This research provides an overview of the special minimum benefit, an alternative Social Security formula that was initially passed by Congress in 1972 to set a benefit “floor” and protect workers from experiencing severe poverty in retirement. To be eligible, workers must have a record of 11 years or more of covered employment and must not be qualified for another Social Security benefit of a higher value.
Over time, indexing of the special minimum benefit formula, combined with economic changes has made the policy ineffective at reducing poverty as intended. Because the indexing was based on prices instead of wages, participation in the program has diminished. Soon no new retirees will qualify for the benefit.
This research indicates that fixing the minimum benefit would help to reduce financial insecurity among seniors by providing adequate benefits for workers with lifetime low income who may not otherwise be able to continue employment past the standard retirement age.