Social Security (United States)

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In the United States, Social Security is a term commonly used for the Old Age, Victim and Disability ( OASDI ) program and is managed by the Warranty Administration Social. The original Social Security Act was signed into law by President Franklin Roosevelt in 1935, and the latest version of the Act, as amended, includes several social welfare and social insurance programs.

Social Security is funded primarily through a payroll tax called the Federal Insurance Contributions Act (FICA) or the Self Employed Contributions Act (SECA). The tax collection is collected by the Internal Revenue Service (IRS) and is officially entrusted to the Federal Guarantee Fund for Old Age and the Federal Freedom Guarantee and the Federal Disability Insurance Trust Fund, two Social Security Trust Funds. With a few exceptions, all salaried earnings, up to the amount specified by law (see table of tax rates below), are subject to Social Security payroll taxes. All income more than that amount is not taxed. By 2018, the maximum taxable income amount is $ 128,400.

With few exceptions, all legal residents working in the United States now have an individual Social Security number. Indeed, almost all working population (and many who do not work) since early 1935 from Social Security have had Social Security numbers as required by various businesses.

In 2015, Social Security spending reached $ 750.5 billion for OASDI and $ 146.6 billion for DI. The 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%. By 2018, trustees of the Social Security Guarantee Fund report that the program will become financially bankrupt by 2034.

Video Social Security (United States)

Histori

Social Security Time Line

• 1935 The 37-page Social Security Act was signed August 14 by President Franklin D. Roosevelt. Retirement benefits are only for workers, welfare benefits begin
• 1937 First Social Security Card issued by the post office, more than 20 million issued in the first year
• 1937 Ernest Ackerman receives the first lump-sum payment (at 17 cents) in January.
• 1939 Two new categories of beneficiaries add: spouses and small children of retired workers
• 1940 Checks the first monthly allowance issued for Ida May Fuller for $ 22.54
• 1950 Benefits of increased and cost adjustment of life (COLA) made at irregular intervals - 77% COLA in 1950
• 1954 Disability Program added to Social Security
• 1960 Flemming v. Nestor. The US Supreme Court ruling gives Congress the power to change and revise the benefit schedule. The court also ruled that the recipient has no contractual right to receive payment.
• 1961 Early retirement age is downgraded to age 62 by reducing benefits
• 1965 Medicare health care benefits added to Social security - 20 million joined in three years
• 1966 Medicare tax of 0.7% is added to pay for Medicare fee increase
• 1972 Additional Security Income Program (SSI) put together and assigned to Social Security Administration
• 1975 Automatic live adjustment cost (COLAs) mandated
• The 1977 COLA adjustment was brought back to the "ongoing" level
• 1980 Amendments are made in defect programs to help solve some fraud problems
• 1983 Taxation of Social Security benefits introduced, new federal employees are required to be under Social Security, retirement age increases for younger workers to 66 and 67 years
• The 1984 Congress passed the Disability Revised Benefit Act modifying some aspects of the disabled program
• 1996, Drug addiction allowance or alcohol addiction can no longer qualify for disability benefits. Income Limit doubles the number of exceptions for a Social Security recipient who has retired. SSI terminations are discontinued for most non-citizens
• 1997 The law requires the adoption of federal standards for state-issued birth certificates and requires SSA to develop a prototype of an anti-counterfeit Social Security card - still in progress.
• 1997 Provisional Assistance for Needy Families, (TANF), replacing Family Assistance with the Dependent Children's Program (AFDC) placed under SSA
• The 1997 Children's Health Insurance Program for low-income citizens - (SCHIP) is added to the Social Security Administration
• 2003 Voluntary drug benefits with additional Medicare insurance payments from recipients added
• 2009 There is No Social Security Benefit for Prisoners of the 2009 Act signed.

A restricted form of the Social Security program began, during the first term of President Franklin D. Roosevelt, as a measure to implement "social security" during the Great Depression of the 1930s. This law is an attempt to limit the unexpected and unprepared for dangers in modern life, including old age, disability, poverty, unemployment, and the burden of widows (er) with and without children.

Social Security provisions have changed since the 1930s, shifting in response to economic concerns as well as coverage for poor, dependent children, couples, victims and disabled people. In 1950, the debate moved from where the working group should be included to get enough taxpayers to finance Social Security for how to deliver more benefits. Changes in Social Security reflect a balance between promoting "equality" and efforts to provide "adequate" and affordable protection for low-paid workers.

Maps Social Security (United States)

Main program

Larger and better known programs under the Social Security Administration, SSA , are:

• Federal Old-Age (Pensions), People Congratulations, and Disability Insurance, OASDI
• Temporary Help for Needy Families, TANF
• Health Insurance for Age and Disability, Medicare
• Providing Country Assistance for Medical Assistance Programs for low-income citizens, Medicaid
• State Children's Health Insurance Program for low-income citizens, SCHIP
• Additional Security Income, SSI

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Benefits

Benefits and Earnings 2012

The largest component of OASDI is the payment of pension benefits. The benefit of this pension is a form of social insurance that is highly biased towards lower paid workers to ensure they do not have to retire in relative poverty. With few exceptions, throughout the worker's career, the Social Security Administration and the Internal Revenue Service (IRS) track their earnings and require a Federal Insurance Contribution Act, FICA or Self Employed Contribution Act, SECA, taxes payable on income. OASI accounts plus trust funds are the only source of Social Security funding that brings more than it sends.

Social Security Income exceeds expenditure, between 1983 and 2009.

