Strengthening Social Security Act of 2023

Section 3121 of the Internal Revenue Code of 1986 is amended—

(A) in subsection (a)(1), by inserting the applicable percentage (determined under subsection (c)(1)) of before that part of the remuneration; and

(B) in subsection (c), by striking (c) Included and excluded service.— For purposes of this chapter, if and inserting the following:

For purposes of subsection (a)(1), the applicable percentage for a calendar year shall be equal to—

(A) for 2025, 80 percent,

(B) for 2026 through 2028, the applicable percentage under this paragraph for the previous year, decreased by 20 percentage points, and

(C) for 2029 and each year thereafter, 0 percent.

For purposes of this chapter, if.

Section 209 of the Social Security Act (42 U.S.C. 409) is amended—

(A) in subsection (a)(1)(I)—

(i) by inserting and before 2025 after 1974; and

(ii) by inserting and after the semicolon;

(B) in subsection (a)(1), by adding at the end the following new subparagraph:

(J) The applicable percentage (determined under subsection (l)) of that part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to the contribution and benefit base (determined under section 230) with respect to employment has been paid to an individual during any calendar year after 2024 with respect to which such contribution and benefit base is effective, is paid to such individual during such calendar year;; and

(C) by adding at the end the following new subsection:

(l) For purposes of subsection (a)(1)(J), the applicable percentage for a calendar year shall be equal to—

(1) for 2025, 80 percent,

(2) for 2026 through 2028, the applicable percentage under this subsection for the previous year, decreased by 20 percentage points, and

(3) for 2029 and each year thereafter, 0 percent.

The amendments made by this subsection shall apply with respect to remuneration paid in calendar years after 2024.

Section 1402 of the Internal Revenue Code of 1986 is amended—

(A) in subsection (b)(1), by striking that part of the net earnings and all that follows through minus and inserting the following: an amount equal to the applicable percentage (as determined under subsection (d)(2)) of that part of the net earnings from self-employment which is in excess of the difference (not to be less than 0) between (i) an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective for the calendar year in which such taxable year begins, and; and

(B) in subsection (d)—

(i) by striking (d) Employee and wages.— The term and inserting the following:

The term; and

(ii) by adding at the end the following:

For purposes of subsection (b)(1), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be equal to—

(A) for 2025, 80 percent,

(B) for 2026 through 2028, the applicable percentage under this paragraph for the previous year, decreased by 20 percentage points, and

(C) for 2029 and each year thereafter, 0 percent.

Section 211 of the Social Security Act (42 U.S.C. 411) is amended—

(A) in subsection (b)—

(i) in paragraph (1)(I)—

(I) by striking or after the semicolon; and

(II) by inserting and before 2025 after 1974;

(ii) by redesignating paragraph (2) as paragraph (3); and

(iii) by inserting after paragraph (1) the following:

(2) For any taxable year beginning in any calendar year after 2024, an amount equal to the applicable percentage (as determined under subsection (l)) of that part of net earnings from self-employment which is in excess of the difference (not to be less than 0) between—

(A) an amount equal to the contribution and benefit base (as determined under section 230) that is effective for such calendar year, and

(B) the amount of the wages paid to such individual during such taxable year, or; and

(B) by adding at the end the following:

(l) For purposes of subsection (b)(2), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be equal to—

(1) for 2025, 80 percent,

(2) for 2026 through 2028, the applicable percentage under this subsection for the previous year, decreased by 20 percentage points, and

(3) for 2029 and each year thereafter, 0 percent.

The amendments made by this subsection shall apply with respect to taxable years beginning during or after calendar year 2025.

Section 215(a)(1)(A)(i) of the Social Security Act (42 U.S.C. 415(a)(1)(A)(i)) is amended by striking 90 percent and inserting 95 percent.

The amendment made by subparagraph (A) shall apply with respect to computations or recomputations of primary insurance amounts made on or after January 1, 2029, except that section 215(a)(1)(A)(i) of the Social Security Act shall be applied by making the following substitutions for 95 percent for computations and recomputations made in the following calendar years:

(i) For calendar year 2029, by substituting 91 percent.

(ii) For calendar year 2030, by substituting 92 percent.

(iii) For calendar year 2031, by substituting 93 percent.

(iv) For calendar year 2032, by substituting 94 percent.

Section 215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) is amended—

(A) by redesignating clause (iii) as clause (iv); and

(B) by inserting after clause (ii) the following new clause:

(iii) With respect to computations or recomputations of primary insurance amounts made on or after January 1, 2029, the amount determined under clause (i) of this subparagraph for purposes of subparagraph (A)(i) for such calendar year shall be increased by—

(I) for calendar year 2030, 1 percent,

(II) for each of calendar years 2031 through 2043, the percent determined under this clause for the preceding year increased by 1 percentage point, and

(III) for calendar year 2044 and each year thereafter, 15 percent.

