AnnualStatisticalSupplement,2000

to the Social Security Bulletin

Social Security AdministrationOffice of PolicyOffice of Research, Evaluation, and Statistics

Social Security Bulletin • Annual Statistical Supplement • 2000 iii

Contents

iv Abbreviations vii List of Tablesxvii List of Chartsxviii Highlights and Trends

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1 Social Security 14 Supplemental Security Income

0

Health Care

34 Medicare47 Medicaid

0

Other Social Insurance and Veterans

53 Unemployment Insurance56 Black Lung Benefits57 Temporary Disability Insurance59 Veterans' Benefits

0

Public Assistance

62 Temporary Assistance for Needy Families63 Food Stamps67 Low-Income Home Energy Assistance Program69 Adult Assistance69 General Assistance

0

70 Social Security Administrative Data0

Technical Notes

328 Sampling Variability330 OASDI Benefit Award Data331 Poverty Data334 Computing a Retired-Worker Benefit

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339 Glossary357 Index to Tables

iv Social Security Bulletin • Annual Statistical Supplement • 2000

AbbreviationsAB Aid to the Blind

ACF Administration for Children and Families

ACR Adjusted community rate

AFDC Aid to Families with Dependent Children

AFDC-UP Aid to Families with Dependent Children-Unemployed Parents

AIDS Acquired immunity deficiency syndrome

AIME Average Indexed Monthly Earnings

AMW Average Monthly Wage

APTD Aid to the Permanently and Totally Disabled

BBA Balanced Budget Act of 1997

BC/BS Blue Cross/Blue Shield

CDR Continuing Disability Review

CLIA Clinical Laboratory Improvement Act

COBRA Consolidated Omnibus Budget Reconciliation Act

CPI-U Consumer Price Index for All Urban Consumers

CPI-W Consumer Price Index for Urban Wage Earners and Clerical Workers

CPS Current Population Survey

CWEP Community Work Experience Program

DI Disability Insurance

DME Durable medical equipment

DOL Department of Labor

DRG Diagnosis-related group

EBT Electronic benefit transfer

EPSDT Early and periodic screening, diagnostic, and treatment

ESRD End stage renal disease

FFS Fee for service

FICA Federal Insurance Contributions Act

FMAP Federal Medical Assistance Percentage

FPL Federal poverty level

FQHC Federally qualified health center

FRA Full retirement age

FUTA Federal Unemployment Tax Act

FY Fiscal year

GA General Assistance

GDP Gross domestic product

HCBS Home and community based services

HCFA Health Care Financing Administration

HHA Home health agency

Social Security Bulletin • Annual Statistical Supplement • 2000 v

HHS Department of Health and Human Services

HI Hospital Insurance

HIV Human immunodeficiency virus

HMO Health maintenance organization

ICF Intermediate care facility

ICFs/MR Intermediate care facilities for the mentally retarded

JOBS Job Opportunities and Basic Skills Training

LIHEAP Low-Income Home Energy Assistance Program

LTC Long-term care

MBC Monthly benefit credited

MBR Master Beneficiary Record

MCCA Medicare Catastrophic Coverage Act

MCCRA Medicare Catastrophic Coverage Repeal Act

MN Medically needy

MSA Medical savings account

NRC National Research Council

OAA Old-Age Assistance

OASDI Old-Age, Survivors, and Disability Insurance

OASI Old-Age and Survivors Insurance

OBRA Omnibus Budget Reconciliation Act

OEO Office of Economic Opportunity

OMB Office of Management and Budget

PACE Programs of All-Inclusive Care for the Elderly

PESS Property essential to self-support

PHP Prepaid health plan

PIA Primary insurance amount

PIB Primary insurance benefit

PPO Preferred provider organization

PPS Prospective payment system

PRO Peer review organization

PSO Provider-sponsored organization

QC Quarter of coverage

QDWIS Qualified disabled working individuals

QI Qualified individual

QMB Qualified Medicare beneficiary

RVS Relative value scale

SCHIP State Children’s Health Insurance Program

SECA Self-Employment Contributions Act

SGA Substantial gainful activity

vi Social Security Bulletin • Annual Statistical Supplement • 2000

SIPP Survey of Income and Program Participation

SLMB Specified low-income Medicare beneficiary

SMI Supplementary Medical Insurance

SNF Skilled nursing facility

SSA Social Security Administration

SSI Supplemental Security Income

TANF Temporary Assistance for Needy Families

TEFRA Tax Equity and Fiscal Responsibility Act

TFP Thrifty Food Plan

USDA Department of Agriculture

VA Department of Veterans Affairs

WEP Windfall Elimination Provision

WIN Work Incentive Program

Social Security Bulletin • Annual Statistical Supplement • 2000 vii

List of Tables

History of OASDI Provisions

Coverage, Financing, and Insured StatusPage

0

71 2.A1 Type of covered employment and self-employment73 2.A2 Noncontributory wage credits74 2.A3 Annual maximum taxable earnings and actual contribution rates, 1937–2000 and thereafter75 2.A4 Maximum annual amount of contribution, 1937–200075 2.A5 Tax credits, 1983–8976 2.A6 Appropriations from general revenues and interfund borrowing77 2.A7 Insured status (benefit eligibility)

0

Benefit Computation and Automatic Adjustments0

79 2.A8 Factors for Indexing earnings, 1951–200081 2.A9 Indexed earnings for workers with maximum earnings, 1951–200082 2.A10 Average monthly wage (AMW) and average indexed monthly earnings (AIME)83 2.A11 Formulas for computing PIA from AIME, increases in PIA based on cost-of-living adjustments, and mini-

mum PIA, for workers who were first eligible (attained age 62, became disabled, or died) in 1979 or later84 2.A11.1 [New] Computation of PIA based on Windfall Elimination Provision (WEP)85 2.A12 Special minimum PIA: Formula applies to years of coverage86 2.A13 Formulas for computing maximum family benefit from PIA, and increases in maximum based on cost-of-

living adjustments, for workers who attained age 62 or died (before attaining age 62) in 1979 or later86 2.A14 Formulas for computing maximum family benefit, and increases in maximum based on cost-of-living

adjustments, for workers first eligible for disability benefits in 1979 or later87 2.A15 Formulas for computing PIA from creditable earnings after 193688 2.A16 Formulas for computing PIA from AMW based on earnings after 1950, and percentage increases in PIA90 2.A17 Minimum PIA and maximum family benefit for workers who attained age 62, were first eligible for dis-

abled-worker benefits, or died before 197991 2.A18 Automatic adjustment provisions93 2.A19 Cumulative effect of statutory and automatic increases in benefits: $100 base benefit

0

Benefit Types and Levels0

94 2.A20 Monthly benefits for retired and disabled workers 95 2.A21 Monthly benefits for spouses and children of retired and disabled workers 97 2.A22 Monthly benefits for survivors of deceased workers101 2.A23 Monthly benefits for transitionally insured workers and their spouses and surviving spouses101 2.A24 Monthly benefits for individuals and couples insured for special age-72 (Prouty) benefits102 2.A25 Lump-sum benefits and vocational rehabilitation services103 2.A26 Monthly benefit amount for selected beneficiary families with first eligibility in 1999, by average indexed

monthly earnings for selected wage levels, effective December 1999104 2.A27 Minimum and maximum monthly retired-worker benefits payable to individuals who retired at age 62,

1957–2000105 2.A28 Minimum and maximum monthly retired-worker benefits payable to individuals who retired at age 65,

1940–20000

Effect of Current Earnings and Taxation of Benefits0

106 2.A29 Earnings (retirement) test108 2.A30 Earnings guidelines regarding substantial gainful activity (SGA), 1961–2000109 2.A31 Taxation of Social Security benefits110 2.A32 Taxation of Social Security benefits: Examples

0

viii Social Security Bulletin • Annual Statistical Supplement • 2000

Supplemental Security Income

111 2.B1 Federal benefit rates

Medicare

112 2.C1 Medicare cost sharing and premium amounts, 1966–2000

Medicaid

113 2.C2 Federal medical assistance percentage and enhanced federal medical assistance percentage0

Aid to Families with Dependent Children

2.E1 Discontinued

SSA Administrative Data

Offices and Staff0

114 2.F1 Number of SSA offices, 1999114 2.F2 Number and percentage of SSA employees, by minority status and grade, September 30, 1999114 2.F3 Number of work years, fiscal years, 1991–99

0

Claims Workloads0

115 2.F4 Old-Age and Survivors Insurance, fiscal year 1999115 2.F5 Disability Insurance, fiscal year 1999115 2.F6 Supplemental Security Income, fiscal year 1999

0

Service Delivery0

116 2.F7 Accuracy rates and use of 800 telephone number, fiscal years 1995–990

Hearings and Appeals0

117 2.F8 Workload of SSA's Administrative Law Judges (ALJs), fiscal years 1998–2000117 2.F9 Number of hearing receipts, dispositions, and end-of-year pending cases, fiscal years 1999–2000117 2.F10 Number of civil litigation cases, fiscal year 1999117 2.F11 Number of SSA Appeals Council cases, fiscal years 1998–2000

0

Social Welfare and the Economy

Social Welfare Expenditures0

118 3.A1 Gross domestic product and social welfare expenditures under public programs, fiscal years 1965–953.A2 Discontinued

119 3.A3 Social welfare expenditures under public programs, fiscal years 1965–95120 3.A4 Private social welfare expenditures, by category and as a percent of gross domestic produce (GDP),

1980–940

Employment and Earnings 0

3.B1 Discontinued121 3.B2 Total earnings and wages and salaries in employment covered by selected social insurance programs,