Tax disability tax (DI) of 1.4% is included in the 6.2% OASDI rate for workers and employers or 12.4% for self-employed. Outgoing $ 140.3 billion while having revenues of just $ 109.1 billion means that defective trust funds are quickly exhausted and may require a good revision to what is "disabled" to be included/licensed/defined as, minimizing fraud or tax increases.

Medicare hospital insurance, HI, (Part A: Hospital insurance, inpatient care, care of skilled care facilities, home health care, and hospital care) expenditures of $ 266.8 billion in 2012 - while earning only $ 243 , 0 billion - means that the HI medicare trust fund is being completely discharged and a tax increase or a reduction in coverage will be required. The expected additional retirees under the "baby boom bulge" will accelerate the decline of this trust fund. Medicare costs, which are related to the growth rate of medical costs, have traditionally increased much faster than GDP growth rates.

Additional Health 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 Insurance Supplementary Guarantee trust fund is also being greatly reduced and tariff increases tax or reduced coverage will be required. Additional retirees expected under the "baby boom bulge" will accelerate the decline of this trust fund as well as legislation to terminate Medicare Part D medical prescription drug funding "donut hole" all tied to the growth rate of medical costs, which traditionally increased faster than growth rates GDP.

For workers, the Social Security tax rate is 6.2% on revenues below $ 127,200 until the end of 2017. Medicare workers tax rate is 1.45% of all revenues - employers pay 1.45% more. Employers pay 6.2% to Medicare wage and tax limits of 1.45 percent for all revenues. Workers who are defined as "self-employed" pay 12.4% of earnings below $ 113,700 and Medicare tax 2.9% on all revenues.

The amount of the monthly Social Security allowance that is entitled to workers depends on the income records they have paid FICA or SECA taxes on and at the age at which the pensioner chooses to begin receiving benefits.

Total benefits paid out, year by year

Amount of Primary Insurance and benefit calculation

To calculate the Average Indexed Monthly salary (AIME) of a person, their closed pay records can be obtained from the Social Security Administration by applying for them and paying fees ranging from $ 15.00 for a one year closed wage to $ 80.00 for 40 years of wages. The adjusted wage index is available at the Social Security Employee's "Benefit Calculation Example" For Workers Stop Working In 2013 ".

To calculate the total benefits of eligible retirees, the average indexed monthly salary (AIME) is then divided into three separate paychecks - each multiplied by a different percentage of benefits. An acceptable allowance (so-called Main Insurance Amount, PIA) is the salary amount in each bracket period that is the percentage of benefits applicable to each group. The percentage of benefits is determined by Congress and thus can easily change in the future. The bendpoints , where brackets change, are adjusted for inflation annually by Social Security. For example, in 2013 the first brackets run from $ 1 to $ 791/month and multiplied by a 90% profit percentage, the second wage group extends from $ 791 to $ 4,781/month multiplied by 32%, the third pay group over $ 4,781/month multiplied by 15%. Higher revenues from ceiling revenues are not covered by FICA and are not considered in the calculation of benefits or in determining the average indexed monthly salary, AIME. At the full retirement age, the projected amount of projected income (PIA) is the sum of these three income groups multiplied by the appropriate percentage of benefits - 90%, 32% and 15%. Unlike income tax brackets, Social Security benefits are highly biased against low-paid workers. Social Security has always been primarily a retirement, disability and spousal insurance policy for low-paid workers and very poor retirement plans for high-paid workers who may have additional retirement plans unless they want to live significantly less after retirement than they earn.

The full pension age couples and divorced spouses (married more than 10 years before the divorce) are entitled to a higher than 50% of their wage earners or benefits. A low-paid worker and full-age pensioner earns less than or equal to $ 791/month with 40 quarter credit credits and at full retirement age (65 if born before 1938, 66 if born from 1938 to 1954 and 67 if born after year 1960) can retire with 135% of the indexed average salary. A full-time retired worker and his fully retired age couple make a ceiling income or more will be eligible for 43% of FICA's ceiling salary (29% if single) and even less if it makes more than a ceiling income.

During the course of the work, low-paid workers are eligible to obtain an Income Tax Credit (FICA refund) and federal child credit and may pay little or no FICA tax or Income Tax. According to the calculations of the Congressional Budget Office (CBO), the lowest income quintiles (0-20%) and the second quintile (21-40%) of households in the US pay average income taxes of -9.3% and -2.6% Social Security tax of 8.3% and 7.9% respectively. By CBO calculations, household income in the first quintile and the second quintile has the average Federal Tax Tariff on average of 1.0% and 3.8% respectively. Higher income retirees must pay income taxes on 85% of their Social Security benefits and 100% of all other retirement benefits they may have.

All workers who pay FICA and SECA taxes for forty quarters of credit (QC) or more than a certain minimum income are "fully insured" and eligible for retirement at age 62 with reduced benefits. In general, the Social Security Administration tries to limit the projected lifetime benefits to the same amount of retirement income that the intended recipient receives if the pension is fully retired. If the recipient retires early, he or she will withdraw the lower Social Security benefits for a longer and prospective life span after retirement. The basic correction of benefits is the age of 62 pensioners can only draw 75% of what they will withdraw at full retirement age with a higher percentage at different ages over 62 and less than the full retirement age.

