An act to amend the Social Security Act with respect to the retirement tests, to reduce spending under title II of the Social Security Act, and for other purposes.

(House agreed to Senate amendments with an amendment)

Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to provide that in the case of an individual receiving: (1) wife's insurance benefits by reason of having a child in her care; (2) child's benefits; or (3) mother's benefits, a monthly test of excess earnings under the earnings test shall apply in the year in which entitlement to such benefits ends. Makes this provision retroactive to January 1978.

Makes Medicare hospital insurance benefits available to individuals who are entitled to OASDI benefits but who have not applied for such benefits by providing for separate applications for the two types of benefits.

Disregards after December 1977, for purposes of computing the amount of OASDI benefits, any income attributable to services performed before becoming eligible for OASDI.

Permits an individual to use the monthly (instead of annual) earnings test during the first year, after 1977, of the individual's entitlement to OASDI benefits.

Prevents the payment of disability benefits to an individual where the disability occurred in connection with the commission of a crime for which the individual was convicted or where the disability arose from the individual's confinement in a penal institution. Excludes from the definition of "full-time student" any individual incarcerated in a penal institution pursuant to a felony conviction. Prohibits the payment of old-age disability insurance benefits to any individual for any month during which such individual is confined in a penal institution or correctional facility. Requires that benefits payable to any individual (other than an individual confined in a penal institution) on the basis of a confined individual's earnings shall be payable as though the confined individual were receiving benefits.