1946–96122 3.B3 Federal minimum wage rates under the Fair Labor Standards Act and average hourly earnings and aver-

age weekly hours for production workers in manufacturing, 1938–99

Interprogram Data

3.C1 Discontinued3.C2 Discontinued

123 3.C3 Selected social insurance programs: Source of funds from contributions and transfers, 1965–99

Social Security Bulletin • Annual Statistical Supplement • 2000 ix

124 3.C4 Social Security and selected public assistance programs: Average monthly amount in current and 1999 dollars, 1950–99

125 3.C5 Population aged 65 or older receiving OASDI benefits, SSI payments, or both, 1940–99, ranked by state, December 1999

126 3.C6 Number and percent of OASDI beneficiaries also receiving federally administered SSI payments, by SSI category and type of OASDI benefit, December 1999

127 3.C6.1 Number of persons aged 18–64 receiving OASDI benefits or federally administered SSI payments based on disability, by type of benefit, 1978–99

128 3.C7 Number of persons aged 15 or older with Social Security benefits or with Supplemental Security Income, by age, sex, race, March 1999, and median annual benefit, 1998

129 3.C8 Number of persons aged 15 or older with Social Security benefits or Supplemental Security Income and number and percent of Hispanic origin, by age, sex, March 1999, and median annual benefit, 1998

3.C9 Discontinued3.C10 Discontinued3.C11 Discontinued

Employee Benefits

3.D1 Discontinued

Poverty

130 3.E1 Weighted average poverty thresholds for nonfarm families of specified size, 1959–99131 3.E2 Number and percent of poor persons, by age, at end of 1959–98132 3.E3 Shares of money income from earnings and other sources for aged and nonaged families, 1998133 3.E4 Current living arrangements of persons aged 65 or older, March 1999

3.E5 Discontinued134 3.E6 Aged families receiving Social Security benefits, by share of income from benefits and race, 1998

3.E7 Discontinued135 3.E8 Poverty guidelines for families of specified size, 1965–2000

Trust Funds

136 4.A1 Old-Age and Survivors Insurance, 1937–99137 4.A2 Disability Insurance, 1957–99138 4.A3 Combined OASI and DI, 1957–99139 4.A4 Total annual benefits paid, by type of benefit and trust fund, and as percent of personal income, 1937–99140 4.A5 Total annual benefits paid from OASI Trust Fund, by type of benefit, 1937–99141 4.A6 Total annual benefits paid from DI Trust Fund, by type of benefit, 1957–99

Covered Workers

142 4.B1 Workers, earnings, and Social Security numbers issued, 1937–99143 4.B2 Number and amount of earnings for wage and salary and self-employed workers, 1951–99144 4.B3 Number of workers and median annual earnings, by type of worker and sex, 1937–97145 4.B4 Percent of all workers and self-employed workers with total annual earnings below annual maximum tax-

able, by sex, 1937–97146 4.B5 Number of all workers, by age and sex, 1937–97147 4.B6 Median earnings of all workers, by age and sex, 1937–97148 4.B7 Number of wage and salary workers, by amount of taxable earnings and sex, 1992–99149 4.B8 Number of self-employed workers, by age and sex, 1951–97150 4.B9 Number of self-employed workers, by amount of taxable earnings and sex, 1992–97151 4.B10 Number of workers, taxable earnings, and contributions, by type of employment and state, 1997152 4.B11 Number of workers, taxable earnings, and contributions, by type of employment, 1937–99153 4.B12 [New] Number of Medicare workers, taxable earnings, and contributions, by type of employment and

state, 1997

x Social Security Bulletin • Annual Statistical Supplement • 2000

Insured Workers

154 4.C1 Estimated number, by insured status, December 31, 1940–2000155 4.C2 Estimated number, by insured status, age, and sex, 1970–2000

4.C3 Discontinued4.C4 Discontinued

157 4.C5 Population in the Social Security area: Estimated number and percent fully insured, by age and sex, 1996–2000

158 4.C6 Period life table, 1997

Benefits in Current-Payment Status

159 5.A1 Number and average monthly benefit, by type of benefit, race, age, and sex, December 19995.A2 Discontinued

170 5.A3 Number and average monthly benefit, with reduction for early retirement, by type of benefit, race, age, and sex, December 1999

173 5.A4 Number and monthly benefits, 1940–99174 5.A5 Number and average age, by type of benefit, December 1999174 5.A6 Number and average monthly benefit, by type of benefit and race, December 1999175 5.A7 Number and average monthly benefit for women, by type of benefit and race, December 1999175 5.A8 Number and average primary insurance amount and average monthly benefit for persons with benefits

based on special minimum primary insurance amount, by type of benefit, December 19995.A9 Discontinued

176 5.A10 Number and average monthly benefit for beneficiaries aged 60 or older, by type of benefit, age, and sex, December 1999

5.A11 Discontinued5.A12 Discontinued5.A13 Discontinued

177 5.A14 Number and percentage distribution of women aged 62 or older, by type of benefit and dual entitlement status, December 1960–99

177 5.A15 Number and average monthly benefit for women aged 65 or older, by age, type of benefit, and dual enti-tlement status, December 1999

178 5.A16 Number and average monthly benefit for adult beneficiaries, by type of benefit, sex, and age, December 1999

179 5.A17 Number and average benefit for disabled beneficiaries, by type of benefit, 1957–990

Retired Workers0

180 5.B1 Number, average primary insurance amount, and average monthly benefit without reduction for early retirement and with delayed retirement credit, by age and sex, December 1999

181 5.B2 Number, average primary insurance amount, and average monthly benefit without reduction for early retirement and without delayed retirement credit, by age and sex, December 1999

182 5.B3 Number and average monthly benefit before and after delayed retirement credit, by age and sex, December 1999

183 5.B4 Number, percent, and average monthly benefit, by year of entitlement as retired worker and sex, Decem-ber 1999

184 5.B5 Number, average age, and percentage distribution, by age and sex, 1940–99185 5.B6 Number and percentage distribution with and without reduction for early retirement, by monthly benefit

and sex, December 1999186 5.B7 Number and percentage distribution with and without reduction for early retirement, by primary insur-

ance amount and sex, December 1999187 5.B8 Number and average monthly benefit with and without reduction for early retirement, by sex, 1956–99188 5.B9 Number and percentage distribution, by monthly benefit, age, and sex, December 1999

0

Social Security Bulletin • Annual Statistical Supplement • 2000 xi

Retired Workers and Dependents0

189 5.C1 Number and percentage distribution, by type of benefit and primary insurance amount, December 1999190 5.C2 Average monthly benefit, by type of benefit and sex, 1940–99

0

Disabled Workers0

191 5.D1 Number, percent, and average monthly benefit, by year of entitlement as disabled worker and sex, December 1999

192 5.D2 Number and percentage distribution, by monthly benefit and sex, December 1999192 5.D3 Number and monthly benefits, by sex, 1957–99193 5.D4 Number, average age, and percentage distribution, by age and sex, 1957–99194 5.D4.1 [New] Number and percentage distribution of disabled beneficiaries, by type of beneficiary and diagnos-

tic group, December 1999195 5.D5 Number and percentage distribution, by diagnostic group and sex December 1999196 5.D6 Number and percentage distribution, by diagnostic group, age, and sex, December 1999

0

Disabled Workers and Dependents0

197 5.E1 Number and percentage distribution, by type of benefit and primary insurance amount, December 1999197 5.E2 Average monthly benefit, by type of benefit, age, and sex, 1957–99

0

Dependents and Survivors0

198 5.F1 Number of wives and husbands and monthly benefits, by type of benefit, 1950–995.F2 Discontinued

199 5.F3 Number and percentage distribution of wives with entitlement based on age, by monthly benefit and age, December 1999

200 5.F4 Number of children and total monthly benefit, by type of benefit, 1940–995.F5 Discontinued

201 5.F6 Average monthly benefit for survivors, by type of benefit, 1940–99202 5.F7 Number and percentage distribution of survivors, by type of benefit and primary insurance amount,

December 1999203 5.F8 Number of widows and widowers and total monthly benefit, by type of benefit, 1950–99204 5.F9 Number, percent, and average monthly benefit, by year of entitlement as nondisabled widow or wid-

ower, December 1999204 5.F10 Number, percent, and average monthly benefit, by year of entitlement as disabled widow or widower,

December 1999205 5.F11 Number and percentage distribution of nondisabled widows, by monthly benefit and age, December

1999206 5.F12 Number of widowed mothers and fathers and monthly benefits, by type of benefit, 1950–99207 5.F13 Number and average monthly benefit for nondisabled widows aged 65 or older, by reduction status

and limitation of benefit, December 19990

Retired Workers with Dual Entitlement0

208 5.G1 Number and percentage distribution of persons receiving both a retired-worker and secondary benefit with and without reduction for early retirement, by primary insurance amount and sex, December 1999

209 5.G2 Number receiving both a retired-worker and secondary benefit, by type of secondary benefit, 1952–99210 5.G3 Number and average monthly benefit for persons receiving both a retired-worker and secondary benefit,

by type of secondary benefit, December 1999210 5.G4 Number, combined average monthly benefit, and retired-worker benefit as percent of total combined

benefit, December 1999211 5.G5 Number and percentage distribution, by total combined monthly benefit and retired-worker benefit,

December 19990

Beneficiary Families0

212 5.H1 Number and average monthly family benefit for selected family groups, 1945–99

xii Social Security Bulletin • Annual Statistical Supplement • 2000

213 5.H2 Number and average primary insurance amount and average monthly family benefit for selected family groups, December 1999

214 5.H3 Number and percentage distribution of retired-worker and disabled-worker families, by monthly bene-fit for selected family groups, December 1999

215 5.H4 Number and percentage distribution of survivor families, by monthly benefit for selected family groups, December 1999

