than $100 paid by an employer in any calendar year to an employee for agricultural labor. The new paragraph (2) excludes from the definition of wages, for purposes of old-age and survivors insurance, cash remuneration paid by an employer in any calendar year to an employee for agricultural labor unless (1) such remuneration is $200 or more, or (2) the employee performs agricultural labor during the year for the employer on 30 or more days for cash remuneration computed on a time basis. (Remuneration paid in any medium other than cash for agricultural labor is excluded under par. (1) of the same subsection of the present law and par. (1) would remain unchanged under both the House bill and the committee bill.)

Under the committee amendment, cash remuneration of $200 or more paid by an employer in a calendar year to an employee for agricultural labor would constitute wages, regardless of the rate, basis, or unit of payment. If cash remuneration is less than $200 in the year, it would constitute wages for old-age and survivors insurance. purposes only if the worker to whom it is paid performs agricultural labor for the employer on 30 or more days during the year for cash remuneration computed on a rate of pay for a unit of time, for example, an hour, a day, or a week. Pay for work at piece rates would be excluded from wages unless the worker's total cash renumeration (including both piece-rate pay and pay based on a unit of time) is $200 or more.

Section 104 (b) of the bill amends section 210 of the Social Security Act by adding a new subsection (m). The amendment, for which there is no corresponding provision in the House bill, provides that individuals furnished by a "crew leader," as defined by the bill, to perform agricultural labor would be deemed to be employees of the "crew leader" for purposes of old-age and survivors insurance; "crew leader" is defined as an individual who furnishes workers to perform agricultural labor for another person (usually a farm operator) if such individual pays (either on his own behalf or on behalf of such person) the workers so furnished by him for their agricultural labor and if such individual has not entered into a written agreement with such person (the farm operator) whereby he (the crew leader) is designated as an employee of the farm operator.

The new subsection (m) also provides that the crew leader would, with respect to the services performed by him in furnishing individuals to perform agricultural labor for another person and with respect also to service performed by him as a member of the crew, be deemed not to be an employee of such other person.

Section 104 (c) of the bill would make a technical amendment in section 213 (a) (2) (B) (iv) of the Social Security Act which prescribes a special method of computing quarters of coverage based on wages from agricultural labor. The amendment would continue the present rule of crediting 1 quarter of coverage (generally the last quarter of the year) for such wages if they equal or exceed $100 but are less. than $200. (The first figure is not mentioned in the existing provision because an individual can have no such wages under the existing sec. 209 (h) (2) unless he receives at least $100 from 1 employer during the year.)

Section 104 (d) of the bill provides that the amendment made by subsection (a) shall be effective only with respect to remuneration paid after 1956; and that the amendment made by subsection (b) shall be effective only with respect to service performed after 1956.

Computation of self-employment income by farm operators

Section 105 (a) of the bill, for which there is no corresponding provision in the House bill, amends section 211 (a) of the Social Security Act by striking out the last two sentences and inserting a new provision for computation of farm self-employment income. Under existing law a self-employed farmer who computes his income on the cash receipts and disbursements method may deem 50 percent of his "gross income" from farming to be his net earnings from self-employment attributable to farming, provided such gross income is not more than $1,800. If the gross income from farming is more than $1,800 and the net earnings from self-employment as computed under the provisions of section 210 (a) are less than $900, such net earnings, at his option, may be deemed to be $900. For this purpose, “gross income" is the excess of gross receipts from farming over the cost or other basis of property which was purchased and sold in carrying on such trade or business, adjusted in accordance with the provisions of paragraphs (1) through (7) (to the extent applicable) of section 211 (a) of the act.

The bill changes the optional method of computing net earnings from farm self-employment, and extends the option to self-employed farmers who report income on the accrual method and to members of farm partnerships. Under the bill a farmer whose gross income from farming operations is not more than $1,200, may, at his option, deem such gross income to be his net earnings from self-employment; and if his gross income from farming is more than $1,200 and his net earnings from self-employment from farming operations (computed under the provisions of section 211 (a) without regard to the optional method of computing net earnings from self-employment) are less than $1,200, he may, at his option, deem his net earnings from self-employment to be $1,200.

