Social security
Social Security (officially Old Age, Survivors, and Disability Insurance (OASDI) , 1937–1946 Social Security Board (SSB) ) is the state pension scheme in the United States' social security system . It is organized by the Social Security Administration (SSA), founded in 1946 and based in Baltimore in the US state of Maryland, which had around 62,000 employees in 2009. The SSA is therefore also responsible for assigning the Social Security Number (SSN, social security number).
Preliminary remarks
The US public pension system - known as Social Security - is the most important social protection system in the US. With very few exceptions, all employees and self-employed persons are obliged to pay contributions.
Overview of the services of Social Security:
- since 1935 old-age pension ( O ld A ge I nsurance, OAI)
- since 1939 widows and orphans ( O ld A ge S urvivors I nsurance, OASIS)
- Since 1956 invalidity pension ( O ld A ge S urvivors D isability I nsurance, OASDI)
- in 1935 introduced elderly care ( O ld A ge A ssistance, OAA), and the income support for the blind ( A id to the B lind, AB), together with in 1950 introduced income aid for disabled ( A id to the P ermanently and T otally D isabled , APTD), incorporated into the uniform social welfare benefit program Supplemental Security Income (SSI) in 1974 .
- in 1935 introduced income support for needy families with dependent children ( A id to the D ependent C hildren, ADC), (from 1960 A id to Fa Milies with D ependent C hildren, AFDC) existed until 1997 and was from the T emporary A ssistance for N eedy F amilies (TANF) program replaced.
history
Social Security was introduced as part of the New Deal by President Franklin D. Roosevelt in 1935 as a public pension system that is essentially pay-as-you-go , i.e. funded on a pay-as-you-go basis . H. the contributions of the current employees finance the expenses for the beneficiaries without building up any noteworthy financial reserves. Financing is provided by contributions from employees and employers in equal parts with the corresponding contribution and benefit assessment limits.
Until the introduction of social security in 1935, ideas of federally organized security systems could not prevail. There was a predominant opinion on private self-responsibility and private welfare organizations. When the economic depression exposed the inadequacy of the fragmented and inconsistent welfare systems across the states, that was the way forward for a national solution. Until 1935, however, there were u. a. the Veterans Pension Scheme introduced in 1861; the Teachers's Pension Plan founded in 1896 ; a pension insurance scheme for teachers in New Jersey ; and from 1912 the Civil Service Retirement System , a federal public service pension scheme.
From 1936 to 1937, over 35 million social security cards were issued to citizens.
At the beginning, the contribution obligation was limited to jobs in the manufacturing sector. However, after World War II , social security expanded very quickly, and by the late 1960s , contributions were almost universal (including the self-employed ). From 1983 the compulsory insurance was extended to all new federal employees and from 1984 also to employees of non-profit organizations . Since 1988, helping family members of the self-employed have also been included. In 1998, 93% of the US workforce were members of Social Security.
In the early days, the amount of pension payments was determined by Congress . Since 1975, pension adjustments have been made automatically to take account of the rising cost of living . In 1983 the US public pension system was on the verge of insolvency. As part of a reform, the contribution rates have been increased to such an extent that the system is currently generating enormous surpluses. These surpluses are accumulated in so-called “trust funds” and are intended to ensure the financial viability of the pension system in the long term.
Since 1984, pension payments have been taxable above certain income levels.
In 1999, the federal budget (Federal budget) was for the Social Security (not Medicare ) about 390.04 billion US dollars , which corresponded to 22.9% of the total budget.
In 2010 the budget was 695 billion US dollars (share: 19.6%).
Social security services
The normal retirement age under Social Security is 65 to 67 years for men and women alike, depending on the year of birth. Since 1956 there has been a flexible age limit from 62 years for women and since 1961 also for men. The majority of citizens today take advantage of the early “old-age pension”, which involves a reduction in the normal old-age pension of around 5–6% per year. Correspondingly, however, the pensioner can postpone his application until the age of 70 in order to claim approximately the same annual supplement. The basic entitlement depends on the payments and the years. Payments for one year count as full if they reach the respective percentage of the income threshold for the year. A minimum contribution period of effectively 5 years is required.
Equal rights are consistently applied in Social Security. It does not matter which of the spouses made contributions to social security. The survivor receives 60% of the amount that the deceased partner received. The survivor does not need to have paid anything for social security or be an American citizen. In addition, while the pensioner is still alive, the spouse receives an amount equal to 50% of the pension recipient's basic entitlement. Social Security also provides this benefit. It is due when the beneficiary reaches retirement age and has applied for the benefit. The beneficiary does not need to have made his own claim or be an American citizen. If the spouse has a self-generated claim based on their own contributions to social security, they have the choice between both claims. However, it is not permitted to use both services at the same time.
Technical details
Currently, the employer and employee each pay 6.2 percent of the employee's gross wages into the pension fund. Self-employed pay the full 12.4 percent alone. Self-employed people whose net income is $ 400 per year or more must report and pay this income directly to the tax authorities. If the net income is less than $ 400 but the gross income is at least $ 600 per year, this income can still be claimed for Social Security to a limited extent and only on request.
No contributions have to be paid on wage income that exceeds the ceiling. The ceiling is currently $ 94,200 annually (2005: $ 90,000). The current contribution rate has been stable since the late 1980s. Benefits can be drawn from the age of 62 at a discount. The age from which full contributions can be drawn depends on the year of birth. For citizens born in 1960 or later, the age limit of 67 years applies.
The pension payments are not made before the third of the respective month to the account, which may be held in every country with which the USA has contact.
Future prospects
In its projections, the Social Security Administration assumes that in the future either the pension contributions will have to be increased or the pension benefits will have to be reduced. Without adjustments, the trust funds would be used up in 2042 because the baby boomer generation will have retired by then and the life expectancy of Americans will increase significantly.
Web links
Individual evidence
- ↑ If you are self-employed information sheet of the IRS (2013)
- ↑ http://www.ssa.gov/pubs/retirechart.htm