Q: I am 74 years old and have been getting my Social Security for over 10 years now. It's barely enough to live on, so I was thrilled when someone even older than me told me he read about some kind of special Social Security payment for folks who are over 72 years old. He said they are called "proud" benefits. What can you tell me about that?
A: Have you ever listened to an oldies radio station and heard the disc jockey refer to an old song as a blast from the past? Well, to an old goat Social Security retiree like me, your email was just that: a blast from my Social Security past.
The person who told you about these so-called "proud" benefits must have been reading a history book because he is referring to a very old Social Security benefit that has long since died away. Or rather, the folks who qualified for these payments have probably all passed on many years ago.
They were known as "special age 72 benefits," although within the Social Security Administration, we referred to them as Prouty benefits. They were so named because it was Senator Winston Prouty of Vermont who sponsored the amendment that led to their creation.
These special benefits were established for people who were supposedly too old to have enough time to build up the required number of credits to qualify for regular Social Security retirement payments. In a nutshell, the law said that if you turned 72 before 1968 (in other words, if you were born before 1896), you could get a small monthly Social Security check if you had at least a few Social Security credits, but not enough to get traditional retirement benefits. The payments were very miserly — something like $40 per month. But they were better than nothing.
The gossip told around SSA water coolers at the time was that Senator Prouty had an aunt who was miffed because she didn't qualify for Social Security (due to her lack of enough work credits) while all her friends and neighbors were getting monthly benefits. She complained to her influential nephew. And lo and behold, a few months later auntie, and thousands of other Americans, were getting special age 72, or Prouty benefits. I guess it's good to have friends in high places!
Alas, you obviously don't qualify for such a bonus from the government. But if you have a niece or nephew or some other relative serving in Congress, who knows what could happen?
Q: I've heard that Social Security is cheating me and millions of other Americans out of Social Security benefits they are due because they round down to the nearest dollar when they are supposed to be rounding up. Is this true?
A: Well, it's true ... and it's false. It's true when you say that benefits are rounded down. But it's false when you say that they are supposed to be rounded up. Here's the story.
When Social Security first started in the 1930s, monthly benefit checks were paid in the exact amount, including dollars and cents. And the law specified that the final check should be rounded up to the nearest penny.
Then in 1950, Congress changed the rules a bit. Recognizing that there are many steps in the process used to compute a monthly Social Security check, they said that the benefit should be rounded up to the nearest dime at each step in the process.
But then we got to the 1980s, and the political mood in the country — and Congress — had shifted to a more conservative tone. Congress was looking for ways to trim government expenditures, not expand them. And Social Security, being one of the largest government programs of all, came under the knife. That's why the 1981 amendments to Social Security included some relatively significant cuts, like eliminating what were known as student benefits; and cutting off monthly payments to widowed mothers when their youngest child turned 16 (as opposed to 18 under previous law).
But one little noticed change brought about by the 1981 amendments was a rule that required benefits to be rounded down, not up. At each step in the computation process, benefits were now required to be rounded down to the nearest dime. And a new twist was added. The final benefit check would no longer be issued in the exact amount. Instead, the new law said the final benefit would be rounded down to the nearest dollar.
Q: I get a very small monthly Social Security check — primarily because I spent the bulk of my working career as a fire fighter, a job where I did not pay into Social Security. Someone told me there is a law that sets a minimum Social Security benefit that can be paid. I'm sure I'm getting less than that minimum. What can you tell me about this?
A: That "someone" should have told you that there once WAS a law that established a minimum benefit threshold below which no Social Security monthly payment could go. But that minimum benefit was also a victim of the 1981 Social Security amendments. Since that time, there is no minimum limit for Social Security checks.
