to be appropriated such sums as 
mav be necessary to carry out this section. 
(i) It shall be the duty of the Health Insurance Benefits Advisory 
Council (established by section 1867 of the Social Security Act) to 
provide timely notice to the Commission of any meeting, and the 
Chairman of the Commission (or his delegate) shall be entitled to 
attend any such meeting. 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1559 
PART G—MISCELI^NEOUS PROVISIONS 
APPOINTMENT OF HEARING EXAMINERS 
42 use 1383 
SEC. 371. The persons who were appointed to serve as hearing exam- note, 
iners under section 1631 (d)(2) of the Social Security Act (as in effect 42 USC 1383. 
prior to January 2, 1976), and who by section 3 of Public Law 94-202 42 USC 1383 
were deemed to be appointed under section 3105 of title 5, United note. 
States Code (with such appointments terminating no later than at 
the close of the period ending December 31, 1978), shall be deemed 
appointed to career-absolute positions as hearing examiners under 
and in accordance with section 3105 of title 5, United States Code, 
with the same authority and tenure (without regard to the expiration 
of such period) as hearing examiners appointed directly under such 
section 3105, and shall receive compensation at the same rate as 
hearing examiners appointed by the Secretary of Health, Education, 
and Welfare directly under such section 3105. All of the provisions of 
title 5, United States Code, and the regulations promulgated pursuant 5 USC 101 et seq. 
thereto, which are applicable to hearing examiners appointed under 
such section 3105, shall apply to the persons described in the preceding 
sentence. 
REPORT OF ADVISORY COUNCIL ON SOCIAL SECURITY 
42 USC 907 note. 
SEC. 372. Notwithstanding the provisions of section 706(d) of the 
Social Security Act, the report of the Advisory Council on Social 42 USC 907. 
Security which is due not later than January 1, 1979, may be filed at 
any date prior to October 1,1979. 
TITLE IV—PROVISIONS RELATING TO CERTAIN STATE 
WELFARE 
AND SERVICE 
PROGRAMS 
RECEIVING 
FEDERAL FINANCIAL ASSISTANCE 
FISCAL RELIEF FOR STATES AND POLITICAL SUBDIVISIONS WITH RESPECT TO 
COSTS OF WELFARE PROGRAMS 
; SEC. 401, Section 403 of the Social Security Act is amended— 42 U
S
C 603. 
(1) in subsection (a), by adding at the end thereof the follow-
ing new paragraph: 
"In the case of calendar quarters beginning after September 30, 
1977, and prior to April 1, 1978, the amount to be paid to each State 
(as determined under the preceding provisions of this subsection or 
section 1118, as the case may be) shall be increased in accordance with 42 USC 1318. 
the provisions of subsection (i) of this section."; and 
(2) by adding at the end thereof the following new subsection: 
"(i)(l) In the case of any calendar quarter which begins after 
September 30, 1977, and prior to April 1, 1978, the amount payable 
(as determined under subsection (a) or section 1118, as the case may 
be) to each State which has a State plan approved under this part 
shall (subject to the succeeding paragraphs of this subsection) be 
increased by an amount equal to the sum of the following: 
"(A) an amount which bears the same ratio to $46,750,000 as 
the amount expended as aid to families with dependent children 
under the State plan of such State during the month of Decem-
ber 1976 bears to the amount expended as aid to families with 
dependent children under the State plans of all States during 
such month, and 
91 STAT. 1560 
PUBLIC LAW 95-216—DEC. 20, 1977 
"(B) (i) in the case of Puerto Eico, Guam, and the Virgin 
Islands, an amount equal to the amount determined under sub-
paragraph (A) with respect to such State, or 
"(ii) in the case of any other State, an amount which bears 
the same ratio to $46,750,000, minus the amounts determined under 
clause (i) of this subparagraph, as the amount allocated to such 
State under section 106 of the State and Local Fiscal Assistance 
31 use 1225. 
Act of 1972, for the most recent entitlement period for which 
allocations have been made under such section prior to the date of 
the enactment of this subsection, bears to the total of the amounts 
allocated to all States under such section 106 for such period. 
