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Social Security Essay, Research Paper
I am focusing on the topic of Life and Health Insurance Provided by Social Security. Social Security benefits provides income continuation in the event of death, disability, or retirement. It also provides medical expense benefits for disabled or retired persons and specified dependents. According to the Social Security Bulletin, in 1994, 42 million people receiving benefits were receiving some type of cash benefit under Social Security. Around 71 percent of the people receiving benefits were retired or dependents of retirees, about 12 percent were disabled workers or dependents, and 17 percent were survivors of former workers. In this paper I will talk about the definition of social security, coverage requirements, eligibility for Benefits and some of the basic Types of Benefits.
There are many different governmental programs designed to provide security for individuals and families. Both public assistance and social insurance programs are organized and undertaken by the government and have the broad social purpose of reducing want destitution. Social insurance is different from public assistance. Social insurance is an insurance program that is compulsory for nearly all Americans, eligibility criteria and benefits are specified by law, and financing is wholly or partially covered by the employer. Unlike public assistance, which is like welfare, employers and employees pay into the social insurance system to earn their rights to benefits. Some examples of social insurance programs include Social Security, which is workers compensation, and unemployment compensation.
Public assistance which is welfare benefits are financed from federal and state funds that come from general revenues and are not based on any contributions that have been made by the recipients or on their behalf. Some examples of public assistance programs are like Aid to Families with Dependent Children and Medicaid, both of them pay benefits based on need. While public assistance programs have a role in providing economic security, they are not insurance programs since the insurance principles of measuring the risk of the insured or spreading the cost of losses among those exposed do not apply. While it is appropriate and necessary to include possible social insurance benefits in individual financial planning in the event of economic loss due to premature death, disability, or retirement. It is not appropriate to include public assistance, one of the purposes of financial planning is to avoid the need for public assistance.
When people talk about Social Security, they are referring to a program created in 1935. This program had the appreviations of OAL standing for Old-Aged Insurance. As more time passed, benefits were added and the program was referred to as Old-Aged and Survivors Insurance or OASI. It was OASDI when disability benefits were added. And when it was the OASDHI, it was because it was the addition of hospital and medical benefits. It is now referred as the Social Security in its publications.(Social Security Handbook)
Social Security cover many different types of people like employees in private industry, most self-employed persons, and members of the armed forces. Social Security taxes must be paid on their wages because coverage is compulsory for well over 90 percent of all workers in the United States. There are some exceptions, for example, railroad workers, who are covered by the Railroad Retirement Act, and federal government employees who were covered by other programs. Before 1984, state and local government s bodies could elect not to cover certain employees not to cover certain employees under Social Security. This option is no longer allowed according to Pritchett, Schmit, Doerpinghaus, and Athearn, there are only some exceptions. Municipal government that were elected before 1984 due have the right to voluntarily join the Social Security Program. Ministers are covered automatically also. Members of religious groups whose beliefs prohibit acceptance of benefits are exempt.
In order to be eligible to receive benefits, you must have insured status. With this status you may be fully insured, currently insured, or disabled insured, depending upon your work history. Most types of Social Security benefits are payable if you are fully insured. If you do not have enough work experience to be fully insured, you may be currently insured, and you would be eligible for some survivor benefits. The amount of work required to become insured is measured in quarters of coverage. According to Pritchett, Schmit, Doerpinghaus, and Athearn, in 1995, an employee earned one quarter of credit for each $630 of earnings, up to a maximum of four quarters each year. You get four quarters of coverage for $2520 , even if you earned this much in only one day. The quarterly measure of earnings is adjusted every year to account for raises in average wages.
If you have forty quarters of coverage, or have a minimum of six quarters of coverage, or if greater, at least as many quarters of coverage as there are years elapsing after 1950 or after you reach the age of 21. For example, A person at age 25 who has six quarters of coverage is fully insured, as when a person who is 40, he needs 19 quarters of coverage to be fully insured. You are currently insuredif you have at least six quarters of coveragein the thirteen- quarter period ending with the quarter of death. Disability insured status is gained by having twenty quarters of coverage in the forty quarters ending when disability begins. If you are under the age of 31 and your blind, less rigorous disability requirements apply.
There are many types of benefits available from Social Security with are abbreviated by OASDHI. First there is old age or retirement. Then there is survivors . Also there is disability and health or Medicare benefits. The insured status of a worker decides if the himself or who in his family is entitled to collect from these benefits.
For retirement income benefits, you have to be a fully insured worker. You are more than eligible to receive most of these benefits. A spouse or a divorced spouse has the right to receive these benefits if is atleast 62 years of age, caring for a at least one child of the retired worker, or a dependent child, grandchild or great-grandchild of the retired worker who is under 18 , a full time students when he is 18 or 19, and disabled which began before he was 22, he is entitled to benefits. Normal retirement age has been 65. A fully insured worker can receive full retirement benefits at 65 reduced benefits at 62. Due to financial pressures according to Pritchet, Schmit, Doerpinghaus, and Athearn, the Social Security system Amendments of 1983 redefined the age of full benefits eligibility. It will be in a later age by the year 2022 to be able to get Social Security benefits.
Survivors benefits protect the surviving dependents of a fully or currently insured deceased worker. A surviving spouse if has a child under the age of 16 can receive monthly benefits to take care of the child. Also the child is disabled under the age of 18, or a full time student attending elementary school he is eligible. Also if the surviving spouse is entitled to monthly income payments if was dependent on the deceased worker and is not married.
In addition to these monthly benefits, a small amount of a death payment of $255 is made upon the death of a worker who is fully or currently insured. It is paid to the spouse living with the worker at the time of death, or a spouse that is entitled otherwise, or children entitled. If there is no children or a spouse, the death benefit is not paid. It is the only benefit that has not raised since the Social Security legislation was passed in 1935 (Pritchett, Schmit, Doerpinghaus, and Athearn.)
A fully insured worker who has a mental condition that prevents any substantial gainful work which is earning $500 or more per month are considered substantial is entitled to disability benefits after a waiting period of five months. This occurs if he or she has been disabled for 12 months and under 65, or has a disability to result in death. Disability benefits may be stopped if the disabled worker refuses to participate in rehabilitation. They may be reduced if disability benefits are received from workers compensation or under federal, state, or local law.( Pritchett, Schmit, Doerpinghaus, and Athearn)
There are many more types of benefits that are still at hand like health or other type of Medicare benefits. There are so many requirements each person has to full fill in order to get some type of Social Security Benefit. These are great benefits that provide income in the event of death, disability, or retirement. This helps a person be dependent the case of an emergency when one is no longer to work anymore and can t have any other form of cash giving. Whether the objective for Social Security is to provide a protection for some people, reform, however, will require agreement by politicians and public on the benefits people are entitled to but what benefits taxpayers are willing to fund. ( Pritchett, Schmit, Doerpinghaus, and Athearn)
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