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DOCOEIT RESUME
07337 - (82567583]
(Potential Savings to the Social Security Administration of
Rounding Benefits Payments to the Nearest Penny]. HRD-78-160;
B-164031(4). September 8, 1978. 3 pp.
Report to Pep. Jamez A. Burke, Chairman, House Ccommitee on gays
and Means: Social Security Subcommittee! by Elmer B. Staats,
Ccmptrcller Gei.eral.
Issue Area: Federally Sponsozee or Assisted Income Security
Programs: Payment Processes, Proce4ures, and Sys':eas (1309).
Contact: Human Resources Div.
Budget Function: Income Security: Public Assistarce and Otler
Income Supplements (604).
Organization Concerned: Deprtomeut of Health, Iducation, and
Welfare; Depart:ent of Labor; Social Security
A dministration.
Congressional Relevance: House Committee on Ways and beans:
Social Security Subcommittee; Senate Committee on Finance.
Rep. James A. Burke.
Authority: social Security Act (42 0°S.C. 415(g)). Social
Security Amendments of 1977.
There is e potential for siqnifjcant savings to the
social sec,:rity sy.teu if benefits wore calculated to the
nearest pemny rathjr than rounded up to the next highest diwe as
required by law. An esti~ated savings of $386 million would
accrue to the Retiresent and Survivors Insurance Program from
calendar years 1980 through 1986 if section 215(g) of the Social
aecarity Act were amended to provide that benefits be calculated
to the nearest perny. The estimate of $386 million in savings
assumed an average savingz of $0.045 per person per check in the
first year and an increase of $0.045 per check for each year the
beneficiary remained cn the rolls since one cost of living
adjustmew would be made each year. A somewhat smaller savings
would als. be achieved for the Disability Insurance Program. A
recent study by the Social Security Adainistraticn estimated
that isplementing the new method of calculating benefits would
involve a one-tie cost of about $700,000 for computer system
redesign and about $600,000 of annual recurring cost for mauual
calculaticns and handling public inquiries. To miniaize
administrative problems and avoid reducing menefits to current
beneficiaries, the Social Security Adminstration believes that
the change should be isplesented concurrently 'ith a general
benefit increase. Section 215 of the Social Security Act should
be amended. (RRS)](ViewImageLocal?handle=hein.gao/gaobaaybi0001&div=1&collection=&method=preview&ext=.png&size=3)