PARA 470: Test #4 (Social Security)
What are the work incentives for SSDI?
All SSDI beneficiaries can earn up to $1,350 a month (in 2022) as long as they are able and with no loss in benefits — which could nearly double the income of a beneficiary receiving the average benefit of $1,359. Beneficiaries may earn unlimited amounts without jeopardizing their benefits while they test their ability to return to work during a nine-month trial work period and three-month grace period. Other program features, like extended Medicare eligibility, are designed to smooth their transition back to the labor market. SSDI benefits are low, and one would expect beneficiaries to take advantage of these rules by trying to supplement their benefits with earnings if they are able to do so.
How can the depletion of the OASDI trust fund be avoided?
All federal taxes would have to double immediately and permanently and all state taxes would have to increase 20% immediately and permanently. OR Benefits for social security, medicare, and government pensions would have to be slashed in half immediately and permanently
How much is the amount of benefits decreased by when you receive early social security retirement benefits?
An individual can begin to receive retirement benefits at 62 if fully insured on that date. However, the benefit level is permanently reduced in proportion to the number of months before full retirement age. The age for early retirement has not changed and so as the full retirement age increases the reduction for early retirement will be greater. For example. when full retirement age was 65 retirement at 62 meant a 20% permanent reduction in the benefit level. For those whose full retirement age is 66, beginning retirement benefits at 63 means a 25% permanent reduction.
What are SSDI benefits based on?
Benefits are based on an individual's past earnings (up to an annual maximum), with higher replacement rates for lower wage workers.
What are retirement benefit amounts based on?
Benefits are based on your highest 35 years of earning Although you need 10 years of work, or 40 credits, to qualify for Social Security retirement benefits, we base the amount of your benefit on your highest 35 years of earnings. If you do not have 35 years of earnings by the time you apply for retirement benefits, your benefit amount will be lower than it would be if you worked 35 years.
What happens if a surviving spouse begins receiving benefits before the surviving spouse's full retirement age?
If a surviving spouse begins receiving benefits before the surviving spouse's own full retirement age, the monthly amount will be reduced by a fraction of a percent for each month before full retirement age.
What health insurance benefits are available to disabled workers on SSDI?
People receiving SSDI benefits are eligible for the full range of benefits that Medicare provides but coverage begins only after a two-year waiting period.
What does the Social Security Act define disability as?
The Social Security Act defines disability as an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
What is the goal of the Ticket to Work and Self Sufficiency Program?
The goal of the Ticket to Work and Self Sufficiency Program is to increase the level and mix of employment support services available to disabled worker beneficiaries, enhancing their employment opportunities and leading more beneficiaries to return to work and self-sufficiency. Beneficiaries receive tickets or vouchers for employment services, case management, vocational rehabilitation, and support services under an individual work plan from a provider of their choice, including state VR agencies.
Who is eligible for survivor social security benefits?
The spouse (or divorced spouse) of a deceased wage earner can receive survivor benefits if the spouse (1) is over 60, (2) is not entitled to a higher benefit on the spouse's own earnings record, and (3) was married for at least 9 months, or 10 consecutive years in the case of a divorced spouse.2
What is substantial gainful activity?
The term substantial gainful activity is used to describe a level of work activity and earnings. Work is substantial if it involves doing significant physical or mental activities, or a combination of both. If an individual is earning more than $1350 it is considered substantial gainful activity.
Who can get disability benefits under Social Security?
There are three categories: - A disabled insured worker under 65 - A person disabled since childhood (before age 22) who is dependent of a deceased insured parent entitled to title II disability or retirement benefits. - A disabled widow or widower, age 50-60 if the deceased spouse was insured under Social Security
What is used to calculate an individual's social security benefit amount?
To calculate an individuals benefit amount, the social security administration starts with that persons lifetime earnings, adjusted to account for changes in average wages since the year the earnings were received. Then the agency calculates the individual's indexed monthly earnings during the 35 years in which the individual earned the most. The agency applies a progressive formula to these earnings to arrive at a basic monthly benefit amount, or "primary insurance amount," and so low-wage workers have a higher replacement rate than high earners.
