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GUIDE TO SOCIAL SECURITY BENEFITS

 
Social Security Administration

 
Who Should Read This Booklet?
 

You should!

 

 

     Whether you're young or old, male or female, single or

with a family--this booklet is for you and about you. That's

because Social Security has programs that affect everybody.

 

     Chances are you're either paying Social Security taxes or

getting Social Security benefits--or you're related to somebody

who is.

 

     Whatever your situation, this booklet has information you

will find helpful and useful.

 

     It was prepared by the Social Security Administration and

tells you what you need to know about Social Security while

you're still working and what you need to know when it's your

turn to collect benefits.

 

     Please Note: This booklet provides a general overview of

the Social Security program. The information it contains is not

intended to cover all provisions of the law. For specific

information about your case, contact a Social Security office.

 

 

What's Inside

 

 

Part 1--Social Security's Future And Yours!

 

Is There Social Security In Your Future?

When Will You Need Social Security?

How To Reach Us When You Need Us

Your Future... And This Booklet

 

Part 2--What You Need To Know About Social Security While

You're Still Working

 

How Social Security Works--The General Idea

Your Social Security Number

The Taxes You Pay

You Become Eligible For Social Security By Earning "Credits"

How Much Will You Get From Social Security?

How Your Benefit Is Figured

If You Didn't Earn Enough Credits To Get Social Security

 

Part 3--What You Need To Know When You Become Eligible For

Social Security

 

How And When To Sign Up For Social Security

What Records Will You Need?

Direct Deposit

Retirement Benefits

Disability Benefits

Benefits For Your Family

Survivors Benefits

Supplemental Security Income

Medicare

 

Part 4--What You Need To Know After You

 

Sign Up For Social Security

What You Need To Report To Us

If You Disagree With A Decision We Make

How Your Earnings Affect Your Benefits

Your Benefits May Be Taxable

When Somebody Needs Help Managing Benefits

 

Other Booklets Available

 

Examples of Benefits

 

Index

 

 

Social Security's Toll-Free Number 1-800-772-1213

Call between 7 a.m. and 7 p.m. any business day.

 

 

Part 1--Social Security's Future... And Yours!

 

 

Is There Social Security In Your Future?

 

 

     Before we get started explaining the program, we think

it's important to answer the first question many people have

about Social Security. Perhaps you've asked it yourself. That

question is: "Will Social Security be there when I need it?"

 

     The simple and logical answer is, "Yes it will." But that

answer deserves an explanation.

 

     If you're concerned about the future of Social Security,

it's probably because you've heard misleading stories about

Social Security money being used for other purposes (which are

partially true) and reports that the system's trust funds

contain only "worthless IOU's" (which are false). Here are the

facts. Out of every dollar you pay in Social Security taxes:

 

   * 73 cents goes to a trust fund that pays monthly benefits

     to about 29 million retirees and their families and to

     about 8 million widows, widowers, and children of workers

     who have died;

 

   * 19 cents goes to a trust fund that pays for the health

 

   * 8 cents goes to a trust fund that pays benefits to about 5

     million people with disabilities and their families.

 

     Money not needed to pay these benefits is invested in U.S.

government bonds-generally considered the safest of all

investments. And the government uses the money it has borrowed

from Social Security, just as it uses the money that you may

have invested in treasury bonds, to pay for all the services

and projects it provides for our citizens. But, just as the

government pays you back with interest when you redeem your

bonds, it has always made good on its obligations to Social

Security. There's no reason to believe it won't continue to do

so. If you own treasury bonds, it's a safe bet you don't

consider them to be "worthless IOU's." We don't either. Our

investments will be honored and we, in turn, will honor your

investment in Social Security. It will be there when you need

it!

 

 

When Will You Need Social Security?

 

 

     Now that we've answered your first question and told you

that Social Security will be there when you need it, the next

question you may ask yourself is this: "When will I need it?"

 

     If you're like most people, you tend to think of Social

Security as a retirement program. Although it's true that most

of our beneficiaries (about 60 percent) receive retirement

benefits, many others get Social Security because:

 

   * they are disabled;

 

   * they are a dependent of someone who gets Social Security;

     or

 

   * they are a widow, widower, or child of someone who has

     died.

 

     So, depending on your circumstances, you may be eligible

for Social Security at any age. In fact, Social Security pays

more benefits to children than any other government program.

Today, 45 million people, almost one out of every six

Americans, collect some kind of Social Security benefit.

 

 

How To Reach Us When You Need Us

 

 

     The Social Security Administration has about 1,300 offices

in cities and towns across America. Of course, you're always

welcome to visit the office nearest you.

 

     But the easiest way to reach us is to call our toll-free

number: 1-800-772-1213. You can get information 24 hours a day.

You can speak to a service representative between 7 a.m. and 7

p.m. on business days.

 

     If you have a push-button (tone) phone, recorded

information and services are available after 7 p.m. weekdays

and all day on weekends and holidays.

 

     If you want to speak to a representative the best times to

call are early in the morning and early in the evening. And if

you can, it's best to call later in the week and later in the

month. When you call, have your Social Security number

handy.

 

     Hearing-impaired callers using "TDD" equipment can reach

Social Security between 7 a.m. and 7 p.m. on business days by

calling 1-800-325-0778.

 

     The Social Security Administration treats all calls

confidentially--whether they're made to our toll-free numbers

or to one of our local offices. We also want to ensure that you

receive accurate and courteous service. That's why we have a

second Social Security representative monitor some incoming and

outgoing telephone calls.

