Information for this article has been taken from various publications of the Social Security Administration. You can reach SSA toll free at 1-800-772-1213. You can also obtain information and services on the Internet www.ssa.gov. Social Security has a new web site for East Asia, Southeast Asia, and the Indian subcontinent. This web site takes you to the Asian American and Pacific Islanders: www.ssa.gov/aapi. Also note that Social Security provides interpreter services free of charge to people visiting their office. Just call six weeks ahead of time at their toll free number. Please also note that figures in this article pertain to year 2003, unless otherwise indicated.
What is Social Security?
Social Security is based on a simple concept. When you work, you pay taxes into the system, and when you retire or you become disabled, your spouse and your dependent children receive monthly benefits that are based on your earnings. And your survivors collect benefits when you die.
How are you linked to Social Security?
You link yourself to the Social Security system through your Social Security card. Your Social Security number on the card is used to keep a track of your earnings while you are working and to track your benefits when you are eligible to get benefits. In order to get your Social Security card you need to call the office of Social Security in your area. You can get the telephone number of local office by calling Social Security at 1-800-772-1213. You need to present original or certified copies of your records such as birth certificate and other identification information.
Your Social Security Taxes:
As stated earlier your Social Security taxes are used to pay your benefits. You and your employer each pay 7.65% of your gross salary up to $87,000.00. This tax is commonly labeled as FICA (Federal Insurance Contribution Act) that authorizes payroll deduction). The 7.65% includes 1.45% for Medicare. If you are self employed, you pay 15.30% of your taxable income into Social Security up yo the amount of $87,000.00. The 15.30% includes 2.90% for Medicare portion. For the Medicare portion you continue paying even if your income exceeds the amount of $87,000.00.
You may be interested to know how your payroll tax is given back to you as benefits. Social Security benefits coming out of your taxes cover monthly payments to retirees and their families and to widows, widowers and children of workers who have died. This portion accounts for about 85% of the total Social Security taxes. The remaining 15% goes to a trust fund that pays benefits to people with disability and their families. The entire amount of your Medicare tax ( 2.90%) goes to a trust fund that pays for hospital and related care. Medicare is administered by the Centers for Medicare and Medicaid Services formerly known as Health Care Financing Administration. You should also know that your Social Security taxes do not pay for Supplemental Security Income benefits. Those benefits are financed by general revenue funds of the US Treasury.
Eligibility for Social Security Benefits:
In order to get benefits you must have worked and paid taxes into the Social Security system. As you work and pay taxes, you earn Social Security "credits". As per year 2003 figure, you earn one credit for $890.00 in earnings and you can earn up to a maximum of four credits per year. Most people need 40 credits to qualify for Retirement benefits. For Disability benefits and Survivors’ benefits, the yardstick of 40 credits may not be used and benefits can accrue if the number of credits is less than forty.
BENEFITS UNDER SOCIAL SECURITY:
There are a number of benefits under Social Security: Retirement, Disability, Survivors. A brief account of these benefits follows. To know more about these benefits you can call Social Security Office at 1-800-772-1213. Please also note the following helpful points :
1. If you are in poor health and are unable to continue working, you may consider applying for Social Security Disability benefits.
2. If you delay your full retirement age, you should still sign up for Medicare at age 65. In some circumstances, medical insurance (Part B of Medicare) costs more if you delay applying for it.
3. You can continue to work and still get retirement benefits. Earnings in, or after, the month you reach age 70 won’t affect your Social Security benefits. However, before age 70, your benefits will be reduced if your earnings exceed certain limits. For more information about how earnings affect your retirement benefits, you may call Social Security 1-800-772-1213 and ask for a copy of the leaflet, How Work Affects Your Benefits (publication # 05-10069).
4. If you are a United States citizen, you can travel or live in most foreign countries, including India, without affecting your eligibility for Social Security benefits. There are a few countries where Social Security checks cannot be sent. Ask for a copy of the booklet: Your Social Security Payments While You Are Outside the United States (publication # 05-10137).