How does the Social Security Administration ensure SSDI beneficiaries remain eligible for the program?
To determine whether an individual remains disabled, the Social Security Administration conducts periodic "continuing disability reviews." SSA collects information from beneficiaries which is sent to the state DDS for review. How often a beneficiary's medical condition or disability is reviewed depends on how severe it is and the likelihood that it will improve.
What are the requirements an individual must meet to receive SSDI benefits?
To receive SSDI, the individual must be (1) disabled, (2) fully insured, and (3) "disability insured." A person is "disability insured" if the person has worked 20 of the last 40 quarters preceding the onset of disability. A special rule covers individuals under 31.
T or F: A surviving spouse under 62 can receive "mother's" or "father's" benefits when caring for the eligible worker's child who is under 16 or disabled.
True
T or F: As an alternative to early retirement benefits, SSDI has assumed increased importance as the retirement age increases. SSDI allows disabled older individuals to avoid the permanent benefit reduction they would potentially face for retiring before their full retirement age.
True
T or F: By 2035, the number of Americans 65 and older will increase from approximately 56 million today to over 78 million
True
T or F: In general, eligibility for social security benefits requires that the wage earner be "fully insured" at the time of retirement, disability, or death.
True
T or F: Many die on the social security disability insurance waitlist
True
T or F: Social Security is a federally administered program
True
T or F: The benefit of delayed retirement credits increase applies whether or not the worker continues to work during the ages of 67-70.
True
T or F: There are currently 2.8 workers for each SS beneficiary. By 2035, there will be 2.3 covered workers for each beneficiary.
True
T or F: Undocumented immigrants are not eligible for social security benefits unless they filed an application for benefits before December 1, 1996.
True
T or F: While Social Security Disability Insurance accounts for only about 18 percent of all social security Title II beneficiaries, it accounts for the overwhelming majority of contested claims considered by the Social Security Administration because disability determinations are made on an individualized basis.
True
T or F: You. may have to pay federal taxes on a portion of your social security benefits if your total income is above a certain amount.
True
T or F: The presence of an impairment that meets the criteria in the Listing of Impairments is usually sufficient to establish that an individual who is not working is disabled
True, however the absence of a listing-level impairment does not mean the individual is not disabled. Rather, it merely requires the adjudicator to move on to the next step of the process and apply other rules in order to resolve the issues of disability.
T or F: If the decedent had credits for six of the thirteen consecutive quarters ending with the quarter of death, children, surviving spouses caring for a child under 16, and disabled adult children may be able to receive survivor benefits even if the decedent was not fully insured at the time of death.
True; this is referred to as "currently insured" status
What is the definition of disability in children?
Under Title XVI, a child under age 18 will be considered disabled if he or she has a medically determinable physical or medical impairment or combination of impairments that causes marked and severe functional limitations, and that can be expected to cause death or that has lasted or can be expected to last for a continuous period of not less than 12 months.
What are the five levels of appeal for an SSDI application?
1. Reconsideration 2. Administrative law judge hearing 3. Appeal council 4. Federal District Court 5. U.S. Circuit Court of Appeals
How much of the FICA tax goes to Medicare?
1.45%
Up to how many months can SSDI beneficiaries receive retroactive payments?
12 months
How many years does Social Security look back for past relevant work?
15 years
The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted in what year?
2034
What is the average SSDI monthly benefit (2022)?
$1,358
How much must be earned according to 2022 numbers for a quarter of coverage to count?
$1,510
What is the 2022 taxable maximum for social security tax (OASDI)?
$147,000
After being on SSDI for _____ months, beneficiaries become eligible for Medicare
24
How many credits of coverage can you get a year?
4
On average, Social Security will replace about ______ percent of your annual pre-retirement earnings, although this can vary substantially based on each person's circumstances
40
How many credits does an individual need to be fully insured?
40 credits
How many months are SSDI benefits delayed after an individual is found eligible and their application is improved?
5 months
What is the SSDI waiting period?
5 months, beginning with the earliest full calendar month throughout which the worker satisfied both the definition of disability and the disability insured requirements.
