Social Security Special Minimum Benefit: Policy Options

Social Security Special Minimum Benefit: Policy Options

Social Security Special Minimum Benefit:
November 2, 2020
Policy Options
Zhe Li
Social Security’s minimum benefit provision, also known as the special minimum primary
Analyst in Social Policy
insurance amount (PIA), is an alternative benefit formula that increases benefits paid to workers

who had low earnings for many years. These benefits are also paid to their dependents and
survivors. Unlike the regular Social Security benefit formula, which is based on a worker’s

career-average earnings in covered employment, the special minimum PIA is based on the
number of years a person has covered earnings at or above a certain threshold. Beneficiaries receive the higher of the regular
benefit or special minimum benefit amount.
The effectiveness of the special minimum PIA in providing adequate benefits to low earners depends on the structure of its
design. Some core design features include, but are not limited to, (1) the full minimum benefit amount paid to long-term low
earners (e.g., 30 or more years of coverage [YOCs] under current law); (2) the method for indexing the special minimum
benefit amount over time; and (3) earnings required to constitute one YOC under the special minimum PIA (i.e., workers
with earnings less than the required amount would not qualify for a YOC under the provision).
Some policy makers and researchers have considered the special minimum PIA insufficient to provide adequate benefits to
long-term, full-time low-wage earners in recent years, typically due to its design as described in the following examples.
 The special minimum PIA generally provides a benefit below the poverty level to long-term low-wage
earners, for many of whom Social Security benefits are the only income during retirement . Since 1979, the
full special minimum PIA has been about 84% of the Department of Health and Human Services (HHS)
poverty guideline for a one-person household.
 The current special minimum PIA has virtually no effect on the benefits paid to new retirees today. Under
current law, it grows with price levels, whereas the regular benefit is linked to wages. Because wages
generally grow faster than prices, the special minimum PIA affects fewer beneficiaries every year.
 For low earners, qualifying for one YOC today is more difficult than in the early 1990s. The earnings
required for each YOC under the special minimum benefit provision are indexed to average wage growth;
in contrast, the federal minimum wage is raised in an ad hoc manner by legislation. The federal minimum
wage generally grew slower than the national average wage after 1997. Therefore, in the recent two
decades, it became more difficult for full-time federal minimum wage earners to qualify for a YOC each
year.
Over time, Congress has considered several proposals to restructure the special minimum PIA. Most of those proposals
would change one or more design features of the current special minimum benefit. Proposals for the special minimum PIA
generally would increase the full special minimum benefit amounts above the poverty level for certain long-term workers and
index those amounts to wage growth in the future. These types of changes intend to assure that the revised special minimum
PIA would provide effectively higher benefits to new retirees who had low earnings for many years, and those higher benefits
would not diminish over time. Some proposals, at the same time as increasing benefit amounts, would decrease the earnings
required for each YOC under the special minimum PIA. These types of revisions would likely allow more full-time federal
minimum wage earners, as well as certain part-time low earners, to qualify for the special minimum benefit.
Some policy proposals suggest changing other design features, such as increasing the partial minimum benefit amounts
available to low earners with relatively short careers (e.g., 20 or fewer years of coverage); increasing the number of YOCs
required for the full or partial special minimum PIAs (i.e., 30 for full minimum benefit and 11 for any minimum benefit
under current law); or allowing a year of child care to be counted as a YOC under the special minimum PIA. Some of these
revisions would likely allow more beneficiaries with shorter careers to qualify for a revised special minimum benefit, allow
more poor beneficiaries (i.e., those with family income below the poverty level) to receive a higher special minimum benefit,
and generate more program outlays from Social Security. The question remains as to whether the Social Security special
minimum PIA is the appropriate program to provide income supports to short -term career low earners and their family
members.
Congressional Research Service

Social Security Special Minimum Benefit: Policy Options

This report discusses the effects on Social Security beneficiaries of policy options that would change certain design features
of the special minimum benefit. For general information about the special minimum PIA, see CRS Report R43615, Social
Security: Minimum Benefits, by Zhe Li.
Congressional Research Service

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Contents
Introduction ................................................................................................................... 1
The Current-Law Special Minimum Benefit ........................................................................ 2
Regular Social Security Retirement Benefits .................................................................. 3
The Special Minimum Benefit Formula ........................................................................ 4
Comparing the Special Minimum PIA with the Regular PIA ............................................ 5
By Earnings Levels............................................................................................... 5
By Years of Coverage ........................................................................................... 6
By Years ............................................................................................................. 7
Selected Proposed Revisions for the Special Minimum PIA................................................... 8
Policy Options for the Special Minimum PIA and Effects on Beneficiaries ............................ 10
The Full Minimum Benefit Amount............................................................................ 10
The Partial Minimum Benefit Amount: Linear vs. Nonlinear Proration ............................ 12
Indexation of the Initial Minimum Benefit Amount ....................................................... 13
The YOC Earnings Threshold.................................................................................... 14
Number of YOCs Required for the Special Minimum PIA ............................................. 18
YOC Credits for Child Caregiving ............................................................................. 21
YOC Credit Years for Child Care Combined with a Decrease in the YOC
Earnings Threshold .......................................................................................... 22
Distributional Effects ............................................................................................... 23
Gender.............................................................................................................. 23
Race ................................................................................................................. 24
Country of Birth................................................................................................. 24
Marital Status .................................................................................................... 24
Educational Attainment ....................................................................................... 25
Current-Law Poverty Status ................................................................................. 25
Household Income Quintile ................................................................................. 25
Current-Law Benefit Type ................................................................................... 26
Discussion of Policy Options for the Special Minimum Benefit ............................................ 26
Short-Term vs. Long-Term Covered Careers ................................................................ 26
Workers with Noncovered Earnings............................................................................ 27
Current vs. Future Beneficiaries ................................................................................. 28

Figures
Figure 1. The Process for a Worker to Become Eligible for a Special Minimum Primary
Insurance Amount (PIA)................................................................................................ 4
Figure 2. The Current-Law Special Minimum PIA and Regular PIA, 2000 ............................... 7
Figure 3. The Regular PIA and the Special Minimum PIA for a Low Earner with 30
YOCs ......................................................................................................................... 8
Figure 4. The Proposed Special Minimum PIA: Full Minimum Benefit Amounts, 2020 ........... 11
Figure 5. The Proposed Special Minimum PIA: Linear and Nonlinear Prorated Partial
Minimum Benefits, 2020 ............................................................................................. 13
Figure 6. Hypothetical Wage-Indexed Full Special Minimum PIA vs. Price-Indexed Full
Special Minimum PIA Under Current Law, 1978-2020..................................................... 14
Congressional Research Service

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Figure 7. The YOC Earnings Threshold for the Special Minimum Benefit Provision,
Annual Earnings at the Federal Minimum Wage (2,080 Hours and 1,500 Hours per
Year), and Annual Earnings for Four Quarters of Coverage, 1951 to 2020 ........................... 15
Figure 8. The Special Minimum PIAs and Regular PIAs Based on Alternative Earnings
Records, 2020 ............................................................................................................ 17
Figure 9. Proposed Special Minimum PIAs Under Alternative YOC Ranges, 2020 .................. 20
Figure 10. Proposed Special Minimum PIA and Regular PIA Under Different Treatments
of YOC Credit Years for Child Care, 2020...................................................................... 21
Figure 11. Effects of Applying the Proposed Special Minimum PIA to Al Social Security
Beneficiaries, 2030 ..................................................................................................... 28

Tables
Table 1. Il ustrative Examples: The Regular PIA, the Special Minimum PIA, and Social
Security Benefits per Month for Low Earners with 30 YOCs, 2000 ..................................... 6
Table 2. The Special Minimum Benefit Provision: Current Law and Selected Proposed
Revisions .................................................................................................................... 9

Table A-1. Summary of Effects of Selected Policy Options for the Special Minimum PIA ........ 29

Appendixes
Appendix. Effects of Policy Options for Changing the Special Minimum PIA ........................ 29

Contacts
Author Information ....................................................................................................... 30

Congressional Research Service

Social Security Special Minimum Benefit: Policy Options

Introduction
Social Security’s minimum benefit provision, also known as the special minimum primary
insurance amount (PIA), is an alternative benefit formula that increases benefits paid to workers
who had low earnings for many years and to their dependents and survivors. Unlike the regular
Social Security benefit formula, which is based on a worker’s career-average earnings, the special
minimum PIA is based on the number of years a person has earnings at or above a certain
threshold.1 Beneficiaries receive the higher of the regular Social Security benefit or special
minimum benefit amount.
The special minimum PIA has been considered insufficient to provide adequate benefits to long-
term, full-time low-wage earners in recent years for several reasons. The special minimum PIA
general y provides a benefit below the poverty level to long-term low earners, for many of whom
Social Security benefits are the only income during retirement.2 Since the early 1980s, the full
special minimum PIA has been about 84% of the Department of Health and Human Services’
(HHS) poverty guideline for a one-person household.3 Additional y, the special minimum PIA has
virtual y no effect on the benefits paid to new retirees. Under current law, it grows with price
levels, whereas the regular benefit is linked to wages. Because wages general y grow faster than
prices, the special minimum PIA affects fewer beneficiaries every year. Moreover, low earners
find it more difficult to qualify for a year of coverage (YOC) under the special minimum PIA
today than in the early 1990s.4 The earnings required for each YOC under the special minimum
benefit are indexed to average wage growth; in contrast, the federal minimum wage is raised in an
ad hoc manner by legislation.5 The federal minimum wage general y grew slower than the
national average wage after 1997.6 Therefore, in the recent two decades, it became more difficult

1 Earnings are referred to as those in Social Security covered employment (i.e., earnings subject to Social Security
payroll taxes). As of December 2019, approximately 7% of workers are exempt from Social Security payroll taxes and
not covered by Social Security. Workers who are exempt from Social Security payroll taxes are primarily (1) certain
state and local government workers, (2) certain religious group workers, or (3) certain noncitizen workers. See Social
Security Administration (SSA), Office of the Chief Actuary (OCACT ), Fact Sheets on the Old-Age, Survivors, and
Disability Insurance Program , July 2020, at https://www.ssa.gov/OACT /FACT S/fs2020_06.pdf.
2 For history of the special minimum primary insurance amount (PIA), see CRS Report R43615, Social Security:
Minim um Benefits, by Zhe Li.
3 Congressional Research Service (CRS) calculations based on the special minimum PIA at various years of coverage
(YOCs). See SSA, OCACT , “Special Minimum Benefits,” at https://www.ssa.gov/cgi-bin/smt.cgi; and Department of
Health and Human Services (HHS) poverty guidelines at HHS, Off ice of the Assistant Secretary for Planning and
Evaluation, “Prior HHS Poverty Guidelines and Federal Register References,” at https://aspe.hhs.gov/prior-hhs-
poverty-guidelines-and-federal-register-references.
4 In 1991, the earnings required for each YOC under the special minimum PIA was $5,940, which was lower than the
annual earnings for a federal minimum-wage worker who worked 1,500 hours in that year ($6,375) or who worked
2,080 hours in that year ($8,840). A full-time federal minimum-wage earner could qualify for a YOC in that year. In
2020, the earnings required for one YOC under the special minimum PIA is $15,345, which is higher than the annual
earnings for a federal minimum-wage worker who would work 1,500 hours during the year ($10,875) or who would
work 2,080 hours during the year ($15,080). Therefore, a full-time federal minimum-wage earner would not qualify for
one YOC in 2020. Working 1,500 hours annually is equivalent to working 50 weeks and 30 hours each week during the
year, and working 2,080 hours annually is equivalent to working 52 weeks and 40 hours each week during the year.
5 See CRS Report R44667, The Federal Minimum Wage: Indexation, by David H. Bradley.
6 For the hourly rate of the federal minimum wage, see SSA, Annual Statistical Supplement, 2020 (in progress), T able
3.B3, at https://www.ssa.gov/policy/docs/statcomps/supplement/2020/3b.html; for the national average wage index
(AWI), see SSA, “Social Security Average Wage Index (AWI),” at https://www.ssa.gov/oact/cola/awidevelop.html.
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for full-time federal minimum wage earners to qualify for one YOC under the special minimum
PIA.
Congress has considered several proposals to restructure the special minimum PIA by changing
its design.7 For example, some Members would increase the full minimum benefit amount to
above the poverty level, some would index the initial special minimum benefit from increases in
prices to average wage growth, and some would reduce the earnings required for one YOC under
the special minimum PIA. These proposals general y intend to al ow more beneficiaries to qualify
for a revised special minimum benefit and provide a higher minimum benefit amount than under
the current law. Proposals may target different groups, with some focusing on long-term low
earners and others targeting both short-term and long-term low earners.
This report identifies key design features of the current special minimum benefit provision and
discusses the effects on Social Security beneficiaries of changing each of these features. In its
discussion of each possible change, this report analyzes how the special minimum PIA would
change for workers with different earnings histories, how many Social Security beneficiaries
would receive a higher special minimum benefit, and who (i.e., type of beneficiaries) would
likely benefit from a policy change.
The microsimulation estimates used in this report are based on the Modeling Income in the Near
Term (MINT, version 8.19) microsimulation results received by the Congressional Research
Service (CRS) from the Social Security Administration’s (SSA’s) Office of Research, Evaluation,
and Statistics (ORES) from December 2019 to April 2020.8
For general information about the special minimum PIA, see CRS Report R43615, Social
Security: Minimum Benefits, by Zhe Li.
The Current-Law Special Minimum Benefit
Under current law, the regular Social Security benefit is based on a worker’s average lifetime
covered earnings, while the special minimum PIA is based on the number of years a person has
covered earnings that are equal to or greater than a certain threshold.9 Beneficiaries receive the
higher of the two benefit amounts.

