The amendments of 1939 made material changes in the benefits provided under the system. The principal revisions were: advancing initial payment of monthly benefits to 1940 instead of 5942 ; increasing benefits during the earlier years of the system by changing the basis and formula for computing benefits ; and increasing security for the family group by providing monthly benefits for certain dependents and survivors of insured employees. Because of the extension of the system to afford protection for the families of workers, the title was changed to "Old-Age and Survivors Insurance." Under the amended system the basis on which benefits are determined is the employee's average monthly wage. The formula for computing monthly benefits is: 40% of the first $50 of average monthly wage, plus io% of the next $200, to which is added an increment of 5% of the basic amount for each year in which the employee made at least $200 in covered employment.
The employee's average monthly wage is obtained by dividing his total accumulated wages (exclusive of amounts in excess of $3,000 re ceived in one year) by the number of months he could have worked under the system—that is, the number of months between 1936 (or his 22nd birthday, if later) and the quarter in which he becomes eligible for benefits or dies.
An insured employee becomes eligible for benefits if he is 65 or more years old, is fully insured, and files a claim for benefits. An employee is fully insured if he has received $50 in covered employ ment in each of 4o calendar quarters ; or if he has received $5o in each of enough calendar quarters to equal half the quarters elapsing between Dec. 31, 1936 (or his attainment of age 21, if later) and the quarter in which he dies or attains age 65, and in not less than six calendar quarters. Any calendar quarter in which he earned at least $50 is considered a "quarter of coverage." Such quarters of coverage count toward benefits even if they occur before he is 21 years old or after he is 65, but they must be subsequent to 1936.
Wages earned after age 65 do not count if earned before Jan. 1, 1939 ; as of that date the amendments removed an earlier provision under which wages counted toward benefits only up to this age. Under the amendments of 5939 when an insured person becomes eligible for monthly retirement benefits, supplementary benefits are provided for a wife 65 years of age or over or for unmarried dependent children under 16 years of age, or under 18, if regularly attending school. The supplementary benefit for each amounts to one-half the benefit of the insured worker. Monthly benefits will not be paid to the annuitant (nor supplementary benefits for his dependents) for any month in which he earns $15 or more in covered employment. When a fully insured person dies, survivors' monthly benefits are provided in the following amounts: three-fourths of the worker's benefit rate for a widow 65 or over, or for a widow with dependent children in her care ; one-half of the worker's benefit rate for each unmarried de pendent child under 18 years of age; one-half of the worker's benefit rate for each dependent parent if there is no widow or dependent child.
If an insured wage earner dies without meeting the requirements necessary to be fully insured, but has received $5o or more a quarter for at least six calendar quarters during the three years prior to his death, monthly benefits are provided for any minor children and the widow, if she has such children in her care.
If there is no survivor entitled to monthly benefits at the time of the worker's death, a death payment, equal to six times the worker's monthly benefit rate, may be paid to certain relatives ; or the indi vidual paying the funeral expenses may be reimbursed for them up to this amount.
The minimum monthly benefit payable in the case of any insured individual is $10. The maximum, both for the individual worker and for the family, varies where supplementary benefits are payable, but in no case can exceed $85.
Coverage.—Chiefly because of the administrative difficulties in volved in their inclusion, certain types of employment were excepted from coverage under the system. The act of 1935 provided the follow ing exceptions : agricultural labour ; domestic service ; casual labour not in the course of the employer's trade or business ; service as an officer or member of a crew of a documented vessel; employment for any Federal, State or local government or its instrumentality ; and service for certain religious, charitable, humane, and educational in stitutions not organized or operated for profit. Employment after age 65 was also excepted. Railroad employment was excepted because it is covered by the separate system for railroad workers under the Railroad Retirement Act.
Under the amendments of 1939, some of the employments previ ously excepted were brought under the system. These include maritime service on American vessels and employment in national banks, building and loan associations and certain similar organizations. As already noted, the exception of employment after age 65 was re moved, as of Jan. 1, 1939, thus enabling many workers previously ineligible because of age to qualify for monthly benefits and others to increase the amount of their benefits. Certain additional exemp tions were provided by the amendments: agricultural labour was defined so as to extend exemptions not only to farming activities, but also to certain closely related services. Certain part-time or in termittent employment providing only nominal wages such as services for fraternal and other non-profit organizations, and services of news boys under 18 were excepted by the amendments, as were family employment and service by employees of foreign governments.