In the case of a member of a farm partnership whose distributive share of the gross income of the partnership (after the gross income of the partnership has been reduced by the sum of all payments made by the partnership to members thereof which constitute guaranteed payments within the meaning of section 707 (c) of the Internal Revenue Code of 1954) is not more than $1,200, the partner may, at his option, deem such distributive share of the gross income of the partnership to be his distributive share of income described in section 702 (a) (9) of the Internal Revenue Code of 1954 derived from the partnership, and may use such figure in computing his net earnings from selfemployment. If the partner's distributive share of the gross income of a farm partnership, computed as provided in the preceding sentence, is more than $1,200 and his distributive share (whether or not distributed) of income described in section 702 (a) (9) of such code derived from such farm partnership (computed under sec. 211 (a) of the act without regard to the optional method provided in that section for computing net earnings from self-employment) is less than $1,200, the distributive share of income described in section 702 (a) (9) of such code derived from such farm partnership may, at his option, be deemed to be $1,200 for purposes of computing his net earnings from self-employment.

Section 105 (a) of the bill further amends section 211 (a) of the act to provide, for purposes of computing net earnings from self-employment under the optional method, that in any case in which the income

is computed under an accrual method, the term "gross income" means gross income from the trade or business carried on by the individual or by the partnership, adjusted in accordance with the provisions of paragraphs (1) through (7) of section 211 (a) of the act. The amendment further provides that for purposes of determining whether an individual (including a member of a partnership) has gross income from farming operations of not more than $1,200 or has gross income from such operations of $1,200 or more, such individual shall aggregate his gross income derived from all farming activities carried on by him as a sole proprietor any payment which he receives from a farm partnership of which he is a member and which is a guaranteed payment within the meaning of section 707 (e) of the Internal Revenue Code of 1954, and his distributive share of the gross income of each farm partnership of which he is a member, (computed in accordance with the provisions of sec. 211 (a) of the act as amended by sec. 105 (a) of the bill).

Under section 105 (b) of the bill, the amendment made by section 105 (a) applies with respect to taxable years ending after 1956.

The House bill contained no comparable amendment of existing law.

Time for filing reports of earnings and for correcting secretary's records

Section 106 of the bill (the same as sec. 105 of the House bill) makes two technical amendments in the Social Security Act to conform certain provisions to the Internal Revenue Code of 1954, which changes the deadline date for filing income-tax returns from March 15 to April 15.

Subsection (a) of this section of the bill amends section 203 (g) (1) of the Social Security Act, which provides that beneficiaries who earn more than the amount of earnings permitted by the "retirement test" must report their earnings to the Secretary of Health, Education, and Welfare. The amendment would permit such reports to be filed up to the 15th day of the 4th month following the close of the individual's taxable year, rather than the 15th day of the 3d month following the close of such year as under present law. This amendment would apply in the case of monthly benefits for months in taxable years (of the individual entitled to benefits) beginning after 1954.

Subsection (b) of this section of the bill amends section 205 (c) (1) (B) of the act, which relates to the definition of the term "time limitation" for purposes of making changes in wage records, to provide that the term shall mean a period of 3 years, 3 months, and 15 days, rather than 3 years, 2 months, and 15 days as under existing law. Alternative insured status

Section 107 of the bill amends section 214 (a) (3) of the Social Security Act, which provides an alternative method for acquiring fully insured status by persons who cannot meet the normal requirement of 1 quarter of coverage for every 2 quarters elapsing after 1950 and up to the quarter of death or attainment of retirement age. The alternative requirement now in the law provides that an individual would be fully insured if all of the quarters elapsing after 1954 and prior to the quarter of death or attainment of retirement age are quarters of coverage, provided that there are at least six such quarters. Under the provisions of the bill, an individual who had at least 6 such quarters of coverage after 1954 would be fully insured under this

alternative provision if all but 4 of the quarters elapsing after 1954 and prior to (1) July 1, 1957, or (2) if later, the quarter in which he attained retirement age or died, whichever first occurred, are quarters of coverage. This change would permit individuals first covered in 1956 to qualify for benefits on the same basis as the present law provides for persons first covered in 1955, since they could omit the four quarters of noncoverage in 1955 from the count of consecutive quarters of coverage required after 1954.

The amendment also would liberalize the fully insured status requirement somewhat for all persons who were covered before 1956 but could not meet the normal requirements nor the special requirements in present law, since such persons could have as many as four quarters after 1954 which were not quarters of coverage and still be fully insured. The amended provision would be effective with respect to individuals who died or attained retirement age before October 1960. Thereafter, the normal requirements in section 214 (a) (2) would be no more difficult to meet than the special requirements in this bill. There was no comparable provision in the House bill.