7 SSA, OCACT , “Solvency Provisions,” B5: Minimum Benefits, at https://www.ssa.gov/OACT /solvency/provisions/
benefitlevel.html#B5.
8 CRS identified a list of policy options that would change various design features to modify the current -law special
minimum PIA and submitted them to SSA’s Office of Research, Evaluat ion, and Statistics (ORES). CRS requested the
office’s technical assistance in producing Modeling Income in the Near T erm (MINT , version 8.19) microsimulation
results for each option. CRS received the MINT microsimulation results from ORES on a rolling basis from December
10, 2019, to April 7, 2020. For more information about MINT , see SSA, ORES, “MINT Overview,” at
https://www.ssa.gov/policy/about/mint.html. MINT is built primarily on the Survey of Income and Program
Participation and linked at the individual level with SSA benefits and earnings records. T he estimates described in this
report were based on the intermediate assumptions in the 2019 Annual Report of the Board of Trustees of the Federal
Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. See SSA, OCACT , The 2019 Annual
Report of the Board of Trustees of the Federal Old -Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, at https://www.ssa.gov/OACT /T R/2019/tr2019.pdf.
9 Unless otherwise specified, this report refers to earnings as those in Social Security-covered employment (i.e.,
earnings subject to Social Security payroll t axes). For more information, see footnote 1.
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Social Security Special Minimum Benefit: Policy Options

Regular Social Security Retirement Benefits
To become eligible for a Social Security retired-worker benefit, a worker general y needs 40
earnings credits (10 years of Social Security-covered employment).10 A worker may earn up to
four earnings credits per calendar year. In 2020, a worker earns one credit for each $1,410 of
covered earnings, up to a maximum of four credits for covered earnings of $5,640 or more.11 The
PIA is the monthly benefit a worker would receive if the worker were to elect to begin receiving
retirement benefits at the worker’s full retirement age (FRA). The PIA is based on a summary
measure of the worker’s average lifetime earnings, cal ed the average indexed monthly earnings
(AIME). To compute a worker’s AIME, the worker’s earnings are converted into current-dollar
terms by indexing each year of earnings to historical wage growth, and the sum of the highest 35
years of indexed earnings are divided by 35 to determine career-average annual earnings.12 This
amount is divided by 12 to get a monthly amount. If a worker had fewer than 35 years of covered
earnings (because of time out of the labor force for family caregiving, unemployment, or other
reasons), years of no earnings would be entered as zeros.
Next, the standard Social Security benefit formula is applied to the worker’s AIME to get the
regular PIA. Two dollar thresholds, known as “bend points,” are used to divide the worker’s
AIME into three segments; in 2020, the two bend points are $960 and $5,785.13 Three conversion
factors—90%, 32%, and 15%—are applied to the three different segments of the worker’s AIME;
90% is applied to the $0-$960 segment, 32% to the $961-$5,785 segment, and 15% to the over-
$5,785 segment. The resulting values of the three segments are totaled to compute the basic
monthly benefit. Because the higher conversion factors (90%) apply to the lower earnings
segments, the benefit formula is progressive. That is, it replaces a higher percentage of the
preretirement earnings of workers with lower career-average earnings than for workers with
higher career-average earnings.14 The formula also ensures that the more a worker earns, or
contributes by means of the payroll tax (up to an annual limit),15 the higher the worker’s benefits
would be.

10 T he earnings credits are also called “ quarters of coverage,” or QCs. Fewer than 40 earnings credits may be required
for Social Security disability benefits, depending on the age at which the worker became disabled. For more
information, see CRS Report R44948, Social Security Disability Insurance (SSDI) and Supplem ental Security Incom e
(SSI): Eligibility, Benefits, and Financing , by William R. Morton.
11 T he amount needed for an earnings credit generally increases annually by the growth in average earnings in the
economy, as measured by Social Security’s AWI. See SSA, OCACT , “Quarter of Coverage,” at https://www.ssa.gov/
OACT /COLA/QC.html.
12 T he indexing of wages happens at the age of 62, and the base year used for indexing is the year the worker turns 60.
Earnings after age 60 are entered into the calculation at their nominal, or unindexed, value. Indexation to average wage
growth is based on the SSA’s national AWI. For more information about the AWI, see SSA, OCACT , “ National
Average Wage Index,” at https://www.ssa.gov/oact/cola/AWI.html.
13 T he amounts of bend points are indexed to Social Security’s AWI.
14 For more details, see CRS Report R43542, How Social Security Benefits Are Computed: In Brief, by Barry F.
Huston. Social Security also provides auxiliary benefits to eligible family members of a retired, disabled, or deceased
worker. Benefits payable to family members are equal to a specified p ercentage of the worker’s PIA. For example, a
spouse’s benefit is equal to 50% of the worker’s PIA and a widow(er)’s benefit is equal to 100% of the deceased
worker’s PIA. For more information on auxiliary benefits, see CRS Report R41479, Social Security: Revisiting Benefits
for Spouses and Survivors, by Zhe Li.
15 Employers and employees each pay 6.2% of covered earnings, up to an annual limit; self -employed individuals pay
12.4% of net self-employment income, up to an annual limit. T he annual limit on taxable earnings (or the contribution
and benefit base) is $137,700 in 2020. T he contribution and benefit base is adjusted annually based on average wage
growth, if a Social Security cost -of-living adjustment (COLA) is payable. See SSA, “ Contribution and Benefit Base,”
at https://www.ssa.gov/oact/cola/cbb.html.
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Social Security Special Minimum Benefit: Policy Options

The Special Minimum Benefit Formula
The special minimum benefit (or special minimum PIA) is based on the number of years a person
has worked in covered employment. A YOC for the purposes of computing the minimum benefit
is a year during which the worker has Social Security-covered earnings higher than a specified
threshold. Since 1991, the annual threshold for a YOC under the minimum benefit has equaled
15% of the old-law contribution and benefit base (OLB).16 The OLB is indexed to increases in the
national average wage. As a result, the YOC earnings threshold for the minimum benefit is
indexed to wage growth. The 2020 threshold for a YOC is $15,345.
The full monthly benefit amount for the special minimum PIA, $886.40 in 2020, is payable to
workers who have 30 or more YOCs. The monthly amount decreases by about $44 for each YOC
below 30. For those with 11 YOCs, the special minimum PIA is $42.50 per month in 2020.
Workers with fewer than 11 YOCs are ineligible for the special minimum benefit.17 The special
minimum PIA has been indexed to prices since 1979.18 Figure 1 displays the process that
determines whether a worker may be eligible for the special minimum PIA.
Figure 1. The Process for a Worker to Become Eligible for a Special Minimum
Primary Insurance Amount (PIA)

Source: Congressional Research Service (CRS).

16 From 1951 through 1978, the threshold equaled 25% of the Social Security contribution and benefit base, and from
1979 through 1990, it was 25% of the “old law” contribution and benefit base (OLB). T he Social Security contribution
and benefit base is the annual limit on the amount of a worker’s earnings that are subject to the Social Security payroll
tax in a given year. T he same annual limit applies when these earnings are used in a benefit computation . For earnings
in 2020, the current -law contribution and benefit base is $137,700. T he OLB is the base in effect before the Social
Security Amendments of 1977 (P.L. 95-216). In 2020, the OLB is $102,300. For a historical series of the YOC
amounts and the OLB, see SSA, “ Old-law Base and Year of Coverage,” at http://www.socialsecurity.gov/OACT /
COLA/yoc.html.
17 For the complete schedule of the special minimum benefit, see SSA, “ Special Minimum Benefits,” at
http://www.socialsecurity.gov/cgi-bin/smt.cgi.
18 Authorized in the Social Security Amendments of 1977 (P.L. 95-216). Under current law, the special minimum PIA
generally increases annually by the Social Security cost -of-living adjustment (COLA), which is based on the Consumer
Price Index for Urban Wage Earners and Clerical Workers (CPI -W). For more information about the COLA, see CRS
Report 94-803, Social Security: Cost-of-Living Adjustm ents, by Paul S. Davies and T amar B. Breslauer.
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Notes: YOC is a year of coverage. A YOC for the purposes of computing the special minimum PIA is a year
during which the worker has covered earnings higher than a specified threshold. The YOC threshold for the
special minimum PIA was 25% of the old-law contribution and benefit base (OLB) between 1951 and 1990 and
15% of the OLB on and after 1991. Workers with fewer than 11 YOCs are ineligible for the special minimum
benefit. The regular Social Security benefit (i.e., regular PIA) is based on a worker’s average lifetime earnings.
Beneficiaries receive the higher of the regular PIA or the special minimum PIA.
Comparing the Special Minimum PIA with the Regular PIA
Because of the benefit formulas’ designs, the special minimum PIA has been available only to
low earners with relatively longer careers since its enactment in 1972 (P.L. 92-603), which is
consistent with its original goal of helping full-time, full-career minimum wage earners.19 This
section discusses several situations in which beneficiaries might receive a special minimum PIA
for different earnings levels, YOCs, or years.
The current-law special minimum PIA virtual y has no effect on the retirement benefits paid to
beneficiaries who become eligible in 2020. Thus, some il ustrative examples described below are
based on beneficiaries who became eligible for Social Security retirement benefits in 2000, when
the special minimum PIA could have affected some long-term low earners.
By Earnings Levels
Under current law, a YOC threshold earner is a worker who general y meets the minimum
requirements for the special minimum PIA. The YOC threshold for the special minimum PIA was
25% of the OLB between 1951 and 1990 and 15% of the OLB after 1990; the change was enacted
in 1990 (P.L. 101-508). Workers with earnings below the YOC threshold in a certain year would
general y not qualify for a YOC, thus making it more difficult for those workers to be eligible for
the special minimum PIA. Table 1 shows a YOC threshold earner who earned the exact amount
needed for a YOC in each year of work for 30 years (i.e., earning 25% of the OLB from 1969 to
1990 and earning 15% of the OLB from 1991 to 1998) and who became eligible for Social
Security benefits in 2000. This YOC threshold earner would have been eligible for the special
minimum PIA and would have received a higher special minimum benefit. In contrast, a similar
worker who earned 15% of the OLB every year of working for 30 years over the same time frame
would have earned 8 YOCs (from 1991 to 1998),20 not qualifying for the special minimum PIA.
Additional y, workers with earnings above the YOC threshold would likely not be affected by the
special minimum benefit provision because most of them would receive a higher regular PIA
(based on lifetime earnings) than the special minimum PIA (based on YOCs). For example, the
worker who earned 25% of the OLB every year of working for 30 years and became eligible for
Social Security benefits in 2000 would have received a regular PIA of $583, which would be
higher than the full minimum benefit in that year ($581), thus the worker would have received the
higher regular PIA (see Table 1). Therefore, after 2000, the special minimum PIA typical y only
affected workers with earnings consistently below 25% of the OLB. Those long-term low earners

