JFKWHP-AR6380-B: President Kennedy Greets Anthony A. Oeding, Fifteen Millionth Person Receiving Social Security Benefits, 27 February 1961

1961 

Social Security Amendments 
H.R. 6027 — Public Law 87-64, approved June 30, 1961 
The 1961 social security amendments provide new or increased benefits to 4.4 million people, totaling some $800 million in the first year, with the increased costs being met through additional payroll taxes.

The major provisions as enacted into law are: 

Increases in minimum benefit.—   From $33 to $40 the minimum monthly retirement benefit at 65 and the minimum monthly disability benefit, with proportionate increases in minimum benefits payable to dependents and survivors. This provision provides increased benefits for 2,175,000 persons, amounting to $170 million, during the first 12 months of operation.

Benefits at age 62 for men.—  Provides the option of early retirement to men at age 62 with benefits on an actuarially reduced basis. In the first year 560,000 would get benefits amounting to $440 million.

Liberalizes insured status requirements.—  Provides that a worker is fully insured for benefit purposes if he has one quarter of coverage for every year elapsing after 1950 and up to the year of disability, death, or attainment of age 65 for men and 62 for women. This would bring 160,000 people on to the rolls in the first year for a total of $65 million in benefits.

Increases widow's, widower's, and parent's benefits.—  Increases aged widow's, widower's, and surviving parent's benefits from 75 to 82 ½ percent of the workers' retirement benefit. (Will affect 1,525,000 persons by $105 million in first 12 months.)

Establishes a period of disability.—  Extends for 1 year, to June 30, 1962, the period within which a person may file to establish a period of disability to determine eligibility for and amount of old-age, survivors, and disability insurance benefits.

Facilitates coverage for certain State and local employees.—  Adds New Mexico to list of States permitted this method of coverage, and employees who originally had chosen not to come under the program will be given an additional chance to elect to be in the group which has coverage. Time extended to December 31, 1962. Ministers and Christian Science practitioners have until April 16, 1962, to elect; however, if a minister or Christian Science practitioner dies after September 12, 1960, and before April 16, 1962, his survivor would have the right to elect coverage up to April 16, 1962.

Increases tax rates.—  Beginning in 1962, contribution rates will be raised by one-eighth of 1 percent each for employees and employers and by approximately three-sixteenths of 1 percent for self-employed.

Increases public assistance.— Increases for 1 year (to June 30, 1962) the amount of public assistance payments which would be subject to Federal matching for old-age assistance, aid to the blind, and aid to the permanently and total disabled programs (by approximately $2.50), at an approximate cost of about $20 million.

Increases in public assistance.—  As enacted into law, increases Federal matching for the lower payment States byincreasing from $30 to $31 the amount the Federal Government will match at the 80percent base level, and increases the maximum which will be matched from $65 to $66effective October 1, 1961, for a 9month period instead of 1 year as in the Senate bill.

Authorized assistance to U.S. nationals.—  As modified, the program will apply only to U.S. citizens rather than U.S. nationals, and will continue for only 1 year rather than indefinitely. As noted in the Senate provision, the temporary assistance is for those U.S. citizens who have returned, or been brought back to this country because of illness, destitution, war, threat of war, or invasion.

Medical care.—  The Senate provision assuring freedom of choice to aged persons in selecting certain medical care has been held in abeyance to permit a more thorough exploration of its ultimate effect. 

1962 

Public Assistance Amendments 
H.R. 10606 — Public Law 87-543, approved July 25, 1962 
Liberalized many of the public assistance provisions of the Social Security Act and as enacted into law it

Increases Federal matching for aged, blind, and disabled on public assistance by $5 a month each, effective October 1, 1962. New increase raises matching formula to twenty-nine thirty-fifths of the first $35 up to a maximum of $70. This means a total of $140 million in the first full year of operation and assists 2.7 million persons.

Reinstates the unemployed parent provision in the aid to dependent children program which expired June 30, 1962. Program reinstated for 5 years, adds a provision for Federal matching for employable parents working on community projects. Assists approximately 275,000 persons and costs about $73 million a year.

Makes permanent the provision allowing Federal matching for ADC children removed by courts into foster homes.

Extends to June 30, 1964, assistance to citizens returning from foreign countries because of destitution, illness, or crisis.

Increases Federal matching for public assistance rehabilitation services at a cost of $40 million a year.

Provides for Federal matching for second parent in the ADC program at a cost of $34 million a year.

Increases child welfare services authorization from present $25 million a year to $30 million for 1963, $35 million in 1964, and $40 million in 1965-66, $45 million in 1967-68, and $50 million in 1969 and thereafter. Earmarks $5 million of this amount for "day care" in 1963 and $10 million in subsequent years to be provided only in those instances where it is determined in the interest of the child and mother and that a need exists. 

Retirement Income Credit 
H.R. 6371 — Public Law 87-876, approved October 24, 1962 
Enacted a measure increasing to 1,524 from $1,200 the maximum annual amount a retired person can subtract from his tax payment.

This retirement credit, which has to be reduced by any social security or railroad retirement benefits the retired person receives, is intended to give equal treatment to retired persons who do not receive Government-managed annuities. 

Self-employed Voluntary Pensions 
H.R. 10  — Public Law 87-792, approved October 10, 1962 
Enacted a bill to encourage establishment of voluntary pension plans by self-employed persons by permitting them to set aside up to $2,500 or 10 percent of their annual income, whichever is less, in an approved retirement program; and would permit them to deduct from taxable income up to a maximum of $1,250 in any one year for contributions to the fund. Bill permits a self-employed person who does not own more than 10 percent of his business to contribute these amounts through a partnership if the plan is not discriminatory among the partners.

In addition the bill would

Permit any self-employed person to contribute up to the lesser of 10 percent of earned income or $2,500; but he may deduct only one-half of the amount so contributed or a maximum of $1,250.

Establish earned income as the base for deduction, which means professional fees and other compensation for personal services. When capital and personal services are material income-producing factors, earned income is considered to be 30 percent of business income or $2,500, whichever is greater.

Require self-employed persons establishing retirement plans for themselves to cover all full-time employees with more than 3 years' service in a comparable plan and requires immediate vesting for all covered employees.

Provide for funding a pension plan through contributions to a trust with a bank as trustee, or by purchase of annuity contracts from an insurance company through custodial accounts if its investments are made solely in stock of a regulated investment company which issues only redeemable stock, or solely in life, endowment, or annuity contracts issued by an insurance company, through purchase of nontransferable face-amount certificates, or through direct investment in a new series of Government bonds issued for purposes of the bill.

Permit additional contributions to the funds by employees, and also permits the owner-employee to make additional nondeductible contributions on his own behalf up to $2,500.

Limit payment of benefits to owner-employees and their employees until they reach age 59 ½ except in the event of permanent disability of death; and requires payment to begin not later than age 70 ½.

Require that if an owner-employee dies, his remaining interest must be either distributed to beneficiaries within 5 years, used within the same period to buy an annuity payable over the beneficiary's life expectance, or paid out under a plan of distribution already stated over a period no longer than the life expectance of the employee or the joint life expectance of the employee and his spouse.

Require that lumpsum distributions be taxed by treating 20 percent of the distribution as taxable income.

Require that all plans be approved by the Secretary of the Treasury.