Dropout of 5 years of low earnings

Section 108 of the bill amends section 215 (b) (4) of the act to provide that as many as 5 years of low or no earnings could be dropped in the computation of an insured individual's average monthly wage, regardless of the number of quarters of coverage he has. Under present law, no more than 4 such years may be dropped from the computation if the individual does not have at least 20 quarters of coverage. Unless the 20-quarter-of-coverage requirement were removed, persons newly covered by this bill as of the beginning of 1956 and who retired or died prior to the fourth quarter of 1960 would not be able to drop all the years 1951-55 from the computation and thus would always have 1 year with no earnings counted against them.

Very few of the persons now on the benefit rolls who had a dropout of only 4 years of low earnings because they did not have 20 quarters of coverage (which would have permitted 5 years to be dropped) would benefit substantially from this amendment. Those individuals whose benefits were based on an average monthly wage computed over the period from 1951 on and who are now on the benefit rolls, and those individuals who will come on the benefit rolls prior to 1957 with benefits computed over the period starting with 1951 could, in general, drop no more than 4 years in any event. Those whose benefits were computed over the period from 1937 on would benefit very little from a dropout of an additional year over so long a period.

To avoid the possibility that large numbers of recomputations would have to be made under this provision under circumstances where little or no additional benefit would result, the amendment would be effective only with respect to benefits based on the earnings record of an individual (1) who becomes entitled to an old-age insurance benefit on the basis of an application filed on or after the date of enactment; or (2) who has substantial enough recent earnings after entitlement to old-age insurance benefits to be entitled (except for the requirement in sec. 215 (f) (6) of the act that the recomputation must result in a higher primary insurance amount) to a "work recomputation" under section 215 (f) (2) (A) of the act based on an application filed on or after the date of enactment of the bill; or (3) who

dies without becoming entitled to an old-age insurance benefit, and on the basis of whose wages and self-employment income no individual was entitled to monthly survivor's benefits, and no lump-sum death payment was payable, under section 202 of the act, on the basis of an application filed prior to such date of enactment; or (4) who dies on or after the date of enactment but who had substantial enough recent earnings after entitlement to old-age insurance benefits to entitle his survivors (except for the requirement in sec. 215 (f) (6) of the act that the recomputation must result in a higher primary insurance amount) to a "work recomputation" for survivors benefits under section 215 (f) (4) (A); or (5) who died prior to such enactment date and whose survivors are (but for the provisions of sec. 215 (f) (6)) entitled to a "work recomputation" for survivors benefits under section 215 (f) (4) (A), but only if no survivor was entitled to monthly benefits or a lump-sum death payment on his wage record on the basis of an application filed prior to such date of enactment and no survivor was entitled to such a benefit, even without the filing of an application therefor, for the month in which the bill is enacted or any prior month.

No such amendment was made under the House bill.

Special starting and closing dates for certain individuals

Section 109 of the bill provides, primarily for persons newly covered beginning in 1956 who can qualify for benefits with a minimum number of quarters of coverage, special starting and closing dates for the computation of benefit amounts. These special dates would apply in the case of any individual who dies or becomes entitled to an oldage insurance benefit in 1957, provided such individual has not less than 6 quarters of coverage after 1955, and prior to the quarter following the quarter in which he died or became entitled to old-age insurance benefits, whichever first occurred. In such cases, the individual's starting date would be December 31, 1955, and his closing date would be July 1, 1957. The primary insurance amount in these cases would be computed through the benefit formula in section 215 (a) (1) (A) of the Social Security Act (55 percent of the first $110 of his average monthly wage, plus 20 percent of the next $240), and the special starting and closing dates would be used only if they would result in a higher primary insurance amount.

With respect to the above provision, although under section 215 (b) (3) (A) a closing date is the first day of a calendar year, July 1, 1957, will be considered a closing date for recomputing the individual's benefit amount after the close of a taxable year which includes July 1, 1957, if the recomputation would result in a higher primary insurance amount.

In any computation based on the July 1, 1957, closing date, the total of wages and self-employment income after December 31, 1956, which may be used in such computation would be reduced to $2,100, if it is in excess of that amount. Without such a provision, an individual's average monthly wage for each month of the 6-month period which would be used in the computation would exceed $350 although in general $350 is the maximum average monthly wage which can be used in the benefit computation.

The provisions of this section were not included in the House bill.