Social Security: The Basics
Federal Entitlement Program Offers Five Types of Benefits
As individuals work and pay taxes into the Social Security system, they earn credits that count toward eligibility for future benefits. A person can earn a maximum of four credits each year. Most people need 40 credits to qualify for Social Security benefits. Younger people need fewer credits to qualify for disability or survivor's benefits.
Social Security and Medicare tax revenues subsidize five major categories of benefits: retirement, disability, family benefits, Medicare and survivor's benefits. Two other major entitlement programs important for many seniors - Medicaid and Supplemental Security Income (SSI) - are not funded through Social Security taxes.
Those caring for seniors may have to handle their interactions with the Social Security Administration (SSA). This could include signing them up for Social Security and filing a claim for survivor's benefits when a spouse dies. Having a basic understanding of Social Security can help you navigate the system.
More than two-thirds of the nation's seniors depend on Social Security for at least half their income. Likewise, many seniors rely on Medicare to help pay for such medical expenses as hospitalizations, physicians' services, laboratory services and diagnostic tests.
Social Security, begun in 1935, was designed to supplement income a senior might have through pension plans, savings and other investments. It was never intended to be a senior's only source of retirement or disability income nor a family's only source of income if the primary wage earner died. Nonetheless, for both caregivers and seniors, it is important to understand and apply for the Social Security benefits available to each individual and family.
For many years, full retirement benefits began at age 65. However, under changes in the law the age will increase incrementally to 67 by the time people born after 1959 reach retirement age. People can also elect to start receiving a reduced level of benefits at age 62. Those who delay retirement benefits by a few years receive an increased amount.
Disability benefits are payable at any age to people who have enough Social Security credits and who have either a severe enough medical problem to prevent them from doing "substantial" work for a year or more or a condition likely to result in death.
If a senior is eligible for Social Security retirement or disability benefits, other family members might be eligible to receive benefits, too. Check with your SSA office for details.
Generally, people who are over 65 and receiving Social Security qualify automatically for Medicare. So do people who have been getting disability benefits for two years. Others must file an application. Medicare has two parts: Part A pays for hospital stays and some nursing home and home health services, and Part B covers doctors' services, outpatient hospital services and other medical expenses.
If a senior dies, family members eligible for survivor's benefits include:
a widow(er) age 60 or older
a widow(er) age 50 or older if disabled
a widow(er) of any age if caring for a child under age 16
the deceased senior's children if unmarried and under age 18, under 19 but still in school, or 18 or older but disabled
the deceased senior's parents if the senior was their primary means of support
Sometimes ex-spouses are also eligible for a widow(er)'s benefit.
The SSA recommends people apply for benefits three months before they want their benefits to begin. Seniors who plan to keep working and postpone receiving retirement benefits should still sign up for Medicare three months before age 65.
The senior or caregiver should apply for disability benefits as soon as the senior becomes disabled. However, benefits will not begin until the sixth full month of disability. The Social Security office will ask you for documentation, and it will speed up the process if you have all the necessary paperwork. However, do not put off filing for benefits simply because you don't have all the needed documentation.
Enrollment in Medicare is handled in two ways: Some seniors are enrolled automatically; others have to apply. Those who delay signing up will usually face a financial penalty for late enrollment.
When a senior dies, the caregiver or other responsible person should promptly notify Social Security. It is important to apply for survivor's benefits promptly because, in some cases, benefits may not be retroactive. Even if you don't have all the necessary documentation, don't put off applying. The Social Security Administration can help you obtain the documentation you need.
If the senior's retirement or disability benefits were paid by check, do not cash any checks received for the month in which the beneficiary died or thereafter. Instead, return the checks to Social Security.
For more information
To make an appointment with Social Security, obtain pamphlets and application forms and locate the SSA office nearest you, call (800) 772-1213. Hearing-impaired individuals may call the TTY number, (800) 325-0778, between 7 a.m. and 7 p.m. Monday through Friday.