Similar calculations based on the average career-adjusted earnings and age of the recipient determine the benefits of disability and survival. Federal, state and local employees who have chosen (when they can) DO NOT pay FICA taxes are eligible to reduce FICA benefits and full Medicare coverage if they have more than forty eligible Social Security jobs. To minimize Social Security payments for those who have not contributed to FICA for 35 years and are eligible for federal, state and local benefits, which are usually more generous, Congress passes the Allowance for the Elimination of the Lost Wind, WEP. WEP provisions will not remove all Social Security or Medicare requirements if the worker has 40 quarters of eligible earnings, but calculates the benefit payment by reducing the 90% multiplier in the first pay group by 40-85% depending on age, etc. WEP provision rarely causes difficulties as most affected people are quite wealthy because by definition they also receive government pensions from unenclosed jobs.

For some cases where workers with very low incomes during long service are too low to receive full pension credits and recipients will receive very small Social Security pension benefits, "special minimum benefits" (PIA minimum special) provide a "minimum" of $ 804 per month in Social Security benefits in 2013. To qualify for the recipients together with helpers and survivors they must have very low assets and are not eligible for the benefits of other pension systems. About 75,000 people in 2013 receive this benefit.

One's benefits are eligible for potentially so complex that potential retirees should consult with the Social Security Administration directly for advice. Many questions are addressed and at least partially answered on many online publications and online calculators.

Estimated benefits online

On July 22, 2008, the Social Security Administration introduced a new online benefit estimator. A worker who has sufficient Social Security credits to qualify for benefits, but who currently does not receive benefits on his or her own Social Security record and who is not a Medicare recipient, can get an estimated benefit of the pension to be given, due to different assumptions about the current age pension. This process is done by opening a secure online account called My Social Security. For retirees who have non FICA or SECA tax wages, regulations are complicated and may require additional assistance.

Normal retirement age

The earliest age at which (deducted) benefits are paid is 62. Full pension benefits depend on the year of the birth of a pensioner.

This table was copied in November 2011 from the Social Security Administration website cited above and referenced in footnotes. There are different rules for widows and widowers. Also from the site, come the following two notes: Notes: 1. People born on January 1 of each year should refer to the normal retirement age for the previous year. 2. For the purpose of determining the reduction of benefits for early retirement, widows and widowers whose rights are based on reaching the age of 60 should add 2 years to the year of birth shown in the table.

Those born before 1938 had a normal retirement age of 65. Normal retirement age increased two months for each subsequent year of birth until 1943, when it reached 66 and remained at 66 to 1955. After that normal retirement age increased again two months for each year until 1960 , when the normal retirement age is 67 years and remains 67 for all individuals born thereafter.

A worker who starts an allowance before the normal retirement age has benefits reduced by the number of months before the normal retirement age, they begin to benefit. This reduction is 5/9 from 1% for every month up to 36 and then 5/12 from 1% for each additional month. This formula provides 80% benefit at age 62 for a worker with normal retirement age of 65, 75% benefit at age 62 for workers with normal retirement age 66, and 70% benefit at age 62 for workers with normal retirement age 67. Great Recession has resulting in a long-term increase in unemployment and an increase in workers taking early retirement.

A worker who postpones the benefits of retirement after a normal retirement age earns a delayed pension credit that increases their allowance until they reach age 70. This credit is also applied to their widow (er) benefit. Child and partner benefits are not affected by this credit.

Normal retirement age for allowances (widows) shifts the year schedule of births to above for two years, so widows born before 1940 have age 65 years as their normal retirement age.

Benefits of spouse and government pensions

Couples retirement benefits are half PIA the amount of benefits from their spouse or their own advantage, whichever is higher, if they both retire at retirement age "normal". Only after a working partner applies for a pension benefit, the unemployed partner applies to the spouse's pension allowance. The benefits of spouses are times PIA "early retirement factors" if the couple is younger than the "normal" retirement age. The early retirement factor is 50% minus 25/36 from 1% per month for the first 36 months and 5/12 of 1% for each additional month earlier than the "normal" full retirement date. This typically works between 50% and 32.5% of the major employee PIA benefits. There is no increase to initiate the benefits of spouses after normal retirement age. This can happen if there are married couples where younger people are the only workers and more than 5 years younger. Every couple is currently eligible, and a divorced or ex-spouse is entitled to a marriage allowance if the marriage lasts for at least 10 years. It is possible arithmetically for one worker to produce a spousal benefit for up to five possible couples, each of which must be consecutive after a proper divorce for each after a marriage that lasts at least ten years each.

The spousal survivor benefit is the full PIA benefit of the working partner (minus if the deceased benefits are reduced) or their own advantage, whichever is higher.

There is a Government Social Security pension guarantee which will reduce or eliminate the benefit of a spouse (or ex-spouse) or widow (er) if the spouse or widow (er) also accepts a federal (state, federal, or local) government which does not require Social Security tax payment. The basic "rule" is that Social Security benefits will be reduced by 2/3 of non-FICA government spouse or pension employees. If a pension from a government (non-FICA paying) partner or widow (er) exceeds 150% of the normal "husbands" or widow (er) profits, then the spouse's benefits will be waived. For example, a normal "husbands" gain or a normal (er) width of $ 1,000/month will be reduced to $ 0.00 if the spouse or widow (er) has withdrawn a government pension subject to a non-FICA tax of $ 1,500/month or more per month. Pensions that are not based on income do not reduce the benefits or benefits of the widow (widow).

Part of the Freedom of Information Toward a Senior Worker , in 2000, allowed workers to earn an unearned income without compensation in the year after they reached full retirement. It also allows spouses and children of a worker who has reached his normal full retirement age to receive benefits under certain circumstances while he does not. Full retirement age workers should have begun receiving allowances, to allow the spouse/children gain beginnings, and then suspend their own allowances to resume postponement of benefits in return for an increase in allowances (5.5-8.0% increase/year) to age 70. Thus a worker can delay retirement until the age of seventy years without affecting the spekal or child support.