0

Geographic Data0

216 5.J1 Estimated total benefits paid, by program, calendar year 1999217 5.J2 Number, by type of benefit, December 1999218 5.J3 Number and monthly benefit for beneficiaries aged 65 or older, December 1999219 5.J4 Total monthly benefit, by type of benefit, December 1999220 5.J5 Number, by age, December 1999221 5.J5.1 Number, by race and sex, December 1999222 5.J6 Average and median monthly benefit for retired workers and number and percentage distribution, by

monthly benefit, December 19995.J7 Discontinued

223 5.J8 Average and median monthly benefit for disabled workers and number and percentage distribution, by monthly benefit, December 1999

224 5.J9 Average and median monthly benefit for nondisabled widows and widowers and number and percent-age distribution, by monthly benefit, December 1999

225 5.J10 Number of children, by type of benefit, December 1999226 5.J11 Number and monthly benefit for beneficiaries in foreign countries, December 1999227 5.J12 Number of disabled workers, by diagnostic group, December 1999228 5.J13 Number and percentage distribution of disabled workers, by diagnostic group, December 1999229 5.J14 Number, average and median monthly benefit, by type of disabled beneficiary, December 1999

0

Direct Deposit0

230 5.K1 Number and percent of beneficiaries, and average monthly benefit, by state and direct deposit status, December 1999

0

Representative Payee0

231 5.L1 Total number of OASDI beneficiaries and number and percent with representative payee, by type of ben-eficiary, December 1999

0

International Agreements0

232 5.M1 Number of beneficiaries and average monthly benefit amount under U.S. totalization agreements, by country involved in the agreement and type of benefit, December 1983–99

Benefits Awarded, Withheld, and Terminated

233 6.A1 Number, by type of benefit, 1940–99234 6.A2 Average primary insurance amount for retired workers and average monthly benefit for retired workers,

disabled workers, and widows, 1940–99235 6.A3 Number and average monthly benefit, by type of benefit, age, sex, and race, 1999237 6.A4 Number and average monthly benefit for retired and disabled workers, by age and sex, 1999238 6.A5 Number and average monthly benefit with reduction for early retirement, by type of benefit, sex, and age,

1999239 6.A6 Number, percentage distribution, and average monthly benefit for retired and disabled workers, by state,

19990

Retired Workers0

240 6.B1 Number and percentage distribution of initial awards and number of months of benefits withheld due to earnings, by age and sex, 1999

Social Security Bulletin • Annual Statistical Supplement • 2000 xiii

241 6.B2 Average primary insurance amount and average monthly benefit for initial awards, by age, sex, and number of months of benefits withheld, 1999

242 6.B3 Number and percentage distribution with and without reduction for early retirement, by monthly benefit and sex, 1999

243 6.B4 Number and percentage distribution with and without reduction for early retirement, by primary insur-ance amount and sex, 1999

244 6.B5 Number, average age, and percentage distribution, by age and sex, 1940–990

Disabled Workers0

245 6.C1 Number and percentage distribution, by monthly benefit and sex, 1999246 6.C2 Number, average age, and percentage distribution, by age and sex, 1957–99247 6.C3 Number and percentage distribution, by diagnostic group, age, and sex, 1999

6.C4 Discontinued6.C5 Discontinued6.C6 Discontinued

248 6.C7 Number of applications, awards, and ratio of awards to applications and awards per 1,000 insured work-ers for selected years, 1960–99

0

Dependents and Survivors0

249 6.D1 Number of wives and husbands, by type of benefit, 1950–996.D2 Discontinued

250 6.D3 Number and average monthly benefit for wives and husbands, by age and sex, 1999251 6.D4 Number of children, by type of benefit, 1957–99253 6.D5 Number and average monthly benefit for children, by type of benefit and age, 1999254 6.D6 Number of mothers and fathers, by type of benefit, 1950–99255 6.D7 Number and average monthly benefit for widows and widowers, by age and sex, 1999256 6.D8 Number of widows and widowers, by type of benefit, 1950–99256 6.D9 Number and average amount of lump-sum death payment awards, 1940–98

0

Benefits Withheld0

257 6.E1 Number and percentage distribution of retired workers with benefits withheld, by monthly benefit, reduction for early retirement, and sex, December 1999

258 6.E2 Number of retired workers aged 62–69 with benefits in current-payment status and with benefits with-held due to earnings, by age and sex, December 1999

259 6.E3 Number and percentage distribution of retired workers with benefits withheld due to earnings, by monthly benefit, age, and sex, December 1999

260 6.E4 Number of beneficiaries with benefits withheld, by reason for withholding payment, type of benefit, and age, December 1999

260 6.E5 Number of wives, husbands, and children with benefits withheld, by reason for withholding payment and type of benefit, December 1999

0

Benefits Terminated0

261 6.F1 Number of benefits terminated, by type, 1940–99262 6.F2 Number, by reason for termination and type of benefit, 1999262 6.F3 Number of wives, husbands, and children, by reason for termination and type of benefit, 1999

Supplemental Security Income

263 7.A1 Number of persons receiving federally administered payments, total amount, and average monthly amount, by source of payment, category, and age, December 1999

263 7.A2 Number of persons receiving federally administered payments, total amount, and average monthly amount, by source of payment and category, December 1999

264 7.A3 Number of persons receiving payments, by source of payment and category, 1974–99265 7.A4 Total annual amount of payments, by source of payment and category, 1974–99266 7.A5 Average monthly amount, by source of payment and category, 1975–99

xiv Social Security Bulletin • Annual Statistical Supplement • 2000

7.A6 Discontinued7.A7 Discontinued

267 7.A8 Number of federally administered awards, by category and age, 1974–99267 7.A9 Number of persons receiving federally administered payments, by category, 1974–99

0

State Data0

268 7.B1 Number of persons receiving federally administered payments and total annual amount, by category, 1999

269 7.B2 Number of persons receiving state-administered supplementation and total amount of payments, by cat-egory, 1999

270 7.B3 Number of persons receiving federally administered payments and average monthly amount, December 1999

7.B4 Discontinued7.B5 Discontinued7.B6 Discontinued

271 7.B7 Total amount, federal payments, and state supplementation, calendar year 1999272 7.B8 Number of blind and disabled persons under age 18 receiving federally administered payments,

December 1999273 7.B9 Number of federally administered awards, by category and age, 1999

0

Benefit Distributions0

274 7.C1 Number and percentage distribution of adult individuals and persons under age 18 receiving federal SSI payments, by category and monthly amount, December 1999

274 7.C2 Number and percentage distribution of couples receiving federal SSI payments, by category and monthly amount, December 1999

0

Other Income Sources0

275 7.D1 Persons receiving both federally administered payments and other income, average monthly amount of income, by source, category, and age, December 1999

276 7.D2 Percent of persons receiving both federally administered payments and Social Security benefits, aver-age monthly amount of benefits, by category, age, and state, December 1999

0

Recipient Characteristics0

277 7.E1 Number and percentage distribution of persons receiving federally administered payments, by race, sex, and age, November 1998

278 7.E2 Number and percentage distribution of federally administered awards, by sex, age, and category, 1999279 7.E3 Number and percentage distribution of persons receiving federally administered payments, by sex, age,

and category, December 1999280 7.E4 Number and percentage distribution of persons with representative payees receiving federally adminis-

tered payments, by category and age, December 1999280 7.E5 Number and percentage distribution of persons receiving federally administered payments, by category,

age, and living arrangement, December 1999280 7.E6 Number of noncitizens receiving federally administered payments as a percent of SSI recipients, by cat-

egory, 1982–990

Disability0

281 7.F1 Number and percentage distribution of blind and disabled persons under age 65 receiving federally administered payments and not transferred from prior state programs, by diagnostic group, December 1999

282 7.F2 Number and percentage distribution of blind and disabled persons under age 65 receiving federally administered payments, by diagnostic group, age, and sex, December 1999

283 7.F3 Number of persons receiving special Supplemental Security Income payments and extended Medicaid coverage, for selected months, 1982–99

Social Security Bulletin • Annual Statistical Supplement • 2000 xv

284 7.F4 Number of persons receiving special Supplemental Security Income payments and extended Medicaid coverage, by age, sex, and types of earned and unearned income, December 1999

285 7.F5 Number of persons receiving special Supplemental Security Income payments and extended Medicaid coverage and average monthly earnings, by state, December 1999

Health Care ProgramsMedicare

Trust Funds0

286 8.A1 Hospital Insurance, 1966–99287 8.A2 Supplementary Medical Insurance, 1966–99

0

Enrollment, Utilization, and Reimbursement0

288 8.B1 Hospital Insurance and Supplementary Medical Insurance: Aged persons enrolled, served, and amount reimbursed, by type of coverage and service, 1967–98

289 8.B2 Hospital Insurance and Supplementary Medical Insurance: Disabled persons enrolled, served, and amount reimbursed, by type of coverage and service, 1974–98

290 8.B3 Hospital Insurance: Number of enrollees, by state, July 1, 1966–99292 8.B4 Hospital Insurance and Supplementary Medical Insurance: Number of persons aged 65 or older

enrolled, by age, sex, and race, selected years, July 1, 1980–99293 8.B5 Hospital Insurance and Supplementary Medical Insurance: Number of disabled persons and persons with

end stage renal disease under age 65 enrolled, by age, sex, and race, selected years July 1, 1980–998.B6 Discontinued8.B7 Discontinued

294 8.B8 Hospital Insurance: Average covered charge per covered day of care in short-stay hospitals (1975–1998) and skilled nursing facilities (1975–99), by state

