Social Security (United States)
In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program. The original Social Security Act was signed into law by President Franklin Roosevelt in 1935, and the current version of the Act, as amended,encompasses several social welfare and social insurance programs.
Social Security is funded primarily through payroll taxes called Federal Insurance Contributions Act tax (FICA) or Self Employed Contributions Act Tax (SECA). Tax deposits are collected by the Internal Revenue Service (IRS) and are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, the two Social Security Trust Funds.[4] With a few exceptions, all salaried income, up to an amount specifically determined by law (see tax rate table below), is subject to the Social Security payroll tax. All income over said amount is not taxed. In 2017, the maximum amount of taxable earnings was $127,200.
With few exceptions, all legal residents working in the United States now have an individual Social Security number. Indeed, nearly all working (and many non-working) residents since Social Security's 1935 inception have had a Social Security number because it is required to do a wide range of things, e.g. paying the IRS and getting a job.
In 2015, Social Security expenditures totaled $750.5 billion for OASDI and $146.6 billion for DI. Income derived from Social Security is currently estimated to have reduced the poverty rate for Americans age 65 or older from about 40% to below 10% The Social Security Administration is headquartered in Woodlawn, Maryland, just west of Baltimore.
Social Security Timeline
1935 The 37-page Social Security Act signed August 14 by President Franklin D. Roosevelt. Retirement benefits only to worker, welfare benefits started
1937 First Social Security Cards issued by post offices, over 20 million issued in first year
1937 Ernest Ackerman receives first lump-sum payout (of 17 cents) in January.
1939 Two new categories of beneficiaries added: spouse and minor children of a retired worker
1940 First monthly benefit check issued to Ida May Fuller for $22.54
1950 Benefits increased and cost of living adjustments (COLAs) made at irregular intervals –77% COLA in 1950
1954 Disability program added to Social Security
1960 Flemming v. Nestor. Landmark U.S. Supreme Court ruling that gave Congress the power to amend and revise the schedule of benefits. The Court also ruled that recipients have no contractual right to receive payments.
1961 Early retirement age lowered to age 62 at reduced benefits
1965 Medicare health care benefits added to Social security—20 million joined in three years
1966 Medicare tax of 0.7% added to pay for increased Medicare expenses
1972 Supplemental Security Income (SSI) program federalized and assigned to Social Security Administration
1975 Automatic cost of living adjustments (COLAs) mandated
1977 COLA adjustments brought back to "sustainable" levels
1980 Amendments are made in disability program to help solve some problems of fraud
1983 Taxation of Social Security benefits introduced, new federal hires required to be under Social Security, retirement age increased for younger workers to 66 and 67 years
1984 Congress passed the Disability Benefits Reform Act modifying several aspects of the disability program
1996, Drug addiction or alcoholism disability benefits could no longer be eligible for disability benefits. The Earnings limit doubled exemption amount for retired Social Security beneficiaries. Terminated SSI eligibility for most non-citizens
1997 The law requires the establishment of federal standards for state-issued birth certificates and requires SSA to develop a prototype counterfeit-resistant Social Security card—still being worked on.
1997 Temporary Assistance for Needy Families, (TANF), replaces Aid to Families with Dependent Children (AFDC) program placed under SSA
1997 State Children's Health Insurance Program for low income citizens--(SCHIP) added to Social Security Administration
2003 Voluntary drug benefits with supplemental Medicare insurance payments from recipients added
2009 No Social Security Benefits for Prisoners Act of 2009 signed.
A limited form of the Social Security program began, during President Franklin D. Roosevelt's first term, as a measure to implement "social insurance" during the Great Depression of the 1930s, when poverty rates among senior citizens exceeded 50 percent.The Act was an attempt to limit unforeseen and unprepared for dangers in the modern life, including old age, disability, poverty, unemployment, and the burdens of widow(er)s with and without children.
Benefits:
The largest component of OASDI is the payment of retirement benefits. These retirement benefits are a form of social insurance that is heavily biased toward lower paid workers to make sure they do not have to retire in relative poverty. With few exceptions, throughout a worker's career, the Social Security Administration and the Internal Revenue Service (IRS) keeps track of his or her earnings and requires Federal Insurance Contribution Act, FICA or Self Employed Contribution Act, SECA, taxes to be paid on the earnings. The OASI accounts plus trust funds are the only Social Security funding source that brings in more than it sends out.
