Social Security is often in the news – especially when it’s time to trim budgets. But tens of millions of Americans rely on this “social safety net” to make ends meet. Social Security is designed to provide just that: security. When age, disability, or death of a spouse or parent interfere with one’s economic security, this safety net is designed to catch them.
What types of Social Security benefits are available, and do you qualify? What about your family? What happens if an application is denied? There are often a lot of questions around these issues; we will help you find your answers.
Your Guide to Social Security Benefits
The Social Security system we have today has remained virtually the same since President Franklin Delano Roosevelt signed the bill into law in 1935. At that time, FDR was combating the worst economic collapse in US history, and New Deal initiatives were designed to get the country working again.
And for those who couldn’t, Social Security delivered that safety net. As FDR said, the law was intended to “give some measure of protection to the average citizen and his family against the loss of a job and against poverty-ridden old age.”
Today, 62 million Americans receive benefits from the Social Security Administration (SSA). For most, these funds are critical in their ability to afford housing, food, heat, transportation, and other essentials.
Today, when people think of Social Security benefits, they immediately think of retirement. In fact, 71 percent of people who receive benefits are retirees. This is a major source of income for those 65 and older.
According to the Social Security Administration, approximately 42 million retired workers received benefits in 2017. The average monthly benefits are $1369.* For 62 percent of seniors, these benefits make up at least half of their total income.
*Note: Exact figures will fluctuate month to month. The statistic is given for the month of June 2017.
How Do You Qualify for Retirement Benefits?
You probably noticed that there is a Social Security tax that is taken from your paycheck (or which you pay at tax time if you are an independent contractor/freelancer/business owner). When you decide to draw benefits, your payments are determined by the amount you contributed. The age at which you retire also impacts payments. More on this in a moment.
The SSA assigns you a “credit” for each quarter year you work and pay Social Security taxes. You qualify for retirement benefits when you have earned 40 credits.
If you were born in or after 1960, the full retirement age is 67; it decreases gradually for those born earlier. If you were born before 1937, the full retirement age is 65. If you retire earlier, your payments will be reduced.
Say, for example, you were born after 1960. If you retire at 62 (the earliest you can draw Social Security), your benefits will be decreased to 70 percent of the full amount. If you wait until age 65, you’ll receive 86.7 percent. At 67, you will receive full benefits, and if you wait until age 70, your benefits will be 24 percent higher because of the delay.
Retirement Benefits for Spouses
When Social Security was enacted, most women did not work outside the home. The law protects them too: spouses could receive benefits even if they never worked. While times have changed, this protection remains in place. Your husband or wife can collect benefits, which are based on your contributions and payments.
Spouses can start to receive benefits at age 62, but again, payments will be lower. If they wait until full retirement age, their payments are the equivalent of half of your benefits.
Now, what if your spouse also works and contributes to Social Security? If they would receive more as a spouse, they are entitled to that higher amount.
And what if your spouse is younger than 62? They may still receive Social Security benefits if they have a child under age 16 or with a disability in their care.
Retirement Benefits for Survivors
While the death of a spouse or parent is a stressful event, Social Security again provides a safety net. The worker’s benefits do not just vanish; certain dependents can claim them and receive payments.
Do You Qualify for Survivors’ Benefits?
Benefits are available if you are:
- A widow/widower age 60 or older.
- A widow/widower of any age, if they care for the decedent’s child.
- An unmarried child under 18.
- A high school student under age 19.
- An unmarried child under 22 if disabled.
- A dependent parent age 62 or older.
- An ex-spouse who was married to the deceased worker for ten or more years and who has not remarried.
Spouses typically receive payments equaling 100 percent of the decedent’s benefits, while qualifying children receive 75 percent. One dependent parent is entitled to 82.5 percent and if both collect benefits, they receive 75 percent of the decedent’s benefits.
Keep in mind that total survivors’ benefits cannot be more than 150 percent of the deceased worker’s entitlements, so amounts may vary from the “typical” formula mentioned above. Learn more about survivor benefits.
Social Security Disability Benefits
The majority (67 percent) of private-sector workers do not have long-term disability insurance. This makes the benefits available through Social Security a vital resource for employees who suffer a “severe or prolonged disability.” This covers approximately 89 percent of employees age 21-64 – as well as their families.
Disabled workers were top of mind when the law was enacted in 1935; this is essential coverage that can prevent a disability from becoming a financial catastrophe. Here is how to qualify for Disability Benefits.
Do You Qualify for Social Security Disability?
To qualify for these benefits, you must meet the following criteria:
- Work requirements. We mentioned that you receive one credit for every quarter year you work. To receive Social Security disability benefits, typically you need to have earned 40 credits, 20 of which were generated in the last 10 years (ending with the time you became disabled).
If you are younger, you may earn fewer credits. For example, if you are under age 24, you may qualify for benefits if you have six credits earned in the 3 year period, ending with your disability. If you are unsure how many credits you need, refer to this chart from the SSA.
What if you are self-employed? In that case, you pay Social Security taxes when you do your quarterly and annual taxes. In 2018, you earn one credit for every $1320 of self-employment income. Be aware that this changes from year to year.
- SSA definition of disability. Social Security does not pay out for partial or short-term disability. Your disability must prevent you to do the work that you did previously, prevent you from adjusting to other types of work, or last/is expected to last for at least one year or is a fatal condition.
The SSA maintains a list of disabilities that automatically qualify you for benefits. You can find that list here.
What if your condition is not listed? The SSA uses other factors to determine if you qualify.
And what if you are turned down? Many of our clients come to us because they have been denied benefits. This tends to be the rule rather than the exception when it comes to Social Security disability. Our expert team can help you re-apply, enhancing your chances of being accepted. Get qualified for Disability Benefits.
The spouse and/or child(ren) of disabled workers may also be able to claim benefits. Qualifying beneficiaries:
- Spouse age 62 or older.
- Spouse with the care of a child under age 16 or a disabled child.
- An ex-spouse who was married to the disabled worker for 10 years or more.
- Minor child of disabled worker (under 18).
- Child in high school (under age 19).
- Child disabled before age 22.
Supplemental Security Income
SSI is typically administered by the states. It is intended to provide money for food, shelter, clothing, and other essentials.
Do You Qualify for SSI?
You may receive SSI benefits if you are:
- Age 65 or older.
- Within income/resource guidelines.
SSI does not have age limits; that is, a child can qualify for benefits if they meet the disability and income criteria.
If your Social Security safety net feels less safe than it should, contact the LaBovick Law Group. We can help you determine eligibility, apply, and receive the benefits to which you are entitled.