296 8.B8.1 [New] Hospital Insurance: Short-stay hospital discharges, by state, fiscal years 1990–99297 8.B9 Supplementary Medical Insurance: Number of reimbursed bills, charges, and amount reimbursed, by

type of service and type of beneficiary, 1991–99299 8.B10 Supplementary Medical Insurance: Claims received by carriers and assignment rates, 1969–99299 8.B11 Supplementary Medical Insurance: Reasonable charge determination for SMI claims assigned and

unassigned for aged and disabled persons, 1971–99300 8.B12 [New] Supplementary Medical Insurance: State buy-ins, 1991–2000

0

Participating Facilities0

301 8.C1 Hospital Insurance and Supplementary Medical Insurance: Number of facilities and beds, by participat-ing providers, December 1967–99

302 8.C2 Hospital Insurance: Number of participating hospitals and beds per 1,000 enrollees, by state, December 1999

303 8.C3 Hospital Insurance and Supplementary Medical Insurance: Number of participating skilled nursing facili-ties, home health agencies, independent laboratories, and end stage renal disease facilities, by state, December 1999

Medicaid

Recipients0

304 8.E1 Unduplicated number of recipients, total vendor payments, and average amounts, by type of medical service, fiscal years 1972–98

305 8.E2 Unduplicated number of recipients, total vendor payments, and average amounts, by type of eligibility category, fiscal years 1972–98

0

State Data0

306 8.H1 Number of recipients, amount of payments, and average amount per recipient, by state, fiscal year 1998

xvi Social Security Bulletin • Annual Statistical Supplement • 2000

Other Social Insurance and Veterans

Unemployment Insurance0

9.A1 Discontinued307 9.A2 Summary data on state programs, 1998

9.A3 Discontinued0

Workers' Compensation [New estimates]0

308 9.B1 Coverage, benefits, and costs, 1940–98309 9.B2 Workers' compensation benefits, by state, 1996–98310 9.B3 Workers' compensation benefits, by type of insurer and medical benefits, by state, 1997311 9.B3 Workers' compensation benefits, by type of insurer and medical benefits, by state, 1998

0

Temporary Disability Insurance312 9.C1 Selected data on state and railroad programs, 1997

0

Black Lung Benefits313 9.D1 Currently payable to miners, widows, and dependents, December 1970–99314 9.D2 Currently payable to miners, widows, and dependents, by state, December 1999315 9.D3 Currently payable to miners and widows, by age, December 1999

0

Veterans' Benefits316 9.F1 Number of payments, by type of payment and age, 1940–99

Public Assistance

Temporary Assistance for Needy Families/AFDC and Emergency Assistance0

317 9.G1 Average monthly number of recipients, total amount of cash payments, and average monthly payment, 1936–98

318 9.G2 Average monthly number of families and recipients of cash payments and total amount of payments, by state, 1998Food Stamps

319 9.H1 Number of persons participating, value of benefits, and average benefit per person, fiscal years 1962–990

Low-Income Home Energy Assistance Program320 9.J1 Number of households receiving home energy assistance, by state, fiscal year 1996, and by type of

assistance, fiscal years 1982–96322 9.J2 Federal net allocations, by state, fiscal year 1996, and by amounts carried over, fiscal years 1982–96324 9.J3 Estimated home emergency assistance obligations, by type of assistance, fiscal year 1996, and fiscal

years 1982–960

Adult Assistance326 9.K1 Average monthly number of recipients, total amount of cash payments, and average monthly payment,

1936–960

General Assistance327 9.L1 Recipients of cash payments and total amount, 1936–97

Sampling Variability

328 10.A1 Approximations of standard errors of estimated number of persons329 10.A2 Approximations of standard errors of estimated percentage of persons from 1-percent file329 10.A3 Approximations of standard errors of estimated percentage of persons from 10-percent file

Social Security Bulletin • Annual Statistical Supplement • 2000 xvii

List of ChartsIncome of the Aged

10 1 Sources of income for the aged, 199910 2 Percentage of income from Social Security for those aged 65 or older, 199911 3 Share of income for the population aged 65 or older, by source of income, 199911 4 Social Security’s role in reducing poverty for the aged, by marital status and race, 1999

Old-Age, Survivors, and Disability Insurance

12 5 OASDI beneficiaries, by type of benefit, December 199912 6 OASDI benefits awarded, by type of benefit, December 199913 7 OASDI beneficiaries, by age, December 199913 8 Average monthly OASDI benefit amount, December 1999

Supplemental Security Income

15 1 Percentage of recipients of federally and state-administered SSI, by category, December 199915 2 Amount of SSI payments, by source of payment, 199916 3 Number of SSI recipients, by age, 1974–99

xviii Social Security Bulletin • Annual Statistical Supplement • 2000

Highlights and Trends

Social Security (OASDI)Cost-of-living adjustment for December 1999 2.4 percent

Average monthly benefit, December 1999—Retired workers $804Widows and widowers, nondisabled 775Disabled workers 754

Employment and Earnings

Workers in OASDI covered employment, 1999 151.8 millionAverage earnings, 1999 $29,396

Earnings required in 2000 for—1 quarter of coverage $780Maximum of 4 quarters of coverage 3,120

Earnings test exempt amounts for 2000Under age 65 for entire year $10,080 For months before attainment of age 65 in 2000 17,000Beginning with month of attainment of age 65 in 2000 Earnings test eliminated

Program Data

Number of beneficiaries, December 1999Old-Age, Survivors, and Disability Insurance 44.6 millionOld-Age Insurance 31.0 million

Retired workers 27.8 millionSurvivors Insurance 7.0 millionWidows and widowers, nondisabled 4.7 million

Disability Insurance 6.5 millionDisabled workers 4.9 million

Benefit payments, 1999Old-Age, Survivors, and Disability Insurance $385.8 billionOld-Age and Survivors Insurance 334.4 billionDisability Insurance 51.4 billion

Administrative expenses, 1999Old-Age and Survivors Insurance $1.8 billion

As a percent of total benefits paid 0.5 percentDisability Insurance $1.5 billion

As a percent of total benefits paid 3.0 percent

Social Security Bulletin • Annual Statistical Supplement • 2000 xix

Social Security (OASDI)

Program Trends

• In December 1999, 44,595,600 persons received Social Security benefits, an increase of 349,900 (0.8 percent) since December 1998. Sixty-two percent were retired workers (27,774,700) and 10.6 percent were nondisabled widows and widowers (4,745,100).

• Seventy-two percent of the 27.8 million retired-worker beneficiaries received reduced benefits because of retirement prior to age 65. Relatively more women (75 percent) than men (69 percent) received reduced benefits

• The number of persons aged 65 or older receiving Social Security benefits rose from 31.1 million in 1994 to 32.1 million in 1999 (3.2 percent). Beneficiaries aged 85 or older increased at greater rate during the 5-year period (14.0 percent) from 3,475,000 in 1994 to 3,962,000 in 1999. In 1999, 38,500 centenarians were receiving Social Security.

• Almost 3 million children under age 18 were receiving benefits, including 1,353,900 surviving children, 1,375,200 children of disabled workers, and 240,900 children of retired workers.

• In December 1999, 5,798,800 beneficiaries were receiving payments on the basis of disability—4,879,500 disabled workers, 720,500 disabled adult children, and 198,800 disabled widows and widowers. In addition 176,300 spouses and 1,412,100 minor and student children of disabled workers were receiving benefits.

• The leading causes of disability for disabled workers were mental disorders (27 percent) which do not involve retardation, and musculoskeletal conditions (23 percent.) About 11 percent had circulatory condi-tions and an additional 10 percent had diseases of the nervous system and sense organs.

• Average monthly benefits for December 1999, includ-ing the 2.4 percent COLA increase, were $804 for retired workers, $754 for disabled workers, and $775 for nondisabled widows and widowers. Among retired workers, benefits averaged $905 for men and $698 for women. For disabled workers, average benefits were $846 for men and $630 for women

• Average monthly family benefits for December 1999 were $1,431 for a widowed mother or father and chil-dren; $1,273 for a disabled worker, wife and children; and $1,545 for a retired worker, wife and children.

• Total OASDI benefit payments for calendar year 1999 were $385.8 billion. Payments from the Old-Age and Survivors Insurance Trust Fund were $334.4 billion—an increase of 2.3 percent from the $326.8 billion paid in 1998.

• Benefit payments from the Disability Insurance Trust Fund, from which benefits are paid to disabled workers, their spouses, and children, increased by 6.6 percent from $48.2 billion in 1998 to $51.4 billion in 1999.

• OASDI benefits awards in calendar year 1999 totaled 3,917,100, including 1,690,000 to retired workers, 375,400 to their spouses and children and 806,900 to survivors. Benefits were awarded to 620,500 disabled workers and 424,300 to their spouses and children. Awards to disabled workers were 608,100 in 1998 and 587,400 in 1997.

xx Social Security Bulletin • Annual Statistical Supplement • 2000

Supplemental Security IncomeFederal benefit rate change, effective January 2000

Cost-of-living adjustment 2.4 percentMonthly amount for—

Individual living in his or her own household $500Couple with both members eligible 769

Program Data

Total:Benefits paid in 1999 $31.0 billionNumber of recipients, December 1999 6.6 millionAverage benefit, December 1999 $374.96

Federally administered payments:Benefits paid in 1999 $30.1 billionNumber of recipients, December 1999 6.6 millionAverage benefit, December 1999 $368.53

Federal SSI payments:Benefits paid in 1999 $26.8 billionNumber of recipients, December 1999 6.3 millionAverage benefit, December 1999 $341.86

Federally administered state supplementation:Benefits paid in 1999 $3.3 billionNumber of recipients, December 1999 1 2.4 millionAverage benefit, December 1999 $110.92

State-administered supplementation:Benefits paid in 1999 $0.9 billionNumber of recipients, December 1999 2 .7 millionAverage benefit, December 1999 $108.70

1 Includes 2.2 million persons receiving federal SSI and state supplementation and 0.3 million persons receiving state supplementation only.