Social Security is funded primarily through payroll taxes called Federal Insurance Contributions Act tax (FICA) or Self Employed Contributions Act Tax (SECA). Tax deposits are collected by the Internal Revenue Service (IRS) and are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, the two Social Security Trust Funds.[4] With a few exceptions, all salaried income, up to an amount specifically determined by law (see tax rate table below), is subject to the Social Security payroll tax. All income over said amount is not taxed. In 2017, the maximum amount of taxable earnings was $127,200.
With few exceptions, all legal residents working in the United States now have an individual Social Security number. Indeed, nearly all working (and many non-working) residents since Social Security's 1935 inception have had a Social Security number because it is required to do a wide range of things, e.g. paying the IRS and getting a job.
In 2015, Social Security expenditures totaled $750.5 billion for OASDI and $146.6 billion for DI. Income derived from Social Security is currently estimated to have reduced the poverty rate for Americans age 65 or older from about 40% to below 10% The Social Security Administration is headquartered in Woodlawn, Maryland, just west of Baltimore.
Social Security Timeline
1935 The 37-page Social Security Act signed August 14 by President Franklin D. Roosevelt. Retirement benefits only to worker, welfare benefits started
1937 First Social Security Cards issued by post offices, over 20 million issued in first year
1937 Ernest Ackerman receives first lump-sum payout (of 17 cents) in January.
1939 Two new categories of beneficiaries added: spouse and minor children of a retired worker
1940 First monthly benefit check issued to Ida May Fuller for $22.54
1950 Benefits increased and cost of living adjustments (COLAs) made at irregular intervals –77% COLA in 1950
1954 Disability program added to Social Security
1960 Flemming v. Nestor. Landmark U.S. Supreme Court ruling that gave Congress the power to amend and revise the schedule of benefits. The Court also ruled that recipients have no contractual right to receive payments.
1961 Early retirement age lowered to age 62 at reduced benefits
1965 Medicare health care benefits added to Social security—20 million joined in three years
1966 Medicare tax of 0.7% added to pay for increased Medicare expenses
1972 Supplemental Security Income (SSI) program federalized and assigned to Social Security Administration
1975 Automatic cost of living adjustments (COLAs) mandated
1977 COLA adjustments brought back to "sustainable" levels
1980 Amendments are made in disability program to help solve some problems of fraud
1983 Taxation of Social Security benefits introduced, new federal hires required to be under Social Security, retirement age increased for younger workers to 66 and 67 years
1984 Congress passed the Disability Benefits Reform Act modifying several aspects of the disability program
1996, Drug addiction or alcoholism disability benefits could no longer be eligible for disability benefits. The Earnings limit doubled exemption amount for retired Social Security beneficiaries. Terminated SSI eligibility for most non-citizens
1997 The law requires the establishment of federal standards for state-issued birth certificates and requires SSA to develop a prototype counterfeit-resistant Social Security card—still being worked on.
1997 Temporary Assistance for Needy Families, (TANF), replaces Aid to Families with Dependent Children (AFDC) program placed under SSA
1997 State Children's Health Insurance Program for low income citizens--(SCHIP) added to Social Security Administration
2003 Voluntary drug benefits with supplemental Medicare insurance payments from recipients added
2009 No Social Security Benefits for Prisoners Act of 2009 signed.
A limited form of the Social Security program began, during President Franklin D. Roosevelt's first term, as a measure to implement "social insurance" during the Great Depression of the 1930s, when poverty rates among senior citizens exceeded 50 percent.The Act was an attempt to limit unforeseen and unprepared for dangers in the modern life, including old age, disability, poverty, unemployment, and the burdens of widow(er)s with and without children.
Opponents, however, decried the proposal as socialism. In a Senate Finance Committee hearing, Senator Thomas Gore (D-OK) asked Secretary of Labor Frances Perkins, "Isn't this socialism?" She said that it was not, but he continued, "Isn't this a teeny-weeny bit of socialism?"
The provisions of Social Security have been changing since the 1930s, shifting in response to economic worries as well as coverage for the poor, dependent children, spouses, survivors and the disabled. By 1950, debates moved away from which occupational groups should be included to get enough taxpayers to fund Social Security to how to provide more benefits.Changes in Social Security have reflected a balance between promoting "equality" and efforts to provide "adequate" and affordable protection for low wage workers.