Pending benefits

If a worker delays receiving Social Security pension benefits until after they reach the full retirement age, there is a Social Security allowance of a certain percentage - depending on the date of birth. After the age of 70, there is no longer an increase in allowable retirement allowance. Social Security uses the "average" survival rate in your full retirement age to prioritize the increase in the number of benefit increases so that the total benefits are approximately the same each time you retire. Women can benefit more than men from this increased delayed benefit because the "average" survival rate is based on men and women and women live about three years longer than men. Another consideration is that workers only have a limited number of years of "good" health remaining after they reach the full retirement age and unless they enjoy their work, they may miss the opportunity to do something they can enjoy while they are still relatively healthy.

Benefits while continuing work

Due to changing needs or personal preferences, one can return to work after retirement. In this case, it is possible to get Social Security benefits and benefits and work at the same time. A worker who has a full retirement age or an older can (with spouse) keep all the benefits, after taxes, regardless of income. But, if the worker or worker is younger than the full retirement age and receives benefits and gets "too much", the benefits will decrease. If working under full retirement age throughout the year and receiving benefits, Social Security deducts $ 1 from employee benefit payments for every $ 2 earned above the $ 15,120 (2013) annual limit. Reduction stops when benefits have been reduced to zero and workers will earn another year of income and age credits, slightly increasing future benefits when retiring. For example, if you receive an allowance of $ 1,230/month (average allowance paid) or $ 14,760 per year and earn $ 29,520/year above the $ 15,120 ($ 44,640/year) limit, you will lose all ($ 14,760) of your profits. If you make $ 1,000 more than $ 15,200/year, you will "only lose" $ 500 in benefits. You will not benefit for months you work until a $ 1 deduction for $ 2 income "squeeze" is satisfied. Your first social security check will be delayed for several months - the first check may be just a fraction of the "full" amount. Profit reduction turns in your year to full retirement age and still works - Social Security only cuts $ 1 in benefits for every $ 3 you generate above $ 40,080 in 2013 for that year and has no deductions thereafter. Limit revenues change (maybe for inflation) from year to year.

Widow (er)

If a worker covered by Social Security dies, a surviving spouse may benefit from the survivors. In some cases, victim benefits are available even to a divorced spouse. A father or mother with small children or disabled in her care may receive an actuarial actuarial benefit. The earliest age for non-disabled benefits is age 60. The benefits are the same as that of basic employee retirement (PIA) (minus if the deceased person receives a reduced allowance) for a spouse who is in, or older than, normal retirement age. If a surviving spouse starts to benefit before the normal retirement age, there is an actuarial reduction. If workers get delayed pension credits with waiting to start benefits after their normal retirement age, the surviving spouse will have the credit applied for their benefit.

Children allowance

Children of retired, disabled or deceased workers receive benefits as "dependent" or "safe" if they are under 18 years of age, or during primary or secondary school attendance up to the age of 19 years, 2 months; or are over 18 years old and disabled before the age of 22 years.

In Astrue v. Capato (2012), the Supreme Court unanimously declares that children conceived after the death of a parent (by in-vitro fertilization procedure) are not entitled to Social Security Survivors' benefits if the law of the country in which the wishes of the parents are signed do not provide such benefits.

Disabled

A worker who has worked long enough and fairly recently (based on "amount of coverage" in the past) to be covered can receive a disability benefit. This benefit begins after five months of disability, regardless of age. The eligibility formula requires a certain amount of credits (based on income) earned, and a specified amount in ten years immediately before disability, but with a softer provision for young workers who become disabled before having the opportunity to compile a long income history.

Workers must be unable to continue their previous work and can not adjust to other jobs, with age, education, and work experience taken into account; Furthermore, disability must be long-term, lasting 12 months, estimated up to the last 12 months, resulting in death, or expected to result in death. As with retirement benefits, the amount of disability benefit benefit depends on the age of the worker and the closed income record.

Additional Income Security (SSI) uses the same disability criteria as an insured social security program, but SSI is not based on insurance coverage. Instead, a facility-testing system is used to determine whether the claimant's income and wealth fall below a certain asset's revenue and threshold.

Children with severe disabilities may be eligible for SSI. Standards for childhood disabilities differ from adults.

The Disability Order in the Social Security Administration has created the largest administrative court system in the United States. Depending on the country of residence, the plaintiff whose initial application for profits is denied can request review or trial before an Administrative Law Judge (ALJ) . Hearing such an opinion sometimes involves the participation of an independent vocational (VE) or medical expert (ME), as summoned by ALJ.

The review involves re-examination of the evidence and, in some cases, an opportunity for a hearing before a disability assistant (non-lawyer). The court officer then issued a decision in writing, justifying the findings. If the plaintiff is rejected at the reconsideration stage, (s) he may request a hearing before the Administrative Judge. In some states, SSA has implemented a pilot program that eliminates the review step and allows the plaintiff to appeal the initial rejection directly to the Administrative Judge.

As the number of applications for Social Security defects is enormous (about 650,000 applications per year), the number of checks requested by complainants often exceeds the capacity of the Administrative Judge. The number of hearings requested and the availability of Administrative Judges vary geographically throughout the United States. In some areas of the country, it is possible for a complainant to conduct an examination with an Administrative Judge within 90 days of his request. In other areas, waiting time of 18 months is not uncommon.