How much of the FICA tax goes toward Social Security?
6.2%
At what age can an individual begin receiving reduced social security retirement benefits?
62
At what age can an individual begin receiving full social security retirement benefits?
67
What is the FICA tax rate?
7.65%
What is the combined medicare and social security tax rate?
7.65%
In the year 2034, what percent of benefits will be payable at the time for social security?
78%
Who qualifies for auxiliary social security disability benefits?
Children under age 18 Child who is disabled before on or before age 22 Spouse if 62 or over Spouse if under 62 and caring for a child under age 16 or disabled
What is FICA?
FICA taxes help provide benefits for retirees, disabled people, and children. This contribution helps your parents and grandparents have a secure retirement while securing today and tomorrow for you and your future family.
T or F: A surviving spouse can begin receiving benefits as early as 60 if the surviving spouse can establish disability under the social security disability standard (see "Initial Determination" below) and if the disability started before or within seven years of the deceased wage earner's death.
False; A surviving spouse can begin receiving benefits as early as 50 if the surviving spouse can establish disability under the social security disability standard (see "Initial Determination" below) and if the disability started before or within seven years of the deceased wage earner's death.
T or F: In 1940, the life expectancy of a 65-year old was almost 14 years old today it is just over 15 years
False; In 1940, the life expectancy of a 65-year old was almost 14 years old today it is just over 20 years
T or F: The term quarter has something to do with calendar quarters
False; The use of the term "quarters" is misleading; it has nothing to do with calendar quarters. It simply refers to a dollar amount that one must earn in a calendar year to obtain a credit that year, with four being the maximum number of credits. A person who obtains the maximum four credits every year would be fully insured after ten years of work.
T or F: The benefit of delayed retirement credits continues to increase past the age of 70
False; the benefit increase no longer applies once the worker reaches 70 even if the worker continues to delay taking benefits after that age
What is the SSDI definition of disability?
For all individuals applying for disability benefits under title II and for adults applying under the XVI, the definition of disability is the same. The law defines disability as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
At what age can an individual begin receiving increased social security retirement benefits?
For each year you wait until age 70, you may increase your benefits by 8% through what is known as delayed retirement credits. (ages 67-70 are the years you can increase the percentage)
Can you work while receiving social security retirement benefits?
If you get retirement benefits but want to continue to work, you can. However, depending on how much you earn before full retirement age, we might temporarily withhold some or all of your benefit amount. When you reach full retirement age, we will recalculate your benefit amount to give you credit for the months we reduced or withheld benefits due to your excess earnings. Any earnings after you reach your full retirement age won't reduce your benefits. Your earnings can increase your monthly benefit amount — even after you start receiving benefits. Each year, we check your earnings record. If your latest year of earnings turns out to be one of your highest 35 years, we will automatically recalculate your benefit amount and pay you any increase due. You can get additional estimates based on what you think your future earnings will be with the my Social Security Retirement Calculator
What is the Ticket to Work and Work Incentives Improvement Act?
It is an act that expanded opportunities for people with disabilities who want to work, in part by extending Medicare coverage. Before the act was passed, people with disabilities who returned to work lost their Medicare benefits after four years.
Is financial need a factor in eligibility determination for Social Security?
No
What does OASDI stand for?
Old-Age, Survivors, and Disability Insurance
How is disability defined and evaluated?
SSDI has a very strict definition of disability. Workers must demonstrate "an inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months." The law states that an individual's physical and mental impairments must be of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. Disability is evaluated using a five-step sequential pocess.
How are your retirement benefits calculated?
Social Security bases your retirement benefits on your lifetime earnings. We adjust or "index" your actual earnings to account for changes in average earnings since the year the earnings were received. Then we calculate your average indexed monthly earnings from your highest 35 years of earnings. We apply a formula to these earnings to determine the benefit amount you would receive at your full retirement age, 67. There are factors that can change the amount of your retirement benefit. Your benefits will be lower if you start them before your full retirement age (as early as age 62) or higher if you start them after your full retirement age (up to age 70).