A. Retirement Benefits:
(For more information ask for publication # 05-10035: Social Security - Retirement Benefits)
As stated earlier, when you work and pay Social Security taxes (normally labeled as FICA), you earn credits. Most people earn the maximum of four credits per year. The number of credits you need to get Retirement Benefits is forty. People born before 1929 need fewer than forty credits. No Retirement benefits can be paid until you have the required number of credits. You can call Social Security at 1-800-772-1213 to apply for benefits or to make an appointment to visit any Social Security office to apply in person. You will need a number of documents such as your Social Security number, your birth certificate, your W-2 forms or self-employment tax return for last year.
How much your Retirement Benefits will be?
Your benefit amount is based on your earnings averaged over most of your working career. Higher lifetime earnings result in higher benefits. Low earnings or no earnings in some years may result in lower benefits than if you had worked steadily. Your benefits are also affected by your age at the time you start receiving benefits. If you start retirement benefits at the age of 62 (the earliest possible retirement age), your benefits will be lower than if you waited until a later age.
The usual retirement age is 65, if you were born before 1938. Social Security calls this "full retirement age", and the benefit amount that is payable is considered the full retirement benefit. Beginning year 2003 due to longer life expectancy the full retirement age has been increasing in gradual steps until it reaches 67. This change affects those born in 1938 and later. If your retirement age is older than 65, you can still take your retirement benefits at age 62, but the reduction in your benefits will be greater than it was in year 2002. The 20% reduction in year 2002 benefits will increase to about 30% at age 62. Reductions in benefits retiring at age 63, 64, 65 and 66 will also be increased to about 25%, 20%, 13.3% and 6.67% respectively.
B. Retirement Benefits for Widows and Widowers:
Widow(er)s can begin receiving benefits at age 60 or age 50 if disabled. If you are receiving such benefits you can switch to your retirement benefits - assuming you are eligible and your retirement rate is higher than your widow(er)’s rate - as early as age 62. In many cases, a widow(er) can begin receiving one benefit at a reduced rate and then switch to the other benefit at an unreduced rate at age 65. The rules vary depending on the situation, so you should talk to a Social Security representative.
RETIREMENT BENEFITS FOR OTHERS THAN THE RETIREE:
There are other Social Security benefits to members of the retiree’s family. Broadly speaking, the retiree’s family may fall into three categories:
Benefits for retiree’s spouse; Benefits for retiree’s children; and Benefits for retiree’s divorced spouse. In addition there are disability benefits.
C. Benefits for Spouse:
A spouse receives one-half of the retired worker’s full benefits unless the spouse begins collecting before age 65. In that case, the amount of the spouse’s benefit is permanently reduced by a percentage based on the number of months before he or she reaches full retirement age. However, if your spouse is taking care of a child who is under age 16 or disabled and receiving Social Security benefits, spouse gets full benefits, regardless of age. If a person is eligible for both his/her own retirement benefits and for benefits as a spouse, Social Security always pays his/her own benefit first.
D. Benefits for Children:
If you are receiving retirement benefits, your children may also receive benefits: Children up to age 18; children 18-19, if they are full-time students, and unmarried, through grade 12; and children over 18, if they are disabled. If you have children eligible for Social Security, each will receive up to one-half of your full benefit.
An Important Note: There is a limit to the amount of money that can be paid to a family. If the total benefits due your spouse and children exceed this limit, their benefits will be reduced proportionately. Your benefit will not be affected.. Consult with a Social Security representative.
E. Benefits for a Divorced Spouse:
A divorced spouse can get benefits on a former husband’s or wife’s Social Security record if the marriage lasted at least 10 years. The divorced spouse must be 62 or older and unmarried. If the spouse has been divorced at least two years, he or she can get benefits, even if the worker is not retired. However, the worker must have enough credits to qualify for benefits and be age 62 or older. The amount of benefits divorced spouse gets has no effect on the amount of benefits a current spouse can get.
F. Social Security Disability Benefits:
What is Disability?
