BECOME WHOLLY VERSED IN SOCIAL SECURITY . . . AND BRIEF LAYOUT OF Such Government Spending Programs

    

    

Social Security Benefits

New York Times business article, “Social Security Benefits Set to Rise 5.9%, Most in Years,” steps up our social security benefits to a boost of 5.9% in the coming year 2022, a scalable size to amass in 40 years.  Rising consumer prices prompted this sudden boost in our cost of living adjustment since 1982.  Certain government programs are indexed under rate of inflation with rising benefits as cost of living goes up. 

 

 

More than 60% of current annual spending takes in the programs such as Medicare, Social Security, and Veterans benefit programs raising taxpayers’ concerns about government control spending.  Clinton administration made marginal cuts in Social Security, Medicare, and Medicaid increasing spending on education, environmental protection, technology, public workers, and jobs training.  Bush administration (‘89-90) made deficit projections which incorporates surplus in the main trust fund of social security system.  Surpluses were the result of boost in social security’s taxes deliberately designed to create a reserve in the system sufficient to meet the payout’s obligations when large numbers of Americans workers began to retire.

 

 

Inter-generational conflict turns out among younger works, baby boomers, and older retirees.  When social security was first passed in 1935, there were 30 American workers to 1 retiree.  Drawing near 3:1 ratio, political movements gained momentum to redistribute more government programs from the elderly to younger works, students, and parents of young children.  Nearly two-thirds of federal budget are spent on “mandatory spending,” such as social security, Medicare, and veteran’s benefits.  “Mandatory spending” is required under existing law reducing Congress’s ability to influence the overall budget without changing the law that authorized the spending.  Their expenditures impact our private economy:     short or long-term.

 

 

What does social security cover?  Social Security aka OASDI (old age, survivor’s, disability insurance) are fixed by our earnings.  Social Security Administration is accountable for administrative benefits and collecting premiums.    This federal program supplies benefits for death benefits, retirement, and disability.

 

Social Security provides several death benefits:

 

1.       Lump Sum Death Benefit.  A one-time payment helps deceased survivors pay for funeral costs.  Payment is made to the surviving spouse who was living with the deceased.  If no surviving spouse is present, benefits are payable to the children of the deceased.

 

2.      Surviving Spouse’s Benefit.  The eligible surviving spouse of a fully insured worker is allowed at the spouse’s normal retirement age to a monthly income equal to the workers primary insurance amount (PIA) at death.  If the spouse wishes to get in benefits early, she can elect reduced benefits starting at age 60.

 

a.        If surviving spouse has a child younger than 16 years (22 if disabled) and the child was dependent of the deceased worker, an additional benefit of 75% of the worker’s PIA is payable regardless of spouse’s age until the child reaches 16.  Disabled children will allow the surviving spouse to this benefit indefinitely as long as the child remains disabled under care of the surviving spouse.

             b.      Blackout period.  No period in which social security benefits are payable to the         surviving spouse of the deceased fully insured worker.  This lays between the time             youngest child of worker’s spouse is 16 and the spouse’s age is 60.

 

1.       Child’s Benefit.  Children under the age of 18 (under 22 if disabled) whose parent is decased worker get in a benefit that adds up to 75% of the worker’s PIA until the child turns age 18.

2.      Other Death Benefits.  Death benefits may be provided for parents of a deceased child if the child provided at least half of parent’s support.

 

 

Social Security Benefits Terms You Should Know

 

1.       Quarters of coverage.  Unit of coverage credited to worker for each section of the calendar year’s covered wages or self-employed income that equals or exceeds the amount specified for that year by law.

2.      Fully Insured.  Person must be fully insured to qualify for retirement benefits.  A person becomes fully insured by gaining sufficient numbers of quarters of coverage to meet either of the two tests:

a.       Person is fully insured if he has 40 quarters of coverage (10 years covered employment).  He is fully insured for life (even if he no longer reaps covered time in employment).

b.      Person is fully insured if

i.                     he has at least 6 quarters of coverage;

ii.                  he has gained at least as many quarters of coverage as there are years elapsing after 1950 (if later under 21 years of age) and before the year in which he dies, becomes disabled, or reaches or will reach age 62 (whichever comes first).  A person can also become fully insured after retirement age if he acquires quarters of coverage after age 62. 

3.       Currently insured.  He’s gained at least 6 quarters of coverage during the full 13-quarter period ending with calendar quarter in which he

i.)                  He died;  ii.) most recently because entitled to disability benefits; iii.) became entitled to retirement benefits.

a.        6 quarters of coverage need not be consecutive but profited during the 13-quarter period.

     

      i.e.  George reached 21 in 1998 and died in March 2015.  He started to work in covered employment in on November 1, 2012 until his death.  He gained 9 quarters of coverage during that period.  George was insured at death because he had more than 6 quarters of coverage in the 13-calendar period. 

 

            PIA = Worker’s full retirement benefits at his/her retirement age.