19 U.S. Congress, Senate Committee on Finance, Social Security Amendments of 1972, report to accompany H.R. 1,
92nd Cong., 2nd sess., S. Rept. 92-1230, September 26, 1972 (Washington, DC: GPO, 1972), p. 4, at
https://www.ssa.gov/history/pdf/Downey%20PDFs/
Amendments%20to%20the%20Social%20Security%20Act%201969 -1972%20Vol.%203.pdf#page=17.
20 Before 1991, the YOC threshold for the special minimum PIA was 25% of the OLB. A worker with earnings equal to
15% of the OLB would have not qualified for a YOC.
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were also the target of the 1990 legislation that lowered the YOC threshold from 25% of the OLB
to 15% of the OLB.21
Table 1. Illustrative Examples: The Regular PIA, the Special Minimum PIA, and
Social Security Benefits per Month for Low Earners with 30 YOCs, 2000
The Social Security benefit is the higher of the regular PIA or the special minimum PIA for each worker.
Receiving the
Earnings per
Special Minimum
Social Security
Special Minimum
Year
Regular PIA
PIA
Benefit
PIA
15% of OLB
$464
NA
$464
No
YOC Earnings
$551
$581
$581
Yes
Threshold
25% of OLB
$583
$581
$583
No
Source: Congressional Research Service (CRS). Current-law special minimum PIAs are available at Social
Security Administration (SSA), “Special Minimum Benefits,” at https://www.ssa.gov/cgi-bin/smt.cgi.
Notes: PIA is primary insurance amount; YOC is a year of coverage; and OLB is the old-law contribution and
benefit base. The low earner is assumed to work 30 years, from age 31 through age 60. The YOC threshold for
the special minimum PIA was 25% of the OLB between 1951 and 1990 and 15% of the OLB on and after 1991.
The benefit level is measured when the worker turns age 62, before any early retirement reduction is applied.
By Years of Coverage
Because of the design of the benefit formula, the special minimum PIA is general y not available
to short-term low earners (i.e., those with 20 or fewer years of work). In 1972, when the special
minimum PIA was created, Congress predicted that it would “general y not be payable to workers
with less than 23 years of covered employment since these workers [would] general y qualify for
higher regular benefits.”22 This feature also applies to future years. For example, in 2000, a YOC
threshold earner (i.e., someone who earned the exact amount needed for the current-law YOC
threshold) would have been eligible for the special minimum PIA if he or she had between 29 and
34 years of work (see Figure 2). Those with fewer than 29 years of work and those with more
than 34 years of work would have been eligible for a higher regular PIA. This is typical y
because the regular PIA is weighted to replace a higher percentage of the preretirement earnings
for workers with lower career-average earnings than for workers with higher career-average
earnings. Short-term low earners tend to have relatively low career-average earnings, so their
regular PIAs might be higher than their special minimum PIAs.

21 U.S. Congress, House of Representatives, Report to Accompany H.R. 5835, Omnibus Budget Reconciliation Act of
1990, 101th Cong., 2st Sess., H. Rept. 101-964, October 27, 1990, p. 949, at https://www.ssa.gov/history/pdf/
Downey%20PDFs/Omnibus%20Budget%20Reconciliation%20Act%20of%201990%20Vol%203.pdf# page=203.
22 U.S. Congress, Senate Committee on Finance and House Committee on Ways and Means, Summary of Social
Security Am endm ents of 1972, committee print, 92nd Cong., 2nd sess., November 17, 1972, vol. 6 (Washington, DC:
GPO 1972), at https://www.ssa.gov/history/pdf/Downey%20PDFs/
Amendments%20to%20the%20Social%20Security%20Act%201969 -1972%20Vol.%206.pdf#page=346.
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Figure 2. The Current-Law Special Minimum PIA and Regular PIA, 2000
shaded area = current special minimum PIA would be greater than the regular PIA

Source: CRS. Current-law special minimum PIAs are obtained from Social Security Administration (SSA),
“Special Minimum Benefits,” at https://www.ssa.gov/cgi-bin/smt.cgi.
Notes: PIA is primary insurance amount, and YOC is a year of coverage. The worker with 35 YOCs is assumed
to work from age 26 to age 60. For each decrease in YOC, the assumption is that the worker delayed the start
of the work period by one year. For example, the worker with 34 YOCs is assumed to work from age 27 to age
60. The worker is assumed to earn the exact amount needed for the current YOC every year. The YOC
threshold for the current-law special minimum PIA was 25% of the OLB between 1951 and 1990. The benefit
level would have been measured when the worker turned age 62 in 2000, before any early retirement reduction
had been applied.
By Years
The initial special minimum PIA is indexed to price inflation. In contrast, regular Social Security
benefits are indexed to wage inflation.23 Because prices have general y tended to increase at a
slower rate than wages since the special minimum benefit’s enactment, the special minimum
PIA’s impact has diminished over time (see Figure 3). In 2020, virtual y no new beneficiaries
qualify for the current special minimum PIA because the special minimum benefit is general y
lower than the worker’s regular PIA. For YOC threshold earners who become eligible for Social
Security benefits in 2020, the current-law special minimum PIA is below the regular PIA
regardless of the number of YOCs.

23 Under current law, the special minimum PIA generally increases annually by the Social Security COLA, which is
based on the CPI-W, whereas the regular Social Security benefit generally increases annually based on SSA’s AWI.
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Figure 3. The Regular PIA and the Special Minimum PIA for a Low Earner with 30
YOCs

Source: CRS. Current-law special minimum PIAs are obtained from SSA, “Special Minimum Benefits,” at
https://www.ssa.gov/cgi-bin/smt.cgi.
Notes: The low earner is assumed to earn the exact amount needed each year for a YOC from age 31 through
age 60 to obtain 30 YOCs. The YOC threshold for the special minimum PIA was 25% of the old-law
contribution and benefit base (OLB) between 1951 and 1990 and 15% of the OLB on and after 1991. The benefit
level is measured when the worker turns age 62, before any early retirement reduction is applied.
Selected Proposed Revisions for the Special
Minimum PIA
Proposals to reform the special minimum PIA general y include the following core features:
 the amount of the initial full minimum benefit;
 a method to prorate the partial minimum benefit;
 a method of indexing the initial minimum benefits;
 a YOC earnings threshold—the earnings level required to constitute one YOC;
 a YOC range—the number of YOCs required for (1) the full minimum benefit
and (2) any minimum benefit (subject to prorating); and
 a YOC credit year for child care.
Table 2 lists design features for the current special minimum benefit and selected revisions to
those features. These changes are found in policy options proposed by some Members of
Congress and policy organizations. SSA’s Office of the Chief Actuary (OCACT) quotes these
proposals to estimate the potential cost to Social Security.24 Most legislative proposals would
change several design features for the special minimum PIA.

24 SSA, OCACT , “Solvency Provisions,” B5: Minimum Benefits, at https://www.ssa.gov/OACT /solvency/provisions/
benefitlevel.html#B5.
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Table 2. The Special Minimum Benefit Provision: Current Law and Selected
Proposed Revisions
Design Features
Current Law
Selected Proposed Revisions
Initial ful minimum benefit
$886.40 in 2020

100% of HHS poverty guideline for a single person
per month
household ($1,063.33 in 2020)a

125% of HHS poverty guideline for a single person
household ($1,329.17 in 2020)

120% of Census Bureau poverty threshold for
aged single individuals ($1,245.72 in 2020)b

133% of Census Bureau poverty threshold for
aged single individuals ($1,380.67 in 2020)

35% of Social Security average wage index (AWI)
two years prior to the eligibility year ($1,520.92 in
2020)
The reduced (prorated)
Linear
Nonlinear (more partial benefits for each YOC)
minimum benefit when YOCs
decrease
Method of indexing the initial
Social Security
Social Security AWId
minimum benefit
COLAc
YOC earnings threshold per
15% of old-law

Four earnings credits ($5,640 in 2020)e
year
contribution and

benefit base

The ful -time federal minimum wage ($10,875 in
2020)f
(OLB; $15,345 in
2020)
Number of YOCs required
11-30

20-30
for (1) the ful minimum

benefit and (2) any minimum

11-35
benefit (prorated)

20-40
YOC credit years for child
None
A child in care (e.g., under age 5) qualifies for a YOC
care
(e.g., up to 8 years in total).
Source: CRS analysis of SSA, Office of the Chief Actuary (OCACT), “Solvency Provisions,” B5: Minimum
Benefits, at https://www.ssa.gov/OACT/solvency/provisions/benefitlevel.html#B5.
a. The poverty guideline refers to the Department of Health and Human Services (HHS) poverty guideline for
a single person household. See HHS, Office of the Assistant Secretary for Planning and Evaluation, “Poverty
Guidelines,” at https://aspe.hhs.gov/poverty-guidelines.
b. The poverty threshold refers to the Census Bureau’s poverty threshold for aged single individuals. See U.S.
Census Bureau, “Poverty Thresholds,” at https://www.census.gov/data/tables/time-series/demo/income-
poverty/historical-poverty-thresholds.html. The poverty threshold in 2020 is obtained by indexing the
poverty threshold in 2019 by the Social Security COLA in January 2020.
c. The Social Security COLA is the cost-of-living adjustment under Social Security. See SSA, “Cost-of-Living
Adjustments,” at https://www.ssa.gov/news/cola/; and CRS Report 94-803, Social Security: Cost-of-Living
Adjustments, by Paul S. Davies and Tamar B. Breslauer.
d. Social Security AWI is the national average wage index. See SSA, “National Average Wage Index,” at
https://www.ssa.gov/oact/cola/AWI.html. The AWI in 2018 was $52,145.80 (the most recent year available).
e. The earnings credits also are cal ed “quarters of coverage,” or QCs. See SSA, “Quarter of Coverage,” at
https://www.ssa.gov/oact/cola/QC.html. A variation of this policy option is to equate the number of YOCs
to the total number of QCs divided by four.
f.
The ful -time federal minimum wage is the product of the federal minimum wage per hour and 1,500 hours
(equivalent to 50 weeks x 30 hours per week).
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Policy Options for the Special Minimum PIA and
Effects on Beneficiaries
This section explains the effects of changing one design feature under the special minimum
benefit on Social Security beneficiaries while keeping other features fixed. The objective is to
show the function of each feature and the effects of potential changes (sometimes at different
magnitudes). In the analysis, some design features may be fixed at a level other than the current
law. For example, most policy options assume the special minimum PIA would be indexed to
wage growth, so it could increase at the same rate as the regular PIA over time. In addition, some
policy options assume the full minimum benefit would be greater than the current law (e.g., above
the poverty level), so long-term low-wage earners would be able to qualify for a higher special
minimum PIA than the regular PIA.
SSA’s ORES has estimated the effects of selected policy options to restructure the special
minimum PIA on Social Security beneficiaries, and Table A-1 summarizes those effects. The
estimates are for each policy option separately, that is, as if each option were enacted alone.
Legislative proposals usual y combine several policy options that may interact with each other.
Due to the effects of interaction among different policy options, the combined effect on Social
Security beneficiaries of two or more options cannot be determined accurately by simple adding
the effect of the individual options.
The Full Minimum Benefit Amount
Because the current-law full minimum benefit is below the poverty level, policy options for the
special minimum benefit provision general y propose a higher full minimum benefit amount,
usual y linked to the poverty level. Figure 4 displays two proposed full minimum benefit
amounts and linearly prorated (reduced) minimum benefits when the number of YOCs decreases.
The proposed full minimum benefits per month at 30 YOCs are 100% of the HHS poverty
guideline for a single person household ($1,063.33) and 125% of the HHS poverty guideline for a
single person household ($1,329.17) in 2020, respectively. The worker considered in this example
is a YOC threshold earner whose earnings each year were equal to the exact amount needed for
the current-law YOC threshold (15% of OLB) and who became eligible for Social Security
benefits in 2020.
General y, more beneficiaries would be likely to receive a higher special minimum PIA and a
higher special minimum benefit amount if the full minimum benefit were higher. For example,
YOC threshold earners with 24 or more YOCs would qualify for the special minimum PIA if the
full minimum benefit were 100% of the poverty guideline, whereas those with 19 or more YOCs
would qualify for the special minimum PIA if the full minimum benefit were 125% of the poverty
guideline. For YOC threshold earners who worked 30 years and became eligible in 2020, the
proposed special minimum PIA would increase their monthly benefit by $165 (or 18%) if the full
minimum benefit were increased to 100% of the poverty guideline and by $431 (or 45%) if the
full minimum benefit were increased to 125% of the poverty guideline.
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Figure 4. The Proposed Special Minimum PIA: Full Minimum Benefit Amounts, 2020
shaded area = proposed special minimum PIA would be greater than the worker’s regular PIA

