percent increase are given in table 1. For the Notes and Brief Reports 31.3 million individuals to whom benefits were payable as May ended, the new rates mean an additional $425 million per month in total benefits. Effect of OASDI Benefit Increase, For retired workers the higher rates brought June 197Y the average monthly benefit amount to $225.25 for men (up $17.25) and to $180.19 for women Social security checks delivered to beneficiaries ($13.99 more). Among disabled workers the in the first week of reflected the first average amount rose to $241.48 for men and to automatic cost-of-living increase in cash benefits, $184.82 for women-increases of $17.99 and $13.75, as authorized by legislation enacted in 1972 and respectively. The average benefit increase for en- 1973. The C&percent increase was applicable to titled dgpendents of these workers ranged from benefits of all those on the rolls as May ended $4.62 for the children of disabled workers to except those receiving them under the special $8.38 for the spouses of retired workers. Among minimum PIA provision.l the survivors of deceased workers, the average benefit increases were highest for nondisabled widows and widowers ($15.19) and lowest for BENEFIT AMOUNTS children ($10.14).

The average monthly benefit amounts payable at the end of May both before and after the 8- ACTUARIALLY REDUCED BENEFITS

*Prepared by Barbara A. Lingg, Division of OASDI Although the cost-of-living provision specified Statistics, Office of Research and Statistics. an 8-percent across-the-board rise, the actual in- ‘See “Automatic Increases under the Social Security crease amounted to more than that for persons Programs,” 8odaZ iSecurity Bulletin, July 1975, pages zi8-36. receiving benefits that had been actuarially re-

TABLE l.-Monthly cash benefits in current-payment status at, end of and under new rate6 effective and average increase, by type of beneficiary and reduction status

Total benefit amount (In thoueands) T Type of benefloiary and reduction status Old rate New rate Old rate New rate Percent

All beneficiaries ______------ai,ai2,444 Ki,s23.19a Betired workers and dependents ______.. _.______.______19,396.347 9,6(12,101 ______Re~~~wo’keers.-.-.-...-...----.------.------16.129,106 3,308,019 $8” 3$ - -e _-__--_----______------.------.------. 8,9la,935 2,067,902 Benefits actuarially reduced- ______._ -- ______. _-. _ 4.246.660 370.323 166 60 Beneflta not aCtUsria~y reduced I--- __ . ______4,667,276 1.137.679 Women ______..____.__--.-.---.---.---.------.---- 7,216,160 Z’E Benefits actuarially reduced-. ______4.717.992 1‘54 91 Beneflta not actuarially reduced * ______.______2,497.163 187 62 Wivesandhusbsnda....-...... ------.-.---.------... 2,322,247 Benefits actuarially reduced ______.______------. 1,336,963 iEJ Beneflti not aotuarislly reduced I_-______Children ______---.------.------.-- .______“Ei%, % 2 Diaabled workers and dependents ______._____ 4,113.361 I______Disabled workers ______.-----.--- 2,347.391 Men ______------l,Kl$.;; i&i ifi Women- _ _. _. ______171 0: Wives and husbands.---...... ------420: 76i 61 7( Children--..-...... ------1,339,64l b6.B Survivors ofdeceasedworkere...... ------7,363.m Wldowed mothers ______-----..-- 566,7@ Children ______------2,961,8w Widows and widowers, nondisabled ______3.712.394 Beneflte actuarially reduced ______1,366,29i Benefits not actuarial1 reduced a______1,366,@$ ~‘i$~-and widowers, B isabled ______------______-______------.----.------22:163 _____-__-. ___-__-_-_ 64.11 69.27 32.17 34.76

