Chapter 10: Key Terms Flashcards
AIME (Average Indexed Monthly Earnings)
A worker’s highest 35 years of earnings adjusted for inflation and averaged on a monthly basis. AIME is used as the basis for the PIA calculation
Benefit Periods
Begins on the first day an individual receives services as a patient in a hospital or skilled nursing facility and ends after 60 consecutive days without further skilled care
Cost-of-Living Adjustment (COLA)
The cost-of-living adjustment applied to Social Security benefits
Currently Insured Workers
A worker who has earned at least six quarters of coverage out of the previous 13 quarters for Social Security
Disability Benefit
A Social Security benefit available to recipients who have a severe physical or mental impairment that is expected to prevent them from performing “substantial” work for at least a year or result in death. To qualify for these benefits, the recipient must have sufficient amount of Social Security credits
Disability Insurance (DI) Trust Fund
The trust fund that pays benefits to workers with disabilities and their families. It is funded by 0.90% of an individual’s taxable earnings up to $128l (2018)
Family Benefit
A Social Security benefit available to certain family members of workers eligible for retirement or disability benefits
FICA (Federal Insurance Contributions Act)
A law allowing Social Security taxes, including Medicare taxes, to be deducted from employee’s paychecks
Fully Insured
A worker who has earned 40 quarters of coverage under the Social Security system
Hospital Insurance (HI) Trust Fund
The trust fund that pays for services covered under the hospital insurance provisions of Medicare (Part A). It is funded by 1.45% of an individual’s taxable earnings (no limitations)
Maximum Family Benefit
The limit on the amount of monthly Social Security benefits that may be paid to a family
Medicaid
Provides medical assistance for persons with low income and resources
Medicare
A federal health insurance plan for those who have attained full retirement age or have been disabled whether retired or still working
Modified Adjusted Gross Income (MAGI)
The sum of an individual’s adjusted gross income plus tax exempt interest, including interest earned on savings bonds used for higher education. Amounts excluded from the taxpayer’s income for employer provided adoption assistance, amounts deducted for interest paid for educational loan. Amounts deducted as qualified tuition expense, and income earned in a foreign country, a U.S. possession, or Puerto Rico that is excluded from income
Old Age, Survivor, and Disability Insurance (OASDI)
An inclusive title given to the Social Security benefits system
Old Age and Survivor Insurance (OASI)
The trust fund that pays retirement and survivors benefits funded by 5.3% of an individuals taxable earnings up to $128,400 (2018)
Primary Insurance Amount (PIA)
The amount on which a worker’s retirement benefits is based. The PIA determines the amount the applicant will receive at his full retirement age based on the year in which the retiree turns 62. The PIA is indexed to the Consumer Price Index (CPI) annually
Retirement Benefit
The most familiar Social Security benefits, full retirement benefits are payable at normal retirement age and reduced benefits as early as age 62 to anyone who has obtained at least a minimum (40 quarters) amount of Social Security credits
Retirement Earnings Limitations Test
A test that may reduce the Social Security benefit paid to an individual based on their other income
Supplemental Security Income (SSI)
A program administered by the Social Security Administration and funded by the general Treasury that is available to those at full retirement age or the disabled who have a low income and few assets
Supplemental Medical Insurance (SMI) Trust Fund
The trust fund that pays for services covered under the medical insurance provisions of Medicare, known as Part B. The coverage is a funded by general federal tax revenues and monthly medicare premiums paid by enrollees
Survivors’ Benefit
Social Security benefit available to surviving family members of a deceased, eligible worker