 

 

Your Future ... And This Booklet

 

 

     Here's one final message about Social Security's future,

your future, and this booklet: Social Security will be

there--whenever you may need it.

 

     But even though Social Security will be ready for you,

will you be ready for Social Security?

 

     This booklet will help you with the kinds of plans and

decisions you need to make now in order to ensure a brighter

and more secure financial future for you and your family.

 

 

Part 2--What You Need To Know About Social Security While

You're Still Working

 

 

How Social Security Works--The General Idea

 

 

     The basic idea behind Social Security is a simple one. You

pay taxes into the system during your working years, and you

and members of your family receive monthly benefits when you

retire or become disabled. Or, your survivors collect benefits

when you die.

 

     Here's An Important Point: Social Security is not intended

to be your only source of income. Instead, it is meant to be

used to supplement the pensions, insurance, savings, and other

investments you will accumulate during your working

years.

 

 

Your Social Security Number

 

 

     What's your Social Security number? You probably know it

as well as you know your own phone number.

 

     We use your Social Security number to track your earnings

while you're working and to track your benefits once you're

getting Social Security.

 

     Almost everybody reading this booklet already has a Social

Security number. Today, even most young children have a number

because the Internal Revenue Service requires that a Social

Security number be shown on tax returns for all dependents age

one and older.

 

     In fact, most parents apply for a Social Security number

for their newborn child when they provide information for the

child's birth certificate. That's because most states make

applying for a Social Security number part of the birth

registration process. This is taken care of before the mother

and child leave the hospital.

 

     In addition to its "official" uses, banks, insurance

companies, and many other businesses and government agencies

use the Social Security number for record-keeping purposes.

Although we can't prevent others from asking for your number,

you should know that if you give it to them they can not use it

to get your Social Security records. We will not give out your

records, without your written consent, unless the law requires

or permits it.

 

     The Social Security Administration is aware of concerns

about the increasing uses of the Social Security number for

identification and record-keeping purposes. That concern

centers on the issue of your right to privacy and the

increasing possibility that it could be invaded if all your

records are kept under one number. If a business or other

enterprise asks for your Social Security number, you can refuse

to give it to them. However, that may mean doing without the

purchase or service for which your number was requested. Our

primary message is this: be careful with your Social Security

number and protect its privacy whenever possible.

 

     If you need a Social Security number, if you lost your

card and need another one, or if you need to change your name

on your current card, just call or visit a Social Security

office. We'll ask you to fill out a simple one-page application

form. And we'll ask to see certain documents depending on your

situation. (We need to see originals or certified copies.)

 

     Some typical examples are:

 

   * A birth certificate and some form of identification for a

     new card;

 

   * Some form of identification for a replacement card;

 

   * A marriage certificate or divorce papers for a name

     change.

 

 

The Taxes You Pay

 

 

     Social Security taxes are used to pay for all Social

Security benefits. In addition, a portion of your taxes is used

to pay for part of your Medicare coverage. General tax

revenues, not Social Security taxes, are used to finance the

Supplemental Security Income (SSI) program.

 

 

If You Work For Someone Else

 

 

     You and your employer pay taxes for Social Security and

Medicare. In 1994, you and your employer each pay 7.65 percent

of your gross salary, up to $60,600. The deduction might be

labeled "FICA" on your pay slip. That stands for Federal

Insurance Contributions Act, the law that authorized Social

Security's payroll tax.

 

 

If You Work For Yourself

 

 

     If you're self-employed, you pay 15.3 percent of your

taxable income into Social Security, up to $60,600. However,

there are special deductions you can take when you file your

tax return that are intended to offset your tax rate.

 

     For More Information: If you would like to learn more

about self-employment tax rates, call or visit Social Security

to ask for a free copy of the factsheet, If You're

Self-Employed (Publication No. 05-10022).

 

 

Extra Taxes For Medicare

 

 

     If you make more than $60,600 in 1994, you continue to pay

the Medicare portion of the Social Security tax on the rest of

your earnings. The Medicare portion of the tax is 1.45 percent

for employers and employees each, and 2.9 percent for

self-employed people.

 

 

You Become Eligible For Social Security By Earning "Credits"

 

 

     You must work and pay taxes into Social Security in order

to get something out of it. (Of course, some people get

benefits as a dependent or survivor on another person's Social

Security record.)

 

     As you work and pay taxes, you earn Social Security

"credits." In 1994 you earn one credit for each $620 in

earnings you have--up to a maximum of four credits per year.

(The amount of money needed to earn one credit goes up every

year.)

 

     Most people need 40 credits (10 years of work) to qualify

for benefits. Younger people need fewer credits to be eligible

for disability benefits or for their family members to be

eligible for survivors benefits if they should die.

 

     During your working lifetime, you probably will earn many

more credits than you need to be eligible for Social Security.

The fact that you earn these extra credits does not increase

your eventual Social Security benefit. However, the income you

earn while working will increase your benefit, as you will

learn in the next two sections.

 

     For More Information: If you want to learn more about the

number of credits you would need to qualify for benefits, just

call or visit Social Security to ask for a Personal Earnings

and Benefit Estimate Statement (see the next section), or ask

for a free copy of one of the following booklets: Retirement,

(Publication No. 05-10035), Survivors (Publication No.

05-10084), or Disability (Publication No. 05-10029).

 

 

How Much Will You Get From Social Security?

 

 

     The amount of your Social Security benefit is based on

factors such as your date of birth, the type of benefit you are

applying for, and most important, your earnings.

