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S. 90 (113th): Notch Fairness Act of 2013

The text of the bill below is as of Jan 23, 2013 (Introduced).


II

113th CONGRESS

1st Session

S. 90

IN THE SENATE OF THE UNITED STATES

January 23 (legislative day, January 3), 2013

introduced the following bill; which was read twice and referred to theCommittee on Finance

A BILL

To amend title II of the Social Security Act to allow workers who attain age 65 after 1981 and before 1992 to choose either lump sum payments over four years totaling $5,000 or an improved benefit computation formula under a new 10-year rule governing the transition to the changes in benefit computation rules enacted in the Social Security Amendments of 1977, and for other purposes.

1.

Short title

This Act may be cited as the Notch Fairness Act of 2013 .

2.

New guaranteed minimum primary insurance amount where eligibility arises during transitional period

(a)

In General

Section 215(a) of theSocial Security Act is amended—

(1)

inparagraph (4)(B), by inserting(with or without the application ofparagraph (8))afterwould be made, and by striking1984inclause (i)and inserting1989; and

(2)

by adding at the end the following:

(8)
(A)

In the case of an individual described inparagraph (4)(B)(subject tosubparagraphs (F)and(G) of this paragraph), the amount of the individual’s primary insurance amount as computed or recomputed underparagraph (1)shall be deemed equal to the sum of—

(i)

such amount, and

(ii)

the applicable transitional increase amount (if any).

(B)

For purposes ofsubparagraph (A)(ii), the termapplicable transitional increase amountmeans, in the case of any individual, the product derived by multiplying—

(i)

the excess under former law, by

(ii)

the applicable percentage in relation to the year in which the individual becomes eligible for old-age insurance benefits, as determined by the following table:

If the individual becomes The applicable
 eligible for such benefits in: percentage is:
1979 55
1980 45
1981 35
1982 32
1983 25
1984 20
1985 16
1986 10
1987 3
1988 5.
(C)

For purposes ofsubparagraph (B), the termexcess under former lawmeans, in the case of any individual, the excess of—

(i)

the applicable former law primary insurance amount, over

(ii)

the amount which would be such individual’s primary insurance amount if computed or recomputed under this section without regard to this paragraph andparagraphs (4),(5), and(6).

(D)

For purposes ofsubparagraph (C)(i), the termapplicable former law primary insurance amountmeans, in the case of any individual, the amount which would be such individual’s primary insurance amount if it were—

(i)

computed or recomputed (pursuant toparagraph (4)(B)(i)) under section 215(a)as in effect in December 1978, or

(ii)

computed or recomputed (pursuant toparagraph (4)(B)(ii)) as provided bysubsection (d),

(as applicable) and modified as provided by subparagraph (E).
(E)

In determining the amount which would be an individual’s primary insurance amount as provided insubparagraph (D)

(i)

subsection (b)(4)shall not apply;

(ii)

section 215(b)as in effect in December 1978 shall apply, except thatsection 215(b)(2)(C)(as then in effect) shall be deemed to provide that an individual’scomputation base yearsmay include only calendar years in the period after 1950 (or 1936 if applicable) and ending with the calendar year in which such individual attains age 61, plus the 3 calendar years after such period for which the total of such individual’s wages and self-employment income is the largest; and

(iii)

subdivision (I) in the last sentence ofparagraph (4)shall be applied as though the wordswithout regard to any increases in that tablein such subdivision readincluding any increases in that table.

(F)

This paragraph shall apply in the case of any individual only if such application results in a primary insurance amount for such individual that is greater than it would be if computed or recomputed underparagraph (4)(B)without regard to this paragraph.

(G)
(i)

This paragraph shall apply in the case of any individual subject to any timely election to receive lump sum payments under this subparagraph.

(ii)

A written election to receive lump sum payments under this subparagraph, in lieu of the application of this paragraph to the computation of the primary insurance amount of an individual described inparagraph (4)(B), may be filed with theCommissioner of Social Securityin such form and manner as shall be prescribed in regulations of theCommissioner. Any such election may be filed by such individual or, in the event of such individual’s death before any such election is filed by such individual, by any other beneficiary entitled to benefits undersection 202on the basis of such individual’s wages and self-employment income. Any such election filed after December 31, 2013, shall be null and void and of no effect.

(iii)

Upon receipt by theCommissionerof a timely election filed by the individual described inparagraph (4)(B)in accordance withclause (ii)

(I)

theCommissionershall certify receipt of such election to theSecretary of the Treasury, and theSecretary of the Treasury, after receipt of such certification, shall pay such individual, from amounts in the Federal Old-Age and Survivors Insurance Trust Fund, a total amount equal to $5,000, in 4 annual lump sum installments of $1,250, the first of which shall be made during fiscal year 2014 not later than July 1, 2014, and

(II)

subparagraph (A)shall not apply in determining such individual’s primary insurance amount.

(iv)

Upon receipt by theCommissioneras of December 31, 2013, of a timely election filed in accordance withclause (ii)by at least one beneficiary entitled to benefits on the basis of the wages and self-employment income of a deceased individual described inparagraph (4)(B), if such deceased individual has filed no timely election in accordance withclause (ii)

(I)

theCommissionershall certify receipt of all such elections received as of such date to theSecretary of the Treasury, and theSecretary of the Treasury, after receipt of such certification, shall pay each beneficiary filing such a timely election, from amounts in the Federal Old-Age and Survivors Insurance Trust Fund, a total amount equal to $5,000 (or, in the case of two or more such beneficiaries, such amount distributed evenly among such beneficiaries), in four equal annual lump sum installments, the first of which shall be made during fiscal year 2014 not later than July 1, 2014, and

(II)

solely for purposes of determining the amount of such beneficiary’s benefits,subparagraph (A)shall be deemed not to apply in determining the deceased individual’s primary insurance amount.

.

(b)

Effective Date and Related Rules

(1)

Applicability of amendments

(A)

In general

Except as provided inparagraph (2), the amendments made by this Act shall be effective as though they had been included or reflected insection 201 of the Social Security Amendments of 1977.

(B)

Applicability

No monthly benefit or primary insurance amount undertitle II of theSocial Security Act shall be increased by reason of such amendments for any month before July 2014.

(2)

Recomputation to reflect benefit increases

In any case in which an individual is entitled to monthly insurance benefits undertitle II of theSocial Security Act for June 2014, if such benefits are based on a primary insurance amount computed—

(A)

undersection 215 of such Actas in effect (by reason of theSocial Security Amendments of 1977) after December 1978, or

(B)

undersection 215 of such Actas in effect prior to January 1979 by reason ofsubsection (a)(4)(B) of such section(as amended by theSocial Security Amendments of 1977),

theCommissioner of Social Security(notwithstandingsection 215(f)(1) of the Social Security Act) shall recompute such primary insurance amount so as to take into account the amendments made by this Act.