Source: CRS. Current-law special minimum PIAs are obtained from SSA, “Special Minimum Benefits,” at
https://www.ssa.gov/cgi-bin/smt.cgi.
Notes: The term poverty refers to the HHS poverty guideline for a single person household. The prorated
schedules for the current-law special minimum PIA, 100% of poverty guideline, and 125% of poverty guideline
options are linear as current law. The worker with 35 YOCs is assumed to work from age 26 to age 60. For
each decrease in YOC, the assumption is that the worker delayed the start of the work period by one year. For
example, the worker with 34 YOCs is assumed to work from age 27 to age 60. The worker is assumed to earn
the exact amount needed for the current YOC every year. The YOC threshold for the current -law special
minimum PIA was 25% of the OLB between 1951 and 1990 and 15% of the OLB on and after 1991. The benefit
level is measured when the worker turns age 62 in 2020, before any early retirement reduction is applied.
SSA’s ORES estimated the effect in 2030, 2050, and 2070 of increasing the full minimum benefit
to 100% and to 125% of the HHS poverty guideline for a single person household on
beneficiaries who would become eligible for Social Security in 2020 or later.25 Under the option
with the full minimum benefit equal to 100% of the poverty guideline, virtual y no newly eligible
beneficiaries would receive a higher minimum benefit (implying that the regular PIA for current-
law YOC threshold earners would be general y higher than the poverty guideline on and after
2030). If the full minimum benefit were increased to 125% of the poverty guideline, 1.2% of
beneficiaries aged 60 and older in 2030, 3.1% in 2050, and 3.3% in 2070 would receive a higher
special minimum benefit,26 with a median benefit increase of about 6% among affected
beneficiaries for each year in the analysis. The estimated effects for the two policy options that
would increase the special minimum benefit amounts indicate that a higher full minimum benefit
would general y result in the provision affecting more beneficiaries, holding everything else
constant.
ORES also estimates that about 4% of beneficiaries aged 60 and older would have family income
below the poverty threshold (i.e., poor beneficiaries) in 2050 based on current-law scheduled

25 T his option assumes that the initial special minimum PIAs would increase with average wages in contrast to the
current -law provision, which grows with prices. For more information, see the “ Indexation of the Initial Minimum
Benefit Amount ” section.
26 Because the proposed new special minimum PIA would affect only beneficiaries becoming eligible in 2020 or later,
the provision would affect a larger share of future beneficiaries in 2050 and 2070 than in 2030 .
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benefits.27 Among those poor beneficiaries, estimates show that about 2.6% would receive a
higher special minimum PIA if the full minimum benefit were increased to 125% of the poverty
guideline in the same year.
The Partial Minimum Benefit Amount: Linear vs. Nonlinear
Proration
Instead of reducing the special minimum PIA linearly as YOCs decrease, as is done under current
law, some policy options would restructure the partial minimum benefits using a nonlinear
proration. Under a linear proration, the special minimum PIA decreases proportionately for each
decrease in YOCs, whereas the nonlinear proration would general y result in a disproportionately
higher minimum benefit at each YOC. Figure 5 compares two sets of special minimum benefit
amounts—a linear and a nonlinear proration for partial minimum benefits—with the full
minimum benefit fixed at 31⅔% of the Social Security average wage index (AWI; $1,376.22 in
2020).28 In both options, workers with 30 YOCs could receive the full minimum benefit, and the
partial minimum benefit would not be available for workers with 10 or fewer YOCs. The
nonlinear prorated schedule would result in a higher partial minimum benefit at each YOC than
the linear proration.
General y, if the partial minimum benefits were prorated (reduced) nonlinearly, more
beneficiaries would be likely to receive a higher special minimum PIA. For example, YOC
threshold earners with 19 or more YOCs would qualify for the special minimum PIA with the
linear proration, whereas those with 14 or more YOCs would qualify for the nonlinear proration.
The main reason for the different effects is that the nonlinear prorated schedule would likely
result in more short-term workers receiving a higher benefit based on partial benefits, holding
everything else constant.
The nonlinear prorated partial minimum benefits would result in more low-wage earners with
relatively shorter careers receiving a higher minimum benefit and a larger increase in their
monthly benefit amount. As in Figure 5, YOC threshold earners who had worked 20 years would
receive a benefit increase of $70 (or 11%) with the linear proration and $469 (or 76%) with the
nonlinear proration.

27 T he poverty threshold is indexed to price growth, and Social Security benefits are indexed to wage growth. Because
wages are projected to grow faster than prices, a decreasing share of the aged population is estimated to be in poverty
over time. See SSA, t he Office of Retirement and Disability Policy, “ Why Will Poverty Decline for Social Security
Beneficiaries Aged 60 or Older?,” at https://www.ssa.gov/policy/docs/program-explainers/poverty-decline.html#mna.
For information about current -law poverty measures, see CRS Report R44780, An Introduction to Poverty
Measurem ent, by Joseph Dalaker.
28 T he nonlinear proration example is part of the Social Security Reform Act of 2016 ( H.R. 6489). T he act proposed to
change the special minimum PIA to 35% of AWI at 35 YOCs and reduce the special minimum PIA by ⅔% of AWI for
each decrease in YOC between 20 and 34, 1% of AWI for YOCs between 15 and 19, and 3% of AWI for YOCs
between 11 and 14. T his prorated schedule would result in 31 2/3% of AWI at 30 YOCs. For more information, see
SSA, “ Solvency Provisions,” B5: Minimum Benefits, Option B5.10, at https://www.ssa.gov/OACT /solvency/
provisions/benefitlevel.html#B5.
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Figure 5. The Proposed Special Minimum PIA: Linear and Nonlinear Prorated
Partial Minimum Benefits, 2020
shaded areas = proposed Special Minimum PIA would be greater than the worker’s regular PIA

Source: CRS. Current-law special minimum PIAs are obtained from SSA, “Special Minimum Benefits,” at
https://www.ssa.gov/cgi-bin/smt.cgi.
Notes: AWI is the national average wage index. The linear prorated schedule is assumed to reduce the ful
special minimum benefit by about 1.58% of AWI for each decrease in YOC. The nonlinear prorated schedule is
assumed to reduce the ful special minimum benefit by ⅔% of AWI for each decrease in YOC between 20 and
34, 1% of AWI for YOCs between 15 and 19, and 3% of AWI for YOCs between 11 and 14. The worker with
35 YOCs is assumed to work from age 26 to age 60. For each decrease in YOC, the assumption is that the
worker delayed the start of the work period by one year. For example, the worker with 34 YOCs is assumed to
work from age 27 to age 60. The worker is assumed to earn the exact amount needed for the current YOC
every year. The YOC threshold for the current-law special minimum PIA was 25% of the OLB between 1951 and
1990 and 15% of the OLB on and after 1991. The benefit level is measured when the worker turns age 62 in
2020, before any early retirement reduction is applied.
SSA’s ORES estimates show that if the full minimum benefit were 31 2/3% of AWI with a
nonlinear prorated schedule for partial minimum benefits, 3.3% of beneficiaries aged 60 and
older (becoming eligible in 2020 and later) would receive a higher special minimum PIA in 2030,
7.4% in 2050, and 8.1% in 2070.29 The median benefit increase would be about 7% for each year
in the analysis.
Among poor beneficiaries aged 60 and older, estimates show that about 9.4% would receive a
higher special minimum PIA under this option. Many of those poor beneficiaries who would
receive higher proposed special minimum benefits with nonlinear prorated partial benefits would
likely be those with relatively shorter careers.
Indexation of the Initial Minimum Benefit Amount
One of the main reasons that the current special minimum PIA has general y no effect on new
beneficiaries is that the initial minimum benefit amounts are indexed to price inflation. In
contrast, regular Social Security benefits are indexed to wage inflation. Because prices tend to

29 T his option implies that the initial special minimum PIAs would increase with average wages (i.e., AWI) in contrast
to the current -law provision, which grows with prices. For more information, see the “ Indexation of the Initial
Minimum Benefit Amount ” section.
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increase at a slower rate than wages, regular PIAs are usual y greater than the special minimum
PIA for newly eligible beneficiaries today. Policy options general y include some indexing
method to increase the initial minimum benefit amount over time, and most of them suggest using
the AWI, the same indexation as for regular Social Security benefits. Figure 6 shows the
hypothetical full minimum benefit amount if it had been indexed to wage growth since 1979
compared with the current-law amount based on price indexation. Because wages general y grew
faster than prices, the wage-indexed full special minimum PIA would have been $1,226.40 in
2020,30 compared with $848.80 under current law. If a new minimum benefit amount w ere
established but continued to be indexed to prices instead of wages, the minimum benefit would
likely eventual y fal below the regular benefit, as has been the case under current law. For this
reason, al policy options discussed in this report would index the initial minimum benefit amount
to wage growth.
Figure 6. Hypothetical Wage-Indexed Full Special Minimum PIA vs. Price-Indexed
Full Special Minimum PIA Under Current Law, 1978-2020

Sources: CRS calculation based on special minimum PIA at SSA, “Special Minimum Benefits,” at
https://www.ssa.gov/cgi-bin/smt.cgi; and Social Security AWI, available at SSA, “National Average Wage Index,” at
https://www.ssa.gov/oact/cola/AWI.html.
Notes: Wage indexation is based on the Social Security AWI two years prior to each year of computation.
The YOC Earnings Threshold
Under the current special minimum PIA, a worker needs to earn 15% of the OLB to qualify for a
YOC, or $15,345 in 2020.31 Some argue that the current YOC threshold is too high for full-time
low-wage earners to qualify. When the YOC threshold was reduced from 25% to 15% of the OLB
in 1991 (from $9,900 to $5,940),32 it was approximately the level of annual earnings for a federal
minimum wage worker who worked 1,500 hours in a year (30 hours per week × 50 weeks). The
current YOC threshold (based on the OLB) is indexed to average wage growth; in contrast, the
federal minimum wage so far has been raised in an ad hoc manner by legislation.33 In the past

