How Do Benefits Work And How Can I Qualify
While you work, you pay Social Security taxes. This tax money goes into a trust fund that pays benefits to:
- Those who are currently retired
- To people with disabilities
- To the surviving spouses and children of workers who have died
Each year you work, youll get credits to help you become eligible for benefits when its time for you to retire. Find all the benefits Social Security Administration offers.
There are four main types of benefits that the SSA offers:
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Learn about earning limits if you plan to work while receiving Social Security benefits
The History Of Social Security
The Social Security system in the U.S. came into existence on Aug. 14, 1935, when President Franklin D. Roosevelt signed the Social Security Act into law. The first monthly benefits checks became payable on Jan. 1, 1940, and the first person to collect one was Ida M. Fuller, a retired legal secretary in Vermont. Her check was for $22.54.
The system and its rules have evolved in the decades since. Today, Social Security is one of the largest government programs in the world, paying out hundreds of billions of dollars each year.
Earn Ssa Work Credits In Some Countries
You may not have enough credits from your work in the United States to qualify for retirement benefits. But, you may be able to count your work credits from another country. The SSA has agreements with 24 countries. If you earned credits in one of those countries, they can help you qualify for U.S. benefits.
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How To Get A Social Security Card
How Effective Is Ssi
SSI benefits are about three-fourths of the poverty line for a single person and slightly over 80 percent of poverty for a couple. Thus, while SSI alone is not enough to lift someone who lives independently out of poverty, it is instrumental in reducing the number of people in extreme poverty, and it greatly lessens the burden on other family members. An SSA study found that, in 2010, the poverty rate of recipients would be 65 percent without counting SSI payments the actual rate, including SSI, was 43 percent. Most families with an SSI recipient remained below 150 percent of the poverty threshold.
SSI is highly effective in reducing the aggregate poverty gap that is, the total amount of money needed to lift families out of poverty among SSI recipients. In 2010, SSI reduced the aggregate poverty gap by over two-thirds. Still, more than two-fifths of SSI recipients live in families with incomes below the poverty threshold, even after taking their benefits into account, and many more elderly or disabled persons in need of assistance do not get any benefits. The following reforms could increase benefit adequacy and improve SSI participation among eligible people.
For someone with no unearned income, the $20 and $65 exemptions are combined, so that the earned income exclusion becomes $85 per month.
SSA, SSI Monthly Statistics, December 2013.
SSA, SSI Annual Statistical Report 2012, Highlights 2012.
SSA OCACT, Annual Report, Table IV.D1.
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Social Security Survivors Benefits
If you’re the surviving spouse of a worker who qualified for Social Security retirement or disability benefits, you and your minor or disabled children can be entitled to benefits based on your deceased spouse’s earnings record. As a widow or widower, you can begin to collect benefits once you reach age 60, or age 50 if you have a disability that prevents you from working. Survivors benefits are also available to minor children and older children who became disabled before age 22. For more information, read our article on survivors benefits.
Does Disability Pay More Than Social Security
Applying for Disability benefits has a reputation as a time-consuming and inefficient process. Consequently, many people entering their 60s who could potentially qualify for disability benefits may opt to just elect for Social Security a couple of years early to avoid the hassle. However, this strategy has the potential to cost you a lot of money in the long run. Whether opting for disability would be the more remunerative strategy will depend on your age. A financial advisor could help you weigh the best options for your retirement goals.
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How To Receive Federal Benefits
To begin receiving your federal benefits, like Social Security or veterans benefits, you must sign up for electronic payments with direct deposit.
If You Have a Bank or Credit Union Account:
- Call the Go Direct Helpline at .
If You Don’t have a Bank or Credit Union Account:
- Direct Express debit card – a pre-paid debit card. Get help by calling the Go Direct Helpline at .
Make Changes to an Existing Direct Deposit Account:
On Go Direct’s FAQ page, learn how to make changes to an existing direct deposit account. You also may contact the federal agency that pays your benefit for help with your enrollment.
When Do You Receive Ssdi Payments
There is a waiting period before you can receive SSDI. You must have been disabled for five months before you can get benefits. If SSA approves your application, youll start getting paid the sixth full month after you become disabled.
The monthly date for SSDI payments depends on your birth date:
- If you were born between the first and tenth of the month, your benefits would come on each second Wednesday.
- If you were born between the 11th and 20th of the month, you would receive your benefits on the third Wednesday.
- If your birthday is between the 21st and the last day of the month, youd get your benefits on the fourth Wednesday.
Each monthly payment will be for the previous months benefits. For example, you will receive your benefits for January in February. If you receive both SSI and SSDI benefits, the SSA will pay them together on the third day of every month.