2 Includes 84,600 persons receiving state supplementation only.

Social Security Bulletin • Annual Statistical Supplement • 2000 xxi

Supplemental Security Income

Program Trends

• In December 1999, 6,556,600 persons received federally administered SSI payments—9,000 less than the previous year. Of the total, 2,018,600 (31 percent) were aged 65 or older; 3,691,000 (56 percent) were blind or disabled aged 18-64; and 847,100 (13 percent) were blind or disabled under age 18.

• The number of blind or disabled aged 18-64 rose by 45,000 (1.2 percent) between December 1998 and December 1999, and blind or disabled under age 18 dropped by 40,000 (4.5 percent). In comparison, between December 1997 and December 1998, blind or disabled aged 18-64 increased by 2.4 percent and blind or disabled under age 18 by 0.8 percent.

• During 1999, 757,600 persons were awarded federally administered payments, an increase of 2.4 percent from the 1998 award total. Of the 1999 awards,124,000 went to recipients aged 65 or older, 494,200 to blind or disabled aged 18-64, and 139,500 to blind or disabled under age 18.

• Total SSI payments were $31.0 billion in 1999, up 2.5 percent from 1998. The 1998 increase over 1997 was 4.0 percent. Federal SSI payments in 1999 were $26.8 billion (an increase of 1.5 percent over the previous year). Federally administered state supple-mentation was $3.3 billion in 1999, up 9.9 percent from the 1998 amount. State-administered supplementation rose to $853 million in 1999, an increase of 5.6 percent from the previous year's total.

• In 1999, the leading causes of disability among the blind or disabled aged 18-64 and those under age 18 were mental disorders and mental retardation. Among disabled recipients aged 18-64, 24.4 percent were mentally retarded and 34.3 percent were diagnosed with another mental disorder. These conditions were also the most frequent diagnoses for blind or disabled under age 18, accounting for 35.6 percent and 25.4 percent, respectively.

xxii Social Security Bulletin • Annual Statistical Supplement • 2000

Health Care

Medicare

Hospital Insurance (Part A):Total benefits paid in calendar year 1999 $128.8 billionNumber of enrollees in July 1999, total 39.1 million

Aged 33.9 millionDisabled 5.2 million

Supplementary Medical Insurance (Part B):Total benefits paid in calendar year 1999 $80.7 billionNumber of enrollees in July 1999, total 37.0 million

Aged 32.3 millionDisabled 4.7 million

Administrative costs, 1999:Hospital Insurance $1.9 billion

As a percent of total benefits paid 1.4 percentSupplementary Medical Insurance $1.6 billion

As a percent of total benefits paid 2.0 percent

Medicaid

Medical service expenditures in fiscal year 1998 $142.3 billionNumber of unduplicated recipients, fiscal year 1998 40.7 million

Average 1998 vendor payment per unduplicated recipient:Persons aged 65 or older $10,242 Permanently and totally disabled persons 9,095Dependent children under age 21 1,203

Average 1998 vendor payment for medical services:Nursing facility services $19,379Inpatient general hospital care 5,031Prescribed drugs 699Physician's services 327

Social Security Bulletin • Annual Statistical Supplement • 2000 xxiii

Unemployment Insurance1999

Total payments $20.7 billionRegular programs 20.7 billion

State programs 20.3 billion Federal employees and ex-service members .4 billion

Extended benefits program .02 billion

Average— Weekly benefit amount (regular programs) $212 Duration of benefits 14.5 weeks Weekly insured unemployment 2.2 million

Covered employment 125.3 million

Workers' Compensation1998

Benefit payments:Total $41.7 billion

Compensation payments 25.8 billionMedical and hospitalization 15.9 billion

Benefits paid by— Private insurance carriers 22.2 billion State and federal funds 10.4 billion Employers' self-insurance 9.2 billion

Covered workers per month 120.9 million

Costs as a percent of covered payroll 1.35 percent

Black LungBenefit adjustment, effective Jan. 1, 2000 3.8 percent

Basic benefit, miner or widow $487.40Maximum family benefit 974.70

Part B (claims filed before July 1, 1973)Number of beneficiaries, December 1999

Total 99,000Miners 13,600Widows 67,400Dependents 18,000

Average monthly benefit, December 1999Miners $629.10Widows 477.20

Total annual payments, 1999 $541.2 million

Part C (claims filed before July 1, 1973 or later)Number of monthly benefits to miners and survivors,September 1999 55,067

Amount of benefits, fiscal year 1999Disability and survivors benefits $363.9 millionMedical benefits 75.6 million

xxiv Social Security Bulletin • Annual Statistical Supplement • 2000

Temporary Disability InsurancePrograms in effect in—

California, Hawaii, New Jersey, New York, Rhode Island, Puerto Rico, and the railroad industry.

Average weekly benefit, 1997

State fund Private plansCalifornia* $227 $351New York $143 $191

*Accounts for half of the workers participating in TDI.

Veterans' BenefitsDisability compensation or pension, 1999

Number of veterans with—Service-connected disability 2,294,000Non-service-connected disability 379,000

Monthly payment for—Service-connected disability

10 percent disability $98Total disability 2,306

Non-service-connected disability (maximum payment)Without dependent 749With one dependent and in need of aid and attendance 1,481

Temporary Assistance for Needy FamiliesTotal payments, 1998 $19.3 billion

Average monthly number of—Recipients 8.4 millionFamilies 3.0 million

Average monthly paymentPer recipient $193Per family 529

Food StampsMonthly benefits, beginning Oct. 1, 1999:

Four-person household with no income $426One person household 127Two person household 234Standard deduction 134

Fiscal year 1999Average number of participants 18.1 millionTotal benefits $15.8 billion

Social Security Bulletin • Annual Statistical Supplement • 2000 xxv

Low-Income Home Energy AssistanceIn fiscal year 1996 the Department of Health and Human Services issued—

$1.08 billion in block grants

$16.9 million in incentive awards to 43 states and 26 tribes or tribal organizations that had leveraged $640 million in private or non-federal public resources in fiscal year 1995 to provide energy benefits

$5 million for Residential Emergency Assistance Challenge Option (REACH) awards

With the enactment of the Human Services Amendments of 1994, LIHEAP was reauthorized through fiscal year 1999. The Coats Human Services Reauthorization Act of 1998 has since reauthorized LIHEAP through fiscal year 2004.

Poverty1999 poverty income thresholds:

Individual, aged 65 or older $7,990Couple, householder aged 65 or older 10,075Family of four 17,029

Percent of population with income below poverty level, 1998:All ages 12.7 percentChildren under age 18 living in families 18.3 percentPersons aged 65 or older 10.5 percent

Social Security

Social Security Bulletin • Annual Statistical Supplement • 2000 1

Social Security (Old-Age, Survivors, and Disability Insurance)

The Old-Age, Survivors, and Disability Insurance(OASDI) program provides monthly benefits to qualifiedretired and disabled workers and their dependents, and tosurvivors of insured workers. Eligibility and benefit amountsare determined by the worker's contributions to SocialSecurity. Benefits are paid as an earned right to workers,their families and their survivors. There is no means test toqualify for benefits.

During 1999, nearly 45 million people received cashbenefits at a rate exceeding $32 billion each month ($385billion annually). According to the latest Social SecurityTrustees Report, these cash benefits comprised just over 4percent of the nation's gross domestic product. During thesame year, approximately 152 million employees and self-employed workers, along with employers, contributed morethan $450 billion to the OASDI trust funds—through whichcontributions are credited and benefits are paid.

Social Security benefits are essential to the economicwell-being of millions of individuals. Social Security paysbenefits to about 90 percent of those aged 65 or older. It isthe major source of income (providing 50 percent or moreof total income) for 64 percent of the beneficiaries. It con-tributes 90 percent or more of income for almost one-thirdof the beneficiaries, and is the only source of income for 18percent of them. (See charts 1–4 at the end of this section.)

Social Security Contributions and Trust Funds

A person contributes to Social Security either throughpayroll taxes or self-employment taxes under the FederalInsurance Contribution Act (FICA) or the Self-EmployedContribution Act (SECA). Employers match the employeecontribution, while self-employed workers pay an amountequal to the combined employer-employee contributions.(Self-employed workers receive a special tax deduction toease the impact of paying the higher rate.) There is a maxi-mum yearly amount of earnings subject to OASDI taxes,$76,200 in 2000. Employees whose contributions exceedthe maximum taxable amount because they worked formore than one employer can receive refunds of excessFICA payments when they file their tax returns.

Taxes are allocated to the Old-Age (Retirement) andSurvivors (OASI) Trust Fund, the Disability Insurance (DI)Trust Fund, and the Hospital Insurance (HI) Trust Fund. Inaddition to the taxes on covered earnings, OASI and DITrust Fund revenues include interest on trust fund securi-ties, income from taxation of OASI and DI benefits, certaintechnical transfers, and gifts or bequests.

By law, the trust funds may only be disbursed for:

(1) Monthly benefits for workers and their families.(2) Vocational rehabilitation services for disabled bene-

ficiaries.(3) Administrative costs (currently less than 1 percent

of expenditures).(4) The lump-sum death payment to eligible survivors.

0

Revenue received from FICA payments is transferredto the U.S. Treasury. FICA revenue in excess of outlays isused to purchase special interest-bearing Treasury bonds.These securities remain assets of the trust funds untilneeded to cover Social Security costs.

