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initial entitlement to such an annuity) not to hove attained such age until the first day of the first month following the end of the quarter or semester in which he is enrolled at such time (or, if the educational institution in which he is enrolled is not operated on a quarter or semester system, until the first day of the first month following the completion of the course in which he is 80 enrolled or until the first day of the third month beginning after such time, whichever first occurs).

Social Security Act

“Sec. 226 (a) (1) * * *

“(e) Notwithstanding the foregoing provisions of this section, every individual who

(1) has not attained the age of 65;

(2) (A) is fully or currently insured (as such terms are defined in section 214 of this Act) or would be fully or currently insured if his service as an employee (as defined in the Railroad Retirement Act of 1937) after December 31, 1936, were included in the term employment as defined in this Act, or (B) is entitled to monthly insurance benefits under title II of this Act or an annuity under the Railroad Retirement Act of 1937, or (C) is the spouse or dependent child (as defined in regulations) of an individual who is fully or currently insured or would be fully or currently insured if his service as an employee (as defined in the Railroad Retirement Act of 1937) after December 31, 1936, were included in the term employment as defined in this Act, or (D) is the spouse or dependent child (as defined in regulations) of an individual entitled to monthly insurance benefits under title II of this Act or an annuity under the Railroad Retirement Act of 1937; and

(3) is medically determined to have chronic renal disease and who requires hemodialysis or renal transplantation for such

disease; shall be deemed to be disabled for purposes of coverage under parts A and B of Medicare subject to the deductible, premium, and copayment provisions of title XVIII.”

APPENDIX-AGENCY REPORT

UNITED STATES OF AMERICA,
RAILROAD RETIREMENT BOARD,

Chicago, Ill., May 24, 1973.
Hon. HARRISON A. WILLIAMS, Jr.,
Chairman, Committee on Labor and Public Welfare, U.S. Senate,

Washington, D.C. DEAR MR. CHAIRMAN: This is the report of the Railroad Retirement Board on S. 1886 [identical to H.R. 7357, as reported], which was introduced by Mr. Hathaway on May 23, 1973. For the reasons stated below, the Board favors the bill and hopes for its early enactment. The amendments proposed by the bill were discussed with representatives of railroad management (Association of American Railroads) and railroad labor (Congress of Railway Unions and Railway Labor Executives' Association) who are also in favor of the bill.

The enactment of the amendments proposed by section 1 of the bill would simplify administration of the social security minimum guaranty provision contained in Section 3(a) of the Railroad Retirement Act. This provision guarantees that the combined monthly retirement benefits which an individual and a dependent deriving benefits from him will receive under the Railroad Retirement Act and the Social Security Act (based on the individual's earnings record) would be no less than 110 percent of the amount which would have been payable to that family under the Social Security Act on the basis of the individual's combined railroad and nonrailroad earnings if his railroad service after 1936 had been covered under the Social Security Act. Under the law prior to the enactment of Public Law 92-460 on October 4, 1972, when computing an annuity under the guaranty provision the Board was required to take into account an employee's earnings in and after the year of his retirement. This necessitated a continuous policing of an annuitant's post-retirement wage record to determine whether he had received additional nonrailroad earnings and, if he did, further necessitated recomputations to determine whether the guaranty provision would, in light of the post-retirement earnings, provide a higher benefit than the regular railroad retirement annuity formula. It is a rare case where the inclusion of post-retirement social security earnings in the guaranty provision computation would result in an annuity previously paid at the rate provided by the regular formula being transferred to the rate provided under the guaranty provision. Therefore, in order to relieve the Board of the problems created by the aforementioned requirement, clauses (ix) and (x) were added to Section 3(e) of the Act by Public Law 92-460 to provide that, in computing the “average monthly wage" for purposes of determining the amount payable under the guaranty provisions, only the individual's social security earnings through the year before his annuity began to accrue would be included.

(11)

While the provisions of clauses (ix) and (x) of Section 3(e) of the Railroad Retirement Act fully accomplished the purpose intended under the law in existence at the time of their enactment, the Social Security Act was amended shortly thereafter by Public Law 92-003 to provide special minimum primary insurance amounts (see section 215(a) (3) of that Act) and so-called "increment month" increases (see section 202(w) of that Act). Since the determination of either a special minimum primary insurance amount or an increment month increase does not involve the computation of an "average monthly wage”, the provisions of clauses (ix) and (x) are not applicable in making such determinations, and, therefore, the purpose of these clauses is defeated to a significant extent. Enactment of section 1 of the bill would fully effectuate the original purpose of the clauses in question.

As a result of the enactment of Public Law 92–603, approved October 30, 1972, the eligibility conditions for children's benefits under the Social Security Act were liberalized, and the amendments proposed by section 2 of this bill would make the same liberalizations for annuities payable under the Railroad Retirement Act. Thus (1) a child's survivor benefit would continue after his adoption by anyone, instead of by a close relative only (section 1(1) of the bill); (2) a survivor benefit would be paid to a child for a disability which began before age 22, instead of before age 18 (section 1(2) of the bill); (3) a student child would continue to receive benefits after age 22 in some cases (section 1(5) of the bill); and (4) a dependent grandchild would be treated as a child of his grandparent (section 1(3) of the bill). In addition, as a result of the change mentioned in item (2), a wife under age 62 (if her husband has attained age 65 and has been awarded an annuity) or widow under age 60 would be eligible for a railroad retirement annuity if she has in her care a child who became disabled between the ages of 18 and 22.

The amendments proposed by section 2 of the bill were originally included in the bill for technical amendments sponsored last year by the Board. These provisions were deleted from the bill which was subsequently enacted, on October 4, 1972, as Public Law 92-460 because they were contingent upon the enactment of H.R. 1, 92d Congress, and it was believed that H.R. 1 would not be enacted in 1972; H.R. 1, however, was enacted on October 30, 1972, as Public Law 92–603. The costs resulting from these amendments together with the cost and savings from the technical amendments enacted in Public Law 92-460 and additional financial interchange gains because of the enactment of Public Law 92-603 balance out so that no financial burden would result.

The bill would also effect an amendment to section 226(e) of the Social Security Act to extend kidney disease Medicare coverage to railroad employees, their spouses, and their dependent children. As a result of the enactment of section 2991 of Public Law 92–603, an individual insured under the Social Security Act, his spouse, or his dependent children who need treatment (hemodialysis or renal transplanation) for kidney disease are covered under Medicare, beginning July 1, 1973, in the same way as beneficiaries age 65 and over or disabled beneficiaries under age 65. The present provision, however, does not corer railroad employees or their spouses or children unless they also happen to

be insured under the Social Security Act on the basis of wages only. Such an omission had to be the result of an oversight since in all other respects railroad retirement beneficiaries are entitled to the same Medicare coverage as their social security counterparts. The proposed amendment would correct this oversight.

The Board, therefore, recommends that your Committee act favorably on this bill.

A report on the identical bill H.R. 7357, introduced in the House of Representatives on April 30, 1973, by Mr. Staggers, has been cleared with the Office of Management and Budget which informed us that there was no objection to the presentation of the report from the standpoint of the administration's program. Sincerely yours,

R. F. BUTLER, Secretary.

96-447 0 - 73 - 29

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