After the trial, the Judge of Administrative Law (ALJ) issued a written decision. The decision could be Fully Beneficial (ALJ found the plaintiff disabled on the date he alleged in the application until now), Partial Profit (ALJ found the plaintiffs disabled at some point, but not since alleged in the application; OR ALJ finds that the claimant has been disabled but has recovered), or Unprofitable (ALJ found that the plaintiff is not disabled at all). The applicant may appeal the decision to the Social Security Appeals Board, which is in Virginia. The Board of Appeal does not hold a hearing; it received a written brief. The response time of the Appeals Board can range from 12 weeks to over 3 years.

If the plaintiff does not agree with the decision of the Board of Appeals, (s) he may appeal the case in the federal district court for his jurisdiction. As in most federal court cases, unfavorable district court decisions may be appealed to the appropriate US Court of Appeals, and unfavorable appeals court decisions may be filed with the United States Supreme Court.

The Social Security Administration has maintained its objectives for judges to complete 500-700 cases per year, but an Administrative Judge on average national disposal of about 400 cases per year. The debate over the social security system in the United States has been going on for decades and there are many concerns about its sustainability.

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Current operation

Joining and stopping

Getting Social Security numbers for a child is voluntary. Furthermore, there is no general legal requirement that individuals join the Social Security program unless they wish or need to work. Under normal circumstances, FICA taxes or SECA taxes will be collected for all wages. The only way to avoid paying FICA or SECA taxes is to join a religion that does not believe in insurance, such as Amish, Christian Science or a religion whose members have taken a vow of poverty (see IRS 517 and 4361 publications). Federal workers working before 1987, various state and local workers including those in some school districts with their own pensions and disability programs were given a one-time option to join Social Security. Many employees and pension and disability systems choose to opt out of the Social Security system because of their limited costs and benefits. Often it is much cheaper to get much higher pension and disability benefits while still using the original retirement and disability plans. Now only a few of these plans allow new employees to join their existing plans without also joining Social Security. In 2004, the Social Security Administration estimated that 96% of all US workers are protected by a system with the remaining 4% mostly a small proportion of government employees registered in civil service pensions and not subject to Social Security taxes due to historical exclusion.

It is possible for train employees to get "coordinated" pension and disability benefits. The US Railway Retirement Board (or "RRB") is an independent agency in the executive branch of the United States government created in 1935 to administer a social insurance program that provides retirement benefits to railroad workers in the country. Revenue rail The Tier I payroll tax is coordinated with social security taxes so that employees and employers pay Tier I taxes at the same rate as social security taxes and have the same benefits. In addition, both workers and employers pay a Level II tax (about 6.2% in 2005), which is used to finance railroad pensions and disability payments that exceed and above the level of social security. Tier 2 allowance is an additional retirement and disability benefit system that pays 0.875% times the average working period of the highest five year salary, in addition to Social Security benefits.

FICA taxes are imposed on almost all workers and entrepreneurs. Employers are required to report wages for closed work for Social Security to process W-2 and W-3 ​​Forms. Some special wages are not part of the Social Security program (discussed below). The Internal Revenue Rule section of section 3101 imposes payroll taxes on individuals and tax-matching employers. Section 3102 mandates that employers deduct this payroll tax from workers' wages before they are paid. Generally, payroll taxes are levied on everyone in the "wage" of employment income as defined in 3121 of the Internal Revenue Code. and also the net income tax of the entrepreneur.

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Social Security Taxes are payable to the Social Security Guarantee Fund administered by the US Treasury (technically, "The Old Age Insurance Fund and Federal Survivors Insurance", as defined by 42 USCÃ,§§ 401 (a) ). The current year fee is paid out of current Social Security tax revenue. When income exceeds expenditure, as they did between 1983 and 2009, the excess is invested in a special series, US government bonds that can not be sold. Accordingly, the Social Security Trust Fund indirectly finances the federal government's general purpose deficit spending. In 2007, the cumulative surplus of Social Security taxes and interest earned on benefits paid amounted to $ 2.2 trillion. Some regard the Trust Fund as an accounting construction with no economic meaning. Others argue that it has certain legal significance because its Treasury securities are backed by "full and credit belief" from the US government, which has an obligation to pay its debts.

The Social Security Administration Authority to make the payment of benefits provided by the Congress only includes current income and the existing Trust Fund balance, ie. , the redemption of ownership of Treasury securities. Therefore, Social Security's ability to make full payments once the annual allowance exceeds the income partly depends on the ability of the federal government to make good on the bonds that have been issued for the Social Security trust fund. As with any other federal obligation, the ability of the federal government to pay for Social Security is based on its power to pay taxes and borrow and the commitment of Congress to fulfill its obligations.

In 2009, the Office of the Chief Actuary of the Social Security Administration calculates helpless liabilities of $ 15.1 billion for Social Security program. Unfunded liabilities are the difference between the cost of future social security (based on some demographic assumptions such as mortality, labor force participation, immigration, and expectancy) and total assets in the Trust Fund awarded the degree of expected contribution through payroll taxes are scheduled at this time. Giving no obligation is stated in the present value and is part of the long-term actuarial estimates of the IMF, not necessarily certainty what will happen in the long term. Note Actuary for the calculation says that "used as a substitute term liabilities term liabilities, as liabilities generally indicates the contractual obligations (such as in the case of private pension and insurance) that can not be changed by the sponsor plans without the agreement of the participants of the plan."

