Social security benefits are retirement benefits. When a person is employed, they pay Old Age, Disability and Survivors Insurance (OASDI) taxes, or Social Security taxes. The federal government collects these taxes. The taxes are placed into a fund. The government takes tax money from this fund to pay social security benefits.
The government pays these benefits to people who have retired. The government also pays benefits to disabled individuals, survivors of deceased employees, and dependents (i.e., children, spouses).
How is Social Security Different from Other Retirement Benefits?
Social security benefits are paid on a different basis than other retirement benefits such as pension benefits. In pension benefit plans, the retirement money is funded in advance by the employer. The money in a pension plan accumulates as an employee works additional years. When a worker retires, the money is therefore “already there” to pay to that worker.
In contrast, the social security benefit program is a “pay-as-you-go” program. This means that today’s employees are paying taxes into the program, and these taxes are taken out of the program and paid as social security benefits. Benefits for workers who retire now, are “paid for” by the workers of today.
Who is Eligible for Social Security Benefits Payments?
Eligibility for social security benefits depends upon several factors. These factors include how long a person has worked, lifetime earnings, and a person’s age:
- Length of Work:While a person is working and paying taxes for social security, the person earns credits. In order to receive benefits, a person must receive a certain amount of credits. 4 credits equal roughly one year of work. Individuals who were born in 1929 or after must earn at least 40 credits to be eligible for benefits;
- Lifetime Earnings: The amount of earnings you accumulate during your career determine the amount of the monthly benefit. Higher career earnings result in a higher monthly benefit rate; and
- Age: A worker can receive social security benefits when the worker reaches 62 years of age. However, such workers will not receive the full amount of benefits. Rather, they will receive partial, or reduced benefits. Full benefits are paid only when an individual reaches the full retirement age. Currently, the full retirement age of individuals who were born in 1960 or after is 67 years of age.
If an individual is receiving social security retirement benefits, family members may also be entitled to benefits. Eligible family members can include:
- Spouses aged 62 or older;
- Former spouses, if their age is 62 or older;
- Children up to the age of 18;
- Children up to the age of 19, if those children are full-time students yet to graduate high school; and
- Disabled children.
Are Surviving Spouses and Non-Income Earning Spouses Entitled to Benefits?
Under certain circumstances, widowers and widows, and spouses who have earned little to no income, can receive benefits. These circumstance are as follows:
- Widows and widowers: Widows and widowers aged 60 years and older, who have been married for nine months are more, are entitled to what is called a “widow’s benefit” upon death of their spouse. The widow’s benefit “bumps up” the widow’s benefit rate so it matches that of the deceased spouse.
- For example, if a widow’s deceased spouse was receiving $900 a month and the widow is receiving $500, the widow can receive an additional $400, to bring the total to what the deceased spouse was earning; and
- Spouses Who Have Low Earnings or Have Never Earned Employment Income: A low-earning spouse, or spouse who has no earnings, is entitled to receive up to one-half, or 50%, of their spouse’s full benefit amount.
What Benefits are Disabled Individuals Entitled To?
Individuals may be entitled to benefits on the basis of being disabled. To be eligible for such benefits, a worker must have a mental or physical impairment likely to prevent them from performing work that is considered substantial. Workers whose condition is likely to result in death are eligible for disability benefits.
Disabled individuals can receive benefits under one of two two social security programs. The program known as Social Security Disability Insurance (SSDI) pays benefits to disabled individuals and certain family members. To receive payment, the disabled person must be under age 65, have worked for a sufficient amount of time, and have paid social security taxes.
A separate program called the Supplemental Security Income Program (SSI) administers benefits to disabled adults and children with limited financial means. To be eligible for SSI disability benefits, the following requirements must be met:
- The individual must be 65 or older, OR be disabled or blind;
- The individual must have limited resources and limited earnings;
- The individual must reside in the U.S.; and
- The individual must be a United States national or citizen, or an alien who meets certain eligibility requirements.
Do I Need a Lawyer for Help with Social Security Benefits?
To ensure you receive benefits to which you are entitled, you should contact a social security attorney. An experienced government attorney near you can counsel you on what benefits you are entitled to, and how you can apply for them and receive them.