Dorcas Hardy, assistant secretary of health and human services for human development services, is still the leading candidate to become Social Security commissioner, according to sources. But another name has emerged: Sandra Smoley, a Sacramento County (Calif.) supervisor and past president of the National Association of Counties. Key members of Congress, however, are still supporting acting commissioner Martha A. McSteen, a longtime career employe.

At the same time, the White House still has to fill several other vacancies at the top of HHS. Among those under consideration are: former representative Lawrence J. DeNardis (R-Conn.) for assistant secretary for legislation; Food and Drug Administration chief Frank Young for assistant secretary for health; Reagan-Bush campaign lawyer Ron Robertson for general counsel; Charles Murray, author of "Losing Ground," which argued that some welfare programs perpetuate poverty instead of reducing it, for assistant secretary for planning and evaluation; and William Roper, a White House health policy specialist, also for the planning and evaluation job. PRIVATIZING SSA? . . .

Social Security officials say there's no truth to charges by a local of the American Federation of Government Employes that the agency plans to contract out some of its most basic record-keeping functions, including processing W-2 forms for Social Security and income tax purposes and issuing annual wage reports on 120 million workers.

Local president John Gage, in a statement prepared for release today, said the idea is to cut federal jobs, but "there are some serious Privacy Act questions involved." Gage produced a memorandum from McSteen, dated Dec. 11, that outlined proposals to contract out the functions and eliminate 2,400 jobs as part of a reduction of 17,000 agency jobs over the next five or six years.

But SSA spokesman James M. Brown said the proposal had been withdrawn and "we have no intention of contracting out" these functions. He said the work-force reductions would be achieved by attrition as the effort to modernize SSA's computer system allows more jobs to be done electronically instead of by hand. WHO'S ON SOCIAL SECURITY? . . .

A survey of people who retired on Social Security in 1980-81 found that the median income for couples was $1,511 a month and for single persons $775 a month. In addition to their Social Security benefits, 56 percent of the couples had pensions (two-thirds of them private, the rest from federal, state or local governments). More than 26 percent of single people had private pensions and 16.5 percent had government pensions.

The survey also showed that 84 percent of the couples and 69 percent of the single people had income from bank accounts, stocks, bonds and other assets, although in many cases the amount was small. More than two-fifths of the couples and a quarter of the single people also had some income from jobs.

Although the retirees had income from many sources, Social Security was the single largest source of income for all but those in the top 10 to 20 percent of the income scale. FROM THE VA TO MEDICARE? . . .

Some Medicare experts expect that the proposed new means test for free veterans' health care would shift a substantial amount of the costs to Medicare. Under current law, veterans can qualify for free care, even if their condition is not connected to their military service, if Veterans Administration facilities have space after taking care of those with service-related disabilities.

Under the Reagan administration proposal, as outlined in a recent memorandum from the Office of Management and Budget to the VA, most veterans with non-service-connected disabilities would be ineligible for free VA care if their income is more than $15,000 for a couple -- a figure chosen because it is twice the amount a couple on a VA pension would receive.

"VA care is not intended to be a substitute for Medicare for veterans with Medicare coverage and incomes above $15,000 ," said the memorandum. It added that such veterans could receive free VA care only if they have already spent a substantial portion of their income over the cutoff level and still need further care.