Thousands of male federal, state and local government retirees who lost monthly Social Security auxiliary benefits of from $43 to $430 this year, would have that money restored under a bill before the House. It also would benefit millions of married male and female public employees whose spouses work in private industry.

The bill is designed to eliminate the controversial Social Security "offset" law passed late last year. What it did was require a dollar-for-dollar offset of Social Security benefits for men who now draw, or will someday become, for a public pension or annuity.

Auxiliary are those benefits due a beneficiary who is either the "spouse" or "survivor" of someone who worked under Social Security and is entitled not only to payments earned themselves, but also benefits earned by a spouse.

Congress exempted women from the offset formula for five years. The idea was to give thousands of older women in government time (until Dec. 1, 1982) to qualify for a portion of their husband's Social Security entitlement. After that date, under the law, the offset provision also would apply to women who apply for auxiliary Social Security benefits based on a husband's entitlement.

Until Congress changed the law, public service retirees could qualify for full auxiliary payments either as the spouse or survivor of a husband or wife who was entitled to draw Social Security benefits. That meant that a federal retiree, for example, could draw his or her own government pension and also get payments from Social Security based on a spouse's Social Security entitlement.

Critics of the practice said it allowed relatively well-to-do federal retirees to "double dip" into the Social Security system - based on a spouse's entitlement - without themselves ever having worked under, or paid money into, Social Security.

Rather than establish a needs or dependency test, Congredd voted the "offset" formula, which means that the auxiliary Social Security benefit payment is reduced, dollar-for-dollar, based on the amount of the pension a retiree was getting or will get from a state or federal government agency.

The new law does not affect any Social Security payments federal retirees may be entitled to based on their own private industry work under Social Security. But it does "offset" the amount of Social Security they may draw as a spouse or survivor.

At the very last minute, Congress voted to exempt women for five years from the effects of the offset. That means that women who qualify for government retirement during the next five years may begin drawing full, lifetime benfits from a husband's Social Security either as his dependent or as his survivor. After five years, women will be in the same position as men retiring from public jobs. They, too will be subject to offset.

Many men feel that the exemption for women is discriminatory. But rather than cut the women out entirely, they want the law repealed to permit both sexes to continue to qualify for auxiliary payments when they reach age 62,or for survivor benefits at age 60 under the old law.

The repeal of the law would be accomplished if the House and Senate go along with a bill (H.R. 10533) by Rep. Joe Waggoner (D-La.). Waggoner believes he can persuade colleagues on the House Ways and Committee to clear the bill. Insiders say there is a good chance the full House will buy it.

Since the offset provision affects more than 8 million people now working for federal, state or local governments, it has strong political sex appeal. Backers of it also believe Congress has a duty to restore the auxiliary benefits that many married couples had counted on in their career planning to bolster their retirement income.

A coalition of public, federal and postal unions, spearheaded by the National Association of Retired Federal Employees, is pushing the Waggoner bill.

Members of the "anti-offset" formula, a provision, incidentally, that is very popular with workers who are not under a federal or public pension plan.

Backers hope Waggoner can use his influence with committee chairman Russell Long (D-La.)., an old friend, to persuade the Senate committee to accept the major change in the new law.