"(2) As a condition of any State receiving an increase, by reason 
of the application of the foregoing provisions of this subsection, in 
the amount determined for such State pursuant to subsection (a) or 
42 use 1318. 
under section 1118 (as the case may be), such State must agree to pay 
to any political subdivision thereof which participates in the cost of 
the State's plan approved under this part, during any calendar quar-
ter with respect to which such increase applies, so much of such 
increase as does not exceed 100 per centum of such political subdivi-
sion's financial contribution to the State's plan for such quarter. 
"(3) Notwithstanding any other provision of this part, the amount 
payable to any State by reason of the preceding provisions of this sub-
section for calendar quarters prior to April 1,1978, shall be made in a 
single installment, which shall be payable as shortly after October 1, 
1977, as is administratively feasible.". 
INCENTIVE ADJUSTMENTS FOR QUALITY CONTROL I N FEDERAL FINANCIAL 
PARTICIPATION I N AID TO FAMILIES WITH DEPENDENT CHILDREN PROGRAMS 
" *' ^' 
* 
SEC. 402. (a) Section 403 of the Social Security Act is amended by 
adding after subsection (i) (as added by section 401 of this Act) the 
following new subsection : 
"(j) If the dollar error rate of aid furnished by a State under its 
State plan approved under this part with respect to any six-month 
period, as based on samples and evaluations thereof, is— 
"(1) at least 4 per centum, the amount of the Federal financial 
participation in the expenditures made by the State in carrying 
out such plan during such period shall be determined without 
regard to the provisions of this subsection; or 
" (2) less than 4 per centum, the amount of the Federal financial 
participation in the expenditures made by the State in carrying 
- 
out such plan during such period shall be the amount determined 
without regard to this subsection, plus, of the amount by which 
such expenditures are less than they would have been if the 
erroneous excess payments of aid had been at a rate of 4 per 
centum— 
"(A) 10 per centum of the Federal share of such amount, 
in case such rate is not less than 3.5 per centum, 
"(B) 20 per centum of the Federal share of such amount, 
in case such rate is at least 3.0 per centum but less than 3.5 
per centum, 
"(C) 30 per centum of the Federal share of such amount, 
in case such rate is at least 2.5 per centum but less than 3.0 
per centum, 
"(D) 40 per centum of the Federal share of such amount, 
in case such rate is at least 2.0 per centum but less than 2.5 
per centum, 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1561 
"(E) 50 per centum of the Federal share of such amount, 
in case such rate is less than 2.0 per centum. 
For purposes of this subsection (i) the term 'dollar error rate of aid' 
means the total of the dollar error rates of aid for (I) payments to 
ineligible families receiving assistance: (II) overpayments to eligible 
families receiving assistance; (III) underpayments to eligible families 
receiving assistance; and (IV) nonpayments to eligible families not 
receiving assistance due to erroneous terminations or denials, and (ii) 
the term 'erroneous excess payments,' means the total of (I) erroneous 
payments to ineligible families receiving assistance, and (II) overpay-
ments to eligible families receiving assistance.". 
(b) Payments may be made under the amendment made by subsec-
tion (a) only in the case of periods commencing on or after Jan-
uary 1,1978. 
ACCESS TO WAGE INFORMATION 
SEC. 403. (a) Part A of title IV of the Social Security Act is amended 
by adding after section 410 the following new section: 
"Dollar error rate 
of aid." 
Effective date. 
42 u s e 603 note. 
a 
ACCESS TO WAGE INFORMATION 
42 use 611. 
"SEC. 411. (a) Notwithstanding any other provision of law, the Sec-
retary shall make available to States and political subdivisions thereof 
wage information contained in the records of the Social Security 
Administration which is necessary (as determined by the Secretary 
in reflations) for purposes of determining an individual's eligibility 
for aid or services, or the amount of such aid or services, under a State 
plan for aid and services to needy families with children approved 
under this part, and which is specifically requested by such State or 
political subdivision for such purposes. 