 

     This booklet will explain in a general way how a Social

Security benefit is figured. In the back of this booklet, you

will find tables that give examples of Social Security

benefits. But if you would like a detailed, personal estimate

of your Social Security retirement, disability, and survivors

benefits, all you have to do is call or visit Social Security

and ask for it. We will send you a form you can use to get a

Personal Earnings and Benefit Estimate Statement.

 

 

How Your Benefit Is Figured

 

 

     In general, a Social Security benefit is based on your

earnings averaged over your working lifetime. This is different

from many private pension plans that are usually based on a

relatively small number of years of earnings.

 

     In its simplest terms, here's how your Social Security

benefit is figured:

 

     Step 1--We determine the number of years of earnings to

     use as a base.

 

     Retirement benefits: For everybody born after 1928 and

     retiring in 1991 or later, which includes most people

     reading this booklet, that number is 35 years. Fewer years

     are used for people born in 1928 or earlier.

 

     Disability and survivors benefits: We use most of the

     years of earnings posted to your record.

 

     Step 2--We adjust these earnings for inflation.

 

     Step 3--We determine your average adjusted monthly

     earnings based on the number of years figured in step 1.

 

     Step 4--We multiply your average adjusted earnings by

     percentages in a formula that is specified by law.

 

     That formula results in benefits that replace about 42

     percent of a person's earnings. This applies to people who

     had average earnings during their working years. The

     percentage is lower for people in the upper income

     brackets and higher for people with low incomes. (That's

     because the Social Security benefit formula is weighted in

     favor of low-income workers who have less opportunity to

     save and invest during their working years.)

 

 

If You Didn't Earn Enough Credits To Get Social Security

 

 

     If you haven't worked long enough to get Social Security,

or if you get only a small amount, you may be eligible for

Supplemental Security Income, or SSI. For more information see

page 22.

 

 

Part 3--What You Need To Know When You Become Eligible For

Social Security

 

 

How And When To Sign Up For Social Security

 

 

     You can apply for benefits at any Social Security office.

The easiest way to file a claim is to call our toll-free number

ahead of time for an appointment. That number is:

1-800-772-1213.

 

     For disability, survivors, and SSI benefits, you should

apply as soon as you're eligible. (The rest of this chapter

will help you decide if and when you are.) When signing up for

retirement, we ask that you talk to a Social Security

representative in the year before the year you plan to retire.

That's because the rules are complicated, and it may be to your

advantage to start your retirement benefits before you actually

stop working.

 

 

What Records Will You Need?

 

 

     To show that you are eligible for Social Security and to

help us decide how much your benefits should be, there are

certain documents we may ask you to provide. The ones you'll

need depend on the circumstances of your claim. Here is a list

of some of the documents you may need when you sign up for

Social Security:

 

   * Your Social Security card (or a record of your number);

 

   * Your birth certificate;

 

   * Children's birth certificates (if they are applying);

 

   * Marriage certificate (if signing up on a spouse's record);

 

   * Your most recent W-2 form, or your tax return if you're

     self-employed.

 

     This is just a partial list to help you get prepared. When

you actually sign up for Social Security, we'll let you know if

other documents are needed.

 

     Here's An Important Point: If you don't have all the

documents you need, don't delay signing up for Social Security.

We'll help you get the information you need.

 

 

Direct Deposit

 

 

     You have a choice of how you receive your Social Security

or SSI payments. Your benefit can either be deposited directly

into your bank account or come to you in the mail. Most people

have their benefits deposited in their bank account because it

is safer and more convenient than receiving checks. It is also

more efficient and saves money for the government.

 

     If you choose direct deposit, have your checkbook or any

papers that show your bank account number with you when you

sign up for Social Security.

 

 

Retirement Benefits

 

 

     This section of the booklet provides a brief overview of

Social Security retirement benefits. If you want to learn more

about the program, call or visit Social Security to ask for a

free copy of the booklet, Retirement (Publication No.

05-10035).

 

 

Full Retirement

 

 

     If you were born before 1938, you will be eligible for

your full Social Security benefit at the age of 65.

 

     However, beginning in the year 2000, the age at which full

benefits are payable will increase in gradual steps from 65 to

67. This affects people born in 1938 and later. For example, if

you were born in 1940, your full retirement age is 65 and 6

months. If you were born in 1950, your full retirement age is

66. Anybody born in 1960 or later will be eligible for full

retirement benefits at 67.

 

 

Reduced Benefits As Early As 62

 

 

     No matter what your "full" retirement age is, you may

start receiving benefits as early as 62. However, if you start

your benefits early, they are reduced five-ninths of one

percent for each month before your "full" retirement age. For

example, if your full retirement age is 65 and you sign up for

Social Security when you're 64, you will receive 93 1/3 percent

of your full benefit. At 62, you would get 80 percent. (Note:

The reduction will be greater in future years as the full

retirement age increases.)

 

     Here's An Important Point: There are disadvantages and

advantages to taking your benefit before your full retirement

age. The disadvantage is that your benefit is permanently

reduced. The advantage is that you collect benefits for a

longer period of time. Each person's situation is different, so

make sure you check with Social Security before you decide to

retire.

 

 

What About Late Retirement?

 

 

     Some people continue to work full time beyond their full

retirement age--and they do not sign up for Social Security

until later. This delay in retirement can increase your

Social Security benefit in two ways:

 

   * Your extra income usually will increase your "average"

     earnings, and the higher your average earnings, the higher

     your Social Security benefit will be.