Can someone work and still receive disability benefits?
Social Security rules make it possible for people to test their ability to work without losing their rights to cash benefits and Medicare or Medicaid. These rules are called work incentives. The rules are different for Title II and Title XVI, but under both programs they may provide: - Continued cash benefits - Continued help with medical bills - Help with work expenses; or - Vocational training
What does the family maximum rule for social security do?
Social security's family-maximum rules limit the total benefits paid to a beneficiary's family. Family-maximum rules that apply to retirement and survivor benefits differ from those that apply to disability benefits. The rules for calculating family-maximum benefits are complicated, but note that the wage earner's own benefit is never reduced; only the benefits of dependents are reduced under these formulas. The benefits for divorced spouses (including surviving divorced spouses) are never reduced under family-maximum rules
Who qualifies for auxiliary social security retirement benefits?
Spouse age 62 or older Spouse under 62 if caring for a child under 16 or a disabled child Former spouse age 62 or older and unmarried (provided you were married 10 years or longer) Children up to age 18 Children up to age 19 if still in school Children over age 18 if disabled before the age of 22
What is the five-step disability determination process?
Step 1: Work Test Is the individual working and earning over the substantial gainful activity amount? If yes, the application is denied. If no, the application moves to Step 2. Step 2: Severity Test Is the applicant's condition severe enough to limit basic life activities for at least one year If yes, the application moves to Step 3. If not, the application is denied. Step 3: Medical Listings Test Does the condition meet the Social Security Administration's medical listings, or is the condition equal in severity to one found on the listings? If yes, benefits are awarded. If no, the application moves to Step 4. Step 4: Previous work test Can the applicant do the work he or she has done in the past? If yes, the application is denied. If not, the application moves to Step 5 Step 5: Any work test Does the applicant's condition prevent him or her from performing any of the work that exists in the national economy? If yes, benefits are awarded. If no, the application is denied.
Who qualifies for auxiliary social security survivor benefits?
Widow/er who is over age 60 (age 50-59 if disabled) Surviving divorced spouse age 60 (age 50-59 if disabled) provided you were married 10 years or longer Widow/er under age 60 if caring for a child under age 16 or disabled Unmarried minor and/or disabled child Parent of a deceased worker if parent is 62 or older and was dependent on the deceased worker for half of his/her support
Does social security currently recognize all valid marriages of same-sex couples for determining eligibility?
Yes
Does the amount retirement social security beneficiaries receive when first getting benefits est the amount they will receive for the rest of their life?
Yes
If an individual qualifies for benefits as a widow, widower, or surviving divorced spouse on the deceased wage earner's record, can the individual choose to apply for survivor benefits and delay receiving the individual's own retirement benefits until later?
Yes; If an individual qualifies for benefits as a widow, widower, or surviving divorced spouse on the deceased wage earner's record, the individual may choose to apply for survivor benefits and delay receiving the individual's own retirement benefits until later, receiving delayed retirement credits
Can you still get retirement benefits if you do not have enough credits?
You need 40 credits to become fully insured for retirement benefits. You can still earn credits and become fully insured if you work. We cannot pay you benefits if you don't have enough credits. This fact sheet will tell you more about earning credits to qualify for benefits and how the number of years you work and how much you earn affects the amount of your benefits.
What are the requirements to be eligible for SSDI?
nsured status. Beneficiaries must be both "fully insured," meaning they have worked for at least one-fourth of their adult lives, and "disability insured," meaning they have worked in at least five of the last ten years. Severe impairment. Beneficiaries must suffer from a severe, medically determinable physical or mental impairment that has lasted for five months and is expected to last at least 12 months or result in death. Inability to perform substantial work. Beneficiaries' physical or mental impairments must render them unable to do their own past work and unable — considering age, education, and work experience — to do any other kind of substantial work. "Substantial work," in 2022, means earnings of $1,350 a month ($2,260 for people who are blind), which is about 40 percent of the median earnings of a full-time worker with a high school diploma but no college.
What is the amount of benefits an individual will receive at full or normal retirement age called?
the primary insurance amount