30 T he Social Security AWI is available two years prior to the eligibility year. In 2020, the most recently updated AWI
was for 2018.
31 T he OLB is $102,300 in 2020.
32 See P.L. 101-508.
33 See CRS Report R44667, The Federal Minimum Wage: Indexation, by David H. Bradley.
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three decades, the federal minimum wage general y grew slower than the YOC threshold.
Therefore, in 2020, the federal minimum wage earner would receive $10,875 if he or she were to
work 1,500 hours during the year, which is about 11% of the OLB—or 4% of the OLB ($4,470)
below the amount needed to earn a YOC (see Figure 7). In other words, a minimum wage worker
working full time cannot currently earn a YOC and has not been able to since the late 1990s.
Therefore, some policymakers have proposed to reduce the YOC threshold to the full-time federal
minimum wage amount (assuming 1,500 hours per year).34
Others argue that the earnings requirement for a YOC under the special minimum PIA should be
equivalent to the earnings requirement for regular Social Security benefits. Regular Social
Security benefits are available to workers who have earned 40 earnings credits, with up to four
earnings credits in a year ($5,640 in 2020). Some policy proposals for the special minimum PIA
suggest reducing the YOC threshold to the amount required for four earnings credits.35
Figure 7. The YOC Earnings Threshold for the Special Minimum Benefit Provision,
Annual Earnings at the Federal Minimum Wage (2,080 Hours and 1,500 Hours per
Year), and Annual Earnings for Four Quarters of Coverage, 1951 to 2020

Sources: The YOC earnings threshold is available at SSA, “Old-Law Base and Year of Coverage,” at
https://www.ssa.gov/OACT/COLA/yoc.html. The federal hourly minimum wage is available at SSA, Annual
Statistical Supplement, 2019, Table 3.B3, at https://www.ssa.gov/policy/docs/statcomps/supplement/2019/3b.html.
For more on four quarters of coverage, see SSA, “Quarter of Coverage,” at https://www.ssa.gov/oact/cola/
QC.html#qcseries.
Notes: The YOC threshold for the special minimum benefit provision was 25% of the OLB between 1951 and
1990 and 15% of the OLB on and after 1991. The annual federal minimum wage is calculated using the federal
hourly minimum wage, assuming 1,500 hours (30 hours per week and 50 weeks) and 2,080 hours (40 hours per
week and 52 weeks) per year, respectively. For years before 1978, an individual general y was credited with a
quarter of coverage for each quarter in which wages of $50 or more were paid, or an individual was credited

34 For example, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.10, at https://www.ssa.gov/
OACT /solvency/provisions/benefitlevel.html#B5.
35 For example, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Options B5.2, 5.3, 5.4, 5.6, and 5.9. Similar
proposals suggest allowing beneficiaries to accumulate YOCs based on the number of earnings credits over their entire
work history; therefore, the number of YOCs would equal the to tal number of earnings credits divided by four. For
example, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Options B5.7 and 5.11.
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with four quarters of coverage for every taxable year in which $400 or more of self-employment income was
earned.
A lower YOC earnings threshold would likely result in more workers qualifying for a YOC under
the special minimum PIA in a certain year. In 2018, about 85% of workers earned more than the
current-law YOC threshold amount ($14,310 in 2018), about 88% of workers had earnings above
the annual full-time federal minimum wage amount ($10,875, assuming 1,500 hours per year),
and 93% earned more than the amount needed for four earnings credits ($5,280). 36 These
statistics, however, do not show the percentage of workers who would have earnings above a
certain threshold throughout their lifetime37 or the percentage of workers who would receive the
special minimum PIA.38
Lowering the YOC earnings threshold would be likely to make the special minimum benefit
available to more workers. Figure 8 displays the current special minimum benefit amounts and
the regular PIA for workers earning 15% of the OLB (the current-law YOC threshold) for every
year of work, the full-time federal minimum wage (for 1,500 hours per year), or four earnings
credits. Under current law, neither a full-time federal minimum wage earner (for 1,500 hours per
year) nor a worker earning four earnings credits every year would be eligible for the special
minimum PIA. Lowering the YOC threshold to the federal minimum wage level (1,500 hours per
year) would al ow workers who earned at or greater than the federal minimum wage to be eligible
for a YOC; lowering the YOC threshold to four earnings credits would al ow workers who earned
at or greater than four earnings credits to be eligible for a YOC.
A lower YOC earnings threshold under the special minimum benefit also would likely result in a
larger average benefit increase among affected beneficiaries than under current law. Beneficiaries
with the same number of YOCs would general y receive the same special minimum PIA
regardless of the amount of earnings underlying each YOC. A worker who earned four earnings
credits every year for 30 years would receive a lower regular PIA than a federal minimum wage
earner (a worker who earned full-time federal minimum wages for every year of work) or a
current YOC threshold earner (a worker who earned 15% of the OLB for every year of work),
holding everything else constant. Therefore, if the earnings required for a YOC threshold were
lowered to four earnings credits, a worker earning four credits every year would be likely to
become eligible for the special minimum benefit and have a larger benefit increase due to the
special minimum PIA than a federal minimum wage earner or a current YOC threshold earner.
Under the current special minimum benefit amounts, Figure 8 shows that a current YOC
threshold earner would not receive a special minimum PIA, as their regular PIA is general y

36 CRS analysis of data from U.S. Census Bureau, Current Population Survey, 2019 Annual Social and Economic
Supplem ents (hereinafter CPS ASEC 2019). Due to the limitations of the data set, the earnings included both those
covered and not covered by Social Security. T he statistics do not reflect the perce ntage of workers who have earnings
below the YOC threshold throughout their lifetime.
37 An SSA study shows that in 2013, about 63% of Social Security beneficiaries aged 62 and older had 30 or more
years of earnings at or greater than four earnings credits, whereas 53% of those beneficiaries had 30 or more years of
earnings at or greater than 15% of the OLB. See Glenn R. Springstead, Kevin Whitman, and Dave Shoffner , Proposed
Revisions to the Special Minim um Benefit for Low Lifetim e Earners, SSA, Policy Brief no. 2014-01, September 2014.
Another study found that, among survivors in the birth cohort 1946 -1950 who lived to at least age 62, about 63.5% of
them had 30 or more years of earnings at or greater than four earnings credits. See Melissa M. Favreault , How Might
Earnings Patterns and Interactions Am ong Certain Provisions in OASDI Solvency Packages Affect Financing and
Distributional Goals?, Center for Retirement Research Center at Boston College, Working Paper 2018-2, March, 2018.
38 Many workers with average lifetime earnings greater than the current YOC earnings threshold would usually receive
a regular PIA, which would likely be higher than the special minimum PIA under current law. For more information,
see the “Comparing the Special Minimum PIA with the Regular PIA” section.
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higher than the special minimum benefit.39 If the YOC threshold were decreased to the full-time
federal minimum wage level (for 1,500 hours per year), the federal minimum wage earner would
receive a higher minimum benefit when the worker obtained 26 or more YOCs, with a benefit
increase of $64 (or 8%) at 30 YOCs.40 If the YOC threshold were decreased to four earnings
credits, the worker earning four credits every year would receive a higher minimum benefit when
he or she obtained 14 or more YOCs, with a benefit increase of $547 (or 161%) at 30 YOCs.41
Lowering the YOC threshold to four earnings credits would likely entitle the special minimum
PIA to workers who have worked part-time during the year (less than half-year at the federal
minimum wage) and those who have short-term work careers (as few as 14 years of work).
Figure 8. The Special Minimum PIAs and Regular PIAs Based on Alternative
Earnings Records, 2020
shaded area = special minimum PIA would be greater than the regular PIA

Source: CRS.
Notes: The worker with 30 YOCs is assumed to work from age 31 to age 60. For each decrease in YOC, the
assumption is that the worker delayed the start of the work period by one year. For example, the worker with
29 YOCs is assumed to work from age 32 to age 60. The benefit level is measured when the worker turns age
62 in 2020, before any early retirement reduction is applied.
SSA’s ORES estimates the effect of changing the YOC earnings threshold from current law to the
full-time federal minimum wage level (1,500 hours per year) and four earnings credits on
beneficiaries in 2030, 2050, and 2070 (for those becoming eligible in 2020 and later). The
estimates assume that the full minimum benefit is equal to the proposed 125% of the HHS
poverty guideline for a single person household at 30 or more YOCs and decreasing
proportional y for YOCs between 11 and 29.42 General y, a larger share of future beneficiaries

39 A federal minimum wage earner or an earner who earned four earnings credits every year of work would not qualify
for the proposed special minimum PIA in which the YOC threshold would be set at 15% of the OLB as current law.
40 A worker who earned four earnings credits every year of work would not qualify for the proposed special minimum
PIA in which the YOC threshold would be set at the full-time federal minimum wage.
41 A worker who earned four earnings credits each year from age 31 to age 60 and becomes eligible for Social Security
benefits in 2020 would receive a regular PIA of about $339.80 per month. T he current special minimum benefit amount
would allow this worker to receive a benefit amount of $886.4 per month, an increase of about 161%.
42 Policy options that propose a decrease in the YOC threshold would often also increase the full special minimum
benefit amount, such as to 125% of the HHS poverty guideline. See SSA, “ Solvency Provisions,” B5: Minimum
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would have had a benefit increase under the proposed special minimum PIA when the YOC
threshold was lower. As discussed earlier, if the full special minimum benefit were increased to
125% of the poverty guideline, 1.2% of beneficiaries aged 60 and older in 2030, 3.1% in 2050,
and 3.3% in 2070 would receive a higher revised special minimum benefit if the YOC threshold
were to remain at the current law (15% of OLB). Those shares would be 3.2%, 6.3%, and 6.8% in
2030, 2050, and 2070, respectively, if the YOC threshold were reduced to the annual federal
minimum wage (1,500 hours); they would be 5.7%, 11.8%, and 12.9%, respectively, if the YOC
threshold were set at four earnings credits. The median benefit increase in 2050 for those three
YOC threshold options would be 6%, 8%, and 12%, respectively, again in conjunction with the
increased special minimum benefit amount to 125% of the HHS poverty guideline.43 As discussed
earlier, lowering the YOC threshold to four earnings credits would be likely to result in the largest
increase in the share of beneficiaries who would receive a higher minimum benefit and the largest
size of such benefit increase.
For poor beneficiaries aged 60 and older in 2050, 2.6% of current-law beneficiaries would receive
a higher benefit under the proposed higher special minimum PIA if the YOC threshold w ere to
remain at the current-law level (15% of OLB), compared with 8.6% if the YOC threshold w ere
reduced to the annual federal minimum wage (1,500 hours) and 28.7% if the YOC threshold w ere
set at four earnings credits. Those estimates indicate that, among the three options decreasing the
YOC threshold, lowering the YOC threshold to four earnings credits would be likely to have the
largest effect on increasing the benefits for poor beneficiaries.
Number of YOCs Required for the Special Minimum PIA
Under current law, the full minimum benefit is payable when the worker has 30 or more YOCs,
and no minimum benefit is payable when the number of YOCs is fewer than 11, with a prorated
minimum benefit paid in the YOC range of 11-30. However, since its enactment, the special
minimum PIA was estimated to produce higher payments than the regular PIA only for workers
with at least 23 YOCs.44 If the full minimum benefit were raised to 125% of the HHS poverty
guideline for a single person household at 30 YOCs and decreased proportional y between 11 and
29 YOCs, a worker with earnings at the current-law YOC threshold every year of work would
receive a higher minimum benefit at 19 and more YOCs (see Figure 9).45
Because the special minimum PIA was original y targeted to full-time, full-career low-wage
earners, some policymakers have suggested increasing the minimum number of YOCs required
for the special minimum PIA, the number of YOCs required for the full minimum benefit, or
both. If the special minimum PIA were reduced proportional y as the YOC decreases, proposals

