M10: Flaschards Flashcards
Recommended average high-cost multiple
1.5 (1.5 years with no new revenue)
Firms with favorable employment records pay reduced tax rates
Experience Rating
Indicates how long a state can pay benefits if it paid benefits equivalent to the average amount paid out during the three highest cost 12 month periods during the previous 20 years, without collecting any additional revenue.
Average high-cost multiple
Benefits paid should provide a certain standard of living to all contributors. This means they are heavily weighted in favor of certain groups, such as low income persons, large families, and the presently retired aged.
Social adequacy
Maximum duration of regular benefits is 26 weeks, this can be applied for an additional 13 weeks.
Extended benefits
Unmarried, disabled children entitled to SS and DI
Disabled before age 22
Quarters of coverage (credits) for Social Security earned each year (max)
Maximum of 4 credits per year
PIA is increased 8% per year for each year of delay for people born XXXX year or after
1943
Three-legged stool approach
Social Security, personal savings, & employer pensions
How Social Security benefits are financed
Payroll tax paid by employees, employers, & self employed
The amount needed for one credit (in 2022)
$1,510
The number of SS credits a fully insured person has
40 credits (about 10 years)
The sum of your adjusted gross income, plus tax free interest, plus 1/2 of your Social Security benefits
Combined Income
Contributors receive benefits directly related to their contributions; the actuarial value of the benefits is closely related to the actuarial value of the contributions
Individual equity
Full social security retirement age for persons born in 1960 or later
Age 67
The worker must have a physical or mental condition that prevents him or her from doing any substantial gainful activity and is expected to last (or has lasted) at least 12 months or is expected to result in death
Definition of disability
The PIA is based on this amount, which updates the worker’s past earned amounts based on increases in average wages
Average indexed monthly earnings (AIME)
The monthly retirement benefit is based on this amount
Primary insurance amount (PIA)
What a person must do to receive credits for Social Security
Must have worked in covered employment
Age at which disability benefits are converted to retirement benefits
Disability conversion age
A basic characteristic of social insurance programs where income is high enough to provide a comfortable standard of living
Floor of income
The insured unemployed in regular state programs as a percentage of the total unemployed
Recipiency rate
The number of SS credits a currently insured person has
At least 6 credits in the last 13 calendar quarters
This requires applicants to show their income/assets are below a certain level for public assistance. This isn’t required for social insurance programs.
Means test
Three programs that provide economic security for millions
OASDI, Workers Comp, & Unemployment insurance
OASDI
Old-Age, Survivor’s, & Disability Insurance (also known as Social Security)
Federal state programs that pay weekly cash benefits to workers who are involuntarily unemployed
Unemployment insurance