Provisions for Railroad Retirement Board Beneficiaries

The OASDI tables do not include a number of personsreceiving Railroad Retirement benefits who would be eligi-ble for Social Security benefits had they applied. The rea-son they have not applied is that receipt of a SocialSecurity benefit would reduce their Railroad Retirementbenefit by a like amount. The number of persons is notavailable, but is estimated to be less than 100,000.

The Railroad Retirement Act of 1974, effective January1, 1975, provided that the regular annuity for employeeswith 10 or more years of railroad service who retired afterDecember 31, 1974, will consist of two components:

• Tier 1—A basic Social Security level componentequivalent to what would be paid under the SocialSecurity Act on the basis of the employee'scombined railroad and nonrailroad service, reducedby the amount of any monthly benefit under OASDIactually paid on the basis of nonrailroad work; and

• Tier 2—A staff level component payable over andabove the Social Security equivalent, on the basis ofa formula applicable only to railroad service.

Structure and OrganizationThe OASDI program is administered by the Social

Security Administration (SSA) which became an indepen-dent agency in 1995. The Commissioner of Social Securityserves a 6-year term following appointment by the Presi-dent and confirmation by the Senate. A bipartisan SocialSecurity Advisory Board serves to review existing laws andpolicies and commissions studies and issues recommen-dations intended to anticipate changing circumstances.The President appoints three of the seven board membersand Congress appoints the other four members.

The Social Security Administration is headquartered inBaltimore, Maryland. Major headquarter componentsinclude the National Computer Center that contains SSA's

Social Security

2 Social Security Bulletin • Annual Statistical Supplement • 2000

mainframe computers that drive its systems, much of theexecutive staff for policy, programs and systems as well asfield support components. SSA's field structure is dividedinto 10 geographic regions containing over 1,300 fieldinstallations in communities throughout the country. Officesizes range from large urban offices with 50 or moreemployees to remote resident stations staffed by one ortwo individuals. Each region is headed by a Regional Com-missioner, and staffed with specialists to handle regionaladministrative tasks and to assist field offices with opera-tional issues. In addition, there are teleservice centerslocated in all regions. While physically located within thevarious regions, each teleservice center manages the pub-lic's Social Security business from throughout the nationusing state-of-the-art communications systems. Six pro-gram service centers provide direct service to the publicand support for the field offices in all aspects of SocialSecurity's workloads.

Significant Program ChangesProgram changes occur through legislation or (in areas

where authority is delegated to the Commissioner) throughregulation. Recent program changes follow.

Work Incentives Improvement Act

The Ticket to Work Incentive and Work IncentivesImprovement Act (TWIIAA) was enacted on December 17,1999. This legislation provides major enhancements toSSA's programs that assist disabled beneficiaries whoattempt to work. The TWIIAA provides beneficiaries morechoices in vocational rehabilitation services, and offersexpanded health care for beneficiaries who are no longereligible for cash benefits due to work. Effective October 1,2000, the Act offers extended Medicare coverage to benefi-ciaries who return to work, and offers a buy-in for Medicaidcoverage.

The provisions of TWIIAA will be phased in over a 3-year period beginning January 1, 2001. These provisionsinclude demonstration projects that will eventually apply adisability earnings test more directed toward individuals'earnings history and circumstances of their reemployment.The Ticket to Work will emphasize and encourage rehabili-tation efforts and will reimburse private vocational rehabili-tation agencies for their services to beneficiaries attemptingto return to work. Also beginning January 1, 2001, former

beneficiaries may have their benefits resumed if their workactivity ends within 5 years of the month their benefitsstopped and they are still disabled.

Elimination of Annual Earnings Test for Persons Reaching Full Retirement Age

Public Law 106-182, The Senior Citizen's Freedom toWork Act of 2000, enacted April 7, 2000 eliminated theearnings test beginning with the month a beneficiary attainsfull retirement age (FRA), currently age 65. Elimination ofthis earnings test is effective for taxable years ending afterDecember 31, 1999.

The earnings limit that applies in the year of attainmentof FRA is based on the limits previously established for per-sons at FRA through age 69—$17,000 in 2000, $25,000 in2001, and $30,000 in 2002. Benefits are withheld at therate of $1 for every $3 of earnings above these exemptamounts. In determining earnings for purposes of theannual earnings test under this legislation, only earningsbefore the month of attainment of FRA will be considered.The legislation also permits retired workers to earn delayedretirement credits for any months between the attainmentof full retirement age and age 70 for which the workerrequests that benefits not be paid.

Public Law 106-182 did not change the annual exemptamount for beneficiaries who are under FRA throughoutthe year, which continues to be pegged to increases in theaverage wage. This amount increased from $9,600 in 1999to $10,080 in 2000. Withholding for beneficiaries subject tothis earnings test is at $1 for each $2 of earnings over theexempt amounts.

Increase in Substantial Gainful Activity Amount

Effective July 1, 1999, the Social Security Administra-tion raised from $500 to $700 the amount of monthly earn-ings for a nonblind disabled individual to be consideredengaging in substantial gainful activity (SGA). This regula-tory change was issued as part of an effort to encouragedisabled individuals to attempt to return to the workforce.

The SGA threshold is part of the definition of disabilitythat requires an individual to be unable to engage in sub-stantial gainful activity to be eligible for benefits. Earningsof more than $700 a month will ordinarily demonstrate thatan individual is engaged in SGA. Earnings of less than$300 a month will ordinarily demonstrate that an individualis not engaged in SGA. Earnings between $300 and $700 amonth will require that consideration be given to circum-stances related to the work activity.

A different definition of SGA applies to blind personsreceiving Social Security disability benefits. Increases inthe SGA amount for blind individuals are pegged toincreases in the national average wage index and thuswere not affected by the 1999 rule change. The level for

Table 2.F2 summarizes data describing SSA's national workforce, and table 2.F3 provides a historical record of work years committed to SSA's overall operations. Table 2.F4 provides workload data for the Old-Age and Survivors' Insurance programs, and table 2.F5 similarly provides workload data for the Disability Insurance program.

Social Security

Social Security Bulletin • Annual Statistical Supplement • 2000 3

blind individuals increased from $1,110 in 1999 to $1,170 in2000.

Coverage and FinancingIn 1999, about 152 million persons worked in employ-

ment or self-employment covered under the OASDI pro-gram. In recent years, coverage has become nearlyuniversal for work performed in the United States, includingAmerican Samoa, Guam, the Northern Mariana Islands,Puerto Rico, and the U.S. Virgin Islands. Approximately 96percent of the American workforce are covered by OASDI.

Workers excluded from coverage fall into five majorcategories:

(1) Civilian federal employees hired before January 1,1984,

(2) Railroad workers (who are covered under the rail-road retirement system, which is coordinated withSocial Security,

(3) Certain employees of state and local governmentswho are covered under their employers' retirementsystems,

(4) Domestic workers and farm workers whose earn-ings do not meet certain minimum requirements(workers in industry and commerce are coveredregardless of the amount of earnings), and

(5) Persons with very low net earnings from self-employment, generally under $400 annually.

0

For most employees, taxes are withheld from wagesbeginning with the first dollar earned. The exceptions aredomestic employees and agricultural workers. In 2000, adomestic employee must earn $1,200 from any singleemployer in a calendar year before FICA is withheld. Mostagricultural workers’ wages are covered if the employerpays more than $2,500 in total wages in a year or if theindividual worker earns over $150 in a year from a singleemployer.

Employees, their employers and the self-employedeach pay taxes on earnings in covered employment andself-employment up to an annual maximum taxable amountfor OASDI. There is no upper limit on taxable earnings forMedicare Hospital Insurance (HI). The OASDI maximumtaxable amount—$76,200 in 2000—is updated automati-

cally each year in relation to increases in the national aver-age annual wage. The current FICA tax rate applicable toboth employees and employers is 6.2 percent for OASDI(5.30 percent for OASI and 0.9 percent for DI), and 1.45percent for HI.

A self-employed person pays the combined employee-employer rate of 12.4 percent for OASDI and 2.9 for HIunder the Self-Employment Contributions Act (SECA).Two deduction provisions reduce the SECA and income taxliability of self-employed persons. The intent of these provi-sions is to treat the self—employed in much the same man-ner as employees and employers are treated for purposesof FICA and income taxes. The first provision allows adeduction from net earnings from self-employment equal tothe amount of net earnings before the deduction, timesone-half the SECA tax rate. The effect of this deduction isintended to be analogous to the treatment of the FICA taxpaid by the employer, which is disregarded as remunera-tion to the employee for FICA and income tax purposes.The second provision allows an income tax deductionequal to one-half of the amount of the SECA tax paid,which is designed to reflect the income tax deductibility ofthe employer's share of the FICA tax.

Insured StatusTo become eligible for his or her benefit and/or benefits

for family members or survivors, a worker must earn a min-imum number of credits based on work in covered employ-ment or self-employment. These credits are described asquarters of coverage. In 2000, a quarter of coverage (QC)is credited for each $780 in annual covered earnings, up toa maximum of four QCs for the year. Earnings of $3,120 ormore in 2000 will give the worker four QCs regardless ofwhen the money is actually earned or paid during the year.The amount of earnings required for a QC is adjusted auto-matically each year in proportion to increases in the aver-age annual wage level.

Table 2.A30 provides related historical data on Disability program earnings guidelines, including reference to recent changes in thresholds for determining substantial gainful activity (SGA).

Table 2.A1 outlines the history of coverage provisions and table 2.A2 provides a history of provisions regard-ing noncontributory wage credits, mostly for military service.

See Table 2.A3 for annual amounts of maximum taxable earnings and contribution rates. Table 2.A4 shows historical annual maximum amounts of contributions by employees and self-employed persons.

