OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE-Continued H.R. 12580 2. Covers service of U.S. citizens after 1960 working for certain labor organizations organized in the Panama Canal Zone by modifying the definition of American employer to include labor organizations which are chartered by labor organizations created or organized in the United States. Validates certain wage credits for which taxes were erroneously paid for service after 1954 and before 1961 for such employees. Effective date: No benefits payable or increased for month of enactment or prior month. No lump sum death payments payable or increased if individual died prior to date of enactment. Bill: Sec. 106(d). House report: pp. 21, 81-82. b. and c. No change. Eliminates the requirementsthat an individual I. COVERAGE-Continued Item Present law C. Geographical scope-Con. Coverage outside of the United States is limited a. American citizens either self-employed b. Citizens of the United States employed by certain foreign subsidiaries of American corporations are covered by voluntary agreements between the Federal Government and the parent American company. The domestic corporation can include some or all of its foreign subsidiaries in the agreement and must agree to pay the equivalent of both employer and employee taxes on behalf of the subsidiaries included. c. Individuals, regardless of citizenship, who are employed on American registered ships and aircraft if either the contract of service was entered into in the United States or the plane or vessel touches a port in the United States. II. PROVISIONS RELATING TO PERMANENT AND TOTAL DISABILITY must have attained age 50 in order to be eligible for benefits. enactment. A. Nature of the Provisions Provides an insurance benefit (for months beginning July 1957) for disabled workers Insurance Trust Fund. period of disability has been established dies putation purposes. For benefits an individual must be precluded from engaging in any substantial gainful activity by reason of a physical or mental impairment. The impairment must be medically determinable and one which can be expected to be of long-continued and indefinite duration or to result in death. No change. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE-Continued II. PROVISIONS RELATING TO PERMANENT AND TOTAL DISABILITY-Continued Item Present law H.R. 12580 Provides that people who become disabled within 60 months (5 years) after termination of a period of disability would not be required to serve another 6-month "waiting period” before they are again eligible to receive benefits. Effective date: Benefits payable for month of enactment and subsequent months. Bill: Sec. 402. House report: pp. 13-14, 103–4. Provides alternative work requirement for in dividuals who have (1) 20 quarters of coverage, whenever acquired, and (2) quarters of coverage in all calendar quarters elapsing after 1950 up to the quarter in which they become disabled, but not less than 6 quarters. Bill: Sec. 404. House report: pp. 14, 106-107. C. Rehabilitation.. The policy of Congress is stated that disabled persons applying for a determination of disability be promptly referred to State vocational rehabilitation agencies for necessary rehabilitation services. Act provides for deduction of benefits for refusal, without good cause, to accept rehabilitation services available under a State plan approved under the Vocational Rehabilitation Act in such amounts as the Secretary shall determine. A member or adherent of a recognized church or religious sect that relies on spiritual healing who refuses rehabilitation services is deemed to have done so with good cause. A disabled person who is receiving rehabilita tion services from a State vocational rehabilitation agency and returns to work shall not, for at least 1 year after his work first started, be regarded as able to engage in substantial gainful activity solely by reason of such work. Broadens present provision to allow, in effect, a 12-month trial work period for all beneficiaries (including childhood disability beneficiaries) who attempt to work. If, after 9 months, the beneficiary has demonstrated that he is no longer disabled within the meaning of the law, he will receive benefits for an additional 3 months. (Only 1 trial work period permitted for each period of disability; no trial work period for persons disabled a 2d time within 60 months.) Any beneficiary who has been determined to be no longer disabled within the meaning of the law will be given an additional 3 months of benefits as above. Effective date: Month beginning after month of enactment. Bill: Sec. 403. House report: Pp. 12–13, 104-106. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE—Continued Number of quarters of coverage required for fully insured status under present law and under H.R. 12580 1 This column represents the requirement under the basic insured status formula in existing OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE-Continued III. ELIGIBILITY FOR BENEFITS-Continued Item Present law H.R. 12580 B. Survivors of workers who died prior to 1940. Persons who died before Sept. 1, 1950, and Provides that any person who died or attained after 1939 with at least 6 quarters of cover- retirement age before 1951 and had at least Effective for benefits starting with the month after the enactment of the bill; effective for lump-sum death payments based on deaths occurring after month of enactment. House report, pp. 14-15, 86-88. widows, children, and parents if the wage earner died before 1940 if he had at least 6 quarters of coverage. House report: pp. 16, 88-89. unless the insured worker's death was after Effective for month after month of enactment. House report: pp. 16, 88–89. eligible child unless he was born, or adopted, or adopted after worker's disability. A natural child or stepchild of the disabled entitled to benefits. C. Widowers of workers who died prior to 1950. D. Children born or adopted after parent's disability. E. Dependency of stepchild on natural father. A child is deemed dependent on natural father or adopting father for benefit purposes un- Provides for payment of child's benefit even though the child was living with and re- stepfather. be changed to 1 year. sured workers wi not result in ineligibility. cation for benefits. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE-Continued III. ELIGIBILITY FOR BENEFITS-Continued Item Present law H.R. 12580 H. Lump sum death payment. Lump sum death payment paid in cases where no eligible spouse survives) only after burial expenses are paid. Allows lump sum to be sent directly to funeral director on application of person who assumes responsibility for funeral home expenses. If any of the lump sum remains, it is paid to person who paid funeral bill; if any still remains to persons who paid other burial expenses in a certain order of priority. Effective date: For deaths after enactment and for deaths before enactment if no application is filed before the 3d month after month of enactment. Bill: Sec. 203. House report: pp. 30–31, 85–86. IV. BENEFIT AMOUNTS A. Computing average monthly wage. In general, an individual's average monthly wage for computing his monthly old-age insurance benefit amount is determined by dividing the total of his creditable earnings after the applicable starting date and up to the applicable closing date, by the number of months involved. Excluded from this computation are all months and all earnings in any year any part of which was included in a period of disability under the disability "freeze" (except that the months and earnings in the year in which the period of disability begins may be included if the resulting benefit would be higher). Also excluded from the computation are all months in any year prior to the year the individual attained age 22 if less than 2 quarters of such year were quarters of coverage. Starting dates may be last day of (1) 1936, or (2) 1950, or, if later, the year of attainment of age 21. The closing date may be either (1) the 1st day of the year the individual died or became entitled to benefits or (2) the 1st day of the year in which he was fully insured and attained retirement age, which ever results in a higher benefit. Applicable starting and closing dates are those which yield the highest benefit amount. The minimum divisor is 18 months. Provides for computation of the average monthly wage, in retirement cases, on the basis of a constant number of years, regardless of when, before age 22, the person started to work or when, after age 65 (age 62 in the case of a woman), he files application for benefits. The number of years would be equal to 5 less than the number of years (excluding years in periods of disability) elapsing after 1950 or after the year in which the individual attained age 21, whichever is later, and up to the year in which the person was first eligible for old-age insurance benefits (generally the year in which he attained age 65—or age 62 in the case of a woman). In death and disability cases the number of years would be determined by the date of death or disability. In those cases where a larger benefit would result (because the individual's best earnings were in years before 1951) the number of years would be those elapsing after 1936, rather than 1950; this alternative is similar to the 1936 alternative "starting date" available under present law in such cases. The subtraction of 5 from the number of elapsed years is the equivalent of the present dropout of the 5 years during which the individual's earnings were the lowest. |
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