Office of Hearings Operations (OHO, previously ODAR or OHA)

On August 8, 2017, Acting Commissioner Nancy A. Berryhill informed employees that the Office of Adjudication and Adjudication Disability ("ODAR") would be renamed the Hearings Operations Office ("OHO"). Hearing offices have been known as "ODAR" since 2006, and the Hearings and Appeals Office ("OHA") before that. OHO manages ALJ's hearings for the Social Security Administration. Judge of Administrative Law ("ALJs") conducts hearings and issues decisions. After the ALJ decision, the Board of Appeal considered a request to review the ALJ decision, and acted as the last administrative review level for the Social Security Administration (the stage at which "fatigue" could occur, a prerequisite for federal court review).

Benefit payout comparisons

Some federal, state, local and educational government employees do not pay for Social Security but have their own retirement, disabled systems that almost always pay pension benefits and disabilities much better than Social Security. This plan usually requires vesting - working for 5-10 years for the same company before eligible for retirement. But their retirement usually only depends on the best average 3-10 year salary times some pension factors (typically 0.875% -3.0%) times of year used. The benefits of this pension can be a "pretty good" salary (75-85% of salary) near the monthly salary they last worked on. For example, if someone joined the University of California pension system at age 25 and worked for 35 years, they could receive 87.5% (2.5% ÃÆ'â € "35) of their highest three-year average salary with complete medical coverage at age 60. Police and firefighters who joined at age 25 and worked for 30 years received 90% (3.0% ÃÆ'â € "30) of average salary and full medical coverage at age 55 years. This termination has a cost of living adjustment (COLA) applied every year but is limited to a maximum average income of $ 350,000/year or less. Benefits for disease survivors are available in 100-67% of primary benefit levels for 8.7% to 6.7% reduction in retirement benefits, respectively. The benefits of UCRP pension and disability plans are funded by contributions from members and universities (usually 5% of their respective salaries) and by combined investment income from total accumulation. These contributions and earnings are kept in the trust funds invested. Pension benefits are much cheaper than Social Security but are believed to be true actuarially. The main difference between state and local government-sponsored pension systems and Social Security is that state and local retirement systems use joint investments that typically weigh heavily on stock market securities - which have historically returned more than 7.0%/year on average. even though a few years with losses. Short-term federal government investments may be "more" secure but pay a much lower average percentage. Almost all other federal, state and local pension systems work in the same way with different benefit retirement ratios. Some plans are now combined with Social Security and "piggy backed" on top of Social Security benefits. For example, the current Federal Employee Pension System, which includes most civil servants employed after 1986, incorporates Social Security, simple defined benefit pension (1.1% per annum of service) and a definite contribution to the Savings Savings Plan.

The Social Security formula currently used in calculating the benefit rate (primary insurance amount or PIA) is progressive vis-ÃÆ'-vis lower average salary. Anyone who works in OASDI includes employment and other pensions will be entitled to non-OASDI alternative pensions and Old Age pension benefits from Social Security. Due to the limited time they work in OASDI covering employment, their total pay amount is multiplied by the inflation factor divided by 420 months resulting in a 35 year-long, low indexed, low-index, AIME. The progressive nature of the PIA formula will essentially allow these workers to also earn a slightly higher percentage of Social Security Benefits at this low average salary. Congress passed in 1983, Provisions on the Elimination of Upstream Winds to minimize Social Security benefits for these recipients. The basic provision is that the first salary, $ 0-791/month (2013) has a 90% normal profit percentage reduced to 40-90% - see Social Security for the right percentage. This reduction is limited to about 50% of what you are entitled to if you are always working under OASDI tax. 90% percentage factor benefit is not reduced if you have 30 years or more "substantial" income.

Social Security Payments averaged $ 1,230/month ($ 14,760/year) in 2013 just slightly above the federal poverty rate for one - $ 11,420/year and below the poverty line of $ 15,500/year for two.

For this reason, financial advisors often encourage those with the option of doing so to supplement their Social Security contributions with a personal pension plan. One "good" additional retirement plan option is a 401 (K) (or 403 (B)) plan sponsored by the company when offered by the employer. 58% of American workers have access to the plan. Many of these employers will match some of the dollar-for-dollar employee savings up to a certain percentage of the employee's salary. Even without an employer match, the individual retirement account (IRA) is a portable, standalone, tax-deferred tax retirement account that offers the potential to substantially increase pension savings. Their limitations include: financial literacy to tell the "good" investment account of the less favorable; barriers to savings faced by those with low-paid jobs or burdened by debt; self-discipline requirements to distribute from an early age the required percentage of salary to "good" (s) investment account; and self discipline is required to leave it there to earn compounded interest until needed after retirement. Financial advisors often suggest that long-term investment horizons should be used, since short-term investment losses are historically "self-righteous", and most investments continue to provide good average investment returns. The IRS has a tax penalty for withdrawals from IRA, 401 (K), etc. Before the age of 59½, and requires a mandatory withdrawal after the pensioner reaches 70; other restrictions may also apply to the amount of tax-deferred income that may be included in the account. For people who have access to them, a self-sustaining retirement savings plan has the potential to match or even exceed the benefits derived from federal, state and local government pensions.

International agreements

People sometimes move from one country to another, either permanently or on a limited time basis. This presents challenges for businesses, governments and individuals who want to ensure future benefits or have to deal with tax authorities in many countries. To this end, the Social Security Administration has signed an agreement, commonly referred to as the Totalization Agreement , with other social insurance programs in various foreign countries.

