Social Security Commissioner Dorcas R. Hardy yesterday unveiled a proposed information letter that, for the first time, will tell a person years in advance -- in plain, clear dollar figures -- precisely how much will be received in monthly benefits when the individual retires, dies or becomes disabled.
Hardy also said she is trying to work out a revenue-neutral version of her proposal to remove the earnings limit for Social Security beneficiaries aged 65 and over.
Hardy told reporters the new informational form -- which has not been cleared for use -- would be a revolutionary improvement over the forms now used when a person writes in to ask how much in Social Security-taxed earnings has been credited in the records. Many citizens write in for such information to make sure records are correct and to try to calculate what future benefits would be.
Hardy said the information letter that Social Security currently uses to respond to such inquiries contains a minimum of information -- a summary of lifetime credited earnings to date, with no figures showing future benefits.
The proposed replacement, which Hardy hopes to have in use by mid-1988, will be far clearer and fuller, she said. It will list by year the amount of credited earnings and the amount of Social Security taxes paid for every year the individual has been working.
More important, if someone sends in an estimate of his or her future yearly earnings, the response from Social Security will contain a calculation of how much -- in today's dollars -- the person would receive on retirement, how much the person would receive if he or she became disabled this year, and how much the person's children and spouse would receive if he or she died this year.
A sample form displayed by Hardy, containing a hypothetical earnings history for someone who entered the labor force in 1950, showed the amount of earnings subject to the Social Security tax for every year since 1950 and the amount of Social Security tax paid.
Although the sample used arbitrary numbers that do not represent actual benefits, it showed how the new form would be worded: "If you retire at 62, your monthly benefit in today's dollars will be about $770.
"If you continue to work until you are 65, then your monthly benefit in today's dollars will be about $985."
The form went on to say that "if you died this year, your child could get a monthly check of about $610. If your surviving spouse, who is caring for your child, and your child both qualify, they could each get about $610 . . . . If you became disabled this year, here is an estimate of the monthly benefits you could get: Your monthly check would be about $795. Your family could get up to a monthly total of $1,195."
On another matter, Hardy said she is seeking to develop a less costly or revenue-neutral version of her proposal to abolish the current $8,160 annual limit on how much a Social Security recipient aged 65 to 69 can earn from a job without loss or reduction of benefits.
Under current law, a person is only entitled to Social Security retirement benefits if he or she is retired. A beneficiary aged 62 through 64 is considered retired if he or she earns no more than $6,000 a year. A person aged 65 through 69 is considered retired if earnings are no more than $8,160. Above age 69 there is no earnings limit.
Hardy has proposed -- but the White House has not endorsed -- the idea of removing the earnings limit for those aged 65 to 69, but not for those younger than that. However, the plan would cost the system a net of $7.5 billion over the next five years. Hardy also said she was pleased that the Senate Wednesday night approved a bill to allow persons on Social Security disability to keep getting benefits until an administrative law judge had ruled on their cases where the government claimed they were no longer disabled enough to receive benefits.