Benefits, Options B5.2, 5.3, 5.4, and 5.9. Despite the fact that the HHS poverty guideline increases with prices (based
on the Consumer Price Index for all Urban Consumers, or CP I-U), the options discussed in this section assume that the
initial special minimum PIAs would increase with average wages (based on AWI) in the same way as the regular PIA.
For more information, see the “ Indexation of the Initial Minimum Benefit Amount ” section.
43 T he estimated median benefit increases in 2030 and 2070 for the options discussed in this paragraph were about the
same as those in 2050.
44 U.S. Congress, Senate Committee on Finance and House Committee on Ways and Means, Summary of Social
Security Am endm ents of 1972, committee print, 92nd Cong., 2nd sess., November 17, 1972, vol. 6, at
https://www.ssa.gov/history/pdf/Downey%20PDFs/
Amendments%20to%20the%20Social%20Security%20Act%201969 -1972%20Vol.%206.pdf#page=346.
45 If the full minimum benefit were kept at the current -law level, the current-law YOC threshold earner would generally
not be eligible for the special minimum PIA, as he or she would receive a higher regular PIA.
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that extend the YOC range to a higher number of YOCs would general y make the minimum
benefit available to a smaller group of beneficiaries.
Some proposals would narrow the YOC range by raising the number of YOCs required to be
eligible for any minimum benefit from 11 to 20, which would reward additional years of Social
Security employment.46 Options with a narrower YOC range provide fewer possible minimum
benefit levels. For example, the 11-30 YOC range under current law introduces 20 possible
minimum benefits, compared with 11 possible minimum benefits for the option using a 20-30
YOC range. Additional y, a broader YOC range (such as the 11-30 YOC range) produces benefits
that rise more gradual y with each additional YOC, and those benefit levels remain above the
comparable benefits available under a proposal with a narrower YOC range (such as the 20-30
YOC range). Therefore, the lower minimum benefit in the proposal with a narrower YOC range
would result in fewer beneficiaries eligible for such special minimum benefit. In the il ustrative
example of YOC threshold earners (see Figure 9), the special minimum PIA would not be
payable to workers with fewer than 26 YOCs under a 20-30 YOC range, compared with 19 YOCs
under the 11-30 YOC range.
Other proposals would increase the minimum number of YOCs required for the special minimum
PIA from 10 to 20, while maintaining the 20-year YOC range, such as 20-40 YOCs.47 Compared
with the current-law 11-30 YOC range, a 20-40 YOCs proposal would reduce minimum benefit
amounts for every possible YOC. For example, a lifetime low-wage worker may receive the full
minimum benefit at 30 YOCs, but he or she would receive about half of the full minimum benefit
if the YOC range became 20-40. The special minimum PIA at 30 YOCs would also likely be
smal er than the regular PIA when the YOC range was 20-40. The il ustrative example in Figure
9, based on a full minimum benefit equal to 125% of the HHS poverty guideline for a single
person household, shows that the minimum benefit would not be payable to YOC threshold
earners with fewer than 35 YOCs if the YOC range were 20-40.

46 For example, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.5. T his option would also set the
full minimum benefit at 133% of the Census Bureau poverty threshold for aged single individuals ($1,380.67 in 2020).
T he poverty threshold refers to the Census Bureau’s poverty threshold for aged single individuals. See U.S. Census
Bureau, “Poverty T hreshold,” at https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-
poverty-thresholds.html. The poverty threshold in 2020 is obtained by indexing the poverty threshold in 2019 by the
Social Security COLA in January 2020.
47 For example, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.9. T his option also would set the
full minimum benefit at 125% of the Census Bureau poverty threshold for aged single individuals ($1,297 in 2020).
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Figure 9. Proposed Special Minimum PIAs Under Alternative YOC Ranges, 2020
shaded area = proposed special minimum PIA would be greater than the Regular PIA

Source: CRS.
Notes: The worker with 40 YOCs is assumed to work from age 21 to age 60. For each decrease in YOC, the
assumption is that the worker delayed the start of the work period by one year. For example, the worker with
39 YOCs is assumed to work from age 22 to age 60. The worker is assumed to earn the exact amount needed
for a YOC every year. The YOC threshold for the current-law special minimum PIA was 25% of the OLB
between 1951 and 1990 and 15% of the OLB on and after 1991. The benefit level is measured when the worker
turns age 62 in 2020, before any early retirement reduction is applied. The ful minimum benefit under the
alternative YOC requirements is assumed to be 125% of the HHS poverty guideline for a single person
household, and the reduced schedule for each alternative YOC requirement is assumed to be linear.
SSA’s ORES estimates the effect of changing the YOC range while setting the full minimum
benefit at 125% of the HHS poverty guideline for a single person household in 2030, 2050, and
2070 for beneficiaries becoming eligible in 2020 and later.48 Consistent with the earlier
discussion, a smaller percentage of beneficiaries aged 60 and older would receive a higher
minimum benefit in those years if the YOC range were narrowed to 20-30 (0.9%, 2.6%, and
2.8%, respectively). An even smal er group of beneficiaries would benefit from the special
minimum benefit provision if the YOC range were changed to 20-40 (0.0%, 0.2%, and 0.2%,
respectively). For comparison, about 1.2%, 3.1%, and 3.3% of beneficiaries aged 60 and older
would receive a higher minimum benefit in 2030, 2050, and 2070, respectively, if the YOC range
were to stay as under current law (11-30). The median benefit increase would be around 6% for
YOC ranges of 11-30 and 20-30 for every year in the analysis, whereas the sample size is too
smal to estimate the benefit increase if the YOC range were changed to 20-40.49
Additional y, a smal er share of beneficiaries aged 60 and older in poverty would receive a higher
minimum benefit if the YOC range were changed from 11-30 to 20-30. ORES’s estimates show
that in 2050, 2.6% of poor beneficiaries would receive a higher revised special minimum benefit
if the YOC range were to remain as current law (11-30), compared with 1.5% if the YOC range
were changed to 20-30. Since short-term workers would be less likely to qualify for a special

48 T he options assume that the initial special minimum PIAs would increase with average wages in contrast to the
current -law provision, which grows with prices. For more information, see the “ Indexation of the Initial Minimum
Benefit Amount ” section.
49 If the sample size is less than 20 for any subgroup, SSA’s ORES omits the data for the category in which the subset
appears for confidentiality reasons. For more information, see SSA, Research, Statistics & Policy Analysis, “ Projection
Methodology,” at https://www.ssa.gov/policy/docs/projections/methodology.html.
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minimum PIA if the YOC range were 20-30 or 20-40 (see Figure 9), poor beneficiaries who are
no longer eligible for the minimum benefit due to a change in the YOC range would more likely
be short-term workers.
YOC Credits for Child Caregiving
Parents, especial y women, may take career breaks to care for a child or other relatives. This
section focuses on proposals that would count a year of caring for a child as a YOC, typical y up
to five years for each child and up to eight years in total (see Table 2). If this feature were added
to the special minimum benefit provision, caregiving parents whose earnings are below the YOC
earnings threshold in a certain year would qualify for a YOC in that year. The YOC credit for
child care would likely al ow more caregiving parents with low career earnings to become
eligible for the proposed minimum benefit or entitled to a higher minimum benefit amount,
assuming the full minimum benefit were set at 125% of the HHS poverty guideline for a single
person household (see Figure 10). For example, if a current-law YOC threshold earner were to
take care of a child for five years and work for nine years, he or she would not be eligible for a
regular Social Security worker’s benefits under current law (minimum 10 years of covered
earnings required). The worker would be eligible for a special minimum benefit if the provision
were al owed for up to five YOC credit years for child care (a benefit amount of $266 per month
at 14 YOCs [i.e., 9 + 5 = 14]). In another example, if a YOC threshold earner were to take care of
a child for five years and work for 25 years, he or she would be eligible for a partial minimum
benefit without a YOC credit year provision for child care (a benefit increase over the regular PIA
of $254 per month, or 34%). If those years of child care could be counted toward YOCs, the
worker would qualify for a full minimum benefit (5 + 25 = 30 YOCs), resulting in a benefit
increase over the regular PIA of $586 per month (or 79%).
Figure 10. Proposed Special Minimum PIA and Regular PIA Under Different
Treatments of YOC Credit Years for Child Care, 2020
shaded area = proposed special minimum PIA would be greater than the regular PIA

Source: CRS.
Notes: The worker with 35 working years is assumed to work from age 26 to age 60 and qualify for five credit
years for child care. For each decrease in YOC, the assumption is that the worker delayed the start of the work
period by one year. For example, the worker with 34 YOCs is assumed to work from age 27 to age 60. The
worker is assumed to earn the exact amount needed for a YOC every year. The YOC threshold for the current -
law special minimum PIA was 25% of the OLB between 1951 and 1990 and 15% of the OLB on and after 1991.
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The benefit level is measured when the worker turns age 62 in 2020, before any early retirement reduction is
applied. The credit year is not al owed in the regular PIA. The ful minimum benefit under the alternative YOC
requirements is assumed at 125% of the HHS poverty guideline for an individual, and the reduced schedule for
each alternative YOC requirement is assumed to be linear.
SSA’s ORES estimates the share of beneficiaries in 2030, 2050, and 2070 who would receive a
higher minimum benefit under various policy options, al owing up to eight YOC credit years for
child care. General y, a larger share of beneficiaries (becoming eligible in 2020 and later) would
receive a higher minimum benefit if credit years were al owed than if such provision did not
exist. For example, if the full minimum benefit were at 125% of the HHS poverty guideline for a
single person household, and the YOC threshold was kept at the current-law level (15% of the
OLB) or counted for a child in care, about 3.5% of beneficiaries aged 60 and older would receive
a higher minimum benefit in 2030, compared with 1.2% without the YOC child care credit year
provision.50 As more beneficiaries become eligible for Social Security over time, a larger
percentage of beneficiaries aged 60 and older would be receiving a higher minimum benefit under
the YOC child care credit year provision—7.0% in 2050 and 6.8% in 2070.
As discussed earlier, a larger share of beneficiaries would be likely to receive a higher special
minimum PIA under a YOC credit year provision for child care, and the size of the benefit
increase would also tend to be larger. Estimates from ORES show that the median percentage
increase in benefit under the proposed special minimum PIA with a YOC child care credit year
provision would be 8% in 2050, compared with 6% without the child care credit years.51
For poor beneficiaries in 2050, estimates show that about 10.7% of current-law beneficiaries aged
60 and older would receive a higher benefit under the proposed higher special minimum PIA if
the YOC threshold were kept as the current law (15% of OLB) or counted for a child in care,
compared with 2.6% without the YOC credit year provision.
In the analysis above, the YOC child care credit years are al owed in the special minimum PIA,
but not in the regular PIA. Some may argue that if taking care of a child were considered in
computing the minimum benefit, it might be reasonable to be included in the computation of the
regular benefit as wel because both low-wage earners and workers with relatively higher wages
may stop working due to child caregiving. However, because the regular PIA is based on career-
average earnings over 35 years rather than YOCs as in the special minimum PIA, the credit years
general y would be treated differently under the regular formula and the special minimum
benefit.52
YOC Credit Years for Child Care Combined w ith a Decrease in the YOC
Earnings Threshold
Some proposals would define the YOC earnings threshold as either a year of earnings equal to
four earnings credits or a child in care up to five years for each child, capped at a total of eight