Overall, this agreement serves two main purposes. First, they eliminate the taxation of two Social Security, a situation that occurs when a worker from one country works in another and is required to pay Social Security taxes to both countries on the same income. Second, the agreement helps fill the gaps in the protection of benefits for workers who have divided their career between the United States and other countries.

The following countries have signed a totalization agreement with SSA (and the date the agreement becomes effective):

Social Security Number

The side effect of the Social Security program in the United States is the almost universal adoption of the program identification number, Social Security number, as the de facto national identification number of U.S. Social security number, or SSN, issued pursuant to section 205 (c) (2) of the Social Security Act, codified as 42 USCÃ, Ã,§Ã, 405 (c) (2) . The government originally stated that SSN will not be an identification tool, but today many US entities use Social Security numbers as personal identifiers. These include government agencies such as the Internal Revenue Service, the military as well as private institutions such as banks, colleges and universities, health insurance companies, and employers.

Although the Social Security Act itself does not require a person to have a Social Security Number (SSN) to live and work in the United States, the Internal Revenue Code usually requires the use of social security numbers by individuals for federal tax purposes:

The social security account number issued to an individual for the purposes of section 205 (c) (2) (a) of the Social Security Act shall, except as otherwise provided under the Regulation of the Secretary [of Treasury or its delegation] , is used as the identification number for that individual for the purpose of this title.

Importantly, most parents apply for Social Security numbers for dependent children to include them on their income tax returns as dependents. Any person applying for tax returns, as taxpayers or spouses, must have a Social Security Number or Taxpayer Identification Number (TIN) because the IRS can not process postage payments or payments for anyone without SSN or NPWP.

The Privacy Act of 1974 is partly intended to limit the use of Social Security numbers as a means of identification. Paragraph (1) of the subsection (a) of section 7 of the Privacy Act, an uncodified provision, states in part:

(1) It is unlawful for any Federal, State or local government agency to reject any individual rights, benefits or privileges granted by law because of the individual's refusal to disclose his social security account number.

However, the Social Security Act provides:

It is the policy of the United States that any State (or its political subdivision) may, in any tax administration, general public assistance, driver's license, or motor vehicle registration law in its jurisdiction utilize the social security account number issued by the Social Security Commissioner for the purpose of establishing the identification of the individual affected by the law, and may request any individual who or appears to be severely affected to provide such State (or political subdivision) or any agent with administrative responsibility for involved, social security account number (or number, if he has more than one such number) issued to him by the Social Security Commissioner.

Furthermore, paragraph (2) of paragraph (a) of section 7 of the Privacy Act provides in part:

(2) the provisions of paragraph (1) of this sub-section are not applicable with respect to -

(a) any disclosures that are required by Federal law , or

(b) the disclosure of the social security number to any Federal, State, or local agent maintaining the existing records system and operating before 1 January 1975, if such disclosure is required under the laws or regulations adopted prior to that date to verify someone's identity.

Exceptions under section 7 of the Privacy Act include the requirement of the Internal Revenue Code that the social security number is used as the taxpayer identification number for the individual.

Demographics and revenue projection

Every year since 1982, OASDI tax revenues, interest payments and other revenues have exceeded payments of allowances and other expenses, for example more than $ 150 billion in 2004. Since "baby boomers" have moved from the workforce and are retiring, will exceed tax revenue and then, after a few more years, will exceed all OASDI trust income, including interest. At that point the system will start using the Treasury Notes, and will continue to pay benefits at the current level until the Trust Fund runs out. In 2013, OASDI's pension fund collected $ 731.1 billion and spent $ 645.5 billion; the disability program (DI) raised $ 109.1 billion and spent $ 140.3 billion; Medicare (HI) raised $ 243.0 and spent $ 266.8 billion and Additional Health Insurance, SMI, raised $ 293.9 billion and spent $ 307.4 billion. In 2013 all Social Security programs except pension retirement (OASDI) spend more than they carry and rely on significant withdrawal from their respective trust funds to pay their bills. The retirement trust fund (OASDI) of $ 2.541 billion is expected to be vacated in 2033 by one estimate because new retirees are eligible to join. The $ 153.9 billion defective trust fund (DI) will be exhausted by 2018; the $ 244.2 billion Medicare (HI) trust fund will be exhausted by 2023 and the Additional Aid Assurance (SMI) trust fund will be exhausted by 2020 if current withdrawal rates continue - even faster if they increase. Total "Social Security" spending in 2013 was $ 1.360 billion, representing 8.4% of $ 16,200 billion GNP (2013) and 37.0% of federal expenditures of $ 3.684 billion (including a deficit of $ 971.0 billion). All other parts of the Social Security program: Medicare (HI), disability (DI), and Medical Supplemental Guard Fund (SMI) have withdrawn their trust funds and are projected to deficit around 2020 if the current withdrawal rate continues. When trust funds run out, benefits must be deducted, fraud is minimized or tax increases. According to the Center for Economic and Policy Research, the upward redistribution of income is responsible for about 43% of the Social Security shortage projected over the next 75 years.

In 2005, the OASDI Trust Fund fatigue was projected to occur in 2041 by the Social Security Administration or in 2052 by the Congressional Budget Office, CBO. After that, however, projections for the event's fatigue date increased slightly after the recession worsened the economic picture of the US economy. The OASDI 2011 Development Report states:

Annual costs exceed non-interest income in 2010 and are projected to continue to grow over the rest of the 75-year valuation period. However, from 2010 to 2022, the total income of trust funds, including interest income, is more than necessary to cover costs, so the assets of the trust fund will continue to grow during that time period. Beginning in 2023, the assets of the trust funds will be reduced until they become exhausted by 2036. Non-interest income is projected to support expenditures at 77 per cent of the scheduled benefits after exhaustion of trust funds in 2036, and then declines to 74 per cent of the scheduled benefits at 2085.

