Social Security Reform Act of 1981

Social Security Reform Act of 1981 - Amends titles II (Old Age, Survivors and Disability Insurance) and XVIII (Medicare) 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 1988, whenever one of the Funds falls below 25 percent of the amount of its disbursements for the 12 months preceding the borrowing. Provides for the repayment of such loans.

Requires that any change in the Consumer Price Index (used to determine cost-of-living increases under title II) be submitted for appropriate congressional review.

Provides from January 1, 2000, to January 1, 2012, a phased increase in the eligibility age for title II benefits. Sets forth interim rules for determining entitlement to and the amount of title II benefits to be paid as well as the amount of social security taxes to be paid during such time period.

Ends the payment of child's insurance benefits on the basis of student status.

Eliminates the minimum benefit amount used in computing the primary insurance amount under title II. Eliminates the earnings limitation under title II for individuals aged 65 or older for taxable years after 1985.

Exempts from social security taxes wages paid to an employee who has reached age 65 and the earnings of a self-employed individual who has reached age 65.

Amends the Age Discrimination in Employment Act of 1967 to prohibit discrimination because of age by employers, employment agencies, or labor organizations against individuals aged 40 or older (currently such prohibition applies to individuals who are at least 40 years old but less than 70 years old).