Chapter 8

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Death Benefits

Social Security Survivors benefits or death benefits: pay a lump-sum death benefit or monthly income to survivors of deceased covered workers. A surviving spouse without dependent children is eligible for Social Security survivor benefits as early as age 60. Survivor benefits are also available to a spouse of any age who is caring for children under age 16 OR children under age 19 who are full time students

Calculating Benefits

The amount of Social Security benefits a person receives is based on the individuals average monthly wage during his working years. The primary insurance amount determines the full amount of retirement benefits for an eligible person at age 65. If a worker retires early, at 62, his retirement benefits will be 80% of his PIA and will remain lower for the covered worker's life.

Blackout Period

the time interval between the date benefits end under Social Security and the date these benefits resume. Blackout period begins when Social Security survivor ship benefits cease. This is when the youngest child turns 16. Blackout period ends when the surviving spouse turns at least 60

Taxation of Social Security Benefits

Social Security benefits are subject to federal income tax if the beneficiary files an individual tax return and his annual income is greater than 25,000$. Joint filers will pay federal income tax on their Social Security benefits if their income is greater than 32,000$

Coverage vs Eligibility

Social Security extends coverage to virtually every American who is employed or self-employed, with a few exceptions. Those not induced are: -Most federal employees hired before 1984 covered by Civil Service Retirement or another similar plan -25% of state and local government employees who are covered by a state pension program and elect not to participate in the Social Security Program -Railroad workers covered under a separate federal program called the Railroad Retirement System

Disability Benefit Qualifications

They are only available to covered workers who are fully insured at the time of disability. Disability as defined for Social Security purposes, described an employee who is unable to engage in any occupation. A person may first become eligible for disability benefits under Social Security after having been disabled for 5 months.

Retirement Benefits

They are only available to covered workers who are fully insured upon retirement. Benefits are paid monthly. If a covered worker retires at the normal retirement age, he will receive 100% of the PIA. However, if a covered worker retires early at 62, the max social security benefit is 80% of the PIA.

Fully insured vs Currently Insured

To obtain fully insured status, covered worker must accrue a total of 40 quarters of credit, which is about 10 years of work. To be considered currently insured, and thus eligible for limited survivor benefits, a worker much have earned 6 credits during the last 13 quarter period.


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