Disability under Social Security is based on your inability to work. You will be considered disable if you are unable to do any kind of work for which you are suited and your disability is expected to last for at least a year or to result in death. Social Security does not pay for partial disability or for short-term disability. The Social Security disability program assumes that working families have access to other resources to provide support during periods of short-term disabilities, including workers’ compensation, insurance, savings and investments. It is designed to provide a continuing income to you and your family when you are unable to do so. Benefits continue as long as you remain disabled, and there are a number of work incentives to ease the transition back to work.
Who is Eligible for Disability Benefits?
You can receive Social Security disability benefits at any age. If you are receiving disability benefits at age 65, (full retirement age in 2002) they become retirement benefits, although the amount remains the same. Certain members of your family may also qualify for benefits: unmarried son or daughter under age 18, or under 19 if in high school full time; unmarried son or daughter, age 18 or older, if he or she is disabled that started before age 22; your spouse who is 62 or older, or any age if he or she is caring for a child of yours who is under 16 or disabled and also receiving checks. Certain family members may qualify for disability benefits if you should die: disabled widow or widower age 50 or older.
In order to qualify for disability benefits, you must have worked long enough and recently enough under Social Security. You earn up to a maximum of four credits per year. The number of credits needed for disability benefits depends on your age when you become disabled. Generally you need 20 credits earned in the last ten years ending with the year you become disabled. However, younger workers may also qualify with fewer credits.
Certain conditions apply and it is advisable to check with the Social Security office, if you or your family members are eligible to apply for benefits.
People with HIV infection or AIDS may also qualify for disability benefits when they are no longer able to work. Ask for : A guide to Social Security and SSI Benefits for People with HIV Infection (publication # 05-10020).
How is Disability Determined?
Once you apply to any Social Security office as soon as you become disabled, the Social Security office will review it to see if you are eligible. Factors considered in reviewing your application include: length of your work; your age; and if you are applying for benefits as a family member, your relationship to the worker. If the Social Security office determines that you are eligible to apply, then the office will send your application to the Disability Determination Services (DDS) office in your state. There a decision will be made as to whether you are disabled under the Social Security law. The DDS uses a very vigorous process: utilizing your medical information, consultation with the medical professionals and medical facilities, your medical history, seeking evidence from different clinics and institutions and host of other factors. Once a decision on your claim is reached, you will receive a written notice from the Social Security Administration. If your claim is approved, the notice will show the amount of your benefit. If it is not approved, the notice will explain why.
Once a decision is made that you are disabled, Social Security disability benefit will begin with the sixth full month from the date your disability began. (Social Security regulations require all applicants to wait five months before benefits start.) If your claim is denied or you disagree with the decision , you may appeal the decision. The Social Security office will help you complete the paperwork. You have 60 days from the time you receive letter from Social Security to file an appeal. You may ask for the publication # 05-10041: The Appeals Process, by calling Social Security office at 1-800-772-1213.
Important Points about Disability Benefits:
The amount of your disability benefit can be affected: Some of the factors affecting your benefits are:
1. If you are also eligible for workers’ compensation or for disability benefits from certain federal, state and local government or Civil Service disability programs.
2. If you become disabled and entitled to a Social Security disability benefit and you also receive a monthly pension based on work not covered by Social Security, your disability benefit payment will be smaller than normal.
3. Some people have to pay federal income taxes on their Social Security benefits, if the total income is high. You may use the IRS publication number 915 for additional information.
4. You will be automatically enrolled in Medicare after you have been getting disability benefits for two years
5. There are a number of special rules that provide cash benefits and Medicare while you attempt to work: these rules are called "work incentives." It is good to know about these rules. You may ask for the publication # 05-10095: Working While Disabled ... How We Can Help.
SUMMARY OF AVERAGE BENEFITS UNDER SOCIAL SECURITY: YEAR 2003
All Retired Workers $ 895.00
Aged Couple, Both Receiving Benefits 1,483.00
Widowed Mother & Two Children 1,838.00
Aged Widow (er) Alone 862.00
Disability Worker, Spouse and
One or More Children 1,395.00
All Disabled Workers 833.00
For specific inquiry, send your question to National Indo-American Association for Senior Citizens (NIAASC) at 7 Roberta Avenue, Farmingville NY 11738. NIAASC is an information, referral and advocacy organization and you can know more about it at its web site: www.niaasc.org