 

   * In addition, a special credit is given to people who delay

     retirement. This credit, which is a percentage added to

     your Social Security benefit, varies depending on your

     date of birth. For people turning 65 in 1994, the rate is

     4.5 percent per year. That rate gradually increases in

     future years, until it reaches 8 percent per year for

     people turning 65 in 2008 or later.

 

 

How Much Will You Get?

 

 

     On Page 11, we explained how you can get a personalized

estimate of the benefits you are due. In addition, there is a

chart on Page 34 that gives examples of retirement benefit

rates.

 

 

Disability Benefits

 

 

     This section of the booklet provides a brief overview of

Social Security's disability program. It concentrates primarily

on benefits for people who have worked and earned enough Social

Security "credit" to qualify for disability on their own work

record.

 

     However, it is important to note that other kinds of

disability benefits are available from Social Security,

depending on your circumstances. These include:

 

   * Widows and widowers with disabilities who are eligible for

     benefits on the record of a spouse;

 

   * People with disabilities who have low income and few

     assets who might be eligible for SSI benefits;

 

   * Children over age 18 with disabilities who might be

     eligible for Social Security benefits on the record of a

     parent, or children of any age with disabilities who might

     be eligible for SSI benefits on their own.

 

     For More Information: Because disability is one of the

most complicated of all Social Security programs, we recommend

that you call or visit Social Security to ask for a free copy

of the booklet, Disability (Publication No. 05-10029), for more

in-depth information.

 

     For information about benefits available to children with

disabilities, see page 24 of this booklet, or call or visit

Social Security and ask for a free copy of the publication,

Social Security and SSI Benefits For Children With Disabilities

(Publication No. 05-10026).

 

 

What Do We Mean By "Disability"?

 

 

     What is a "disability"? The dictionary defines it as "a

physical or mental condition that prevents a person from

leading a normal life." But Social Security's definition of

disability is more specific and is generally related to your

ability to work.

 

     To qualify for disability from Social Security, you must

have a physical or mental impairment that is expected to keep

you from doing any "substantial" work for at least a year.

Generally, monthly earnings of $500 or more are considered

substantial. Or you must have a condition that is expected to

result in your death.

 

     This is a strict definition of disability. Unlike many

private pension plans or even other government disability

programs, Social Security is not intended for a temporary

condition. In other words, there is no such thing as a

"partial" disability payment from Social Security.

 

 

What You Should Do If You Become Disabled

 

 

     If you become disabled, you should file for disability

benefits as soon as possible. You can do this by calling or

visiting any Social Security office.

 

     You can shorten the time it takes to process your claim if

you have the following medical and vocational information when

you apply:

 

   * The names, addresses, and phone numbers of your doctors,

     and of hospitals, clinics, etc., where you have been

     treated; and

 

   * A summary of where you worked in the last 15 years and the

     kind of work you did.

 

     Here's An Important Point: Social Security's disability

rules are different from those of other private plans or

government agencies. So the fact that you qualify for

disability from somebody else does not mean you will be

eligible for Social Security. Further, the fact that you have a

statement from your doctor indicating you are disabled does not

mean you will be automatically eligible for Social Security

disability payments.

 

 

When Do Your Disability Benefits Start?

 

 

     If we decide you are disabled, in most cases your monthly

benefits will begin with the sixth full month of your

disability. Here's a simple example of how this works:

 

     John has a severe heart attack on March 15. He files for

     disability on March 29, and his claim is approved on May

     30. September is the sixth full month that he is disabled,

     so his benefits begin that month. Social Security checks

     are usually paid on the third of the following month, so

     John's first check (the September check) will arrive

     October 3.

 

     Here's An Important Point: Do not delay signing up for

Social Security because of this "waiting period." By filing

early, all the paperwork will be processed before your first

check is due. There is no waiting period for disabled

children's benefits or for SSI disability payments.

 

 

How Much Will You Get?

 

 

     On Page 11, we told you how you can get a personalized

estimate of any benefits you are due. There is a chart on

Page 35 that gives examples of disability benefit rates.

 

 

Workers' Compensation

 

 

     If you get workers' compensation or certain other

government disability benefits, your Social Security disability

benefit may be reduced. Or, your Social Security benefits may

reduce your other disability payments. The sum of all

disability payments to you and your family cannot exceed 80

percent of your earnings averaged over a period of time shortly

before you became disabled.

 

 

How Long Will Your Disability Benefits Continue?

 

 

     You will continue to get disability benefits unless your

condition improves or you return to "substantial" work (see

Page 16). We check your claim periodically to determine if this

is the case. To help us decide, you may be asked to undergo a

special test or examination that we will pay for.

 

 

Incentives To Return To Work

 

 

     There are special rules that help people who would like to

return to work but are concerned about the effect this might

have on their disability benefits. These rules offer special

incentives that permit people to try working without the risk

of a sudden loss of their monthly benefits and their Medicare

coverage.

 

     For More Information: If you would like to learn more

about these special work incentives, call or visit Social

Security to ask for a free copy of the booklet, Working While

Disabled... How Social Security Can Help (Publication No.

05-10095).

 

 

Benefits For Your Family

 

 

     This section of the booklet provides a brief overview of

benefits payable to members of your family when you are

eligible for retirement or disability benefits.

 

 

Who Can Get Benefits?