In 2007, the Social Security Supervisors suggested that payroll taxes could increase to 16.41 percent by 2041 and continue to increase to 17.60 percent by 2081 or cuts in allowances by 25 percent by 2041 and continue to increase to an overall cut of 30 percent in 2081..

Social Security Administration Project that the demographic situation will be stable. The cash flow deficit in the Social Security system will subside as part of the economy. This projection is questionable. Some demographers argue that life expectancy will increase more than projected by the Social Security Supervisor, a development that will make solvency worse. Some economists believe future productivity growth will be higher than the current projection by the Social Security Supervisor. In this case, the Social Security shortage will be smaller than projected at this time.

Tables published by the National Center for Health Statistics show that life expectancy at birth was 47.3 years in 1900, rising to 68.2 in 1950 and reaching 77.3 in 2002. The latest annual report of the Social Security Supervisory Agency (Badan Pengawas Jamamin Sosial) SSA) projected that life expectancy would increase only six years in the next seven decades, to 83 by 2075. A separate set of projections, by the Census Bureau, showed faster growth. The Census Bureau's projection is that a longer life span projected for 2075 by the Social Security Administration will be achieved by 2050. However, other experts think that the past gain in life expectancy can not be repeated, and adds that adverse effects on the Financial system can partially offset if improved health or reduced pension benefits encourage people to keep working longer.

Actuarial science, of the kind used to project social security solvency in the future, is essentially subject to uncertainty. SSA actually made three predictions: optimistic, midline, and pessimistic (until the late 1980s it made 4 projections). The Social Security Crisis that flourished before the 1983 reform resulted from a midline projection that turned out to be too optimistic. It has been argued that overly pessimistic projections from the mid to late 1990s are partly the result of low economic growth (according to the assumption of an actuary David Langer) that resulted in pushing back the projected fatigue date (from 2028 to 2042) respectively. Trust Agent Report. During the heavy boom years of the 1990s, the midline's projection was too pessimistic. Obviously, projecting out 75 years is a significant challenge and, as such, the actual situation may be much better or much worse than expected.

The Social Security Advisory Council has three times since 1999 appointed the Technical Advisory Panel to review the methods and assumptions used in the annual projection for the Social Security trust fund. A recent report from the Technical Advisory Panel, released in June 2008 with the October 2007 copyright date, includes a number of recommendations to improve Social Security projection.

In December 2013, under current legislation, the Congressional Budget Office reports that "The Disability Insurance Trust Fund will be exhausted in fiscal 2017 and the Old-Age and Survivors Insurance guarantees will be exhausted by 2033".

Increased spending on Social Security will occur at the same time as Medicare increases, as a result of aging baby boomers. One projection describes the relationship between two programs:

From 2004 to 2030, combined spending on Social Security and Medicare is expected to increase from 8% of national income (gross domestic product) to 13%. Two-thirds increase in Medicare.

How to get rid of projected flaw

Social Security is predicted to run out of enough money to pay all future pensioners on today's benefit payouts by 2033.

• Lift up the payroll ceiling . The payroll is now adjusted for inflation. Robert Reich, former US Department of Labor, advises to raise the limit on income taxed Social Security tax, which is $ 127,200 starting January 1, 2017.
• Increase Social Security tax . If workers and employers each pay 7.6% (up from 6.2% today), it will eliminate the financing gap altogether. This 1.4% increase (2.8% for self-employed) has more than 60% support in surveys conducted by the National Academy of Social Insurance (NASI).
• Increase retirement age (s) . Elevating early retirement options from ages 62 to 64 will help reduce Social Security benefit payments.
• Test benefits . The phase of Social Security benefits for those who already have revenues of more than $ 48,000/year ($ 4,000/month) will eliminate more than 20% of the funding gap. It's not very popular, with only 31% of households surveyed who love it.
• Change cost of living adjustment, COLA .
• Reduce benefits for new retirees . If Social Security benefits are reduced by 3% to 5% for new retirees, about 18% to 30% percent of funding gaps will be removed.
• Average in several working years . Social Security Benefits are now based on an average of 35 salaries of workers paid highest with zero averaged if wages are closed less than 35 years. The average period can be increased to 38 or 40 years, potentially reducing the deficit by 10 to 20% respectively.
• Require everyone newly hired to join Social Security . Over 90% of all workers have paid FICA and SECA taxes, so there is not much to gain with this. There will be an initial increase in Social Security revenues that will be partially offset by the benefits they may accrue when they retire.

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Taxation

Tax on wages and entrepreneurial income

Benefits are funded by taxes imposed on employee wages and self-employed persons. As described below, in the case of employment, employers and employees are each responsible for half of the Social Security tax, with half the employees deducted from employee salaries. In the case of self-employed persons (ie, independent contractors), the self-employed person is responsible for the entire amount of Social Security tax.

The portion of taxes collected from employees for Social Security is referred to as a "trust fund tax" and the employer must submit it to the government. These taxes take priority above all else, and represent the only debt company or LLC that can impose personal responsibility to the officer or manager. A sole proprietor and an officer of an enterprise and manager of an LLC may be held personally liable for not paying income tax and social security taxes whether actually collected from employees.

The Federal Insurance Contribution Act (FICA) (codified in

Source of the article : Wikipedia