Senate-House conferees today are to begin work on a multibillion dollar Social Security financing bill. In addition to raising taxes for most private employees and employers, it contains a controversial proposal to eliminate future "windfall" Social Security benefits for people entitled to federal, state or local government retirement benefits.

One of the many important issues the conferees must wrestle with is whether to accept, reject or delay the Senate-passed "offset" provision.

Under it, persons who get a public pension could not get full payments from a spouse's Social Security as either a survivor or a dependent. Their income from the spouse's Social Security would be reduced on a dollar-for-dollar basis by the amount of any federal, state or local government pension they get.

Federal retirees who already are getting full payments from Social Security as the dependent or survivor of a spouse who worked under Social Security would not be affected. Nor would federal retirees or workers who have themselves earned credit under Social Security through past, present or future private jobs.

The people who would be hit are federal retirees applying in the future for full dependent or survivor benefits based on the Social Security earnings of their public pension.

Under the Senate-passed bill, the provision "would become effective with respect to benefits payable for months starting with the month of enactment on the basis of applications filed in or after the month of enactment." So, if the President signed the Senate version of the bill this month, the cutoff date would be back-dated to yesterday, Nov. 30.

The House-passed Social Security financing bill does not contain any "offset" language, which the Senate said is necessary to eliminate "windfall" benefits that federal workers now can draw from their own pensions, their own Social Security (if any) and as dependents or survivors of a spouse under Social Security.

Because the House did not mention offset in its bill, federal unions, retiree groups and area legislators (who represent 14 per cent of the federal work force) will try to persuade Hous conferees to hold firm and kill the Senate offset language.

Barring that - and the decision will not be made today - they hope at least to get the Senate to agree to delay the effective date of offset for six months. This would give thousands of retired - or about to retire - federal workers time to decide whether to quit now and qualify for full benefits from a spouse's Social Security entitlement, or keep working and retire under the "offset" rule.

To be eligible for dependent benefits both partners must be retired and age 62 and, of course, the non-federal spouse must be entitled to Social Security. To be eligible for benefits as a survivor, the federal retiree must be at least 60 and be the widow or widower of someone entitled to Social Security.

Lots of very tough lobbying is ahead with many taxpayer groups trying to close the "loophole," and with equally determined federal employee (and taxpayer) groups trying to preserve the status quo.