Benefits:
The largest component of OASDI is the payment of retirement benefits. These retirement benefits are a form of social insurance that is heavily biased toward lower paid workers to make sure they do not have to retire in relative poverty. With few exceptions, throughout a worker's career, the Social Security Administration and the Internal Revenue Service (IRS) keeps track of his or her earnings and requires Federal Insurance Contribution Act, FICA or Self Employed Contribution Act, SECA, taxes to be paid on the earnings. The OASI accounts plus trust funds are the only Social Security funding source that brings in more than it sends out.
Social Security revenues exceeded expenditures, between 1983 and 2009.
The disability insurance (DI) taxes of 1.4% are included in the OASDI rate of 6.2% for workers and employers or 12.4% for the self-employed. Outgo of $140.3 billion while having income of only $109.1 billion means the disability trust fund is rapidly being depleted and may require either revisions on what "disabilities" are included/allowed/defined as, fraud minimization or tax increases.
The Medicare hospital insurance, HI, (Part A: Hospital Insurance, inpatient care, skilled nursing facility care, home health care, and hospice care) expenditure rate of $266.8 billion in 2012 while bringing in only $243.0 billion means that the medicare HI trust funds are being seriously depleted and increased taxes or reduced coverage will be required. The additional retirees expected under the "baby boom bulge" will hasten this trust fund depletion. Medicare expenses, tied to medical costs growth rates, have traditionally increased much faster than GDP growth rates.
The Supplementary Medical Insurance, SMI, (otherwise known as Medicare Part B & D) expenditure rate of $307.4 billion in 2012 while bringing in only $293.9 billion means that the Supplementary Medical Insurance trust funds are also being seriously depleted and increased tax rates or reduced coverage will be required. The additional retirees expected under the "baby boom bulge" will hasten this trust fund depletion as well as legislation to end the Medicare Part D medical prescription drug funding "donut hole" are all tied to medical costs growth rates, which have traditionally increased much faster than GDP growth rates.
For workers the Social Security tax rate is 6.2% on income under $127,200 through the end of 2017.The worker Medicare tax rate is 1.45% of all income—employers pay another 1.45%. Employers pay 6.2% up to the wage ceiling and the Medicare tax of 1.45 percent on all income. Workers defined as "self employed" pay 12.4% on income under $113,700 and a 2.9% Medicare tax on all income.
The disability insurance (DI) taxes of 1.4% are included in the OASDI rate of 6.2% for workers and employers or 12.4% for the self-employed. Outgo of $140.3 billion while having income of only $109.1 billion means the disability trust fund is rapidly being depleted and may require either revisions on what "disabilities" are included/allowed/defined as, fraud minimization or tax increases.
The Medicare hospital insurance, HI, (Part A: Hospital Insurance, inpatient care, skilled nursing facility care, home health care, and hospice care) expenditure rate of $266.8 billion in 2012 while bringing in only $243.0 billion means that the medicare HI trust funds are being seriously depleted and increased taxes or reduced coverage will be required. The additional retirees expected under the "baby boom bulge" will hasten this trust fund depletion. Medicare expenses, tied to medical costs growth rates, have traditionally increased much faster than GDP growth rates.
The Supplementary Medical Insurance, SMI, (otherwise known as Medicare Part B & D) expenditure rate of $307.4 billion in 2012 while bringing in only $293.9 billion means that the Supplementary Medical Insurance trust funds are also being seriously depleted and increased tax rates or reduced coverage will be required. The additional retirees expected under the "baby boom bulge" will hasten this trust fund depletion as well as legislation to end the Medicare Part D medical prescription drug funding "donut hole" are all tied to medical costs growth rates, which have traditionally increased much faster than GDP growth rates.
For workers the Social Security tax rate is 6.2% on income under $127,200 through the end of 2017.The worker Medicare tax rate is 1.45% of all income—employers pay another 1.45%. Employers pay 6.2% up to the wage ceiling and the Medicare tax of 1.45 percent on all income. Workers defined as "self employed" pay 12.4% on income under $113,700 and a 2.9% Medicare tax on all income.
The amount of the monthly Social Security benefit to which a worker is entitled depends upon the earnings record they have paid FICA or SECA taxes on and upon the age at which the retiree chooses to begin receiving benefits.
Comments
Post a Comment