Social Security in the United States is a social insurance program funded through a dedicated payroll tax. It is also known as the Old Age, Survivors and Disability Insurance program (OASDI), in reference to its three components. In the calendar year 2004, it paid out almost $500 billion in benefits. The U.S. Social Security program is the largest government program in the world.
In 2005, the possibility of changing the Social Security system became a major political issue; see Social Security debate (United States).
This article concerns the OASDI program, which is administered by the Social Security Administration. Related programs that are not part of the Social Security Administration include TANF (Temporary Aid to Needy Families), Black Lung (Pneumoconiosis) benefits, Medicare, railroad retirement benefits, unemployment insurance, and Veterans' benefits. The Social Security Administration is also responsible for some programs other than OASDI, such as Supplemental Security Income.
The largest component of OASDI is the payment of retirement benefits. Throughout a worker's career, the Social Security Administration keeps track of his or her earnings. The amount of the monthly benefit to which the worker is entitled depends upon that earnings record and upon the age at which the retiree chooses to begin receiving benefits.
Normal Retirement Age
The earliest age at which (reduced) benefits are payable is 62. Full retirement benefits are dependent on a retiree's year of birth. Table from Soc Sec Admin Those born before 1938 have a normal retirement age of 65. Normal retirement age increases two months for each ensuing year of birth until the 1943 year of birth when it stays at age 66 years and zero months until the 1954 year of birth. Starting in 1955, the normal retirement age increases again by two months for each year ending in the 1960 year of birth when normal retirement age stops at age 67 for all born thereafter.
The normal retirement age for spousal retirement benefits shifts the year of birth schedule upward by two years so that those spouses born before 1940 have age 65 as their normal retirement age.
Any current spouse is eligible and divorced or former spouses are eligible generally if the marriage lasts for at least 10 years. While not recognizing polygamy it is arithmetically possible for one man to generate spousal benefits for all four of his wives; but each in succession after exactly ten-year intervals. The spousal retirement benefit is half the PIA of the worker; this is different from the spousal survivor benefit, which is the full PIA. The benefit is the product of the PIA times one-half times the early retirement factor if the spouse is younger than normal retirement age. There is no gross up for starting spousal benefits after normal retirement age. This can occur if there is a married couple where the younger person (say man) is the only worker and is more than 5 years younger. Only after the worker applies for retirement benefits may the non-working spouse apply for spousal retirement benefits. In this case, when the worker attains age 65, the non-working spouse would be at least age 70.
A worker who has worked long enough (based on quarters of coverage within the recent past) and recently enough to be covered can receive benefits upon becoming totally disabled, regardless of his or her age. The eligibility formula requires a certain number of credits (based on earnings) to have been earned overall, and a certain number within the ten years preceding the disability, but with more lenient provisions for younger workers who become disabled before having had a chance to compile a long earnings history.
The worker must be unable to continue in his or her previous job and unable to adjust to other work, taking into account the worker's age, education and work experience; furthermore, the disability must be long term lasting 12 months, expected to last 12 months, resulting in death, or expected to result in death. As with the retirement benefit, the amount of the disability benefit payable depends on the worker's age and record of covered earnings.
Supplemental Security Income (SSI) uses the same disability criteria as the insured social security disability program, but SSI is not based upon insurance coverage. Instead, a system of means-testing is used to determine if the claimants' income and net worth fall below certain income and asset thresholds after the claimants establish disability.
Severely disabled children may qualify for SSI. Standards for child disability are different from those for adults. In addition, non-disabled minor children of disabled or deceased workers may receive dependent or survivor's benefits. A program called Disabled Adult Child Insurance Benefits (DACIB) provides benefits for the disabled adult children of disabled or deceased workers.
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