Minimum Social Security Benefits

In 1979, GAO recommended that Congress eliminate the minimum benefits for new social security beneficiaries. Unlike the President's proposal which applied to present and future beneficiaries, the GAO recommendation applied only to future beneficiaries. GAO found that the minimum benefit provision, which was intended to help the poor, has in recent years mainly benefited retired government workers with pensions and homemakers supported by their spouses' incomes. Most needy people receive no additional income from the minimum provision because they are already covered by the Supplemental Security Income Program, which requires an offset for other income received. Eliminating the minimum for new beneficiaries would save the Government $405 million during fiscal years 1982 through 1986. The minimum benefit provides an unearned bonus or windfall to people who have had very low lifetime earnings covered by social security. It establishes a minimum for all eligible beneficiaries that is used whenever the regular formula for computing benefits results in a smaller amount. Forty-four percent of sampled beneficiaries received no additional income from the minimum provision because of offsets required in other Federal benefits. Twenty-three percent were dually entitled to social security benefits on either their own or their spouse's account, and their spouse's account provided a higher payment. Some of the rest of the people entitled to minimum social security benefits had some other primary means of support, such as State or local pensions. Most minimum beneficiaries were part-time or intermittent workers. Minimum beneficiaries could not depend primarily on their earnings from covered employment because they were too low. For these people, social security was a new source of income, rather than a replacement of lost covered earnings.