Social Security

Supplemental Security Income (SSI) is a United States government program that provides stipends to low-income people who are either aged 65 or older, blind, or disabled.Although administered by the Social Security Administration, SSI is funded from the U.S. Treasury general funds,not the Social Security trust fund. SSI was created in 1974 to replace federal-state adult assistance programs that served the same purpose. The restructuring of these programs was intended to standardize the eligibility requirements and level of benefits.The new federal program was incorporated into Title XVI (Title 16) of the Social Security Act.Today the program provides benefits to approximately eight million Americans. The legislation creating the program was a result of President Richard Nixon's effort to reform the nation's welfare programs. At that time, each state had similar programs under the Aid to the Blind, Aid to the Permanently and Totally Disabled, and Aid to the Elderly. The Nixon ...

Tax on wages and self-employment income Benefits are funded by taxes imposed on wages of employees and self-employed persons. As explained below, in the case of employment, the employer and employee are each responsible for one half of the Social Security tax, with the employee's half being withheld from the employee's pay check. In the case of self-employed persons (i.e., independent contractors), the self-employed person is responsible for the entire amount of Social Security tax. The portion of taxes collected from the employee for Social Security are referred to as "trust fund taxes" and the employer is required to remit them to the government. These taxes take priority over everything, and represent the only debts of a corporation or LLC that can impose personal liability upon its officers or managers. A sole proprietor and officers of a corporation and managers of an LLC can be held personally liable for non-payment of the income tax and social se...

All workers paying FICA (Federal Insurance Contributions Act) and SECA (Self Employed Contributions Act) taxes for forty quarters of credit (QC) or more on a specified minimum income or more are "fully insured" and eligible to retire at age 62 with reduced benefits and higher benefits at full retirement ages, FRA, of 65, 66 or 67 depending on birth date.Retirement benefits depend upon the "adjusted" average wage you or your spouse have earned in the last 35 years and your respective ages. Wages of earlier years are "adjusted" before averaging by multiplying each annual salary by an annual adjusted wage index factor, AWI, for earlier salaries.Adjusted wages for 35 years are always used to compute the 35 year "average" indexed monthly salary. Only wages lower than the "ceiling" income are considered in calculating the adjusted average wage. If the worker has fewer than 35 years of covered earnings these non-contributory years are assign...