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December 6, 1955

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December 6, 1955 December 6, 1955 ' L-55-593 *'-170 The Board The Associate General Counsel The effect on the Board's administration of H.R. 7225 (passed by the House of Representatives on July 18, 1955)• The Board's attention was called in July of this year to the bill H.R. 7225, referred to in the subject above. 1/ At that time the Board was primarily concerned with the proposed amendment to the Social Security Act to reduce the eligibility age for women's benefits from 65 to 62. On the dates of the memoranda referred to in footnote 1 the bill was not available for examination, and there was no way of ascertaining the extent to which it may have been technically defective for the purposes of coordination between the railroad retirement and social security systems. The difficulties in this respect came to light only upon examination of the bill after it was reported out b; the House Committee on Ways and Means. 2/ The pertinent provisions of the bill suggest for the Board's consideration the following: 1. A permanently disabled child whose disability began before age 18 and is otherwise entitled to a child's benefit before that age, 1/ See memorandum from the Secretary to the Board dated July 8, 1955, entitled "Spouse's Eligibility Age", and my memorandum to the Board dated July 11, 1955, entitled "Effect on the Railroad Retirement j.ct of contemplated amendments to the Social Security act to reduce the eligibility age from 65 to 62 for spouses' and aged survivors' bene­ fits, and to provide benefits, before age 65, to persons who are totally and permanently disabled. 2/ A section-by-section analysis of the bill is attached. - 2 - Memorandum to the Board ■ would continue to receive a child's benefit after attainment of that age. (Section 101 of the bill.) Section 109(a) of the bill would make the Social Security Act as amended by the bill applicable to the Railroad Retirement Act, instead of the Social Security Act of 195k; and it would follow from this that, by reason of section 3(e) of the Railroad Retirement Act, a child's disability annuity under the Railroad Retirement Act would be subject to the over-all social security minimum irrespective of the special provision now in section 3(e) providing that minimum for diabled children, Moreover, such child's disability annuity would have to be considered under the pro­ visions of section 5> (k) (2); and it is quite obvious that the Railroad Retire­ ment Account stands to gain from this provision. It should be noted, however, that before the Board could apply section 5(k)(2) of the Railroad Retirement Act to a child's disability annuity, it would have to be established that the disability on the basis of which the Board awarded a child's annuity is the same as on the basis of which the Social Security Act, as amended by the bill, would require payment to such child of a monthly disability benefit. It is my opinion that the definition of disability in the bill for a child's disability benefit is substantially the same as the definition in the Railroad Retirement Act for a child’s disability annuity, so that no question should arise in this respect. However, I think it would be wise to remove any doubt before the enactment of the bill by incorporating a statement to that effect in the Senate Committee's report, If this cannot be agreed upon, it might be well to provide specifically in section 5(k)(2) of the Railroad Retirement Act that for the purpose thereof the disability defined in the bill for a child's benefit under the Social Security Act shall - 3 - Memorandum to the Board be deemed to be the same as the disability defined under the Railroad Retirement Act for the purposes of a child's disability annuity. The provision in the proposed section 22h of the Social Security Act (proposed by section 103(a) of the bill) for reducing a child's disa­ bility annuity by the amount payable to such child as a disability benefit "under any other law of the United States" would be of no concern to the Board with respect to a child's survivor disability annuity since a survivor's benefit is payable only under one or the other of the two Acts, and not under both, but it would have to be taken into account by the Board in live cases in determining the amount due to the family of an annuitant having a disabled child who would be entitled to a disability benefit under the Social Security Act, In such a case, the Board would not only have to ascertain whether or not the child would be entitled to a disability benefit under the Social Security Act, but also if, and to what extent, the child is entitled to a disability benefit under some other law of the United States, or some state law, as provided in said section 22h, which would reduce the amount of the social security benefit. The resulting administrative problems for the Board will undoubtedly be commented on by the Director of Retirement Claims. If the problem is too difficult, and avoidance thereof is desired, it would be well to amend section 3(e) of the Railroad Retirement Act to provide that, for tiie purposes thereof, the Board shall disregard the reduction provisions of the said section 22li (and, possibly, providing in section 5(k)(2) that, for the purpose thereof, the full amount of the social security benefit would be treated as payable nevertheless under the Social Security Act). 2, The eligibility age for women's benefits (wipes', old age, women parents, and aged widows') would be reduced from 65 to 62 (Section - h - Memorandum to the Board 102 of the bill.) Here, again, by reason of the provisions of section 109(a) of the bill (which would make the Social Security Act as amended by the bill applicable to the Railroad Retirement Act, instead of the Social Security Act of 195k), the provisions of section 3(e) of the Railroad Retirement Act would be applicable. The effect of this amendment, in the case of a wife's benefit, would be that though the Board would not be required to pay a spouse's annuity before the spouse attained age 65, the Board would be required to increase the annuity of an employee age 65, whose wife attained age 62 and would otherwise meet the eligibility conditions for a wife's benefit under the Social Security Act, by an amount which would make the total payable to the employee no less than the sum which would be payable to the employee and his wife under the Social Security Act if the.employee1s service as an "employee" were "employment" under the Social Security Act. Further, by reason of the provisions of section 5(k)(2) of the Railroad Retirement Act, the Board could charge the social Security Adminis­ tration with the full amount which would be payable under the Social Security Act as a wife's benefit to the wife of the employee whose annuity was in­ creased under section 3(e) of the Railroad Retirement Act, regardless of the amount, if any, by which such annuity was increased. It is thus quite obvious that the Railroad Retirement Account stands to gain from the present provision in the bill insofar as it would permit the application of section 5(k)(2) of the Railroad Retirement Act to spouset1 annuities by as much as three years sooner than is now the case. On the other hand, however, should the Board adopt the recommendation made - 5 - Memorandum to the Board by the Director of Retirement Claims in his memorandum to the Board dated July 18, 1955 (in which he concluded that "From an administrative point of view, therefore, it would seem that lowering the eligibility age for spouses would be preferable to increasing the employee's annuity under section 3(e)."), the provisions of section 5(k)(2) of the Railroad Retirement Act would not be advantageous to the Board since a spouse's annuity under the Railroad Retire­ ment Act would generally be as much as, or more than, the wife's annuity under the Social Security Act, and payment would be made in spouses' cases to a much greater extent than would be under the provisions of the bill as now drafted (under the over-all social security minimum)e 3/ If such recommendation should be adopted, an amendment to section 2(e) of the Railroad Retirement Act would be necessary. The provisions of section 109(b)(1) and 109(b)(2) would be necessary whether or not the eligibility age for a spouse's annuity under the Railroad Retirement Act is reduced to age 62. The first of these two provisions would enable a widow (-‘-hose benefit, as such, would be based on combined services covered under both Acts) to elect the residual lump-sum amount, under section 5(f)(2) of the Railroad Retirement Act, before she attains age 62, instead of age 65, as is now the case. The other is a technical change to avoid possible difficulties from referring to section "202" of the Social Security Act which reference would not include the new section 223 (providing for disability insurance benefits at age 50). Since such section 223 is in Title II of that 3/ For a discussion ol the administrative problems which the bill, as now drafted, would create for the Railroad Retirement Act in this respect, I refer you to the above-mentioned memorandum from the Director of Retirement Claims.
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