Social Security Act Amendments of 1954: A Summary and Legislative History by WILBUR J. COHEN, ROBERT M. BALL, and ROBERT J. MYERS* The Eighty-third Congress enacted amendments to the Social tended 24 months, to September 30, Security Act that make significant improvements in the old-age 1956. and survivors insurance program and also affect public assist• (3) Approval of the Pennsylvania ance. The article that follows summarises the major changes; and Missouri laws for aid to the blind articles on specific aspects of the amendments will appear in is extended for 2 additional years. future issues of the Bulletin. Old-Age and Survivors Insurance HE Social Security Amend• million persons who in the course of Extension of Coverage ments of 1954 became Public a year work in jobs that have not At the end of 1953 the, old-age and TLaw No. 761 (Eighty-third Con• previously been covered. Approxi• survivors insurance program covered gress), on September 1, 1954, when mately 6 million of these persons are about 8 out of 10 of the Nation's President Eisenhower affixed his sig• covered on a compulsory basis and jobs; under the new law about 9 nature to H.R. 9366. about 4 million on an elective basis. out of 10 jobs will be covered at the The amendments were charac• The largest groups are farmers, beginning of 1955. The act extends terized by Oveta Culp Hobby, Secre• members of State and local govern• coverage to about 10 million persons tary of Health, Education, and ment retirement systems (under who, in the course of a year, work in Welfare, as representing "the most voluntary agreement), additional jobs that were not covered under significant advance for the social farm and domestic workers, minis• previous law. ters and members of religious orders security system since the inception Under the new law, coverage is ex• (on a voluntary basis;. and self- of survivors insurance 15 years ago." tended to farmers, members of State employed members of specified pro• The inclusion of self-employed farm• and local retirement systems (other fessions. ers—the largest group covered by than policemen and firemen), addi• the amendments—will have the (2) Primarily to overcome the tional farm workers and domestic "eventual effect of reducing ma• handicap of the late entry into the workers, ministers and members of terially the need for public assistance system for these newly covered work• religious orders, and certain other in rural areas just as it has in urban ers, up to 5 years of lowest or no smaller groups, including some pro• areas. ... The expansion of the earnings are dropped in computing fessional self-employed persons. The social security system as a result of benefits and the insured-status re• exclusion in the earlier law of self- these important amendments will quirements are liberalized. employed lawyers and of self-em• contribute materially to building a (3) The total annual earnings on ployed physicians, dentists, and stronger and better America." which benefits and contributions are members of several other medically The new law amends the Federal based is raised from $3,600 to $4,300. related professions is continued. old-age and survivors insurance pro• (4) Benefits are increased, on the Other major groups that are still excluded are members of the Armed visions of the Social Security Act, average, about $6 a month for per• Forces, most Federal civilian em• the corresponding provisions of the sons now receiving old-age benefits, ployees, and policemen and firemen Internal Revenue Code, the public with proportionate increases for de• covered by a State or local govern• assistance titles of the Social Security pendents and survivors: the mini• ment retirement system. (A tem• Act, and the Railroad Retirement Act. mum old-age benefit is $30.00 and the porary provision enacted earlier Eight major amendments to the So• maximum $98.50. The increase is grants free wage credits of $160 a cial Security Act and other important effective with the September benefit month for periods of service in the modifications were adopted. payments. For those coming on the Armed Forces.) The major changes in the old-age rolls in the future the range will be from $30.00 to $108.50 for an indi• and survivors insurance program are Farm operators.—The amendments vidual and to $200 for a family. as follows: extend coverage to about 3.6 million (1) Coverage is extended, effective (5) The retirement test is liberal• self-employed farm operators. One January 1, 1955, to approximately 10 ised and improved. of the major stumbling blocks to (6) The benefit tights of disabled their coverage has been the apparent * Mr. Cohen is Director, Division of persons are protected. necessity of requiring low-income Research and Statistics, Office of Com• There are two-major amendments farm operators, who may have no in• missioner: Mr. Ball is Deputy Director of come-tax liability, to keep records the Bureau of Old-Age and Survivors in the public assistance program: Insurance; and Mr. Myers is Chief Actu• (1) The present Federal matching that they would not ordinarily main• ary of the Social Security Administration. formula for public assistance is ex• tain. The new legislation includes a simplified reporting procedure for survivors insurance agreement, if a coverage under a State agreement, the use of the low-income turner. referendum by secret written ballot at the option of the State, of civilian The farm operator with gross income is held among the members of the employees of State National Guard of not more than $1,800 in a year system and a majority of those eligi• units and certain inspectors of agri• who reports his income tax on a ble to vote in the referendum vote cultural products. Special provision cash basis may report either his in favor of coverage. is also made for coverage under the actual net earnings from farm self- The law continues the present ex• Utah agreement of employees of cer• employment, as determined on his clusion of policemen and firemen who tain educational institutions in posi• income-tax return, or 50 percent of are covered by a State or local re• tions covered by a retirement system his gross income. If his gross income tirement system. These two groups, and for retroactive coverage of mem• is more than $1,800, he must com• because of the special demands of bers of the Arizona Teachers' Retire• pute his net earnings, although he their work, usually have special pro• ment System. may report an assumed income of visions in their retirement systems Farm workers.—Under the 1950 $900 if his actual net income is less (lower retirement ages, for example), law, to be covered a farm worker than that amount. and most of the organizations repre• needed to be "regularly employed" Employees of State and local gov• senting policemen and firemen were by one employer and to receive cash ernments under retirement systems.— opposed to the coordination of their wages of $50 or more in a calendar In the course of a year about 3.5 provisions with the provisions of the quarter from that employer. The def• million employees (other than police• old-age and survivors insurance sys• inition of "regularly employed" was men and firemen) are in positions tem. complicated and difficult to apply. In covered by State and local retirement It is the policy of Congress, the general, after a farm worker had systems.1 The 1950 law provided for law states, that the protection of worked for one employer continuously covering State and local government members and beneficiaries of the re• for an entire calendar quarter, he was employees under voluntary agree• tirement systems should not be im• "regularly employed" in succeeding ments between the individual States paired as a result of coverage of the quarters if he worked for that em• and the Federal Government. It ex• members under old-age and survi• ployer on a full-time basis on at least cluded from coverage under such an vors insurance. This statement of 60 days during the quarter. Records agreement, however, employees in policy was designed by Congress to must have been kept over a substan• positions covered by a State or local make clear its intent in providing tial period before it was clear whether retirement system on the date the for coverage of this group; it does or not an individual was covered. agreement was made applicable to not have the effect of requiring that The new law substitutes a simple the coverage groups to which they the provisions of the retirement sys• coverage test for the old test. A farm 2 belong. tem be subject to Federal review. worker is covered with respect to his Under the 1950 law the only way The law also removes the possibility work for an employer if he is paid in which employees under a retire• that members of a system (other at least $100 in cash wages by that ment system could be covered was by than firemen and policemen) may be employer in a calendar year. The dissolving the system before the covered without a referendum by new test continues to exclude from group was brought under the Federal- dissolving the retirement system. coverage intermittent and short- State agreement. Several States and A State may cover without a refer• term workers and to avoid nuisance a large number of local governments endum employees who are in positions reporting of small amounts of wages save secured old-age and survivors covered by a retirement system but but will result in the coverage of insurance coverage for employees by who are not themselves eligible for most workers who make a living this method.