ch 8 insurance social security test

what are the 2 types of social security statuses

1. fully insured 2. currently insured

who is not covered by social security

1. most federal employees hired before 1984 who are covered by Civil Service Retirement or another similar plan. 2. Approximately 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 3 railroad workers covered under a separate federal program called the Railroad Retirement System

q is severely injured in a car accident and becomes totally disabled. how many months must q be disabled before being able to apply for social security disability benefits?

5 months

taxable wage base

FICA tax is applied to an employee's income up to a certain income amount this is called (fill in)

definition of disability

In order to be considered totally disabled, an individual has to qualify according the following requirements: • The inability to engage in any gainful work that exists in the national economy • The disability must result from a medically determinable physical or mental impairment that is expected to result in early death, or has lasted, or is expected to last for a continuous period of 12 months

all of these are considered to be a benefit under social security except for?

unemployment

full insured status

a covered worker must accrue a total of 40 quarters of credit, which is about 10 years of work.

currently insured status

a worker must have earned 6 credits during the last 13 quarter period, to be eligible for limited survivor benefits.

to be eligible for social security disability benefits an employee must be unable to perform?

any occupation

social security disability benefits

are only available to covered workers who are fully insured at the time of the disability. Disability income benefits are paid to the covered worker in the amount of the PIA after a 5-month waiting period. Social Security disability benefits are only available prior to the age of 65. Social Security does not pay partial disability or short-term disability benefits. The disability must be total and expected to last 12 months or end in death. Benefits include monthly payments to the disabled worker, spousal benefits, and child's benefits.

retirement benefits

benefits 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 the age of 62, the maximum Social Security benefit is 80% of the PIA. This reduction remains all through retirement. Retirement benefits pay covered retired workers at least 62 years of age, their spouses and other eligible dependents monthly retirement income. Retirement benefits include monthly retirement payments to the covered worker, spousal benefits, and child's benefits

Black-out period

benefits paid to the surviving spouse of a deceased person who was receiving Social Security. The "black-out period" begins when Social Security survivorship benefits cease. This is when the youngest child turns 16 years old, or if no children- immediately. The "black-out period" ends when the surviving spouse turns at least 60 years old.

the primary insurance amount(PIA) does what

determines the full amount of retirement benefits for an eligible person at age 65. is based on the average earnings over your lifetime

a person must be insured under the social security program in order for what

for survivors, disability or retirement benefits to pay.these benefits are based on how long a covered worker has worked throughout his life

how is social security funded

from FICA payroll taxes, from employers, employees and self-employed individuals

social security benefits are subject to federal income tax if what

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 is what

if their income is greater than 32,000

survivors benefits

include a 255 lump sum death benefit, surviving spouse benefits, child benefit, and parents benefit

what is social security

it is also known as Old Age, Survivors, and Disability Insurance (OASDI), was signed into law in 1935 by president Roosevelt as part of the social security act. It was established during the great depression to assist the masses of people who could not afford to sustain their way of life because of unemployment, disability, illness, old age or death

Medicare Part A taxes are

not subject to a maximum taxable wage cap

social security survivors benefits or death benefits

pay a lump sum death benefit or monthly income to survivors of deceased covered workers

what determines the full amount of social security retirement benefits a qualified individual is entitled to receive?

primary insurance amount (PIA)

what is the amount of social security benefits based on for a person

the individuals average monthly wage during his working years

what amount is indexed to the national average wage index

the maximum amount of earnings that can be subject to social security tax each year. this applies to employers, employees, and self employed

if a worker retires early for example at age 62 his retirement benefits will be what

will be 80% of his PIA and will remain lower for the covered workers life.