 

 

     When you start collecting Social Security retirement or

disability benefits, other members of your family might also be

eligible for payments. For example, benefits can be paid to:

 

   * Your husband or wife if he or she is 62 or older (unless

     he or she collects a higher Social Security benefit on his

     or her own record);

 

   * Your husband or wife at any age if he or she is caring for

     your child (the child must be under 16 or disabled and

     receiving Social Security benefits);

 

   * Your children, if they are unmarried and:

 

     --Under 18; or

 

     --Under 19 but in elementary or secondary school as a

       full-time student; or

 

     --18 or older and severely disabled (the disability must

       have started before age 22).

 

 

How Much Can Family Members Get?

 

 

     Usually, each family member will be eligible for a monthly

benefit that is up to 50 percent of your retirement or

disability rate. However, there is a limit to the amount of

money that can be paid to a family on your Social Security

record. The limit varies, but is generally equal to about 150

to 180 percent of your retirement benefit. (It may be less for

disability benefits.) If the sum of the benefits payable on

your account is greater than this family limit, then the

benefits to the family members will be reduced proportionally.

Your benefit will not be affected.

 

 

Benefits For Divorced People

 

 

     If you are divorced (even if you have remarried), your

ex-spouse can be eligible for benefits on your record. In some

situations, he or she could get benefits even if you're not

receiving them. In order to qualify, your ex-spouse must:

 

   * Have been married to you for at least 10 years;

 

   * Be at least 62 years old;

 

   * Be unmarried;

 

   * Not be eligible for an equal or higher benefit on his or

     her own Social Security record, or on someone else's

     Social Security record.

 

     Here's An Important Point: If your ex-spouse receives

benefits on your account, it does not affect the amount of any

benefits payable to you or your other family members.

 

 

Survivors Benefits

 

 

     This section of the booklet provides a brief overview of

the benefits payable when a family breadwinner dies. For more

information, call or visit Social Security to ask for a free

copy of the booklet, Survivors (Publication No.

05-10084).

 

 

Who Can Receive Survivors Benefits?

 

 

     When you die, certain members of your family may be

eligible for benefits on your Social Security record if you had

earned enough credits while you were working.

 

     The family members who can collect benefits include:

 

   * A widow or widower who is 60 or older;

 

   * A widow or widower who is 50 or older and disabled;

 

   * A widow or widower at any age if she or he is caring for a

     child under 16 or a disabled child who is receiving Social

     Security benefits;

 

   * Children if they are unmarried and:

 

     --Under 18; or

 

     --Under 19 but in an elementary or secondary school as a

       full-time student; or

 

     --18 or older and severely disabled (the disability must

       have started before age 22);

 

   * Your parents, if they were dependent on you for at least

     half of their support.

 

 

Special One-Time Death Benefit

 

 

     If you had enough credits, a special one-time payment of

$255 also will be made after your death. This benefit is paid

only to your widow(er) or minor children.

 

 

Benefits To Divorced Widows And Widowers

 

 

     If you are divorced (even if you have remarried), your

ex-spouse will be eligible for benefits on your record when you

die. In order to qualify, your ex-spouse must:

 

   * Be at least 60 years old (or 50 if disabled) and have been

     married to you for at least 10 years;

 

   * Be any age if caring for a child who is eligible for

     benefits on your record;

 

   * Not be eligible for an equal or higher benefit on his or

     her own record;

 

   * Not be currently married, unless the remarriage occurred

     after 60--or 50 for disabled widows. (In cases of

     remarriage after the age of 60, your ex-spouse will be

     eligible for a widow's benefit on your record or a

     dependent's benefit on the record of his or her new

     spouse, whichever is higher.)

 

     Here's An Important Point: If your ex-spouse receives

benefits on your account, it does not affect the amount of any

benefits payable to other survivors on your record.

 

 

How Much Will Your Survivors Get?

 

 

     The amount payable to your survivors is a percentage of

your basic Social Security benefit--usually in a range from 75

percent to 100 percent each. However, there is a limit to the

amount of money that can be paid each month to a family. The

limit varies, but is generally equal to about 150 to 180

percent of your benefit rate. If the sum of the benefits

payable to your surviving family members is greater than this

limit, then the benefits to your family will be reduced

proportionately.

 

     The Personal Earnings and Benefit Estimate Statement,

explained on Page 11, will provide you with a more accurate

measurement of potential survivors benefits payable on your

record. In addition, there is a chart on Page 36 that gives

examples of survivors benefit rates.

 

 

Retirement Benefits For Widow(er)s

 

 

     If you are receiving widows or widowers (including

divorced widows or widowers) benefits, you should remember that

you can switch to your own retirement benefits (assuming you're

eligible and your retirement rate is higher than your widow's

rate) as early as age 62. In many cases, a widow(er) can begin

receiving one benefit at a reduced rate and then switch to the

other benefit at an unreduced rate at age 65. The rules are

complicated and vary depending on your situation, so you should

talk to a Social Security representative about the options

available to you.

 

 

Supplemental Security Income

 

 

     This section of the booklet provides a brief overview of

the Supplemental Security Income (SSI) program. For more

information, call or visit Social Security to ask for a free

copy of the booklet, SSI (Publication No. 05-11000).

 

 

What Is Supplemental Security Income?

 

 

     Supplemental Security Income is usually called "SSI" for

short. Although this program is run by Social Security, the

money to pay for SSI benefits does not come from Social

Security taxes or Social Security trust funds. SSI payments are

financed by the general revenue funds of the U.S. Treasury.

 

     SSI makes monthly payments to people who have low incomes

and few assets. In addition, to get SSI you must:

 

   * Be living in the U.S. or the Northern Mariana Islands;

 

   * Be a U.S. citizen or be living in the U.S. legally;

 

     And you must be:

 

   * 65 or older; or

 

   * Blind; or

 

   * Disabled.

