Committee Prints

recovered through the adjustment procedures now in the law. Specific procedures for cashing the check and for recovery of the overpayment would be spelled out in regulations of the Secretary of the Treasury. There would be no cost to the program as a result of this change.

H. VALIDATION OF CERTAIN ERRONEOUSLY REPORTED WAGES OF SOME EMPLOYEES OF NONPROFIT ORGANIZATIONS WHO HAVE FILED WAIVER CERTIFICATES FOR OASDI COVERAGE

TEXT

On page 235, between lines 7 and 8, insert the following new subsection:

(d) If

(1) an individual performed service with respect to which remuneration was paid before the date of enactment of this Act by an organization which, before such date, filed a waiver certificate pursuant to section 3121(k)(1) of the Internal Revenue Code,

(2) such service is excluded from employment under title II of the Social Security Act but would not be excluded therefrom if the requirements of such section. 3121(k)(1) had been met with respect to such service, (3) such service was performed during the period such certificate was in effect, and

(4) such individual was listed pursuant to such section
3121(k)(1) at any time during such period and before
the date of enactment of this Act as an employee who
concurred in the filing of such certificate or such indi-
vidual filed a request for coverage pursuant to section
105(b) of the Social Security Amendments of 1960, as
in effect prior to the enactment of this Act (but such
listing or request was not effective with respect to the
service described above),

then, subject to the conditions stated in subparagraphs (B),
(C), (D), and (E) of paragraph (1), and paragraph (4), of
section 105(b) of the Social Security Amendments of 1960,
as amended by this section, the remuneration of such in-
dividual which was paid with respect to such excluded
service shall be deemed to constitute remuneration for
employment for purposes of such title II.

JUSTIFICATION

Employees of nonprofit organizations can be covered under the social security system only if the organization files a waiver certificate in accordance with section 3121(k) of the Internal Revenue Code. If such a certificate is filed, then all current employees who sign a list at that time (it may be amended to include additional names for a period of 2 years thereafter), or who are employed after the filing of the certificate, are covered for social security purposes.

From time to time in the past organizations which have failed to meet all the requirements of section 3121(k) of the Internal Revenue Code with respect to some or all of their employees, but which have

paid the taxes due with respect to the remuneration of the employees not fully covered as a result of the failure, have been given an opportunity to rectify their omissions or other errors prospectively or retroactively, or both, through the enactment of special provisions of law. (The present bill includes one such provision, although, hopefully, the enactment of the bill, which also includes a provision permitting the waiver certificate filed under section 3121(k) of the Internal Revenue Code to be made retroactive (at the option of the organization) for up to 5 years, should all but completely eliminate the need for such special provisions in the future.)

Though the Social Security Amendments of 1960 permitted many organizations to rectify their past errors under section 3121(k), we have learned of at least one case-and there may well be otherswhere the organization made further errors in attempting to provide social security coverage for its employees through the use of the provisions of the amendments. As a result of these errors, the attempt to gain coverage for such employees was ineffective for part of the period of their employment. Their services both before and after this noncovered period were effectively covered for social security purposes. The change here recommended in the bill would enable this organization, and any others in similar circumstances, to rectify this further, unintentional, error on their part and remove this gap in the coverage of some of their employees.

III. PUBLIC ASSISTANCE

A. SOCIAL SECURITY PAYMENTS TO BE DISREGARDED BY THE STATE IN DETERMINING NEED

TEXT

On page 281, strike out lines 12 through 14, and insert the following: Act, any amount paid to any individual under title II of such Act (or under the Railroad Retirement Act of 1937 by reason of section 326(a) of this Act), for any one or more months which occur after December 1964 and before the third month following the month in which this Act is enacted, to the extent that such payment is

JUSTIFICATION

Section 406 of the bill would authorize the States to disregard, in determining the need for aid or assistance under the Federal-State public assistance programs, any payment for months prior to the month it is received which is attributable to the OASDI benefit increase or the newly authorized benefits for children age 18 to 22 attending school. The amendment on page 281 would make it clear that this section is intended only to take care of cases where the payments for prior months are due to the provision in the bill making the benefit increase and these new children's benefits retroactive to January 1, 1965. As drafted, this section of the bill is not clearly confined to such payments, as it unquestionably was intended to be. The revision would make it clear that this section applies only to payments covering a period of 1 or more months before the month

in which the payment is made, and which occur after December 1964 and before the third month following the month in which the bill is enacted.

The Social Security Administration indicates that if the bill is enacted during the first 15 days of a month the first regular monthly check reflecting the benefit increase (or including the regular payment for children over 18) will most likely be the check for the second month following the month of enactment. This check would be mailed to the beneficiaries for receipt on the third day of the next month, i.e., the third month following the month of enactment. The lump-sum check covering retroactive payment fo the benefit increase (or retroactive benefits for children over 18) would be mailed during the second month following the month of enactment and would cover the increase through the month following the month of enact

ment.

If enactment is delayed until after the 15th of a month, the first regular check would be the one for the third month after enactment (mailed in the fourth month) and the lump-sum retroactive check would be mailed in the third month after the month of enactment (to include payments through the second month). The proposed revision would cover such retroactive checks.

The Ways and Means Committee, while clearly not intending to cover retroactive payments which are not related to the provision of the bill making the benefit increase and the benefits for children over 18 retroactive to January 1, 1965, did intend to cover all payments which were so related. including payments covering this 1- or 2-month period after enactment; otherwise the States would be required to make a distinction between the portion of the retroactive check which covers months after the month of enactment and the portion thereof which covers months up through the month of enactment.