How would you make Social Security stronger?
That was the challenge AARP issued to policy researchers last year. Two of the five ideas recently selected as the best in a flood of responses came from a professor at the McCormack Graduate School at the University of Massachusetts Boston and two gerontology scholars who received their PhD degrees from the school.
AARP recognized a proposal by Christian Weller, a McCormack professor of public policy, to expand qualifying credit options for Social Security benefits. It also selected a proposal by Kimberly J. Johnson and Elizabeth Johns to revise minimum benefits to better meet adequacy and equity standards in Social Security. Johnson, now an assistant professor at the Indiana School of Social Work, received her UMass degree in 2013. Johns, an independent scholar in Orono, Maine, was awarded her degree last year.
With AARP’s support, the selected authors will develop their innovation and work with The Urban Institute to assess the impact of their policy proposals.
Weller’s proposal would allow workers to receive credits for three categories that currently are not used to compute Social Security benefits: caregiving, unemployment, and job training. People could obtain a maximum of three years of credit for each individual category and a total of no more than five years of credit across the three categories.
A second component of the proposal would be aimed at paying for these changes by applying a 6.2 percent tax to investment income, including interest and dividend income as well as realized capital gains, above $200,000 annually
The proposal by Johnson and Johns would revise Social Security’s minimum benefit to assure that eligible retired workers avoid impoverishment. It adopts an augmented poverty threshold linked to employment history. At the full retirement age, beneficiaries with at least 20 years of covered employment and annual household incomes below 125 percent of the poverty threshold would receive a supplement raising their income to that level. Beneficiaries with 10–19 years of covered employment would be assured incomes of at least 112 percent of poverty. At age 80, all eligible workers would be guaranteed an income of at least 125 percent of poverty.
To offset the cost of the initiative, employers not contributing at least 3 percent of an employee’s earnings to a qualified pension account would pay a FICA tax of 7 percent for that worker rather than the prevailing 6.2 percent. The proposal would raise the taxable income threshold from $127,200 to $200,000.