Social Security Essay Research Paper I am

Social Security Essay, Research Paper

I am focusing on the topic of Life and Health Insurance Provided by Social Security. Social Security benefits provides income continuation in the event of death, disability, or retirement. It also provides medical expense benefits for disabled or retired persons and specified dependents. According to the Social Security Bulletin, in 1994, 42 million people receiving benefits were receiving some type of cash benefit under Social Security. Around 71 percent of the people receiving benefits were retired or dependents of retirees, about 12 percent were disabled workers or dependents, and 17 percent were survivors of former workers. In this paper I will talk about the definition of social security, coverage requirements, eligibility for Benefits and some of the basic Types of Benefits.

There are many different governmental programs designed to provide security for individuals and families. Both public assistance and social insurance programs are organized and undertaken by the government and have the broad social purpose of reducing want destitution. Social insurance is different from public assistance. Social insurance is an insurance program that is compulsory for nearly all Americans, eligibility criteria and benefits are specified by law, and financing is wholly or partially covered by the employer. Unlike public assistance, which is like welfare, employers and employees pay into the social insurance system to earn their rights to benefits. Some examples of social insurance programs include Social Security, which is workers compensation, and unemployment compensation.

Public assistance which is welfare benefits are financed from federal and state funds that come from general revenues and are not based on any contributions that have been made by the recipients or on their behalf. Some examples of public assistance programs are like Aid to Families with Dependent Children and Medicaid, both of them pay benefits based on need. While public assistance programs have a role in providing economic security, they are not insurance programs since the insurance principles of measuring the risk of the insured or spreading the cost of losses among those exposed do not apply. While it is appropriate and necessary to include possible social insurance benefits in individual financial planning in the event of economic loss due to premature death, disability, or retirement. It is not appropriate to include public assistance, one of the purposes of financial planning is to avoid the need for public assistance.

When people talk about Social Security, they are referring to a program created in 1935. This program had the appreviations of OAL standing for Old-Aged Insurance. As more time passed, benefits were added and the program was referred to as Old-Aged and Survivors Insurance or OASI. It was OASDI when disability benefits were added. And when it was the OASDHI, it was because it was the addition of hospital and medical benefits. It is now referred as the Social Security in its publications.(Social Security Handbook)

Social Security cover many different types of people like employees in private industry, most self-employed persons, and members of the armed forces. Social Security taxes must be paid on their wages because coverage is compulsory for well over 90 percent of all workers in the United States. There are some exceptions, for example, railroad workers, who are covered by the Railroad Retirement Act, and federal government employees who were covered by other programs. Before 1984, state and local government s bodies could elect not to cover certain employees not to cover certain employees under Social Security. This option is no longer allowed according to Pritchett, Schmit, Doerpinghaus, and Athearn, there are only some exceptions. Municipal government that were elected before 1984 due have the right to voluntarily join the Social Security Program. Ministers are covered automatically also. Members of religious groups whose beliefs prohibit acceptance of benefits are exempt.

In order to be eligible to receive benefits, you must have insured status. With this status you may be fully insured, currently insured, or disabled insured, depending upon your work history. Most types of Social Security benefits are payable if you are fully insured. If you do not have enough work experience to be fully insured, you may be currently insured, and you would be eligible for some survivor benefits. The amount of work required to become insured is measured in quarters of coverage. According to Pritchett, Schmit, Doerpinghaus, and Athearn, in 1995, an employee earned one quarter of credit for each $630 of earnings, up to a maximum of four quarters each year. You get four quarters of coverage for $2520 , even if you earned this much in only one day. The quarterly measure of earnings is adjusted every year to account for raises in average wages.

If you have forty quarters of coverage, or have a minimum of six quarters of coverage, or if greater, at least as many quarters of coverage as there are years elapsing after 1950 or after you reach the age of 21. For example, A person at age 25 who has six quarters of coverage is fully insured, as when a person who is 40, he needs 19 quarters of coverage to be fully insured. You are currently insuredif you have at least six quarters of coveragein the thirteen- quarter period en