Table 2.A5 describes income tax credits for 1984-89 intended to cushion the impact of increases in FICA and SECA taxes enacted in 1983. The SECA tax credits were replaced, effective 1990, by the deduction provi-sions described above. Table 2.A6 outlines the history of provisions regarding appropriations from general revenues and interfund borrowing.

Social Security

4 Social Security Bulletin • Annual Statistical Supplement • 2000

Fully Insured

Eligibility for most types of benefits requires that theworker be fully insured. To be fully insured, a worker musthave a number of QCs at least equal to the number of cal-endar years elapsing between age 21 (or 1950 if later) andthe year in which he or she reaches age 62, becomes dis-abled, or dies—whichever occurs first. Under this require-ment, workers who reach age 62 in 1991 or later need themaximum number of 40 QCs to be fully insured. For work-ers who become disabled or die before age 62, the numberof QCs needed for fully insured status depends on their ageat the time the worker is disabled or dies. A minimum of 6QCs is required regardless of age.

Currently InsuredIf a worker dies before achieving fully insured status,

benefits can still be paid to qualified survivors if the workerwas "currently insured" at the time of death. (In the case ofa young worker, survivor benefits are potentially payable toa worker's children and to a widow(er) with children incare.) To be currently insured, the worker must haveearned 6 QCs in the 12 quarters before death (that is, 6 ofthe last 13 quarters, including the quarter in which deathoccurred).

Disability InsuredTo qualify for disability benefits, a nonblind worker must

have recent work activity as well as being fully insured.Under the test involving recent work experience, a non-blind worker older than age 31 must have earned at least20 QCs among the 40 calendar quarters ending with thequarter in which the disability began. Workers disabled atages 24 through 30 must have earned QCs in one-half ofthe calendar quarters elapsing between age 21 and the cal-endar quarter in which the disability began. Workers underage 24 need 6 QCs in the 12-quarter period ending with thequarter of disability onset. Workers who qualify for benefitsbased on blindness need only be fully insured.

International AgreementsThe President is authorized to enter into international

agreements (also called "totalization" agreements) to pro-vide coordination between the Social Security programs ofthe United States and the programs of other countries. TheUnited States currently has social security agreements ineffect with 17 countries. Agreements with several othercountries are in process.

An international social security agreement is designedto benefit both workers and employers. Such agreements

eliminate dual coverage and contributions with respecttocountries that are parties to the agreement. Agreementsthe same work under the social security programs of the

from a country even if the worker lacks the necessary cov-erage/contributions for a full benefit. Under the agree-ments, coverage from other countries is added to thecoverage from the other to create sufficient periods of cov-erage to establish eligibility under the laws of the countryfrom which benefits are being claimed and that were notalready credited under its own laws. A benefit is then com-puted based on the proportion of total covered earnings inthat country.

Benefit Computation and Automatic Adjustment ProvisionsThe primary insurance amount (PIA) is the monthly

benefit amount payable to the worker upon retirement atfull retirement age or upon entitlement to disability benefits.The PIA is also the base figure from which monthly benefitamounts payable to the worker's family members or survi-vors are determined. The PIA is derived from the worker'sannual taxable earnings, averaged over a period thatencompasses most of the worker's adult years. Until thelate 1970s, the average monthly wage (AMW) was theearnings measure generally used. For worker's first eligiblefor benefits after 1978, average indexed monthly earnings(AIME) have replaced the AMW as the usually applicableearnings measure. The PIA computation based on AIMEcurrently involves the following three steps:

(1) Indexing of earnings: The worker's annual taxableearnings after 1950 are updated (or "indexed") toreflect the general earnings level in the indexingyear—the second calendar year before the year inwhich the worker is first eligible (that is, the year aworker reaches age 62, becomes disabled, ordies). Earnings in years after the indexing year arenot indexed, but instead are counted at their actualvalue. A worker's earnings for a given year areindexed by multiplying them by the following ratio

Table 2.A7 summarizes the basic provisions concerning insured status.

Social Security Agreements and Effective Dates

Austria ................... 1991 Luxembourg ..........1993Belgium ................. 1984 Netherlands ...........1990Canada.................. 1984 Norway ..................1984Finland .................. 1992 Portugal .................1989France ................... 1988 Spain .....................1988Germany ............... 1979 Sweden .................1987Greece .................. 1994 Switzerland............1980Ireland ................... 1993 United Kingdom.....1985Italy........................ 1978

Table 5.M1 provides data on the number of beneficiaries receiving totalization payments, and average amounts.

Social Security

Social Security Bulletin • Annual Statistical Supplement • 2000 5

(indexing factor): the average wage in the nationaleconomy for the indexing year, divided by the cor-responding average wage figure for the year to beindexed.

(2) Determining AIME: The period used to calculateAIME equals the number of full calendar yearselapsing between age 21 (or 1950, if later) and theyear of first eligibility, usually excluding the lowest 5years. Workers disabled before age 47 havebetween zero and four excluded years. At an abso-lute minimum, two years are used to computeAIME. The actual years used in the computation—the "computation years"—are the years of highestindexed earnings after 1950, including any yearsbefore age 22 or after age 61, as well as the year ofdisability or death. AIME is calculated as the sumof indexed earnings in the computation period,divided by the number of months in that period.

(3) Computing the PIA: The formula used to computethe PIA from AIME is weighted to provide a higherPIA-to-AIME ratio for workers with comparativelylow earnings. The formula applies declining per-centage conversion rates to three AIME brackets.For workers who reach age 62, become disabled,or die in 2000, the formula provides a PIA equal tothe sum of:

90 percent of the first $531 of AIME, plus 32 percent of the next $2,671 of AIME, plus 15 percent of AIME over $3,202.

0

Beginning with the first year of eligibility, the PIA isincreased by cost-of-living adjustments (COLAs).

The dollar amounts defining the AIME brackets arereferred to as "bend points." These bend points (asdescribed in table 2.A11) are updated automatically eachyear in proportion to increases in the national averageannual wage level. This automatic adjustment ensures thatbenefit levels for successive generations of eligible workerswill keep up with rising earnings levels, thereby assuringconsistent rates of earnings replacement from one genera-tion of beneficiaries to the next.

The benefit formula applicable to a worker depends onthe year of eligibility (or death) rather than on the year ben-efits are first received. Thus the PIA of a worker retiring atage 65 in 2000 is calculated using the benefit formula thatapplies to all workers first eligible in 1997 (the "year ofattainment" of age 62). The PIA derived from that formula isthen increased by the COLAs effective for December 1997,1998, and 1999 to obtain the PIA effective at age 65. Sub-sequent recomputations of the worker's benefit (additionalearnings not originally considered, delayed retirementcredits, or additional COLA increases) all are based on thecomputation that originally applied for the year of attain-ment.

Beginning in 1981, benefits have been rounded to thenext lower ten cents at each step in the computation. Thefinal benefit payment is rounded to the next lower dollaramount (if not already an even dollar). Prior to 1981, SSApaid in ten-cent increments after rounding down to them inthe process.

A cost-of-living increase in benefits generally is estab-lished each year if the Consumer Price Index for UrbanWage Earners and Clerical Workers (CPI-W), prepared bythe Department of Labor, indicates a percentage increase(after rounding) of at least 0.1 percent between two speci-fied quarters. The arithmetic mean of the CPI-W for July,August, and September in the year of determination iscompared with the arithmetic mean of the CPI-W for thelater of (a) July, August, and September in the year inwhich the last effective cost-of-living increase was estab-lished or (b) the 3 months of the calendar quarter in whichthe effective month of the last general benefit increaseoccurred. The percentage increase in the CPI-W, roundedto the nearest one-tenth of one percent, represents the sizeof the increase in benefits, effective for December of theyear in which the determination is made.

Under certain conditions, depending on the size of thecombined OASDI Trust Funds relative to estimated dis-bursements, the applicability and size of a cost-of-livingadjustment are determined under an alternative method,called the "stabilizer provision." In no case, however, arebenefits reduced below the benefit level existing in the yearof determination.

Table 2.A8 shows the indexing factors applicable to the earnings of workers who were first eligible in 1987-2000. Table 2.A9 shows indexed earnings for workers first eligible in 1993-2000 who had maximum taxable earnings in each year after 1950. For a more detailed technical description of an AIME computation, including a computation worksheet, see the Technical Note "Com-puting a Retired-Worker Benefit".

Table 2.A10 provides a historical outline of provisions related to AIME and AMW, and describes variations in the number of dropout years. Tables 2.A15 and 2.A16 describe AMW benefit computations based on the worker's nonindexed earnings after 1936 and 1950, respectively. (Very few persons currently being awarded benefits have PlAs computed under these old-start or new-start computation methods. These methods, partic-ularly the new-start method shown in table 2.A16, are more frequently applicable in earnings recomputations for workers who reached age 62 before 1979.)

Table 2.A11 shows the PIA formula and first applicable COLA for workers first eligible in 1979 or later.

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6 Social Security Bulletin • Annual Statistical Supplement • 2000

Alternative PIA Computation Provisions

Special minimum PIA.—Workers with low earnings buta steady work history over most of their adult years mayqualify for monthly benefits based on the special minimumPIA computation. This computation does not depend on theworker's average earnings, but on the number of coverageyears—years in which the worker had earnings equal to orabove a specified amount. The level of the special mini-mum PIA is the same for workers having the same numberof coverage years, regardless of age or year of first eligibil-ity. Benefits based on the special minimum PIA areincreased by cost-of-living adjustments (COLAs).