"(b) The Secretary shall establish such safeguards as are necessary 
(as determined by the Secretary under regulations) to insure that 
information made available under the provisions of this section is used 
only for the purposes authorized by this section.". 
(b) Section 3304(a) of the Federal Unemployment Tax Act is 26 USC 3304. 
amended by redesignating paragraph (16) as paragraph (17) and by 
inserting after paragraph (15) the following new paragraph: 
"(16) (A) wage information contained in the records of the 
agency administering the State law which is necessary (as deter-
mined by the Secretary of Health, Education, and Welfare in 
regulations) for purposes of determining an individual's eligibil-
ity for aid or services, or the amount of such aid or services, under 
a State plan for aid and services to needy families with children 
approved under part A of title IV of the Social Security Act, shall 42 USC 601. 
be made available to a State or political subdivision thereof when 
such information is specifically requested by such State or political 
subdivision for such purposes, and 
"(B) such safeguards are established as are necessary (as deter-
mined by the Secretary of Health, Education, and Welfare in 
regulations) to insure that such information is used only for the 
purposes authorized under subparagraph (A);". 
(c) Section 402 (a) of the Social Security Act is amended— 
42 USC 602. 
(1) by striking out the word "and" at the end of paragraph 
(2) by striking out the period at the end of paragraph (28) and 
inserting in lieu thereof a semicolon and the word "and"; and 
91 STAT. 1562 
PUBLIC LAW 95-216—DEC. 20, 1977 
(3) by adding at the end thereof the following new paragraph: 
"(29) effective October 1, 1979, provided that wage informa-
tion available from the Social Security Administration under 
42 use 611. 
the provisions of section 411 of this Act, and wage information 
available (under the provisions of section 3304(a) (16) of the 
26 use 3304. 
Federal Unemployment Tax Act) from agencies administering 
State unemployment compensation laws, shall be requested and 
utilized to the extent permitted under the provisions of such sec-
tions ; except that the State shall not be required to request such 
information from the Social Security Administration where such 
information is available from the agency administering the State 
unemployment compensation laws.". 
Effective date. 
(d) The amendments made by this section shall be effective on the 
42 use 602 note, date of the enactment of this Act. 
STATE DEMONSTRATION PROJECTS 
42 use 1315. 
SEC. 404. Section 1115 of the Social Security Act is amended— 
(1) by inserting "(a) "after "SEC. 1115."; 
(2) by redesignating subsections (a) and (b) as paragraphs 
(1) and (2),respectively; and 
(3) by adding at the end thereof the following new subsection: 
"(b) (1) In order to permit the States to achieve more efficient and 
effective use of funds for public assistance, to reduce dependency, and 
to improve the living conditions and increase the incomes of individ-
uals who are recipients of public assistance, any State having an 
42 use 601. 
approved plan under part A of title IV may, subject to the provisions 
of this subsection, establish and conduct not more than three demon-
stration projects. In establishing and conducting any such project the 
State shall— 
" (A) provide that not more than one such project be conducted 
on a statewide basis; 
"(B) provide that in making arrangements for public service 
employment— 
"(i) appropriate standards for the health, safety, and 
other conditions applicable to the performance of work and 
training on such project are established and will be main-
tained, 
"(ii) such project will not result in the displacement of 
employed workers, 
" (iii) each participant in such project shall be compensated 
for work performed by him at an hourly rate equal to the 
prevailing hourly wage for similar work in the locality where 
the participant performs such work (and, for purposes of 
this clause, benefits payable under the State's plan approved 
under part A of title IV of the family of which such partic-
ipant is a member shall be regarded as compensation for work 
performed by such participant), 
"(iv) with respect to such project the conditions of work, 
training, education, and employment are reasonable in the 
light of such factors as the type of work, geographical region, 
and proficiency of the participant, and 
"(v) appropriate workmen's compensation protection is 
provided to all participants; and 
"(C) provide that participation in such project by any indi-
vidual receiving aid to families with dependent children be 
voluntary. 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1563 
Application. 
Notice. 
