In 1935, Franklin Roosevelt, who was the President of America at that time, signed the Social Security Act which included several social insurance and social welfare programs. Since its inception more than 80 years earlier, Social Security Act has provided services and support to benefit countless American citizens. This program is primarily managed and run by the Federal government which includes an insurance program called Social Security.
Funding for Social Security Scheme
The Internal revenue Service (IRS) collects the funds for the Social Security Schemes through the payroll taxes paid by people and is known as the Federal Insurance Contributions Act tax or FICA and the Self Employed Contributions Act Tax (SECA). The payroll taxes have to be paid by all those people who have jobs and regularly receive a salary, with a few exceptions.
To be eligible to receive Social Security Insurance benefits, the legal American residents who live and work here have to have their Social Security Number which enables them to apply for the Social Security scheme and insurance when they require it and if they require it at any point of their lives.
Beneficiaries of Social Security Insurance
A 2011 report on Social Security Act has stated that in the year 2010, nearly 54 million people were given the assistance under the Social Security Insurance towards which as many as 157 million people had contributed through the payroll taxes; the SSA collected the fund above $781 billion out of which $712.5 billion was spent. Among the total beneficiaries of the scheme in 2010, the retirement benefits were bestowed upon 44 million people, disability benefits were given to 10 million people.
The Objective of Social Security Insurance
The Social Security Act’s aim is to provide financial support to the American people who are old and living on the pension, have a severe physical disability and cannot get employment, are the survivors of the Social Security benefactor, etc. and are going through a tough financial situation. Some of the major objectives of Social Security Insurance with regards to providing services and benefits to the people of America are –
- To provide financial support to people and provide funds to their family’s material needs
- To provide protection to people above 62 years of age
- To provide financial security to the disabled people
- To provide financial support to people and make them able to afford the expenses for illnesses and other times of financial turmoil
- To provide support to the family to maintain the bond even during the difficult times
- To provide holistic and positive environment to children to grow in
Major Programs under the Social Security Insurance
This scheme provides a regular and a stable source of income after you retire and have no other employment. To be eligible for the Social Security retirement benefits, you should have earned 40 or more social security credits while working a job. You are eligible to receive the retirement benefits at age of 62, but if you do not retire at this age and keep n working for more years then you tend to receive higher amount every month. It also makes your spouse and dependent children or family members eligible to receive the monthly checks. To apply for benefits under the Social Security, you have to apply by filling the forms online or calling the local Social Security office and provide the documents containing your social security card, birth certificate, citizenship proof (if you were not born in the US). Social Security Insurance for retirement also serves as the alternate source of income.
This insurance protects the families, including the spouse and children of the person against a variety of risks that can lead to financial instability. The insurance covers the following scenarios –
- The passing away of the employed spouse or parent.
- The passing away of the retired spouse or the caregiver.
- The loss of income as a result of retirement where the person has inadequate savings or pension.
This insurance is vital as there is a high risk of disability or premature death even before reaching the full retirement age. The value of Social Security’s survivors’ benefits is higher than the value of most life insurance plans. Its payments also increase based on the cost-of-living index so that the survivor families can keep up with the inflation.
Social Security Disability Insurance (also known as SSD or SSDI) is managed by the Social Security Administration (SSA). This insurance provides financial assistance to the physically disables people who are incapable of or are restricted in getting the employed due to their physical disability. The benefits under this scheme are given on temporary as well as the permanent basis it basically depends on the nature of the disability. The Social Security disability claims are first processed through the local Social Security Administration field offices and the state agencies. The people whose applications get rejected can get their appeals of unfavorable determination checked out again by the authorities concerned. To submit the applications for disability benefits, you can use the telephone, mail or through the online mode to the Social Security representatives.
The applicant or the claimant has to fill the forms and add all the required details such as the description of the impairment, sources from where the individual is getting the treatment, and any other related information.
The basic verification of non-medical eligibility requirements such as the age, employment status, marital status, etc, is done in the field office, which then is forwarded to the DDS for the evaluation of the disability claim. The DDS gathers all the evidence regarding the claims of disability, which if verified is processed to receive the benefits. Then the DDS returns the case to the field office and the SSA moves on to compute the appropriate benefit amount and the claimant soon receives the benefits.
If the claimant’s disability is found to be unsubstantiated then the file is withheld in the field office if the claimant decides to appeal the determination.
This program provides financial support to the workers who lose their job without their own fault. To apply for the insurance, you have to fill the form online or call the toll-free number.