History of SSA During the Johnson Administration 1963-1968


Another change in the 1965 amendments which calls for explanation es tablished a new procedure for automatically reevaluating, on annual basis, the beneficiary's earnings in order to take account of any covered earnings the worker might have had in the preceding year that could increase his initial benefit amount. The amendment was effective for calendar years after 1964. In the past, the beneficiary had to formally request that his benefits be refigured. The refiguring was then manually accomplished by the Social Security Administration.

It had been long recognized that the provisions of the Social Security Act, that required a beneficiary to file for an increased benefit amount due to his earnings after retirement, placed a heavy burden on the beneficiary. In addition, the provisions of the Social Security Act then in effect provided slightly higher benefits in limited situations if a beneficiary were to delay his filing of an application until after age 65.

This became important because under Medicare legislation a beneficiary should file at age 65 to protect his rights to hospital and medical insurance. The Social Security Administration wanted to be in a position to assure all applicants that they would not lose anything by filing at age65. In order to accomplish this an automatic reappraisal of earnings was necessary. {1}

However, until 1962 it was not feasible to consider these improvements. At that time, because of the improved capacity to process data, the Social Security Administration was able to propose that the burden of recomputing benefits be placed on the Administration rather than the beneficiary. The 1965 amendments to the Social Security Act contained this provision. {2}

Early in 1965, an Administrative Strategy Committee was established and recommended that the Administration, "actively plan for and if feasible adopt, . . . a process for automatically recomputing benefits in lieu of the current paper flow process." {3}

A task force approach was decided upon. This group consisted of skilled technical personnel from the involved components of the Social Security Administration. The task force made a detailed recommendation for a highly automated method of processing these earnings reappraisals. This mamoth undertaking involved screening of over 24,000,000 beneficiaries in force to select the beneficiaries potentially due an increase, taking those records and ascertaining the actual earnings by searching through over 150,000,000 records of earnings kept by the Social Security Administration. With this information at hand, computations had to be made to determine if higher benefits were due individuals, and if so, then actual payment of the increase was to be made to the beneficiary. {4}

On April 20, 1966, Robert M. Ball, Commissioner of the Social Security Administration, approved the recommendations of the task force. The task force then devoted its efforts to creating a system which would accomplish the goals they had set. On November 6, 1966, the system was implemented and by January 3, 1967, almost 1,000,000 people had received a reappraisal of their earnings. {5}

Under the new automated system over 2,600,000 people are already receiving increased social security payments. The highly automated nature of this operation has produced a significant side effect in the savings of a total of $32,271,300 in the cost of administration ofthese reappraisals in the first full year of operation alone. {6}

Footnotes (Footnote numbers not same as in the printed version)

{1} Proposal for a legislative solution to problems connected with the time at which an application for benefits is filed, July 3, 1962.

{2} Compilation of the Social Security Laws (including the Social Security Act as amended and related enactments through December 31, 1965) Vol. I p. 100-102.

{3} Administrative Strategy Committee, Report Number 4, May 4, 1965.

{4} Face Sheet for Commissioner's Action Meeting Submittal, from the Office of Administration, to Mr. Robert-M. Ball, Office of the Commissioner, "Systems Requirements for 1966 Automatic Earnings
Reappraisal Operations," April 4, 1966.

{5} Commissioner's Decision--April 20, 1966, p. 198-199.

{6} Social Security Administration Planning Guide, March 28, 1968.