Many people struggle when applying for disability benefits. Its often difficult to get approval, even if you know you qualify. Talk to a Social Security Disability lawyer to get help with your claim or an appeal.
John Foy & Associates can help. To get a FREE consultation, call or contact us online today.
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Get Ssa Benefits While Living Abroad
U.S. citizens can travel to or live in most, but not all, foreign countries and still receive their Social Security benefits. You can find out if you can receive benefits overseas by using the Social Security Administrations payment verification tool. Once you access the tool, pick the country you’re visiting or living in from the drop-down menu options.
If You Retire Early Could You Potentially Run Out Of Money
While you won’t run out of Social Security benefits , you could exhaust your 401 or other retirement savings. However, you can help prevent that by being conservative with your withdrawal rate if you retire early, Tierney said.
She recommends regularly monitoring your spending and 401 withdrawal rate so you don’t outlive your assets. Forgoing an annual spending increase or reducing spending — especially when the market is down or inflation is high, like we’re experiencing now — can help avoid depleting your retirement savings.
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Should I Get Professional Help
If you need help filing an application for SSDI or SSI, or you want to appeal a denied claim, contact an experienced disability representative to discuss your options. Disability attorneys and advocates virtually always offer free consultations, and don’t charge a fee unless you win your case.
According to a survey of our readers, applicants who filed an initial application without help were denied 80% of the time. Getting help at the initial application stage gives you a good chance of getting benefits in just three or four months. That’s because a legal professional can help you complete your initial application for benefits in a way that’s accurate but persuasive. If you’d like help with your application, click for a free case evaluation with a legal expert.
Supplemental Security Income Eligibility Requirements
To be eligible for SSI, you generally must be 65 or older and have a disability. Children are also eligible to receive SSI. SSI is paid monthly through Medicaid. The amount is determined by need .
SSI is intended for those who have low income and very little in assets. Generally, if the Social Security Administration finds that the value of all your personal property and assets exceeds $2,000 for an individual or $3,000 for a couple , you won’t qualify for SSI.
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Talk To A Social Security Disability Lawyer For Free Today
SSDI pays more compared to SSI for most people. However, both programs can provide benefits for necessary needs. If you need help from SSI or SSDI , contact a Social Security Disability lawyer.
At John Foy & Associates, we have helped countless clients get the benefits they need. We can help you with the application process, appeal process, and everything else. To get a FREE consultation, reach out to us today.
Call or text or complete a Free Case Evaluation form
Social Security Dependents Benefits
If you’re the spouse of a retired or disabled worker who qualifies for Social Security retirement or disability benefits, you may be entitled to benefits based on the worker’s earnings record. This is true whether or not you actually depend on your spouse for your support.
Spousal benefits are available for those who reach age 62 or are taking care of the worker’s child age 16 or under. Read about spousal dependents benefits here.
Minor children, and older children who became disabled before age 22, can also collect dependent benefits based on the worker’s earnings record. Read about child dependents benefits here.
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How Does A Person Qualify For Ssi
In addition to meeting the disability criteria , an SSI enrollee must meet several non-medical criteria, including having a low income. SSA has complex rules for determining financial eligibility. In general, income is anything received in cash, earned or unearned, that can be used to meet a persons need for food or shelter.17 Income is countable except for some limited amounts that are disregarded.18 Income also includes in kind support, such as any food or shelter provided or paid by another person. In kind support generally is valued at one-third of the maximum federal benefit amount.19 SSA also deems a portion of income from a persons spouse or parent/step-parent as countable income.20 To financially qualify for SSI, a persons countable income cannot exceed the maximum federal benefit rate , and the amount of SSI that a person actually receives is the maximum federal rate reduced by the amount of their countable income.21 These rules apply to SSI enrollees of all ages.
Figure 4: SSI Disability Determination Process for Adults
Figure 5: Disability and SSI Status of Nonelderly Adults with Medicaid, 2019
Figure 6: SSI Application Allowance Rate for Medical Decisions by Adjudicative Level, 2018
When Does Social Security Pay More Than Disability
The reverse of the above situation is true if you are between your FRA and age 70. After you reach your FRA, your Social Security benefit amount increases by 0.8% for every month you hold off on claiming your benefits. This continues until you reach 70, at which point your benefit reaches its maximum. In this situation, your monthly Social Security benefit would be larger than your monthly disability benefit.
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Report The Death Of A Social Security Or Medicare Beneficiary
You must report the death of a family member receiving Social Security or Medicare benefits. The Social Security Administration processes death reports for both. Find out how you can report a death and how to cancel benefit payments. In addition to canceling SSA and Medicare benefits, find out what other benefits and accounts you should cancel.
