Senate-House conferees have tentatively approved legislation that would eliminate or cut back "dependent" Social Security benefits for nearly 8 million federal, state and local government workers when they retire. The bill could go to the full Senate and House Thursday and, if approved, be signed into law before Christmas. The conferees will meet again today but it is unlikely that they will reconsider the issue.

Under the "offset" formula that is part of the giant Social Security financing bill, future public retirees would have the amount of their auxiliary (dependent or survivor) benefits, which are based on a spouse's Social Security entitlement, cut back dollar-for-dollar based on the amount of their public annuity or pension.

The legislation does not cut the pension of anyone now or in the future. Nor does it affect any Social Security benefits that a public employee may be entitled to now or in the future based on his or her earnings in the private sector.

What it does is say that, in the future, public retires who apply for either dependent or survivor benefits would have that auxiliary benefit reduced or offset based on the amount of their public annuity. In other words they would not be able to draw full auxiliary benefits based on a spouse's Social Security entitlement while drawing a public pension at the same time.

This means virtually all the people now making careers in government at the state, local or federal level would be subject to the offset provision when they retire.

Conferees did modify slightly the original offset language approved by the Senate. What they did was to allow women public employees who are retired, or those eligible (by age and service) to retire immediately, to be "grandfathered" in. They will be able to keep the full amount of their spouse's Social Security auxiliary benefits no matter what kind of or size pension they draw.

Although that "grandfathering" applies almost exclusively to women, it would help out the relatively few government retirees who could prove they are the financial dependents of their wives. In other words, men will have to prove dependently to qualify while women immediately eligible for the benefit will not.

The Senate originally approved the offset language to eliminate what it called "windfall" benefits for federal and public retirees. The Senate said thousands of relatively well-off retirees were allowed to "double dip" into Social Security, drawing maximum benefits as either a dependent or survivor of a spouse who had worked under Social Security.

The House did not include offset language in the bill it approved. But conferees agreed to the modified Senate version.They did so on grounds that it would stop a potential multibillion-dollar drain on the Social Security fund from public employees who are not needy.

Major differences still exist between the conferees, differences that could delay final approval. If that happens, the conferees would wait until next year to tackle the bill. But insiders feel that, despite the differences, a compromise will be reached - with the offset language included - before Congress gets out of town.