Windfall Elimination Provision PIA.—The WindfallElimination Provision (WEP) affects persons who receiveSocial Security benefits along with a pension based onnoncovered work after 1956. First eligibility for the noncov-ered pension and Social Security benefits must be afterDecember 31, 1985 for WEP to apply. WEP reduces theSocial Security PIA upon which SSA benefits are basedand affects all benefits paid on that record, except survivorsbenefits. The WEP reduction ceases when entitlement tothe pension payment ends, the wage earner dies or thewage earner earns a total of 30 years of substantial SocialSecurity earnings. The WEP reduction amount is nevermore than one-half of the noncovered pension.

A WEP PIA is generally based on 40% of the first bendpoint instead of 90% as with the regular PIA:

Example: A retired worker with a noncovered pensionof $2,000 a month and less than 20 years of coveredemployment attains age 62 in 2000:

If a worker has more than 20 years of substantial cov-ered earnings, the WEP PIA begins to increase. With the21st year of substantial covered earnings, the first bendpoint percentage is increased by 5 percentage points. Thisrate of increase applies for each additional year of substan-tial covered earnings, through the 30th year of substantialearnings at which point WEP no longer applies. After 23years of substantial coverage, for example, the first bendpoint percentage would be 55 percent. Thirty years of sub-stantial earnings would yield a first bend point percentageof 90 percent (the normal percentage of the first bendpoint).

Examples of pensions subject to WEP are U.S. CivilService Retirement System annuities, retirement benefitsbased on foreign earnings, and state and local pensionsbased on noncovered earnings.

Family maximum provisions.—Monthly benefits pay-able to the worker and family members or to the worker'ssurvivors are subject to a maximum family benefit amount.The family maximum level for retired-worker families or sur-vivor families usually ranges from 150 percent to 188 per-cent of the worker's PIA. The maximum benefit fordisabled-worker families is the smaller of 85 percent ofAIME (or 100 percent of PIA, if larger) or 150 percent of thePIA.

Like the formula for determining the PIA, the maximumfamily benefit formula applicable to a worker depends onthe year of first eligibility (that is, the year of attainment ofage 62). Once the worker's maximum family benefitamount for the year of first eligibility is determined, it isincreased by subsequent COLAs.

Table 2.A18 presents a history of provisions relating to the automatic adjustment of benefits, including a description of the stabilizer provision. In addition, Table 2.A18 includes a summary history and description of provisions relating to the annual automatic adjustment of (1) the maximum amount of taxable and creditable earnings, (2) the dollar amount needed to establish a quarter of coverage, (3) the bend points defining the AIME brackets in the PIA formula and the PIA brackets in the maximum family benefit formula, and (4) the exempt amounts under the earnings (retirement) test. All of these adjustments are linked to increases in the level of the national average annual wage, rather than to increases in the CPI. Table 2.A19 illustrates the cumula-tive effect of statutory and automatic increases in bene-fits for workers who have been in benefit status over varying time periods.

See Table 2.A12 for additional information on the Special Minimum PIA.

Normal PIA, based on AIME of $800: $531 x .90 = $477.90 $269 x .32 = $86.08 PIA = $563.90WEP PIA, based on AIME of $800: $531 x .40 = $212.40 $269 x .32 = $86.08 PIA = $298.40

Table 2.A11.1 provides more detail about the WEP computation and contains the amounts of substantial earnings for years after 1990. Substantial earnings for earlier years are listed in table 2.A12.

For information on family maximum provisions, as described here, see table 2.A13 (comparison of family maximums to the PIAs on which they are based), and table 2.A14 (disability family maximums. Table 2.A17 shows the maximum family benefit amounts applicable in cases of first eligibility before 1979.

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Social Security Bulletin • Annual Statistical Supplement • 2000 7

Benefit Types and Levels

Retired and Disabled Workers

The full retirement age is the earliest age at which anunreduced retirement benefit is payable (sometimesreferred to as the "normal retirement age"). The age for fullretirement benefits is scheduled to rise gradually from age65 to age 67, with the first incremental increase affectingworkers who reach age 62 in the year 2000. Workers overage 62 who leave the workforce before they are eligible fora full retirement benefit can receive reduced benefits. Themonthly rate of reduction from the full retirement benefit(that is, the PIA) is 5/9 of 1-percent a month for the first 36months immediately preceding FRA. The reduction rate is5/12 of 1 percent a month for any additional months. Themaximum overall reduction for early retirement will haverisen from 20 percent to 30 percent by 2022, when age 67becomes the full retirement age.

If a disabled worker receives a reduced retirement ben-efit for months before disability entitlement, the disabilitybenefit is reduced by the number of months for which he orshe received the reduced benefit.

For workers who postpone their retirement beyond thefull retirement age, benefits are increased for each monthof nonpayment beyond that age. This increase is called a"delayed retirement credit," and is potentially available forany or all months following attainment of the full retirementage (currently a maximum of 60 months for persons age65). The annual rate of increase for delayed retirementcredits is 6-1/2 percent for workers who reach age 62 in1999 or 2000. The credit will increase to 7 percent in 2001and will eventually rise to 8 percent for workers reachingage 62 in 2005 or later.

Spouses and Children of Workers

Spouses receive 50 percent of the worker's PIA(regardless of the worker's actual benefit amount), if thespouse has attained the full retirement age. The spouse ofa retired or disabled worker can elect monthly benefits asearly as age 62. These benefits are reduced at the rate of25/36 of 1 percent a month for the first 36 months immedi-ately preceding FRA and 5/12 of 1 percent for each addi-tional month.

Children of retired or disabled workers are also eligibleto receive monthly benefits. The term "child" refers to achild under the age of 18, a child up to the age of 19 attend-ing elementary or secondary school full time, or to an adultchild, aged 18 or older, who was disabled prior to age 22. Inaddition, young spouses (that is, those under the age of 62)who care for a worker's entitled child may also be eligible.For purposes of defining young spouses' benefits, the term"child" refers to a child under age 16, or to an adult child ofthe worker who was disabled prior to age 22. Children ofliving workers can receive up to 50 percent of the worker's

PIA, as can young spouses. (The benefit of a youngspouse is not reduced for age.) Monthly benefits payable tothe spouse and children of a retired or disabled worker arelimited to a family maximum amount, as discussed earlier.

Benefits are payable to unmarried divorced spouses ofretirement age who were married at least 10 years to theworker. A divorced spouse benefit is excluded from familymaximum provisions. Divorced spouses age 62 or olderwho have been divorced for 2 or more years (after mar-riage of 10 or more years) may be independently entitledon the record of the ex-spouse if the ex-spouse could beentitled if he or she applied.

Survivors Benefits

Widows and widowers of fully insured workers are eligi-ble for unreduced benefits at full retirement age (FRA), cur-rently age 65. As with retired workers and spouses,widows' and widowers' FRA will gradually increase to age67. Widows and widowers can elect reduced monthly ben-efits at age 60 or, if disabled, as early as age 50. Survivingdivorced spouses can also receive benefits if married to theworker for at least 10 years and not remarried before age60 (age 50 if disabled).

For survivors whose full benefit retirement age is 65,the monthly rate of reduction for the first 60 months imme-diately preceding FRA is 19/40 of 1 percent of the worker'sPIA, with a maximum reduction of 28.5 percent at age 60.For survivors whose full benefit retirement age is over 65,the amount of reduction for each month prior to FRA isadjusted accordingly to ensure that the maximum reductionat age 60 remains 28.5 percent of the worker's PIA.

Benefits for widows and widowers are increased if thedeceased worker delayed retirement beyond the FRA. Inthese cases, the survivor benefits include any delayedretirement credits the deceased worker had earned. Con-versely, if the worker had elected early retirement, widows'and widowers' benefits are limited for widows and widow-ers first entitled to survivor benefits at age 62 or later. Forthese beneficiaries, the benefit is the higher of 82.5 percentof the worker's PIA or the amount the worker would bereceiving if still alive. Disabled widows and widowers aged50 - 60 receive the age 60 widow's rate (71.5 percent ofPIA) regardless of their age at the time of entitlement.

Children of deceased workers and mothers and fathersunder FRA are eligible to receive monthly benefits up to 75percent of the worker's PIA if the worker died either fully orcurrently insured. Mothers and fathers must be caring forthe worker's entitled child who is either under age 16 or dis-abled. (See the above definitions of "child".) A dependentparent aged 62 or older is eligible for monthly benefitsequal to 82.5 percent of the worker's PIA. Each of twodependent parents can qualify for benefits equal to 75 per-cent of the deceased worker's PIA. Monthly benefits pay-able to survivors are reduced to conform to the familymaximum benefit payable on the deceased worker's

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8 Social Security Bulletin • Annual Statistical Supplement • 2000

account. Benefits for a surviving divorced spouse, however,are disregarded when computing the maximum family ben-efit. (See charts 5–8 at the end of this section.)

Effect of Current Earnings on Benefits

Beneficiaries under age 65 with earnings in excess ofcertain exempt amounts may have all or part of their bene-fits withheld as a result of the annual earnings test (AET)provisions of the Social Security Act. For those aged 65 orolder, however, there have been recent changes to AETprovisions. Amendments in 1996 eased the impact of AETprovisions, while changes in 2000 removed the AET alto-gether for beneficiaries age 65 and older. Public Law 104-121, enacted March 29, 1996 substantially raised theexempt amounts under the annual earnings test for per-sons who have reached full retirement age. These amountsare $12,500 in 1996; 13,500 in 1997; $14,500 in 1998;$15,500 in 1999; $17,000 in 2000; $25,000 in 2001; and$30,000 in 2002. After 2002, the annual exempt amountwill be indexed to the growth in average wages. Benefitswere withheld at the rate of $1 in benefits for every $3 ofearnings above the age 65 exempt amount.

P.L. 106-182, enacted April 7, 2000 el