Social Security Amendments of 1981

Social Security Amendments of 1981 - Title I: General Provisions - Amends the Internal Revenue Code and title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to increase the old age, survivors and disability insurance tax rates on employees, employers, and self- employment income and revise the allocations of wages and self-employment income from the Treasury to the Federal Disability Insurance Trust Fund. Amends the Code and title XVIII (Medicare) of the Social Security Act to finance the hospital insurance program partially through general revenues. Provides a corresponding decrease in the hospital insurance tax rates on employees, employers, and self-employment income.

Amends titles II and XVIII of the Social Security Act to permit the Trustees of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund to make loans to the other Funds, prior to fiscal year 1991, whenever one of the Funds falls below 20 percent of the amount of its disbursements for the 12 months preceding the borrowing. Provides for the repayment of such loans.

Amends title II to provide for the payment of child's insurance benefits to an individual on the basis of student status only if such individual is a full-time elementary or secondary school student (currently student status includes being a full-time postsecondary school student).

Terminates a nondisabled child's entitlement to child's insurance benefits when such child reaches age 16 (currently such entitlement ceases when a child reaches age 18).

Eliminates prospectively the minimum benefit amount used in computing the primary insurance amount. Sets forth provisions with respect to the computation of monthly benefits and cost-of-living increases in benefits. Authorizes reimbursement of the cost of providing information to assist specified parties with respect to the administration of an employee benefit plan.

Provides that the combined earnings of a married couple, which are attributable to the period of their marriage, shall be shared equally between them for purposes of determining their eligibility for title II benefits and the amount of title II benefits to which each spouse is or may become separately entitled if: (1) they were married to each other for at least 25 years; (2) they were divorced on or after January 1, 1985; and (3) the spouse credited with lower earnings at the end of their marriage or (either spouse if both have been credited with the same amount of earnings) has reached age 50 at the time of their divorce.

Revises the method of computing the primary insurance amount of a decreased individual in order to increase the amount of benefits to which such individual's widow, surviving divorced wife, or widower is entitled.

Eliminates the earnings limitation under title II for individuals aged 68 or older for taxable years after 1982. Increases to 68 the age at which full benefits are payable.

Title II: Provisions Affecting the Disability Insurance Program - Reduces disability insurance benefits under title II for individuals aged 65 who are entitled to periodic disability benefits under any Federal, State, or local law or plan (currently such benefit reduction applies to individuals aged 62 who are entitled to workmen's compensation benefits for total or partial disability).

Eliminates direct funding of vocational rehabilitation services for disabled individuals under title II. Authorizes the transfer of funds from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund to enable the Secretary of Health and Human Services to reimburse the States for the costs of vocational rehabilitation services provided for disabled individuals under a State plan for such services approved under title I of the Rehabilitation Act of 1973.

Requires the Secretary to review a specified percentage of all disability determinations by administrative law judges in and after fiscal year 1981.

Sets forth guidelines and evidentiary rules which shall govern disability determinations under title II of the Social Security Act.

Amends title VII (Administration) of the Social Security Act to: (1) reimburse medical schools and schools of osteopathy for the costs of providing courses in the evaluation of medical impairments in connection with disability determinations under title II; and (2) direct the Secretary to pay the costs of continuing education relevant to disability claims for physicians and osteopaths employed by the Social Security Administration or by State agencies in connection with disability determinations. Authorizes the payment of such costs from funds out of the Federal Disability Insurance Trust Fund. Creates an Advisory Council on the Medical Aspects of Disability to: (1) assist in the development of courses in the evaluation of medical impairments in connection with disability determinations; (2) evaluate continuing education programs in the medical aspects of disability; (3) advise the Secretary on the level of medical documentation needed for adjudication of disability claims; (4) advise the Secretary on the listing of impairments in regulations; (5) examine the feasibility of making disability awards on a time-limited basis and the rehabilitation potential of specified diseases; and (6) advise the Secretary on policy matters with respect to disability determinations. Requires the Council to report to Congress on its activities every two years.

Title III: Provisions Affecting Government Workers - Sets forth a special rule for computing the primary insurance amount of individuals entitled to old age or disability insurance benefits who are entitled to pensions, annuities, or periodic benefits for non-covered work as well.

Prohibits a State or the Secretary from terminating a coverage agreement under which State and local government employees are eligible for title II benefits after March 25, 1981.

Extends from five to ten years the period during which a spouse or mother becoming eligible for a Government pension may qualify for an exemption from provisions of the Social Security Amendments of 1977 requiring a reduction in such spouse's or mother's title II benefits based on receipt of a Government pension.

Amends the Internal Revenue Code to permit the employer of State and local governmental employees entitled to title II benefits under a State coverage agreement to pay the employers' tax imposed with respect to the services of such employees without regard to the contribution and benefit base limitation.