 

     Here's An Important Point: Children as well as adults can

get SSI benefits because of blindness or disability. See Page

24 for more information.

 

 

Income And Asset Limits For SSI

 

 

     To get SSI, your income and the value of the things you

own must be below certain limit.

 

     By the term income, we mean the money you have coming in

such as earnings, Social Security, or other government checks,

pensions, etc. But we also mean "non-cash" items you receive

such as the value of free food and shelter.

 

     How much income you can have and still get SSI depends on

whether you work or not--and in which state you live. Although

there is a basic national SSI payment rate, some states add

money to the national payment, so they have higher SSI rates

and higher income limits than others. Check with your local

Social Security office to find what the SSI rates and income

limits are in your state.

 

     Assets are the things you own such as property, cash, and

bank accounts. But we don't count everything you own when we

decide if you can get SSI. For example, we don't count your

home and many of your personal belongings, and we usually don't

count your car.

 

     You may be able to get SSI if the things you own that we

count are worth no more than:

 

   * $2,000 for one person; or

 

   * $3,000 for a couple.

 

     Unlike the income category, these limits do not change

from state to state.

 

 

How Much Can You Get From SSI?

 

 

     How much you will get from SSI depends on your other

income and where you live. The basic monthly SSI check is the

same in all states--$446 for one person and $669 for a couple.

But some states add money to the basic rate, so you may get

more if you live in one of these states. You will get less if

you have other income or if someone helps pay for your food and

shelter.

 

     For more information about SSI rates in your state,

contact your local Social Security office.

 

 

SSI For People With Disabilities--Including Children

 

 

     People with disabilities including children, can get SSI

if their income and assets are below the limits discussed in

the previous sections.

 

     Most of the rules used to decide if a person has a

condition severe enough to qualify for Social Security

disability benefits also apply to SSI.

 

     And as with Social Security, the SSI program has special

plans designed to help people who want to try going back to

work without the risk of suddenly losing their benefits or

Medicaid coverage. To learn more about these special plans, ask

for a copy of the booklet, Working While Disabled... How Social

Security Can Help (Publication No. 05-10095).

 

     Social Security has special guidelines for evaluating

disability in children filing for SSI benefits. If you have a

child with a disability, contact your local Social Security

office to apply for SSI disability benefits.

 

     For special information about benefits for children with

disabilities, ask for a copy of the publication, Social

Security and SSI Benefits For Children With Disabilities

(Publication No. 05-10026).

 

 

Other Help You Can Get

 

 

     Most people who get SSI can also get food stamps and

"Medicaid" assistance. Medicaid, which is a different program

than Medicare, helps pay doctor and hospital bills. For more

information about food stamps, ask Social Security for a copy

of the factsheet Food Stamp Facts Publication No. 05-10101).

For more information about Medicaid, contact your local social

services office.

 

 

Medicare

 

 

     Medicare is our country's basic health insurance program

for people 65 or older and many people with disabilities.

 

     You should not confuse Medicare and Medicaid. Medicaid is

a health insurance program for people with low income and

limited assets. It is usually run by state welfare or social

service agencies. Some people qualify for one or the other;

some qualify for both Medicare and Medicaid.

 

     This booklet provides only a brief overview of the

Medicare program. If you would like to learn more about

Medicare, call or visit Social Security to ask for a free copy

of the booklet, Medicare (Publication No. 05-10043).

 

 

Medicare Has Two Parts

 

 

     There are two parts to Medicare:

 

   * Hospital insurance (sometimes called "Part A") -- This

     helps pay for inpatient hospital care and certain followup

     services; and

 

   * Medical insurance (sometimes called "Part B") -- This

     helps pay for doctors' services, outpatient hospital care,

     and other medical services.

 

 

Who Is Eligible For Hospital Insurance (Part A)?

 

 

     Most people get hospital insurance when they turn 65. You

qualify for it automatically if you are eligible for Social

Security or Railroad Retirement benefits. Or you may qualify on

a spouse's (including divorced spouse's) record. Others qualify

because they are government employees not covered by Social

Security who paid the Medicare part of the Social Security tax.

 

     In addition, if you have been getting Social Security

disability benefits for 24 months, you will qualify for

hospital insurance.

 

     Also, people who have permanent kidney failure that

requires maintenance dialysis or a kidney replacement qualify

for hospital insurance if they are insured or if they are the

spouse or child of an insured worker.

 

     Almost everybody qualities for hospital insurance through

one of the above methods. But if you don't and if you're 65 or

older, you can buy hospital insurance just like you can buy

other health insurance policies.

 

 

Who Can Get Medical Insurance (Part B)?

 

 

     Almost anyone who is eligible for hospital insurance can

sign up for medical insurance. Unlike Part A, which was paid

for by your taxes while you worked and is free when you're

eligible for it, Part B is an optional program that generally

costs $41.10 per month. Almost everybody signs up for this part

of Medicare.

 

 

How Do You Get Medicare?

 

 

     If you are already getting Social Security benefits when

you turn 65, you will be automatically enrolled in Medicare

(although you have the opportunity to turn down "Part B").

 

     If you are disabled, you will be automatically enrolled in

Medicare after you have been getting disability benefits for 24

months. (And you can turn down "Part B" if you want.)

 

     If you turn 65 but plan to keep working and do not plan to

sign up for Social Security at that time, you should call or

visit a Social Security office so we can help you decide if you

should sign up for Medicare only.

