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There are five major categories of benefits paid for through your Social Security taxes: retirement, disability, family benefits, survivors and Medicare. A sixth benefit type, SSI benefits, are not financed by Social Security taxes.
Retirement: Social Security retirement benefits are payable at full retirement age (with reduced benefits available as early as age 62) for anyone with enough Social Security credits. The full retirement age is 65 for persons born before 1938. The age gradually rises until it reaches 67 for persons born in 1960 or later. People who delay retirement beyond full retirement age get special credit for each month they don't receive a benefit until they reach age 70. There are certain circumstances under which retirement benefits are not paid.
Disability: If you are disabled, then you may be eligible for Social Security Disability benefits. Benefits can be paid to people at any age who have enough Social Security credits and who have a severe physical or mental impairment that is expected to prevent them from doing "substantial" work for a year or more or who have a condition that is expected to result in death. Generally, earnings of $800 or more per month are considered substantial. You must also be "currently insured." The disability program includes incentives to smooth the transition back into the workforce, including continuation of benefits and health care coverage while a person attempts to work.
Family Benefits: If you are eligible for retirement or disability benefits, other members of your family might receive benefits, too. These include: your spouse if he or she is at least 62 years old or under 62 but caring for a child under age 16; and your children if they are unmarried and under age 18, under 19 but still in school or 18 or older but disabled. If you are divorced, your ex-spouse could be eligible for benefits on your record. A spouse's benefit is generally one-half of the amount that is paid to the covered worker.
Survivors: When you die, certain members or your family may be eligible for benefits if you earned enough Social Security credits while you were working. The family members include: a widow(er) age 60 or older, 50 or older if disabled or any age if caring for a child under age 16; your children if they are unmarried and under age 18, under 19 but still in school or 18 or older but disabled; and your parents if you were their primary means of support. A special one-time payment of $255 may be made to your spouse or minor children when you die. If you are divorced, your ex-spouse could be eligible for a widow(ER)'s benefit on your record.
Medicare: There are two parts to Medicare: hospital insurance (sometimes called Part A) and medical insurance (sometimes called Part B). Generally, people who are over age 65 and getting Social Security automatically qualify for Medicare. So do people who have been getting disability benefits for two years. Others must file an application. Part A is paid for by a portion of the Social Security tax of people still working. It helps pay for inpatient hospital care, skilled nursing care and other services. Part B is paid for by monthly premiums of those who are enrolled and from general revenues. It helps pay for such items as doctors' fees, outpatient hospital visits and other medical services and supplies.
Supplemental Security Income Benefits : SSI makes monthly payments to people who have a low income and few assets. To get SSI, you must be 65 or older or be disabled. Children as well as adults qualify for SSI disability payments. As its name implies, Supplemental Security Income "supplements" your income up to various levels--depending on where you live. Generally, your countable income cannot exceed the federal benefit rate and you cannot have countable resources in excess of $2000 if you are single or $3,000 if you are married.For policy reasons, certain resources are excluded (not counted). In certain circumstances, SSI benefits can be protected by placing assets into a special needs trust.
The federal government pays a basic rate and some states add money to that amount. Check with your local Social Security office for the SSI rates in your state. Generally, people who get SSI also qualify for Medicaid, food stamps and other assistance.
SSI benefits are not paid from Social Security trust funds and are not based on past earnings. Instead, SSI benefits are financed by general tax revenues and assure a minimum monthly income for elderly and disabled persons.
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© 2004, Law Office of David L. McGuffey, LLC
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