Chapter 8 Social Security Flashcards
Purpose of Social Security
provide for the general welfare of citizens 65 and over.
FICA taxes
applied to employees incomes up to certain limits. called taxable wage base.
OASDI
Old Age, Survivor, and Disability. a portion of FICA taxes go to this.
6.25% of FICA
OASDI taxable wage base is $118, 500
Medicare
portion of FICA goes to this. 1.45%
No CAP on earnings
What is total % of FICA tax (OASDI and medicare combined)
7.65%
self employed incur 15.3%
Fully Insured
40 quarters of participating contribution. completed eligibility for SS benefits
each credit =$1220 annual FICA taxed earnings
Currently Insured
6 credits within last 13 quarters prior to death.
each credit =$1220 annual FICA taxed earnings
SS before 1979
computed on Average Monthly Wage (AMW)
SS after 1979
based on workers Average Indexed Monthly Earnings (AIME)
How much is the lump sum payment for a deceased worker ( to spouse or children)
equal to 3 times the workers PIA with a cap of $255
How to qualify for SS disability
unable to perform any substantial gainful work.
waiting period of 5 consecutive months, must remain disabled
can be paid retroactively up to 12 months minus waiting period
AIME
Average Indexed Monthly Earnings.
basis used for calculating primary insurance amount for SS benefits
FICA
Federal Insurance Contributions Act
OASDI Benefits
Old Age, Survivors, Disability and Hospital Insurance.
retirement, death, disability and hospital benefits provided under SS system
PIA
Primary Insurance Amount
