Social Security is not only a retirement program. It also provides a safety net for the short- and long-term disabled, the aged poor and survivors of deceased contributors to Social Security.
Even if you are healthy now, do not dismiss the importance of disability benefits. According to the Social Security Administration, a 20-year old has a three-in-ten chance of becoming disabled before retirement age. Imagine what those odds must be for older people.
Today’s is an easy lesson on the non-retirement benefits provided by Social Security. There are several programs but Crabby Old Lady will concentrate on the three most important ones.
[Also, check out the Privatization: Recent Developments section at the bottom of this post. Crabby will append this section (or publish full entries) as developments warrant.]
Certain family members are eligible for survivor benefits when a Social Security contributor dies. There is the small lump-sum benefit that most survivors are eligible for, along with the following. (Remember, these benefits are for survivors of deceased relatives who contributed to the program for a minimum of ten years during their working lives.)
Widows and widowers may receive survivor benefits at their full retirement age - 65 or slightly more, depending on birth year - or reduced benefits at age 60.
Disabled widows and widowers may receive benefits as early as age 50.
Unmarried children, disabled children and even dependent parents age 62 and older may receive survivor benefits. Some divorced spouses may be eligible and in some circumstances, survivors can work while receiving benefits. The Social Security website has a clear explanation.
Social Security Disability Insurance
The SSDI program pays benefits for workers who suffer a medical condition or disability that prevents them from working for a year or more, and the benefit continues until they can return to work. The benefit converts to the retirement program if a worker continues to be disabled until normal retirement age.
Other family members may be entitled to benefits when worker is disabled. They include:
- A spouse at age 62 or older
- A spouse of any age if caring for the disabled person’s child under age 16 or who is disabled
- Disabled children
- In some cases, divorced spouses
These benefits are allowed for eligible children whether biological, adopted or step-children. More detailed information can be found here.
Social Security Income
SSI provides assistance for those in dire financial need who have no Social Security benefits. It is paid for from general tax revenues, not the Social Security fund, but is managed by the Social Security Administration.
This program is a cash benefit to help with the basics – food, clothing, shelter – and may also include food stamps and home energy assistance. Among those who are eligible are the aged, and blind and disabled adults and children with little or no income.
The amount of the benefit depends on income and other resources and can be reduced depending on the value of assets. Generally, however, a home and the property it is on, a car, a small life insurance policy and a burial plot do not reduce benefit payments.
The Social Security website has complete information including elegibility requirements and calculators for SSI and all its programs. And by the way, given the bureaucracy of most government agencies, it is a pleasant surprise to Crabby to find that the Social Security website, is one of the best-organized, thorough and easy-to-use sites anywhere online, particularly considering the complexity of the programs being handled there.
So far, none of the privatization partisans – pro and con – has addressed what might happen to these related Social Security programs if a privatization system is adopted. It is essential that these benefits continue for it is by the treatment of its least advantaged citizens that a nation must be judged. All it takes, sometimes, for anyone to join their ranks, is an unfortunate accident that can happen in the blink of an eye.
There. You are almost finished with Crabby Old Lady's Social Security backgrounder. The next installment will explain the Trust Fund and then you'll be finished with the basics. After that, Crabby will lead you through the maze of privatization fact and fiction as the political battle for this crucial change in policy heats up.
Privatization: Recent Developments
Kicking off his Social Security privatization campaign last Monday, 6 December, President Bush met with a bipartisan group of congressional leaders to discuss the issue. This was a move to get the ball rolling with Congress because the president cannot push through privatization without support from both sides of the aisle.
In briefing the press on this meeting (and in past discussions), White House spokesman, Scott McLennan, never once mentioned that word – privatization – and you are unlikely to ever hear it from government proponents. The White House prefers such phrases as “strengthening" or "saving Social Security,” “personal savings accounts,” “personal retirement accounts” and “ownership of the system,” which McLennan used throughout the briefing. Crabby will use "privatization."
On the other hand, McLennan repeated seven times the phrase, “Social Security is unsustainable.” Ignore it. It’s just spin to scare you and Crabby into going along with the privatization proposal without serious consideration of other options. Crabby will help you, in the coming months, to separate the spin from the known facts. (See Crabby’s recent take on euphemisms.)
On Thursday, President Bush made his first explicit statement, flatly refusing to consider raising Social Security contributions to pay for privatization which, it is said, would cost trillions of dollars over the coming decades.
"We will not raise payroll taxes to solve this problem," Mr. Bush told reporters after meeting with trustees of the Social Security system.
- - The New York Times, 10 December 2004
In its email Tipsheet today, The Hill reports that unnamed congressional Republicans are saying the president needs to submit is own privatization bill if he wants legislation to pass in 2005:
"Republicans are particularly concerned that President Bush will simply issue a set of vague 'principles.' While that was Bush's strategy vis-à-vis last year's prescription drug bill, these Republicans note that revamping Social Security is much more contentious."
...to be continued...