50 T he options assume that the initial special minimum PIAs would increase with average wages in contrast to the
current -law provision, which grows with prices. For more information, see the “ Indexation of the Initial Minimum
Benefit Amount ” section.
51 T he estimated median benefit increases in 2030 and 2070 for the options discussed in this paragraph were about the
same as those in 2050.
52 T he allowance of credit years (sometimes referred to as “drop-out” years) in the regular Social Security benefit
computation would likely decrease the number of benefit computation years (35 years under current law), which is the
key input in the calculation of the Average Indexed Monthly Earnings (AIME). For proposals regarding drop -out years
in regular Social Security benefits, see H.R. 4126 and S. 2317 (the Social Security Caregiver Credit Act of 2019).
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years.53 The ORES estimates show that if the full minimum benefit were at 125% of the HHS
poverty guideline for a single person household, and the YOC threshold was four earnings credits
or a child in care, about 8.6% of beneficiaries aged 60 and older would receive a higher minimum
benefit in 2030. In addition, the share of beneficiaries would increase to 17.3% in 2050 and
18.7% in 2070, compared with 5.7%, 11.8%, and 12.9% in 2030, 2050, and 2070, respectively,
without the YOC child care credit provision. The median percentage increase in benefit under the
proposed minimum benefit would be 16% with YOC child care credit years, compared with 12%
without the provision. In particular, estimates show that about 56.2% of poor beneficiaries aged
60 and older would receive a higher minimum benefit in 2050 under this proposal, and nearly half
of those with a higher minimum benefit would be lifted out of poverty.
Distributional Effects
Distributional effects refer to the effects of a policy or policy change on individuals and families
and consider how those effects are distributed by characteristics such as gender, age, marital
status, race/ethnicity, income level, and poverty status. These distributional effects can aid
policymakers in identifying the effectiveness of a given policy proposal (e.g., whether it moves
individuals out of poverty) and determine how wel a policy may target a particular population of
interest (e.g., long-term low earners). In the MINT microsimulation, ORES estimated the
alternative special minimum benefit proposals’ distributional effects using the same underlying
proposal parameters modeled by SSA’s OCACT. The estimates pertain to current-law
beneficiaries aged 60 or older in 2030, 2050, and 2070. Potential outcomes of interest from the
ORES MINT estimates include changes in benefit amounts, household income, and poverty—
among al beneficiaries and affected beneficiaries—disaggregated by gender, race, country of
birth, marital status, educational attainment, current-law poverty status, household income
quintile, and current-law benefit type. This section describes the main findings of those
distributional effects for policy options that would restructure the special minimum PIA.
Gender
For most policy options discussed in this report, a change in the special minimum PIA would
likely affect a larger share of women than men. This is probably because women are more likely
than men to have shorter working careers and lower earnings and to take off working years for
child care. For example, one study found that among individuals born between 1946 and 1950
who lived through age 62, 3.1% of men and 9.1% of women have earnings in fewer than 10
years, and 7.8% of men and 11.7% of women have earnings between 10 and 19 years.54 In 2018,
about 15% of workers earned less than the current-law YOC threshold amount ($14,310 in 2018),
including 12% of working men and 19% of working women.55 Therefore, more women would
likely qualify for a YOC if the current YOC threshold were reduced. In addition, research finds
that the average number of working years at age 65 was 39.2 for men, compared with 32.1 for

53 SSA, “Solvency Provisions,” B5: Minimum Benefits, Options 5.3 and 5.6, at https://www.ssa.gov/OACT /solvency/
provisions/benefitlevel.html#B5.
54 See Appendix T able 3 in Melissa M. Favreault, How Might Earnings Patterns and Interactions Among Certain
Provisions in OASDI Solvency Packages Affect Financing and Distributional Goals? , Center for Retirement Research
Center (CRR) at Boston College, Working Paper 2018-2, March 2018. (Hereinafter Favreault CRR 2018.)
55 CRS analysis of data from the CPS ASEC 2019. Due to the limitations of the data set, the earnings included both
those covered and not covered by Social Security. T he statistics do not reflect the percentage of workers who have
earnings below the YOC threshold throughout their lifetime.
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women without children, 31.8 for women with one child, 30.6 for women with two children, and
26.8 for women with three or more children.56
Race
The revised special minimum benefit would general y benefit a larger share of Hispanics and
Blacks than Whites and others, partly because Hispanics and Blacks are more likely to have
earnings below the current YOC threshold in a certain year and lower lifetime earnings. In 2018,
about 17% of Blacks and 19% of Hispanics earned less than the current-law YOC threshold
($14,310), compared with 14% of Whites and 15% of others.57 One study also found that the
average real lifetime earnings up to 2012 for those born in 1945 to 1949 was about $2.5 mil ion
for Black males and $2.2 mil ion for Hispanic males, compared with $3.2 mil ion for White
males.58
Country of Birth
Under most policy options that would change the special minimum benefit discussed in this
report, a larger share of foreign-born workers would likely receive a higher special minimum
benefit than those born in the United States. One possible explanation might be that some low-
earning foreign-born workers arrive in the United States later in their careers, thus having
relatively shorter careers covered by Social Security than others. Estimates based on the MINT
model show that among Social Security current-law beneficiaries aged 65 to 75 in 2030 who were
in the lowest quartile of the AIME distribution (excluding disability insurance beneficiaries),59 the
median cumulative number of earnings credits by 2030 for foreign-born workers would be 52,
compared with 65 for those born in U.S.60 The 13 earnings credits difference is equivalent to 3¼
years of working time based on the Social Security definition of earnings credits.
Marital Status
For almost al policy options that would change the special minimum benefit, a larger share of
never-married beneficiaries would likely receive a higher special minimum benefit than those
married at a certain point in life (e.g., married, divorced, and widowed). This result may be
explained by the fact that many spouses and survivors with low career-average earnings can
receive a higher auxiliary benefit (e.g., spousal benefits and survivors benefits) based on another
worker’s earnings record and are less likely to receive a higher minimum benefit.61 In addition,
the MINT estimates show that a much smal er share of widowed beneficiaries would receive a
higher minimum benefit under most policy options than those who are married or divorced. This
probably occurs because widowed beneficiaries can receive up to 100% of a deceased spouse’s
basic benefit, which is higher than spouses and divorced spouses, who can receive up to 50% of a
spouse’s basic benefit.

56 Favreault CRR 2018, Appendix T able 4.
57 CPS ASEC 2019.
58 Favreault CRR 2018, Appendix T able 7.
59 For information about the AIME, see the “ Regular Social Security Retirement Benefits” section.
60 CRS received estimates from SSA’s ORES using the MINT microsimulation model (version 8.19) and generated on
December 3 and December 10, 2019.
61 See CRS Report R41479, Social Security: Revisiting Benefits for Spouses and Survivors, by Zhe Li.
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Educational Attainment
For almost al proposed policy revisions to the special minimum benefit discussed above, a larger
share of beneficiaries with fewer years of education would likely receive a higher minimum
benefit than those with relatively more years of education. This may be partly because individuals
with fewer years of education are more likely to earn less than the YOC earnings threshold in a
certain year and would be more likely to become eligible for a special minimum benefit should
the YOC threshold decrease. In 2018, about 37% of workers who have fewer than 12 years of
education earned less than the current-law YOC earnings threshold, compared with 17% of those
with a high school degree, 18% of those with some col ege education, 9% of those with a
bachelor degree, and 6% of those with graduate degrees. Workers with fewer years of education
also would be more likely to receive a higher special minimum benefit under the policy options
discussed in this report because they tend to have lower lifetime earnings than those with higher
levels of education. One study found that the average real lifetime earnings up to 2012 for those
born in 1945 to 1949 was about $1.9 mil ion for males with less than a high school diploma, $2.8
mil ion for males with a high school diploma, $2.9 mil ion for males with some college, and more
than $3.5 mil ion for males with bachelor and higher degrees.62
Current-Law Poverty Status
Based on the ORES estimation, policy options that propose to restructure the special minimum
benefit would have mixed effects on beneficiaries in poverty compared with those above poverty.
For some proposed changes, a relatively larger share of beneficiaries above poverty would
receive a higher special minimum benefit. Those revisions would include an increase in the full
minimum benefit and linear proration for partial benefits and an increase in the number of YOCs
required for minimum benefits. For those policy changes, beneficiaries who could receive a
higher revised special minimum benefit would likely be long-term workers. In contrast, under
some other proposed policy-lever changes that could benefit some workers with shorter careers, a
relatively larger share of beneficiaries in poverty would receive a higher special minimum
benefit. Those proposed revisions include a nonlinear prorated partial minimum benefit, a lower
YOC earnings threshold, a YOC credit for child care, and a combination of those measures.
Workers with shorter careers are more likely to receive a Social Security benefit that is lower than
the poverty level, which might explain these different effects. One study shows that about 43% of
workers with between 10 and 19 years of earnings received a Social Security family benefit
below the poverty level in 2009, compared with 32% for those with 20-29 years of earnings and
20% for those with 30-34 years of earnings.63
Household Income Quintile64
The ORES estimates show that for almost al policy options to change the special minimum
benefit, a larger share of beneficiaries with lower household income would likely receive a higher

62 Favreault CRR 2018, Appendix T able 6. T he study also found that the average real lifetime earnings to 2012 for
females born in 1945 to 1949 was about $0.6 million for those with less than a high school diploma, $1.3 million for
those with a high school diploma, $1.7 million for those with some college, and more than $1.8 million for those with
bachelor and higher degrees.
63 Favreault CRR 2018, Appendix T able 13A. T he current -law poverty status is determined based on family income.
T herefore, family income can better reflect economic well-being than Social Security benefits alone. However, given
that many disabled and older adults solely depend on Social Security benefits, especially when a person spends down
his or her wealth later in life, this statistic gives an important indication of vulnerability.
64 Each quintile represents 20% of the household population for current -law Social Security beneficiaries aged 60 and
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special minimum benefit than those with higher household income. One potential explanation of
this effect may be that workers in the bottom of the household income distribution are more likely
to earn less than the YOC earnings threshold and would be more likely to receive a special
minimum benefit if the YOC earnings threshold were reduced. Statistics show that in 2018, 34%
of individuals in the lowest quintile (i.e., bottom 20%) of the household income distribution had
earnings below the current YOC earnings threshold, compared with 15% of those in the second
quintile of the household income distribution and around 10% for those with even higher
household income.65
Current-Law Benefit Type
SSA’s ORES estimates general y show that under the policy options to change the special
minimum benefit, a relatively larger share of disabled workers, retired workers, and spouses
would receive a higher minimum benefit than widow(er)s.66 This might be due to the fact that
some low-wage widow(er)s can receive up to 100% of a deceased spouse’s basic benefit and
would less likely be affected by the special minimum benefit, which would be based on their own
earnings records.
Discussion of Policy Options for the Special
Minimum Benefit
When evaluating the policy options that restructure the special minimum benefit, policymakers
may ask to identify the target group of the revised provision. For example, the target group of the
revised provision could be long-term workers or short-term workers, those with al earnings
covered by Social Security or those with earnings not covered, and could be only future Social
Security beneficiaries or both current and future beneficiaries.
Short-Term vs. Long-Term Covered Careers
The current special minimum benefit and Social Security regular benefit general y are designed to
encourage workers to work longer. The original special minimum PIA enacted in 1972 targeted
workers with 23 YOCs or more, while the Social Security regular PIA is based on the 35 highest
years of annual wage-indexed earnings. Under legislation enacted in 1983 (P.L. 98-21), the full
retirement age (FRA) is increasing gradual y from 65 to 67 over a 22-year period (for those
reaching age 62 between 2000 and 2022); the increase in the FRA might imply that the full-time
career should be longer than that considered in the past.
Policy options that could grant the special minimum benefit to shorter-term workers might be
particularly helpful to those in poverty. For example, among Social Security current-law retired-
worker beneficiaries who would be aged 65 to 75 in 2030 and in the lowest quartile (i.e., the
bottom 25%) of the AIME distribution, SSA’s ORES estimates show that the median number of
years with earnings at or greater than four earnings credits would be 14. Further, 90% of those