BULLETIN, NOVRMRER 1975 29 duced because they were claimed before age 65. rolls were receiving reduced benefits, their higher The larger percentage increase for this group of percentage in&ease brought the overall increase beneficiaries results from the fact that the 8- in the average benefit for all beneficiaries to 8.3 percent rise was calculated on the beneficiary’s percent. ‘Lprimary” or basic benefit amount before reduc- tion and was then added to the amount of the benefit after reduction. The increase was thus PERSONS RECEIVING BENEFITS UNDER more than 8 percent of the reduced benefit that SPECIAL MINIMUM qROVlSlON - was payable at the end of May.2 Persons in this group who had reached age 65 The primary insurance amount (PIA) is the by June 1975 received the full amdunt of the amount payable to a retired worker at age 65 or increase, since no reduction for months before to a disabled worker and serves as the base for age 65 was necessary. Even for those under age computing all types of benefits payable on the 65 and thus requiring a reduction in the increase worker’s earnings record. It is related to the for the months before they would reach that age, worker’s average monthly earnings. The “special the amount of the increase was actuarially re- minimum” PIA (effective ) is de- duced by less than the original percentage reduc- signed to help those who worked in covered tion and the increase after reduction was still employment for many years but with low earnings greater than 8 percent of the benefit amount being and is thus related to the number of years of received under the old rate. covered employment, not the worker’s average The benefit increases therefore averaged 8.0 monthly earnings. From January 1973 through percent for retired workers with unreduced February 1974, the highest possible special mini- benefits and 8.7 ‘percent for those with reduced mum PIA was $170.” It was raised to $180 in benefits. Among nondisabled widows and wid- March 1974 and has remained at that level since owers, they averaged 8.0 percent for unreduced then. benefits and 9.0 percent for reduced benefits. The The number of persons receiving benefits based beneficiary category with the largest percentage on the special minimum provision reached its increase (9.5 percent) was the group subject to the largest actuarial reduction-disabled widows ‘For a description of beneficiaries affected by this ’ and widowers. Because so many persons on the provision in 1973, see Barbara A. Lingg, The Eflects of the Special NMmum Primury Insurance Amount and the Delayed Retirement CredJt: Initial Findings, Re- ’ Social Security Administration, OAHDI Digest, 1974, search and Statistics Note No 17, Offlce of Research and page 15. Statistics, 1974. , TABLE Z.-Beneficiaries with special minimum PIA, by type of benefit, at end- of specified month, 1974-75 Retired workera and ’ Disabled workers dependents I and dependents l- Burvivors Benef.Maries and avera:es Total Retired workers Vidows, widowers I 1 F Ihlldren :hfldren and 1 Men Nomen parents -- May 1974 Number-...-...... -.------217,745 77.817 85,456 17,389 910 2.034 1,232 4,804 Average special minimum PIA ______t:U; ;; 3:g.;; 3;gf $171.45 Average regular PIA ______%% %*S 2;; E ‘:%z 167.26 Average monthly amount.- ______148: 10 157: 95 163:72 173’90 46:313 41:66 1cQ:re 97.36 Number ______117.120 42,331 46,242 9,230 453 1.029 3,035 2,356 Averwe special minimum PIA ______$;U; g t:n;.g $176.03 up; 3;;;.; *175:z! s;;;.4$ Average regular PIA ______% i?i 167.92 % 8*: Average monthly amount ______14e:43 158’50 163:17 175.46 46.36 42:16 147:29 *z 96:12 May 1975 Number ______125.175 45,387 46,973 11,305 1,380 3,646 Average special minimum PIA ______$;;;.;T 3;;;.4J 3176% $177.68 3;; 1: 3:;;y; Average regular PIA ______%:: i: 169.23 Average monthly amount ______146: 16 157:96 158:as ‘E 46.66 145:96 98:32 June 1975. Number. _. ______27,803 10,223 10,693 2,468 112 745 131 Average special minimum PIA. ______$176.91 $176.88 ‘;u;.~ 3;g.g $175.35 $177.26 Average regular PIA ______170.94 170.70 % ti 169 32 Average monthly amount ______147.21 158.28 157:75 176: 59 a:63 146.73 YEi -

$0 SOCIAL SRCURITY peak in May 1974, when 217,745 persons had ployment or sickness benefits, a worker must have benefits that were calculated on this basis (table railroad earnings of at least $1,000 in the pre- 2). Since the second stage of the 11-percent benefit vious calendar year (base period), not counting increase (effective for June 1974) raised the regu- more than $400 for any one month. The new law, lar PIA for some 100,000 beneficiaries in this however, reduces the number of months that group to more than $180, it was more advan- a new employee must have worked in the base tageous to have their benefits based on the regular year to be eligible for benefits from 7 months PIA. The number with benefits based on the to 5 months. special minimum PIA therefore dropped to The waiting period for payment of sickness 117,120 by the end of June 1974. benefits has also been liberalized to conform in The June 1975 benefit increase raised the reg- general with that for unemployment insurance ular PIA for about 97,000 additional “special benefits. Under previous law, sickness benefits minimum” beneficiaries above $180, and the num- were payable only when the claimant had more ber receiving benefits on that basis declined to than 7 days of sickness during the first 14-day 27,803. It is likely that, for most persons coming claim period in,a benefit year. Now, the claimant under this provision, the benefits under the special receives benefits after 4 consecutive days of ill- PIA would be converted to the regular PIA ness. If the illness continues, benefits are to be basis by the time of the next cost-of-living in- paid for all days exceeding 4 in subsequent regis- crease, unless the $180 limit on the special mini- tration periods, as in the previous law. mum PIA is also lifted. Normal sickness benefits are available for the same length of time as normal unemployment benefits-up to a maximum of 130 days (26 weeks) but are not to exceed the amount of an employee’s creditable wages in the base year. As with unemployment benefits, up to $775 (pre- viously $400) a month can be counted toward creditable wages in the base year for purposes of setting the maximum amount of normal benefits that are payable. Railroad Unemployment and Sickness The 1959 amendments to the act introduced Benefit Amendments of 1975” the concept of paying extended unemployment On August 9, 1975, President Ford signed and sickness benefits to railroad workers with Public Law 94-92 amending the Railroad Unem- long-term service who have exhausted their ployment Insurance Act to increase unemploy- rights to normal benefits. Employees with 10-14 ment and sickness benefits for railroad workers. years of service could receive up to 65 additional The legislation was based on joint recommenda- days (13 weeks) of benefits, and employees with tions from railway, labor, and management, 15 or more years of service could receive up to Under the amended act, the maximum daily 130 additional days (26 weeks). benefit for both unemployment and sickness com- The new law includes somewhat comparable pensation has been raised to $24.00 from the provisions of a permanent nature for railroad previous rate of $12.70 that had been in effect employees with less than 10 years of service.l since 1968. This provision will be retroactive They are the workers with the lowest seniority to July 1,1975, and will extend through , who generally would be most subject to layoff 1976, after which the maximum will be raised and who would be laid off for long periods of to $25 a day. Each beneficiary’s daily benefit rate time. Now they will be eligible for extended un- will be figured as 60 percent of his last daily employment (but not sickness) benefits up to a pay rate in the base year, subject to the $24 or $25 maximum of 65 additional days during periods maximum but with a minimum of $12.70. of high unemployment in either the national As under previous law, to qualify for unem- ’ In earlier years, special Federal legislation was pasged + By Andrea Novotny, Division of Retirement and during periods of high unemployment to provide for an Survivor Studies, Office of Research and Statistics. extended-beneflt period.

BULLETIN, 111