Introduction to Social Security Benefits

The Social Security Administration can provide benefits in three different categories including; when you retire, if you become incapacitated for work and finally when you die. Information about social security benefits can be found on the website of the Social Security Administration. The age to receive full retirement benefits has been 65 for many years, but for those born after 1938, it is gradually being raised to age 67 for those born after 1959. A person can receive retirement benefits as early as age 62. However, if someone decides to receive benefits from age 62, their benefit will be reduced by a fraction of a percent for each month before your full retirement age. To find out how much a person would lose if they retire at age 62, you can visit the Social Security website. An individual has the choice to retire between age 62 and full retirement age. A person qualifies for Social Security benefits by earning Social Security credits when they work in a job and paying Social Security taxes.

The credits are based on the amount of the individual’s income and their employment history determines eligibility for retirement, disability, and survivor benefits when a person dies. For the year 2007, an individual will receive one credit for $1,000 in income, up to a maximum of four credits per year. Each year, the amount of income required to receive credits increases slightly as the average income level rises. The credits earned remain on the person’s Social Security register even if they change jobs or have no income for a while. There are special rules for social security coverage for certain types of work.

If a person is self-employed, he earns the same number of credits as employees, but special rules apply if he has a net salary of less than $400. For individuals in the military, they earn credits in the same way as civilians, but there is an opportunity to get additional credits under certain conditions. There are also special rules that apply to individuals who hold jobs such as; housework, farm work, or individuals who work for the Church or Church-controlled organizations who do not pay Social Security taxes.

There are also types of work that do not count towards social security. Most federal employees were hired before 1984, because since January 1, 1983, all federal employees have paid the Medicare hospital insurance portion of the Social Security tax. Others who suffer from this are railway workers who have been employed for more than 10 years. Employees of some state and local governments have chosen not to participate in Social Security and are also ineligible and finally children under the age of 21 who do household chores for a parent. An individual may also choose to defer retirement benefits. If so, their benefit will be increased by a certain percentage depending on the year they were born, and the increase will be added automatically from the time they reach full retirement age until they decide to retire or until they reach age 70, whichever comes first. One last thing to consider about retirement benefits is whether a person is working and receiving benefits. A person’s income in or after the month he reaches full retirement age will not reduce his Social Security benefits, but his benefits will be reduced if his income exceeds certain limits in the months before reaching full retirement age.

If a person works and receives benefits before full retirement age, $1 in benefits is deducted for every $2 in income they have above the annual limit. In 2007, the limit is $12,960. In the year the person reaches full retirement age, his benefit is reduced by $1 for every $3 he earns over another annual limit, $34,440 for 2007, until the month he reaches full retirement age. Once the individual has reached full retirement age, they can continue to work and their Social Security benefits will not be reduced, no matter how much they earn.

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Another helpful benefit that the Social Security Administration provides is disability benefits. The Social Security Administration pays disability benefits in two different ways, one through Social Security disability insurance and the second through the Supplemental Security Income (SSI) program. Click on the attached link for information about the SSI Disability Program. Social Security pays benefits to people who are unable to work because they have a medical condition that is expected to last at least a year or result in death. Federal law requires such a strict definition of disability, while some other programs provide benefits to individuals who are partially disabled or have a short-term disability, Social Security does not. A person must meet certain income requirements to qualify for benefits. Individuals must meet two different income tests to qualify for disability benefits. The first test is a “recent work” test based on the individual’s age at the time they became incapacitated for work and the second test is a “duration of work” test to demonstrate that they have worked long enough under social security. A person should apply for disability benefits as soon as he or she becomes disabled as it can take a long time to process the disability benefit application. It usually takes about 3 to 5 months. After the application is sent, the Social Security Administration will review their application and ensure they meet some basic benefits requirements, such as whether they have worked long enough to qualify, and they will evaluate any current employment. If these requirements are met, they will send your application to the Disability Determination Services office in their state. This agency makes the decision for the SSA, they use their doctors and disability specialists to ask their doctor information about their condition, all the facts in their case will be considered. They will also use evidence from a hospital, doctor’s office, clinic, or facility that the person has been treated to obtain any other information.

Another option that the Social Security Administration offers is the Survivor’s benefits. People usually think of Social Security only as paying retirement benefits, but some of the Social Security taxes that individuals pay go toward providing survival insurance for employees and their families. The value of the survivor’s insurance that the individual has under Social Security is likely more than the value of his individual life insurance. Because an individual works and pays Social Security taxes, they earn credits toward their Social Security benefits. The number of years and individual need to work depend on the person’s age at the time of his or her death. The younger a person is, the fewer years they must have worked, but no one has to work more than 10 years to qualify for Social Security benefits. If a person has only worked for a year and a half in the three years immediately before death, benefits can be paid to persons and their spouses who care for the children under a special rule. Those who qualify for survivor benefits include; the widow/widower of the person concerned at the age of 65 if they were born before 1 January 1940 or at the age of 67. Reduced widow’s benefits can be obtained as early as age 60. The person’s widow or widower can receive benefits at any age if he/she cares for their child who is eligible for child support and who is 16 years of age or younger or is disabled. The unmarried children of a person who are under the age of 18 or 19 if they are in full-time primary or secondary education. Their children can receive benefits at any age if they were disabled before the age of 22 and remain disabled. Under certain circumstances, a benefit may also be given to stepchildren, grandchildren or adopted children. Dependent parents can also receive benefits if they are 62 years of age or older. If a person is divorced, his former spouse qualifies if he is 60 years of age or older and if the marriage has lasted more than 10 years. If a person’s ex-spouse does not meet the age requirement or the required length of marriage, but cares for his/her child under the age of 16, they may still be entitled to it.