3. Purpose
• Social security isn't just for old people
• Unemployment benefits
• Children’s health insurance
• Medicare
• Medicaid
• Patient Protection
5. Primary Insurance Amount
• A workers retirement income benefit is based on
the PIA
• PIA is the average of the highest 35 years of the
workers covered earnings (before FICA
deductions)
6. Normal Retirement Age
• For people born prior to 1937 normal retirement
age is 65
• For people born between 1943 and 1954 normal
retirement age is 66
• For people born after 1960 normal retirement
age is 67
• Minimum age for early retirement is 62, at a
reduced benefit level
7. Disability
• Workers injured on the job can collect a portion
of their salary
• Supplemental Security Income (SSI)
• Severely disabled children
8. Social Security Number
• Originally not a means of identification
• Has been adopted by the Internal Revenue
Service, military, colleges and
universities, health insurance companies, banks
and employers as means of identification
• Privacy Act of 1974 makes it unlawful for
federal, state or local governments to deny
individual rights, benefits or privileges based on
the refusal to provide a SSN
9. Self-Employment Taxation
• Even if you don’t get a paycheck as an
employee, you still have to pay into Social
Security
• The Federal Insurance Contributions Act (FICA)
sets the Social Security withholding tax rate
equal to 15.3% of net earnings from self-
employment
• A self-employed individual pays the employee
and employer portion of the Social Security tax
10. Criticisms
• Discriminates against the poor
• Low rate of return compared to private pensions
• Constitutionality
• Fraud and abuse stemming from SSN theft
• Fraud and acquisition of benefits
11. References
• United States Social Security
Administration, www.ssa.gov
• Baby picture
http://farm4.staticflickr.com/3248/234963828
1_40dc9b7af8_o.jpg
• Paycheck
http://themint.org/images/paycheck.gif