older. T he first quintile depicts the 20% of the older household population with the least income, and the fifth quintile
depicts the 20% of older households with the most income.
65 CPS ASEC 2019.
66 T he widow(er)s in this section indicate Social Security beneficiary type, which is different from the widowed
beneficiaries under the marital status section. Beneficiaries who are widowed can receive workers’ benefits based on
their own earnings records or widow(er) benefits based on a deceased spouse’s earnings records.
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beneficiaries would work fewer than 23 years with earnings at or greater than four earnings
credits.67 The ORES estimates for the potential effects of the special minimum benefit policy
options also suggest that policy changes that could increase benefits for shorter-term workers
would be more likely to reduce the number of future beneficiaries in poverty.
If the revised special minimum benefit stil targets only long-term workers, policy options may
include increasing the number of YOCs required for a full minimum benefit, increasing the
number of YOCs required for any minimum benefit, or both.68 If the special minimum benefit
were revised to target both long-term and shorter-term workers, policy options may include
increasing partial minimum benefits for smal er YOCs (such as nonlinear proration)69 or al owing
YOC credits for child care.70 Substantial y increasing the full minimum benefit amount while
keeping linear proration for partial minimum benefits or substantial y reducing the earnings
required for each YOC may also al ow shorter-term workers to qualify for a revised special
minimum benefit.
Workers with Noncovered Earnings
Another question that policymakers may want to answer is whether the special minimum benefit
would be available for workers with earnings based on employment not covered by Social
Security. Under Social Security, the windfall elimination provision (WEP) is a modified benefit
formula that reduces the regular Social Security benefit of certain retired or disabled workers
who have relatively shorter careers in Social Security-covered jobs and are entitled to pension
benefits based on earnings from jobs not covered by Social Security.71 The special minimum PIA
does not have a WEP provision. Therefore, a beneficiary who is affected by the WEP may receive
a higher special minimum benefit. Evidence shows that among the 32,806 families receiving the
special minimum PIA in June 2013, the WEP affected nearly 40% of them.72 This percentage is
partly because the impact of the special minimum PIA has diminished over time, and since 1999,
the special minimum PIA has benefited only newly entitled beneficiaries whose regular benefit is
subject to the WEP.73 In effect, the special minimum PIA has partly reversed the impact of the
WEP reduction for these beneficiaries.
SSA’s ORES estimates the share of beneficiaries aged 60 and older (becoming eligible in 2020
and later) who would receive a higher minimum benefit under a revised special minimum benefit
policy with different treatments of the WEP provision. Those estimations assume that the full
minimum benefit at 30 YOCs is equal to 125% of the HHS poverty guideline for a single person
household (prorated linearly for YOCs between 11 and 29), and the YOC earnings threshold is
equal to four earnings credits. Among beneficiaries who would receive a higher minimum benefit
in 2030, roughly 5% would be affected by the WEP; those affected beneficiaries general y would
have a family income above the poverty level.

67 CRS received estimates from SSA’s ORES using the MINT microsimulation model (version 8.19) and generated on
December 3 and December 10, 2019.
68 See the “ Number of YOCs Required for the Special Minimum PIA” section.
69 See the “ T he Partial Minimum Benefit Amount : Linear vs. Nonlinear Proration” section.
70 See the “ YOC Credits for Child Caregiving” section.
71 See CRS Report 98-35, Social Security: The Windfall Elimination Provision (WEP), by Zhe Li.
72 Craig A. Feinstein, Diminishing Effect of the Special Minimum PIA, SSA, Actuarial Note no. 154, T able 5,
November 2013, at http://www.ssa.gov/oact/NOT ES/pdf_notes/note154.pdf. (Hereinafter Feinstein, SSA, T able 5.)
73 Feinstein, SSA, T able 5.
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Current vs. Future Beneficiaries
The policy options discussed earlier in this report74 would apply to beneficiaries becoming
eligible for Social Security benefits in 2020 and later (equivalent to retired workers born in 1958
and later).75 This implies that beneficiaries becoming eligible for Social Security before 2020
would receive benefits based on current law. As discussed earlier, if the full minimum benefit
were increased to 125% of the HHS poverty guideline for a single person household and the YOC
threshold were decreased to four earnings credits, about 5.7% of newly eligible beneficiaries aged
60 and older and 17.6% of those newly eligible poor beneficiaries in 2020 and later would receive
a higher special minimum PIA in 2030. ORES also estimates that if those beneficiaries who
become eligible before 2020 could also receive the restructured special minimum PIA, an
additional 4.3% of beneficiaries aged 60 and older would receive a higher minimum benefit, and
an additional 15.4% of poor beneficiaries would receive a higher minimum benefit in 2030 (see
Figure 11). The number of affected beneficiaries who became eligible before 2020 would decline
over time. In terms of program cost, al owing beneficiaries who became eligible before 2020 to
receive a restructured special minimum PIA would increase the program outlay in the short term,
adding an additional financial burden to the existing Social Security funding shortfal .76
Figure 11. Effects of Applying the Proposed Special Minimum PIA to All Social
Security Beneficiaries, 2030

Source: CRS analysis based on MINT estimates received from SSA’s ORES.
Notes: The proposed special minimum PIA is assumed to be 125% of the HHS poverty guideline for a single
person household at 30 or more YOCs and reduced proportional y for YOCs between 11 and 29. The YOC
threshold is assumed to be four earnings credits. Estimates are based on current law beneficiaries aged 60 and
older.

74 See discussions in “ Policy Options for the Special Minimum PIA and Effects on Beneficiaries” section.
75 SSA, “Solvency Provisions,” B5: Minimum Benefits, at https://www.ssa.gov/OACT /solvency/provisions/
benefitlevel.html#B5.
76 For general information about Social Security’s financial status, see CRS In Focus IF10522, Social Security’s
Funding Shortfall, by Barry F. Huston. For cost estimations of selected policy options that would change the special
minimum benefit, see SSA, “Solvency Provisions,” B5: Minimum Benefits, at https://www.ssa.gov/OACT /solvency/
provisions/benefitlevel.html#B5.
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Appendix. Effects of Policy Options for Changing
the Special Minimum PIA
Table A-1 summarizes the effects of selected policy options for revising one or more design
features under the special minimum PIA on Social Security beneficiaries in 2050. Estimated
effects are based on the MINT microsimulation model from SSA’s ORES. Al policy proposals
would apply to beneficiaries who become eligible for Social Security retirement benefits in 2020
and assume the initial special minimum benefits would be indexed to average wage growth. The
estimates are for each policy option separately, that is, as if each option were enacted alone.
Legislative proposals usual y combine several policy options that may interact with each other.
Due to the effects of interaction among different policy options, the combined effect on Social
Security beneficiaries of two or more options cannot be determined accurately by simple adding
the effect of the individual options.
The proposed changes would general y result in a larger number of beneficiaries receiving a
higher special minimum PIA relative to the regular PIA and a higher increase in benefit amount.
In terms of program outlays, a larger share of beneficiaries and a larger benefit increase for a
revised special minimum PIA would general y cost more for the Social Security program.77
Table A-1. Summary of Effects of Selected Policy Options for the Special Minimum
PIA
al policy options assume the initial special minimum benefits would be indexed to wage growth
Effects on All Beneficiaries
Effects on Poor Beneficiaries

in 2050
in 2050
% of
Beneficiaries
% of
with a
Median %
Beneficiaries
Median %
Design Features Different from
Benefit
of Benefit
with a Benefit
of Benefit
Current Law
Increase
Increase
Increase
Increase
An increase in the full minimum benefit

Ful minimum benefit: 100% of poverty
0.0%
0.0%
0.0%
guidelinea
—
Ful minimum benefit: 125% of poverty
guidelineb
3.1%
6.0%
2.6%
—
Nonlinear proration for the partial minimum benefits
Ful minimum benefit: 31 2/3% of AWI
Proration for partial benefits:
7.4%
7.0%
9.4%
9.0%
nonlinearc
A decrease in the YOC earnings threshold, assuming the full minimum benefit equal to 125% of the
poverty guideline
YOC earnings threshold: ful -time
6.3%
8.0%
8.6%
12.0%
federal minimum waged

77 Proposals for the special minimum PIA would usually combine several policy options. For the cost estimate of those
proposals, see SSA, “Solvency Provisions,” B5: Minimum Benefits, at https://www.ssa.gov/OACT /solvency/
provisions/benefitlevel.html#B5.
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Effects on All Beneficiaries
Effects on Poor Beneficiaries

in 2050
in 2050
% of
Beneficiaries
% of
with a
Median %
Beneficiaries
Median %
Design Features Different from
Benefit
of Benefit
with a Benefit
of Benefit
Current Law
Increase
Increase
Increase
Increase
YOC earnings threshold: four earnings
creditse
11.8%
12.0%
28.7%
20.0%
A change in the YOC range, assuming the full minimum benefit equal to 125% of the poverty guideline
YOC range: 20-30f
2.6%
6.0%
1.5%
—
YOC range: 20-40g
0.2%
—
0.0%
—
Allowing a YOC credit year for child care, assuming the full minimum benefit equal to 125% of the poverty
guideline
YOC earnings threshold: 15% of OLB
and a child in careh
7.0%
8.0%
10.7%
10.0%
YOC earnings threshold: four earnings
credits and a child in carei
17.3%
16.0%
56.2%
30.0%
Source: CRS analysis based on MINT estimates received from SSA’s ORES.
Notes: Under the current law special minimum PIA, the ful minimum benefit is $886.40 in 2020, indexed to
price growth since 1979, and is payable to workers who have 30 or more YOCs. The monthly amount decreases
by about $44 for each YOC below 30. For those with 11 YOCs, the special minimum PIA is $42.50 per month in
2020. Workers with fewer than 11 YOCs are ineligible for the special minimum benefit. The YOC earnings
threshold is 15% of the old-law contribution and benefit base (OLB). In al policy options listed in the table, initial
benefits would be indexed by growth in Social Security’s average wage index (AWI). The poverty guideline refers
to the HHS poverty guideline. Dashes indicate that estimates are not available due to smal samples. Estimates
are based on current law beneficiaries aged 60 and older.
a. For examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Options B5.6, 5.7,
and 5.11, at https://www.ssa.gov/OACT/solvency/provisions/benefitlevel.html#B5.
b. For examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option s B5.2, 5.3,
5.4, and 5.9.
c. For examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.10.
d. For examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.10.
e. For examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Options B5.2, 5.3,
5.4, 5.6, and 5.9.
f.
For examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.5.
g. For examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.9.
h. For similar examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Option B5.5.
i.
For (similar) examples of this provision, see SSA, “Solvency Provisions,” B5: Minimum Benefits, Options
B5.3, 5.6, 5.7, and 5.11.

Author Information

Zhe Li

Analyst in Social Policy

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Social Security Special Minimum Benefit: Policy Options

Acknowledgments
The Social Security Administration’s Office of Research, Evaluation, and Statistics provided technical
assistance in producing MINT microsimulation results for policy options analyzed in this report.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
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