"(2) Any State which establishes and conducts demonstration proj-
ects under this subsection may, subject to paragraph (3), with respect 
to any such project— 
" (A) waive, subject to paragraph (3), any or all of the require-
ments of sections 402(a)(1) (relating to statewide operation), 42 USC 602. 
402(a) (3) (relating to administration by a single State agency), 
402(a) (8) (relating to disregard of earned income), except that 
no such waiver of 402 (a) (8) shall operate to waive any amount in 
excess of one-half of the earned income of any individual, and 402 
(a) (19) (relating to the work incentive program); 
"(B) subject to paragraph (4), use to cover the costs of the proj-
ect such funds as are appropriated for payment to such State with 
respect to the assistance which is or would, except for participa-
tion in a project under this subsection, be payable to individuals 
participating in such projects under part A of title IV for any 
fiscal year in which such projects are conducted; and 
"(C) use such funds as are appropriated for payments to States 
under the State and Local Fiscal Assistance Act of 1972 for any 31 USC 1221 
fiscal year in which the project is conducted to cover so much of "ote. 
the costs of salaries for individuals participating in public serv-
ice employment as is not covered through the use of funds made 
available under subparagraph (B). 
"(3) (A) Any State which wishes to establish and conduct demon-
stration projects under the provisions of this subsection shall submit 
an application to the Secretary in such form and containing such 
information as the Secretary may require. Whenever any State sub-
mits such an application to the Secretary, it shall at the same time 
issue public notice of that fact together with a general description of 
the project with respect to which the application is submitted, and 
shall invite comment thereon from interested parties and comments 
thereon may be submitted, within the 30-day period beginning with 
the date the application is submitted to the Secretary, to the State or 
the Secretary oy such parties. The State shall also make copies of the 
application available for public inspection. The Secretary shall also 
immediately publish a summary of the proposed project, make copies 
of the application available for public inspection, and receive and 
consider comments submitted with respect to the application. A State 
shall be authorized to proceed with a project submitted under this 
subsection— 
"(i) when such application has been approved by the Secretary 
(which shall be no earlier than 30 days following the date the 
application is submitted to him), or 
"(ii) 60 days after the date on which such application is sub-
mitted to the Secretary unless, during such 60 day period, he denies 
the application. 
"(B) Notwithstanding the provisions of paragraph (2) (A), the 
Secretary may review any waiver made by a State under such para-
graph. Upon a finding that any such waiver is inconsistent with the 
purposes of this subsection and the purposes of part A of title IV, the 42 USC 601 
Secretary may disapprove such waiver. The project with respect to 
which any such disapproved waiver was made shall be terminated by 
such State not later than the last day of the month following the 
month in which such waiver was disapproved. 
Copies, public 
inspection. 
91 STAT. 1564 
PUBLIC LAW 95-216—DEC. 20, 1977 
42 use 607. 
Termination. 
"(4) Any amount payable to a State under section 403(a) on behalf 
of an individual participating in a project under this section shall not 
be increased by reason of the participation of such individual in any 
demonstration project conducted under this subsection over the amount 
which would be payable if such individual were receiving aid to fam-
ilies with dependent children and not participating in such project. 
"(5) Participation in a project established under this section shall 
not be considered to constitute employment for purposes of any finding 
with respect to 'imemployment' as that term is used in section 407. 
"(6) Any demonstration project established and conducted pursuant 
to the provisions of this subsection shall be conducted for not longer 
than two years. All demonstration projects established and conducted 
pursuant to the provisions of this subsection shall be terminated not 
later than September 30, 1980.". 
42 use 1383 
note. 
87 Stat. 155. 
42 u s e 1382e. 
Appropriation 
authorization. 