The Best Age To Start Collecting
There are two schools of thought about whether to start collecting Social Security at 62 or wait.
The first is that everyone should start getting their money out of the system as soon as possible.
This theory is based on two things:
In other words, getting some benefits now is better than the promise of more benefits later.
The second theory states that you should wait until full retirement age in order to collect larger monthly sums. If you live long enough, this option will be more profitable.
Lets take a closer look at your total payout potential based on the age at which you begin collecting benefits. Assume your full benefit amount would be $1,000 per month, or $12,000 each year, and your full retirement age is 67. Heres the total amount you could receive from the Social Security program.
Starting benefits at age 62 would mean more money overall if you dont live past age 79. However, if you live to 79 or older, youd receive more money during your lifetime if you began earning benefits at age 67.
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What Is The Difference Between Ssi And Social Security Benefits
The United States Social Security Administration has a lot of different programs available to assist Americans in need and elderly Americans. About 178 million people pay into the Social Security system, and about 64 million people receive monthly Social Security benefits. Whether the benefits are for retirement, to help those with disabilities, or to pay survivor benefits, the SSAs goal is to improve the quality of life for many of us.
In fact, SSA plays a role in our lives directly or indirectly from the time we are born until we pass away. Most parents apply for a childs Social Security number at birth. When you get your first and subsequent jobs, the SSA verifies you with your employer based on your Social Security number, which reduces fraud and ensures the accuracy of your earnings. When you get married, you should let the SSA know so that you may receive certain retirement, survivor, and disability benefits with your spouse. And also, the SSA has assistance for those who become disabled, who need financial support in difficult times, and in retirement.
One of those main SSA programs available in the Supplemental Security Income program. Not to be confused with Social Security Disability Insurance , SSI pays monthly benefits to people with limited income and resources who are disabled, blind, or age 65 or older.
What Is Supplemental Security Income
The federal Supplemental Security Income program provides monthly cash assistance to people who are disabled, blind, or elderly and have little income and few assets. In December 2013, nearly 8.4 million people collected SSI benefits . For nearly three-fifths of recipients, SSI represents their only source of income.
Although run by the same agency, SSI is distinct from the Old-Age, Survivors, and Disability Insurance programs commonly known as Social Security. Nevertheless, the two programs often overlap. Many SSI recipients have worked long enough to collect Social Security but their Social Security benefit is low enough that they also qualify for SSI. Nearly one-third of adult SSI recipients under age 65, and almost three-fifths of recipients over 65, also get Social Security.
Social Insurance Versus Means-Tested Programs
An important difference between Supplemental Security Income and Social Security is that the former is a means-tested program, while the latter is a social insurance program:
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Does Ssi Or Ssdi Pay More
In general, SSDI pays more than SSI. Based on data from 2020:
- The average SSDI payment is $1,258 per month.
- The average SSI payment is $575 per month.
Those with disabilities can receive a lot more from SSDI than from SSI. Some people will be eligible for benefits from both programs. Also, some states will offer small supplementary benefits to SSI.
According to SSI federal payment amounts for 2020, the most someone can get for SSI is $783 per month. If someone applies and has an eligible spouse too, the maximum is $1,175 per month. Both amounts are still less than the average for SSDI.
SSDI benefits will depend on the persons work history. The SSA will determine their benefits based on how much theyve paid into Social Security. Those who need help seeking SSI or SSDI payments should talk to a Social Security Disability lawyer.
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Future Of Social Security
Fast Fact
An increase in eligible participants combined with an increase in life expectancy is straining the Social Security program. Because of the financial burden this created, Social Security was amended in 1983, changing the age people can collect full Social Security benefits.
As a result of the 1983 amendments, the retirement age will increase between 2003 and 2026 from age 65 to age 67 with an 11-year gap at which the retirement age will remain at 66, depending on the year of birth.
Economic analysts predict that the Social Security system eventually will pay out more in benefits than it receives in payroll taxes. Analysts have long warned of this shortfall, and they predict the program could be in jeopardy as of 2035.
It is anticipated a reduction in benefits of about 13% or an immediate increase in payroll tax rate from 12.4 to 14.4%, or a little of both, will be needed to allow full payment of scheduled payments for the next 75 years.
As the challenges to meet the needs of millions of retirees continue, policymakers and politicians continue to argue about revamping or privatizing the program. The recent economic downturn has affected jobs and savings programs, further weakening the program. With so many people dependent upon Social Security for retirement benefits, its vital to understand the system and its limitations, as well as to make changes before time runs out.
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