Social Security (United States)

Social Security ( officially Old Age, Survivors, and Disability Insurance ( OASDI ), 1937-1946 Social Security Board ( SSB) ) denotes the state pension insurance in the social security system of the United States. It is founded in 1946 by the Social Security Administration Social Security Administration ( SSA ), headquartered in Baltimore, Maryland, in 2009 around 62,000 employees included, organized. The SSA is therefore also responsible for the award of Social Security Number (SSN, social security number ).

Preliminary remarks

The U.S. public pension system - known as Social Security - is the most important system of social protection in the United States. Apart from very few exceptions, every worker and self-employed persons is liable for contributions.

Overview of the services of Social Security:

  • Since 1935, old-age pension ( Old Age Insurance, OAI)
  • Since 1939 for widows and orphans pension ( Old Age Survivors Insurance, OASI )
  • Since 1956, disability pension ( Old Age Survivors Disability Insurance, OASDI )
  • 1935 introduced Eldercare ( Old Age Assistance, OAA ) and income support for the blind ( Aid to the Blind, AB) along with the 1950 introduced income support for disabled ( Aid to the Permanently and Totally Disabled, APTD ), 1974 in the unified social assistance performance program Supplemental Security Income ( SSI) paid off.
  • 1935 introduced income support for needy families with minor children ( Ald to the Dependent Children, ADC ), ( 1960 Ald to Families with Dependent Children, AFDC ) existed until 1997 and was replaced by the Temporary Assistance for Needy Families ( TANF ) program.

History

Social Security was introduced as part of the New Deal of President Franklin D. Roosevelt in 1935 as a public pension system, which is mainly funded by the PAYG system, ie to finance the contributions of current employees, the expenditure on the grant recipients, without appreciable financial reserves to be established. The financing is done through contributions by employers and employees in equal parts with corresponding contribution and benefit assessment limits.

Until the introduction of Social Security 1935, notions of nation- state-organized security systems have not been successful. There was an overwhelming opinion to the private self- responsibility and private welfare organizations. As the economic depression revealed the inadequacy of the fragmented and inconsistent security systems in the states, this was the way for a national solution. By 1935, however, there was, inter alia, 1861 introduced the Veterans Pension Program, the Teacher 's Pension Plan, founded in 1896, a pension provision for teachers in New Jersey and in 1912, the Civil Service Retirement System, a pension system for the public service of the Federation.

From 1936 to 1937, 35 million social security cards have been issued to the citizens.

At the start of the obligation to contribute was limited to occupations in the manufacturing sector. After the Second World War, the Social Security expanded, however, very quickly and at the end of the sixties the obligation to contribute was almost universal ( including self-employed). In 1983 the compulsory insurance was extended to all new federal employees and from 1984 also to employed by non-profit organizations. From 1988, also helping family members of self- involved. In 1998, 93 % of the workforce in the United States member of the Social Security.

In the initial period, the amount of the pension payments was determined by Congress. Since 1975, the Renta adjustments are made automatically to reflect the cost of living rising bill. In 1983, the public pension system in the United States came to the brink of insolvency. As part of the reform, the contribution rates were increased so that the system currently generates enormous surpluses. This surplus will be accumulated in the so-called "trust funds" and are intended to protect the financial viability of the pension system in the longer term.

Since 1984, the pension payments are taxable on certain income levels.

In 1999 the federal budget ( Federal Budget) for the Social Security (excluding Medicare ) about 390.04 billion U.S. dollars, equivalent to 22.9 % of the total budget.

2010, the budget was 695 billion U.S. dollars (share: 19.6 %).

Benefits of Social Security

The normal retirement age under Social Security is for men and women alike 65 to 67 years, depending on year of birth. Since 1956 there is the flexible age limit from 62 years for women and since 1961 also for men. The majority of people today take the early " retirement allowance ", which is accompanied by a reduction of the normal retirement pension of about 5-6 % per year. According to the pensioner can defer its application until the age of 70 but also to take about the same annual fee. The basic claim is based on the deposits and the years. Payments for a year count as full when they reach the respective percentage of the income threshold for the year. A minimum period of 5 years effective is a prerequisite.

Equality is consistently applied in Social Security. Which of the spouse had made ​​contributions to Social Security, does not matter. The survivors will receive 60% of the amount that the partner had received. The survivors must not have even paid something for Social Security nor the American citizenry possess. In addition, the spouse receives, during the retiree is still alive, an amount equal to 50 % of the claim of the pensioner. This preferential treatment is also done by the Social Security. It is due when the beneficiary reaches the age of retirement and has applied for favoring. The beneficiary must have earned either to its claim, nor have the American citizenship. Should the spouse because of his own contributions to Social Security have a self-generated claim, he has the choice between the two claims. However, a simultaneous use of both services is not permitted.

Technical details

Currently, employers and employees each pay 6.2 percent of gross wages of the employee into the pension fund. Self-employed pay the full 12.4 percent alone. Self-employed, be a net revenue was $ 400 per year or more, this revenue must report directly to the tax authority and pay. If the net income is less than $ 400, the gross receipts amount to a minimum of $ 600 per year, this income can be validly made for Social Security to a limited extent and only on request.

On wage income that exceeds the income limit, no contributions must be paid. The ceiling is currently set at an annual salary of $ 94,200 (2005: $ 90,000 ). The current contribution rate has been stable since the end of the eighties. Services can be purchased at a discount from the age of 62. The age can be obtained from the full posts, depending on the year of birth. For citizens who were born in 1960 or later, the age limit of 67 years applies.

The pension payments are made not before the third day of each month to the account, which may be performed in any country with which the United States maintain contact.

Future prospects

The Social Security Administration, in its projections assume that future pension contributions either increased or pension benefits must be cut. Without adjustments, the trust fund would be depleted in 2042, because the baby boomer generation has set up there to rest and the life expectancy of Americans will increase significantly.

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