REIMBURSEMENT FOR ERRONEOUS STATE SUPPLEMENTARY PAYMENT 
SEC. 405. (a) Notwithstanding any other provision of law, the Secre-
tary of Health, Education, and Welfare is authorized and directed 
to pay to each State an amount equal to the amount expended by such 
State for erroneous supplementary payments to aged, blmd, or disabled 
individuals whenever, and to the extent to which, the Secretary 
through an audit by the Department of Health, Education, and Wel-
fare which has been reviewed and concurred in by the Inspector 
General of such department determines that— 
(1) such amount was paid by such State as a supplementary 
payment during the calendar year 1974 pursuant to an agreement 
between the State and the Secretary required by section 212 of the 
Act entitled "An Act to extend the Kenegotiation Act of 1951 for 
one year, and for other purposes", approved July 9, 1973, or such 
amount was paid by such State as an optional State supplementa-
tion, as defined in section 1616 of the Social Security Act, during 
the calendar year 1974, 
(2) the erroneous payments were the result of good faith reli-
ance by such State upon erroneous or incomplete information 
supplied by the Department of Health, Education, and Welfare, 
through the State data exchange, or good faith reliance upon 
incorrect supplemental security income benefit payments made by 
such department, and 
(3) recovery of the erroneous payments by such State would 
be impossible or unreasonable. 
(b) There are authorized to be appropriated such sums as are 
necessary to carry out the provisions of this section. 
TITLE V—MISCELLANEOUS 
COVERAGE U N D E R MEDICARE OF CERTAIN POWER-OPERATED W H E E L C H A I R S 
42USei395x. 
SEC. 501. (a) Section 1861 (s) (6) of the Social Security Act is 
amended by inserting after "wheelchairs" the following: "(which may 
include a power-operated vehicle that may be appropriately used as a 
wheelchair, but only where the use of such a vehicle is determined to be 
necessary on the basis of the individual's medical and physical condi-
tion and the vehicle meets such safety requirements as the Secretary 
may prescribe)". 
PUBLIC LAW 95-216—DEC. 20, 1977 
91 STAT. 1565 
Effective date. 
42 u s e 1395x 
note. 
(b) Section 1842(b) (3) of such Act is amended by inserting after 42 USC 1395u. 
the fourth sentence thereof the following new sentence: "With respect 
to power-operated wheelchairs for which payment may be made in 
accordance with section 1861 (s) (6), charges determined to be reason- Ante, p. 1564. 
able may not exceed the lowest charge at which power-operated 
wheelchairs are available in the locality." 
(c) The amendments made by this section shall be effective in the 
case of items and services furnished after the date of the enactment 
of this Act. 
rEDERAL ELECTION CAMPAIGN ACT AMENDMENTS 
SEC. 502. (a) Section 328 of the Federal Election Campaign Act of 
1971 (2U.S.C.441i) is amended— 
(1) by inserting "(a)" immediately after "SEC. 328.", and 
(2) by adding at the end thereof the following new subsections: 
"(b) If an honorarium payable to a person is paid instead at his 
request to a charitable organization selected by payor from a list of 
6 or more charitable organizations provided by that person, that per-
son shall not be treated, for purposes of subsection (a), as accepting 
that honorarium. For purposes of this subsection, the term 'charitable 
organization' means an organization described in section 170(c) of 
the Internal Revenue Code of 1954. 
"(c) For purposes of determining the aggregate amount of hon-
orariums received by a person during any calendar year, amounts 
returned to the person paying an honorarium before the close of the 
calendar year in which it was received shall be disregarded. 
"(d) For purposes of paragraph (2) of subsection (a), an honorar-
ium shall be treated as accepted only in the year in which that hon-
orarium is received.". 
(b) The amendments made by subsection (a) shall apply with 
respect to any honorarium received after December 31,1976. 
Approved December 20, 1977. 
26 USC 170. 
Effective date. 
2 USC 441i note. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 95-702, pt. I (Comm. on Ways and Means), No. 95-702, pt. II 
(Coram, on Post Office and Civil Service) and No. 95-837 (Comra. 
of Conference). 
SENATE REPORTS: No. 95-572 accompanying H.R. 5322 (Comm. on Finance) and 
No. 95-612 (Comm. of Conference). 
CONGRESSIONAL RECORD, Vol. 123 (1977): 
Oct. 26, 27, considered and passed House. 
Nov. 1-4, considered and passed Senate, amended. 
Dec. 15, Senate and House agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 52: 
Dec. 20, Presidential statement.