The amendments made by this subsection shall apply with respect to every individual who becomes entitled to old-age or disability insurance benefits under title II of the Social Security Act, or who dies (before becoming so entitled), in any calendar year. Notwithstanding section 215(f)(1) of the Social Security Act, the Commissioner of Social Security shall recompute the primary insurance amount of each such individual on the first day of each calendar year during the period beginning with calendar year 2029 and ending with calendar year 2044 to the extent necessary to carry out the amendments made by this section.

Section 215(a)(1)(A) of the Social Security Act (42 U.S.C. 415(a)(1)(A)) is amended—

(1) in clauses (i), (ii), and (iii), by inserting basic before average indexed monthly earnings each place it appears;

(2) in clause (ii), by striking and at the end;

(3) in clause (iii), by adding and at the end; and

(4) by inserting after clause (iii) the following new clause:

(iv) 5 percent of the individual’s surplus average indexed monthly earnings,.

Section 215(b)(1) of such Act (42 U.S.C. 415(b)(1)) is amended—

(A) by inserting basic before average; and

(B) in subparagraph (A), by striking paragraph (3) and inserting paragraph (3)(A) and by inserting before the comma the following: to the extent such total does not exceed the contribution and benefit base for the applicable year.

Section 215(b)(1) of such Act (as amended by paragraph (1)) is amended—

(i) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;

(ii) by inserting (A) after (b)(1); and

(iii) by adding at the end the following new subparagraph:

(i) An individual’s surplus average indexed monthly earnings shall be equal to the quotient obtained by dividing—

(I) the total (after adjustment under paragraph (3)(B)) of such individual’s surplus earnings (determined under clause (ii)) for such individual’s benefit computation years (determined under paragraph (2)), by

(II) the number of months in those years.

(ii) For purposes of clause (i) and paragraph (3)(B), an individual’s surplus earnings for a benefit computation year are the total of such individual’s wages paid in and self-employment income credited to such benefit computation year, to the extent such total (before adjustment under paragraph (3)(B)) exceeds the contribution and benefit base for such year.

The heading for section 215(b) of such Act is amended by striking Average Indexed Monthly Earnings and inserting Basic Average Indexed Monthly Earnings; Surplus Average Indexed Monthly Earnings.

Section 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is amended—

(A) in subparagraph (A), by striking subparagraph (B) and inserting subparagraph (C) and by inserting and determination of basic average indexed monthly income after paragraph (2);

(B) by redesignating subparagraph (B) as subparagraph (C); and

(C) by inserting after subparagraph (A) the following new subparagraph:

(B) For purposes of determining under paragraph (1)(B) an individual’s surplus average indexed monthly earnings, the individual’s surplus earnings (described in paragraph (2)(B)(ii)) for a benefit computation year shall be deemed to be equal to the product of—

(i) the individual’s surplus earnings for such year (as determined without regard to this subparagraph), and

(ii) the quotient described in subparagraph (A)(ii).

The amendments made by subsections (b) and (c) shall apply with respect to individuals who initially become eligible (within the meaning of section 215(a)(3)(B) of the Social Security Act) for old-age or disability insurance benefits under title II of the Social Security Act, or who die (before becoming eligible for such benefits), in any calendar year after 2029.

The Bureau of Labor Statistics of the Department of Labor shall prepare and publish an index for each calendar month to be known as the Consumer Price Index for Elderly Consumers that indicates changes over time in expenditures for consumption which are typical for individuals in the United States who have attained early retirement age (as defined under section 216(l)(2) of the Social Security Act (42 U.S.C. 416(l)(2)) for purposes of an old-age, wife's, or husband's insurance benefit).

Subsection (a) shall apply with respect to calendar months ending on or after June 30 of the calendar year in which this Act is enacted.

There are authorized to be appropriated such sums as are necessary to carry out the provisions of this section.

Section 215(i) of the Social Security Act (42 U.S.C. 415(i)) is amended—

(1) in paragraph (1)(G), by inserting before the period the following:, and, with respect to any monthly insurance benefit payable under this title, effective for adjustments under this subsection to the primary insurance amount on which such benefit is based (or to any such benefit under section 227 or 228), the applicable Consumer Price Index shall be deemed to be the Consumer Price Index for Elderly Consumers and such primary insurance amount shall be deemed adjusted under this subsection using such Index; and

(2) in paragraph (4), by striking and by section 9001 and inserting, by section 9001, and by inserting after 1986, the following: and by section 5(a) of the Strengthening Social Security Act of 2023,.

Section 215(i)(1)(C) of the Social Security Act, as in effect in December 1978 and applied in certain cases under the provisions of such Act in effect after December 1978, is amended by inserting before the period the following:, and, with respect to any monthly insurance benefit payable under this title, effective for adjustments under this subsection to the primary insurance amount on which such benefit is based (or to any such benefit under section 227 or 228), the applicable Consumer Price Index shall be deemed to be the Consumer Price Index for Elderly Consumers and such primary insurance amount shall be deemed adjusted under this subsection using such Index.

The amendments made by this section shall apply to determinations made by the Commissioner of Social Security under section 215(i)(2) of the Social Security Act (42 U.S.C. 415(i)(2)) with respect to cost-of-living computation quarters ending on or after September 30, 2024.