 

     There are many other rules associated with Medicare

enrollment including penalties for not enrolling in Part B when

you're first eligible. Please contact your Social Security

office for more details.

 

 

What Does Medicare Pay For?

 

 

     Medicare hospital insurance helps pay for:

 

   * Inpatient hospital care;

 

   * Skilled nursing facility care;

 

   * Home health care;

 

   * Hospice care.

 

     Medicare medical insurance helps pay for:

 

   * Doctors' services;

 

   * Outpatient hospital services;

 

   * Home health visits;

 

   * Diagnostic X-ray, laboratory, and other tests;

 

   * Necessary ambulance services; and

 

   * Other medical services and supplies.

 

 

What Medicare Does Not Pay For

 

 

     Not all health services are covered by Medicare. For

example, Medicare does not pay for:

 

   * Custodial care;

 

   * Dentures and routine dental care;

 

   * Eyeglasses, hearing aids, and examinations to prescribe

     and fit them;

 

   * Nursing home care (except skilled nursing care);

 

   * Prescription drugs; and

 

   * Routine physical checkups and related tests.

 

 

Help For Low-Income Medicare Beneficiaries

 

 

     If you get Medicare and have low income and few resources,

your state may pay your Medicare premiums and, in some cases,

other "out-of-pocket" Medicare expenses such as deductibles and

coinsurance. Only your state can decide if you qualify. To find

out if you do, contact your state or local welfare office or

Medicaid agency. For more general information about the

program, contact Social Security and ask for a copy of the

leaflet, Medicare Savings For Qualified Beneficiaries (HCFA

Publication No. 02184).

 

 

Part 4--What You Need To Know After You Sign Up For Social

Security

 

 

     After you've signed up for retirement, disability,

survivors, Medicare, or SSI benefits, your involvement with

Social Security is just beginning. This section of the booklet

provides a brief overview of a few things you need to know

about your benefits and how they work.

 

     When you start getting Social Security, we send you a

booklet that explains your rights and responsibilities. In

addition, we produce a variety of publications that explain

other facts you need to know about Social Security and SSI. If

you need more information, call or visit Social Security to

tell us your situation. There is probably a pamphlet or

factsheet we can send you that will answer your questions.

 

 

What You Need To Report To Us

 

 

     People who get Social Security should let us know when

something happens that might affect their benefits. Here are

some examples:

 

   * If they move;

 

   * If they get married or divorced;

 

   * If their name changes;

 

   * If their income or earnings change;

 

   * If a child is born or adopted;

 

   * If a beneficiary is imprisoned;

 

   * If they leave the United States;

 

   * If a beneficiary dies.

 

 

If You Disagree With A Decision We Make

 

 

     Whenever we make a decision that affects your eligibility

for Social Security or SSI benefits, we send you a letter that

explains our decision. If you disagree with our decision, you

have the right to appeal it. In other words, you can ask us to

review your case. If our decision was wrong, we will change it.

 

 

     For More Information: To learn more about the appeals

process, call or visit any Social Security office to ask for a

copy of the factsheet called The Appeals Process (Publication

No. 05-10041). In addition, you have the right to be represented

by a qualified person of your choice when dealing with Social

Security. For more information, ask us for a copy of the

factsheet, Social Security And Your Right To Representation

(Publication No. 05-10075).

 

 

How Your Earnings Affect Your Benefits

 

 

     There is a provision in the law that limits the amount of

money you can earn and still collect all your Social Security

benefits. This provision affects people under the age of 70 who

collect Social Security retirement, dependents, or survivors

benefits. (Earnings in or after the month you reach age 70

won't affect your Social Security benefits.) People who work

and collect disability or SSI benefits have different earnings

requirements and should report all their income to Social

Security.

 

     If you are under age 65, you can earn up to $8,040 in 1994

and still collect all your Social Security benefits.

 

     However, for every $2 you earn over $8,040, $1 will be

withheld from your Social Security benefits.

 

     If you are age 65 through 69, you can earn up to $11,160

in 1994 and still collect all your Social Security benefits.

 

     However, for every $3 you earn over $11,160, $1 will be

withheld from your Social Security benefits.

 

     We count only the earnings you make from a job or your net

profit if you're self-employed. This includes compensation such

as bonuses, commissions, and vacation pay. It does not include

such items as pensions, annuities, investment income, interest,

Social Security, veterans, or other government benefits.

 

     For More Information: If you would like to learn more

about the Social Security earnings limits and how they affect

you, call or visit any Social Security office to ask for a free

copy of How Work Affects Your Social Security Benefits

(Publication No. 05-10069).

 

 

Your Benefits May Be Taxable

 

 

     Some people who get Social Security will have to pay taxes

on their benefits. You will be affected only if you have

substantial income in addition to your Social Security

benefits.

 

     If you file a Federal tax return as an "individual," and

your combined income* is between $25,000 and $34,000, you may

have to pay taxes on 50 percent of your Social Security

benefits. If your combined income* is above $34,000, 85 percent

of your Social Security benefits is subject to income tax.

 

     If you file a joint return, you may have to pay taxes on

50 percent of your benefits if you and your spouse have a

combined income* that is between $32,000 and $44,000. If your

combined income* is more than $44,000, 85 percent of your

Social Security benefits is subject to income tax.

 

     If you are a member of a couple and file a separate

return, you probably will pay taxes on your benefits.

 

   * "Combined income" means your and your spouse's adjusted

     gross income (as reported on your Form 1040) plus

     nontaxable interest plus one-haft or your Social Security

     benefits.

