U.S. Rep. John Larson, (D-Connecticut) introduced a bill July 9, 2020 to reduce the inequities related to benefits caused by COVID-19. Larson asked Social Security’s chief actuary to determine the cost of the bill and it was determined it would be about $75 billion over a 10-year period. The extra $75 billion would be funded each year from the Treasury Department’s general fund. Below are the provisions of the bill. Unfortunately the bill has no chance of pasting the Senate and being signed by President Trump, at least during this election year.
- For any year starting with 2020, if the National Average Wage Index (AWI) as computed under current law is lower than the AWI for any previous year, then the largest AWI among all previous years would be used for the purpose of computing the Average Indexed Monthly Earnings (AIME) and the Primary Insurance Amount (PIA) for all beneficiaries who become initially eligible for benefits two years after such year.
- Increase the first PIA formula factor from 90 percent to 93 percent for all benefits payable for months of entitlement from January 2020 through December 2020, including benefits for those who become newly eligible both before and after January 2020.
- Increase the special minimum PIA for all benefits payable for months of entitlement from January 2020 through December 2020, including benefits for those who become newly eligible both before and after January 2020.
- Replace the current-law thresholds for federal income taxation of OASDI benefits with a single set of thresholds at $35,000 for single filers and $50,000 for joint filers for taxation of up to 85 percent of OASDI benefits, effective for any tax year that begins in calendar year 2019. The amount of revenue from taxation of OASDI benefits that would be allocated to the HI Trust Fund will be at the same level as if the current-law computation (in the absence of this provision) were applied.
- Extend eligibility for student benefits up to age 23 for months of entitlement from January 2020 through December 2020, including benefits for those who become newly eligible both before and after January 2020.
- Increase the benefit payable to qualifying widow(er) beneficiaries to 75 percent of the sum of their own retired worker or disabled worker benefit and the PIA of their deceased spouse, for months of entitlement from January 2020 through December 2020, including benefits for those who become newly eligible both before and after January 2020.
- Extend eligibility for a child dependent benefit on the account of a beneficiary to whom the child is a grandchild, step-grandchild, or other first degree, second-degree, third-degree, fourth-degree, or fifth-degree relative of an individual or the individual’s spouse, for months of entitlement from January 2020 through December 2020, including benefits for those who become newly eligible both before and after January 2020. Eligibility to the benefit would require custody by court order of the child to the grandparent, step-grandparent, or other qualifying relative.
