Social Security

The Social Security Act, passed in 1935, created a retirement program intended to provide financial support for elderly workers who could no longer perform gainful labor. Since that time, Social Security has expanded to include disabled workers, dependents of persons qualified to receive Social Security, and survivors (widows, widowers or children) of someone who has died but is still legally eligible to receive Social Security. Thus, depending on a person’s circumstances, he or she may be eligible for Social Security at any age. Approximately one out of every six Americans today, or nearly 44 million people, collect some form of Social Security. About $27 billion is paid in cash benefits every month; that is the equivalent of $888 million per day or $616 thousand per minute.

How Social Security Works

The purpose of Social Security is to provide a financial safety net for retirees, disabled workers, dependents of recipients and survivors, though it should be stressed that Social Security is not intended as a recipient’s only source of income. Instead, it is meant to supplement pensions, insurance, savings, and other forms of income accumulated during a person’s working years.

The funds used to pay Social Security benefits are raised through Social Security taxes. Every payday, 7.65 percent of an employee’s gross salary goes to Social Security (as of 1995). This deduction is usually labeled “FICA” for the Federal Insurance Contributions Act which authorizes the payroll tax. A person’s employer is also required to contribute 7.65 percent of an employee’s gross salary to Social Security. (If a person is self-employed, he or she pays 15.3 percent of his or her taxable income to Social Security, but half of that is deductible from federal income tax as a business expense.) Of the money received from Social Security payroll taxes, the largest portion goes to pay retirement benefits; smaller portions pay disability benefits and Medicare (see below for more information on Medicare). As of 1995, there were approximately 141 million people paying into Social Security.

Eligibility for Social Security Benefits

In order to receive Social Security benefits, a person must have paid into the Social Security system (with the exception of dependents and survivors who receive benefits based on another’s Social Security record). As a person works and pays Social Security taxes, he or she earns credits. As of 1995, for every $630 a person earns, he or she receives one credit up to a maximum of four credits per year. The Social Security Administration (SSA), which operates the Social Security system, uses a person’s Social Security number to track earnings over the course of his or her working career. Most people require 40 credits (10 years of work) to qualify for retirement benefits.

If you are entitled to SSDI benefits and your application has been denied, you need an experienced attorney to fight for your rights. 


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