Section 202(e) of the Social Security Act (42 U.S.C. 402(e)) is amended—

(A) in paragraph (1)—

(i) in subparagraph (B), by inserting and at the end;

(ii) in subparagraph (C)(iii), by striking and at the end;

(iii) by striking subparagraph (D);

(iv) by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively; and

(v) in the flush matter following subparagraph (E)(ii), as so redesignated, by striking or becomes entitled to an old-age insurance benefit and all that follows through such deceased individual,;

(B) by striking subparagraph (A) in paragraph (2) and inserting the following:

(A) Except as provided in subsection (k)(5), subsection (q), and subparagraph (D) of this paragraph, such widow’s insurance benefit for each month shall be equal to the greater of—

(i) subject to paragraph (9), the primary insurance amount (as determined for purposes of this subsection after application of subparagraphs (B) and (C)) of such deceased individual, or

(ii) subject to paragraphs (9) and (10), in the case of a fully insured widow or surviving divorced wife, 75 percent of the sum of any old-age or disability insurance benefit for which the widow or the surviving divorced wife is entitled for such month and the primary insurance amount (as determined for purposes of this subsection after application of subparagraphs (B) and (C)) of such deceased individual.;

(C) in paragraph (5)—

(i) in subparagraph (A), by striking paragraph (1)(F) and inserting paragraph (1)(E); and

(ii) in subparagraph (B), by striking paragraph (1)(F)(i) and inserting paragraph (1)(E)(i); and

(D) by adding at the end the following new paragraphs:

(9) For purposes of clauses (i) and (ii) of paragraph (2)(A), in the case of a surviving divorced wife, the amount determined under either such clause (and, for purposes of clause (ii) of paragraph (2)(A), as determined after application of paragraph (10)) shall be equal to the applicable percentage (as determined under section 202(b)(2)(B)) of such amount (as determined before application of this paragraph but after application of subsection (k)(3)).

(10) For purposes of paragraph (2)(A)(ii), the amount determined under such paragraph shall not exceed the primary insurance amount for such month of a hypothetical individual—

(A) who became entitled to old-age insurance benefits upon attaining early retirement age during the month in which the deceased individual referred to in paragraph (1) became entitled to old-age or disability insurance benefits, or died (before becoming entitled to such benefits), and

(B) to whom wages and self-employment income were credited in each of such hypothetical individual’s elapsed years (within the meaning of section 215(b)(2)(B)(iii)) in an amount equal to the national average wage index (as described in section 209(k)(1)) for each such year.

Section 202(f) of the Social Security Act (42 U.S.C. 402(f)) is amended—

(A) in paragraph (1)—

(i) in subparagraph (B), by inserting and at the end;

(ii) in subparagraph (C)(iii), by striking and at the end;

(iii) by striking subparagraph (D);

(iv) by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively; and

(v) in the flush matter following subparagraph (E)(ii), as so redesignated, by striking or becomes entitled to an old-age insurance benefit and all that follows through such deceased individual,;

(B) by striking subparagraph (A) in paragraph (2) and inserting the following:

(A) Except as provided in subsection (k)(5), subsection (q), and subparagraph (D) of this paragraph, such widower’s insurance benefit for each month shall be equal to the greater of—

(i) subject to paragraph (9), the primary insurance amount (as determined for purposes of this subsection after application of subparagraphs (B) and (C)) of such deceased individual, or

(ii) subject to paragraphs (9) and (10), in the case of a fully insured widower or surviving divorced husband, 75 percent of the sum of any old-age or disability insurance benefit for which the widower or the surviving divorced husband is entitled for such month and the primary insurance amount (as determined for purposes of this subsection after application of subparagraphs (B) and (C)) of such deceased individual.;

(C) in paragraph (5)—

(i) in subparagraph (A), by striking paragraph (1)(F) and inserting paragraph (1)(E); and

(ii) in subparagraph (B), by striking paragraph (1)(F)(i) and inserting paragraph (1)(E)(i); and

(D) by adding at the end the following new paragraphs:

(9) For purposes of clauses (i) and (ii) of paragraph (2)(A), in the case of a surviving divorced husband, the amount determined under either such clause (and, for purposes of clause (ii) of paragraph (2)(A), as determined after application of paragraph (10)) shall be equal to the applicable percentage (as determined under section 202(c)(2)(B)) of such amount (as determined before application of this paragraph but after application of subsection (k)(3)).

(10) For purposes of paragraph (2)(A)(ii), the amount determined under such paragraph shall not exceed the primary insurance amount for such month of a hypothetical individual—

(A) who became entitled to old-age insurance benefits upon attaining early retirement age during the month in which the deceased individual referred to in paragraph (1) became entitled to old-age or disability insurance benefits, or died (before becoming entitled to such benefits), and

(B) to whom wages and self-employment income were credited in each of such hypothetical individual’s elapsed years (within the meaning of section 215(b)(2)(B)(iii)) in an amount equal to the national average wage index (as described in section 209(k)(1)) for each such year.

The amendments made by this section shall apply with respect to widow’s and widower’s insurance benefits payable for months after December 2024.