Social Security Amendments of 1985

Social Security Amendments of 1985 - Title I: Administrative Improvements - Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act and the Railroad Retirement Act of 1974 to adjust the benefits available to an individual from both programs when such individual's entitlement to retroactive benefits under one of the programs results in incorrect payments under the other program.

Consolidates the reports which are required on continuing disability review into the Social Security Administration's annual report to the Congress.

Amends Federal Law to make certain debts for benefit overpayments, made under title II and title XVI (Supplemental Security Income) of the Social Security Act and under the Railroad Retirement Act of 1974, nondischargeable in bankruptcy.

Title II: Coverage - Amends the Internal Revenue Code and title II of the Social Security Act to treat the gross income and deductions derived from a trade or business in community property states as the income and deductions of the spouse who is carrying on the trade or business (removes the preference for the husband).

Treats the services performed by one spouse in the employ of the other spouse, except for domestic services performed in the employer spouse's home, as employment under the Internal Revenue Code and title II of the Act. Reduces to 18 the age after which services performed in the parent's employ may be treated as employment, but requires a child to be 21 before service outside the employing parent's trade or business or domestic service in the parent's home will be considered employment.

Makes agreements, providing for Old Age, Survivors and Disability Insurance (OASDI) coverage of U.S. citizens and residents employed abroad by a foreign affiliate of an American employer, permanent.

Provides OASDI coverage for employees of the District of Columbia with respect to services performed after December 31, 1985.

Title III: Miscellaneous and Technical Amendments - Entitles certain individuals who have not attained retirement age and were eligible for OASDI benefits for the month preceding the month in which their spouse died to file for reduced widow's and widower's benefits.

Adds deductions from dependents' benefits which result from an old-age beneficiary's noncovered work outside the United States to those deductions which might protect one's eligibility for delayed retirement increments in old-age insurance benefits.

Eliminates the consideration of an individual's average monthly wage in determining average current earnings for purposes of the disability offset calculation. Requires that, in order to avoid the offset, periodic disability benefits provided under a Federal law or plan must be based on service which is substantially all covered employment.

Provides that the reduction period for old-age insurance benefits shall not exclude months for which an individual was entitled to disability insurance benefits if such an individual received on old-age insurance benefit for that month.

Requires work deductions from OASDI benefits to precede reductions in auxiliary benefits.

Amends the OASDI and SSI programs to prohibit the payment of benefits to individuals before the Secretary of Health and Human Services or a court makes a final decision as to the individual's entitlement to benefits.

Amends title XI (General Provisions) of the Act to authorize the Secretary to conduct demonstration projects designed to encourage disabled beneficiaries to return to work or otherwise promote the objectives or facilitate the administration of the OASDI program.

Makes technical amendments to the Internal Revenue Code and the OASDI program.

Includes, within the calculation of the disability benefit offset, those sums paid to an individual which result from a cause of action under specified Federal laws and are analogous to periodic disability benefits.

Title IV: Amendments to the Supplemental Security Income Program - Amends the Supplemental Security Income (SSI) program to provide that an alien's three year period of ineligibility for SSI benefits shall not apply when the organization sponsoring the alien is no longer in existense or is adjudged bankrupt.

Authorizes the Secretary to make an emergency cash advance to presumptively eligible individuals who are initially applying for SSI benefits up to the amount which would be payable for the first month to an eligible individual with no other income.

Provides that the Secretary's determination of an individual's eligibility under a State Medicaid (title XIX of the Act) plan may exclude determinations unnecessary in carrying out the SSI program.

Extends Federal reimbursement of State interim SSI assistance to cover such assistance provided for the period during which an individual's benefits were erroneously terminated or suspended.