 

     For More Information: If you would like more information

about the taxation of your Social Security benefits, there are

some IRS publications that will help you. Call or visit IRS to

ask for a copy of Publication 554, Tax Information for Older

Americans, and Publication 915, Social Security Benefits And

Equivalent Railroad Retirement Benefits.

 

 

When Somebody Needs Help Managing Benefits

 

 

     Sometimes, people who receive Social Security or SSI are

not able to handle their own financial affairs. In those cases,

and after a careful investigation, we appoint a relative, a

friend, or another interested party to handle their Social

Security matters. We call that person a "representative payee."

All Social Security or SSI benefits due are made payable in the

representative payee's name on behalf of the beneficiary.

 

     Here's An Important Point: If you have "power of attorney"

for someone, that does not automatically qualify you to be his

or her representative payee.

 

     If you are a representative payee, you have important

responsibilities.

 

   * You must use the Social Security or SSI benefits for the

     personal care and well-being of the beneficiary. Any

     excess funds must be saved on the beneficiary's behalf.

 

   * You must keep Social Security informed of any events that

     might affect the beneficiary's eligibility for benefits.

     For example, you should tell us if the beneficiary moves

     or gets a job. And, of course, you should tell us when the

     beneficiary dies.

 

   * You must file a periodic accounting report with Social

     Security that shows how you spent or saved the benefits

     you were paid.

 

     For More Information: If you would like to learn more about

receiving benefits on behalf of another individual call or visit

any Social Security office to ask for a copy of the brochure, A

Guide For Representative Payees (Publication No. 05-10076).

 

 

Other Booklets Available

 

 

     We said right up front that this booklet was intended to

provide a general overview of Social Security programs and how

they might affect you. Throughout this booklet, we referred you

to other publications whenever the situation required more

information or a more detailed explanation.

 

     The Social Security Administration and the Health Care

Financing Administration (the Medicare people) produce many

publications and factsheets designed to help explain these

programs to you. Here is a list of some you may find helpful.

 

   * Retirement (Publication No. 05-10035)--A guide to Social

     Security retirement benefits

 

   * Disability (Publication No. 05-10029)--A guide to Social

     Security disability benefits

 

   * Survivors (Publication No. 05-10084)--A guide to Social

     Security survivors benefits

 

   * Medicare (Publication No. 05-10043)--A guide to the

     Medicare program

 

   * SSI (Publication No. 05-11000)--A guide to the

     Supplemental Security Income program

 

   * Social Security And SSI Benefits For Children With

     Disabilities (Publication No. 05-10026)--An overview of

     benefits available to children

 

   * A Guide To Social Security And SSI Disability Benefits For

     People With HIV Infection (Publication No. 05-10020)--An

     explanation of benefits for people with the AIDS virus

 

   * Financing Social Security (Publication No. 05-10094)--A

     factsheet that provides an overview of Social Security's

     trust fund operations

 

     These and other publications can be obtained free of

charge at any Social Security office or by calling our

toll-free number: 1-800-772-1213.

 

Fingertip Facts

 
     Here's a summary of important Social Security information

 1994 Social Security and Medicare Taxes

 

   --You and your employer each pay 7.65 percent up to $60,600

 

   --If you're self-employed, you pay 15.3 percent up to

     $60,600

 

 

Extra Taxes For Medicare In 1994

 

 

   --You and your employer each pay 1.45 percent on all wages

     above $60,000

 

   --If you're self-employed, you pay 2.9 percent on all net

     earnings above $60,600

 

 

Work Credits In 1994

 

 

   --For each $620 you earn, you receive one Social Security

     "credit" up to four per year

 

   --Most people need 40 credits to be eligible for retirement

     benefits

 

   --Younger people need fewer credits to qualify for

     disability and survivors benefits

 

 

Average 1994 Social Security Benefits

 

 

   --retired individual: $674

 

   --retired couple: $1,140

 

   --disabled individual: $641

 

   --disabled individual with a spouse and child: $1,092

 

   --widow(er): $631

 

   --young widow(er) with 2 children: $1,316

 

 

1994 Earnings Limits

 

 

   --If you're under 65, you can earn up to $8,040 with no

     reduction in benefits; for every $2 you earn over $8,040,

     $1 is withheld from benefits

 

   --If you're 65-69, you can earn up to $11,160 with no

     reduction in benefits; for every $3 you earn over $11,160,

     $1 is withheld from benefits

 

   --If you' re 70 or older, there is no limit on your earnings

 

 

1994 SSI Payment Rates

(does not include state supplement, if any)

 

 

   --$446 for an individual

 

   --$669 for a couple

 

 

Index

 

 

Subject

 

appeals

benefits

  --estimate of

  --figuring amount of

  --kinds of

children (benefits for)

credits

direct deposit

disability benefits

divorced people (benefits for)

early retirement

earnings limits

estimate of benefits

family benefits

FICA (Federal Insurance Contributions Act)

financing of Social Security

hospital insurance

incentives to work

late retirement

Medicaid coverage

medical insurance

Medicare coverage

  --help for low-income Medicare beneficiaries

parents (benefits for)

quarters of coverage (see credits)

reporting requirements

representative payee

retirement benefits

self-employment taxes

Social Security numbers

Supplemental Security Income (SSI)

survivors benefits

taxation (of Social Security benefits)

taxes (Social Security)

telephone numbers (toll-free)

trust funds

waiting period

widows and widowers

workers' compensation
 

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