Description of Proposed Provision:
B4.4: Reduce the number of computation years (increase dropout years) for parents having a child in care under the age of 6. The parent must have no earnings (covered or non-covered) for the year to be eligible for the credit. Only one parent can claim the childcare added dropout year for a given earnings year. Each parent can earn at most 2 dropout years per child, and a maximum of 5 dropout years in total. The years designated as childcare years do not have to be the years that could otherwise be included in the computation of the average indexed monthly earnings (AIME). The provision would be effective for all benefits payable for entitlement in January 2021 and later (without regard for when the beneficiary became initially eligible).

Estimates based on the intermediate assumptions of the 2019 Trustees Report

Summary Measures
Current law
[percent of payroll]
  Change from current law
[percent of payroll]
  Shortfall eliminated
Long-range
actuarial
balance
Annual
balance in
75th year
  Long-range
actuarial
balance
Annual
balance in
75th year
  Long-range
actuarial
balance
Annual
balance in
75th year
-2.78 -4.11   -0.05 -0.05   -2% -1%

graph of OASDI cost rates and income rates by year, under
                 current law and provision. click on graph to view underlying
                 data. graph of OASDI trust fund ratio by year, under current law
                 and provision. click on graph to view underlying data.