The United States Congress passed the Social Security Act in 1935. The Depression drew attention to the needy elders, encouraging the promulgation of regulations and the approval of the program. Congress added survivor benefits to family members in 1939. Disability provisions occurred in 1954 and Medicare in 1965. Congress has modified the system, following the basic plan.
Social Security has three payment sectors: retirement, survivor ship benefits and disability. All three divisions operate under the Federal Insurance Contributions Act or FICA taxes, which are funds paired with employers designated to Social Security and Medicare. Workers in the United States pay income taxes through the withholding of checks. They also pay FICA taxes to cover Social Security and Medicare benefits. With the first payment of taxes, the worker begins a life of contributions to Social Security. Contributions will continue as long as the individuals work, even after retirement age. Children can receive benefits in the work history of parents, and a spouse can receive benefits based on the employment of a wife or husband. All Social Security benefits depend on the employment history of a person who will enter the system.
If at any time the worker becomes disabled, Social Security benefits can help him until he can return to work. If the worker dies, life insurance in the form of a life annuity is available to those who rely on the worker as support. When the worker retires, the Social Security provides a monthly check for retirement. According to Social Security statistics, 96 percent of workers in the United States pay Social Security. This replaces about 40 percent of pre-retirement income, which means about half of what the retiree needs. Pensions, interest and part-time employment are often the other half for the retiree.
Social Security calculates benefits for retirees based on 35 years of work, and the worker must have at least 10 years or 40 credits to be entitled to retirement. Workers who earn high incomes receive higher benefit checks than those with low-paying jobs. The maximum monthly retirement benefit for Social Security at full retirement age of 66 in 2011 was US $ 2,366. A worker who receives this amount would have to pay the maximum in the Social Security system with FICA taxes every year during the 35 years that are used for the calculation. This worker could also wait to retire at 70 years of age and receive 30 percent more in benefits. Other family members can charge in their work history without reducing their benefit.
Because the bases of Social Security benefit strictly from the work history, you can ask what happens with those who do not work or have never done it in the United States. Social Security administers a program that is outside the scope of the tax system to provide the basic necessities of life. Supplemental Security Income (SSI) is based on need, not work. SSI beneficiaries must qualify with low income or few resources and assets, and must be disabled, blind or elderly to receive benefits. Thanks to this program, created in 1974, there is no minimum for Social Security benefits. A sporadic low-income worker who is blind, If you have a disability or are older, you may receive minimal Social Security benefits and supplement those with SSI. A qualified person who has never worked only receives SSI.