Course 3: Introduction to Social Security What are the purposes of Social Security?

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Course 3: Introduction to Social Security

  1. What are the purposes of Social Security?

The Social Security Act and related laws establish a number of programs that have the following basic purposes:

  • To provide for the material needs of individuals and families;

  • To protect aged and disabled persons against the expenses of illnesses that may otherwise use up their savings;

  • To keep families together; and

  • To give children the chance to grow up healthy and secure.

  1. What programs are included under the Social Security Act and related laws?

The following programs are included:

  • Retirement insurance

  • Survivors insurance

  • Disability insurance

  • Hospital and medical insurance for the aged, the disabled, and those with end-stage renal disease;

  • Prescription Drug Benefit

  • Extra help with Medicare Prescription Drug Costs

  • Supplemental security income

  • Special Veterans Benefits

  • Unemployment insurance

  • Public assistance and welfare services, including:

    • Temporary assistance for needy families

    • Medical assistance

    • Maternal and child health services

    • Child support enforcement

    • Family and child welfare services

    • Food stamps

    • Energy assistance


  1. How is the Social Security Administration (SSA) structured?

SSA is headed by a Commissioner. Our central office is located in Baltimore, Maryland. Our administrative offices and the computer operations are also located there. Individual claims services are provided by our local Social Security offices.
For more information on the organizational structure of SSA, and to view an organization chart see Organization of SSA.

  1. What services can your local Social Security Office provide?

Your local Social Security office is the place where you can:

  • Apply for a Social Security number;

  • Check on your earnings record;

  • Apply for Social Security benefits, SSI, hospital insurance protection, and extra help with Medicare prescription drug costs;

  • Enroll for medical insurance;

  • Receive assistance in applying for food stamps; and

  • Get full information about individual and family rights and obligations under the law.

Note: There is no charge for the services of the office staff.

  1. How can you obtain Social Security services?

You can go into any of nearly 1,300 Social Security offices nationwide. To find the office nearest you, please go to our SSA office locator; Or, you can call our toll-free telephone number, 1-800-772-1213, to receive the services listed above. This toll-free telephone number service is available from 7 a.m. to 7 p.m. any business day. All calls are confidential. The toll-free telephone number is not accessible from outside the United States. For information on how to obtain services when you are outside the United States, see:
Places you can meet Social Security office staff other than the local offices. If you live far away from the city or town in which the local office is located, our staff makes regular visits to outlying areas. We make visits to locations called contact stations. You can obtain a schedule of these visits from the nearest Social Security office. You can also telephone the nearest Social Security office or call our toll-free number, 1-800-772-1213, to obtain prompt answers to questions or to apply for benefits. If necessary, a representative from our office will make a personal visit to your home if you are unable to visit the office or contact station because of illness or infirmity.  
Where you can find contact information for the nearest Social Security office. For the telephone number or address of the nearest Social Security office, look in the telephone directory in the blue pages for Social Security Administration under "United States Government." You can also call our toll-free number, 1-800-772-1213 or access US online at and use the SSA office locator.
Where SSA's regional offices are located. We have 10 regional offices headed by Regional Commissioners who are directly responsible for the Social Security offices located within a specified area. There are approximately 1,300 Social Security offices throughout the U.S., the U.S. Virgin Islands, Puerto Rico, Guam, and American Samoa that deal directly with the public. Each region also has a number of teleservice centers located primarily in metropolitan areas. These offices handle telephone inquiries and refer callers appropriately.
To locate State and local coverage specialists by region, refer to our SSA regional office specialists’ page.
6. Why is your Social Security coverage important?

Social Security is more than a retirement program. It can help support your family when you die and provide monthly benefits when you retire or if you become severely disabled. Your work in Social Security covered employment helps you and your family qualify for those benefits. The benefit amounts are based on the earnings reported to the Social Security Administration. Therefore, it is important that you make sure your earnings record is correct.

It is easy to check your record. Each year, you will automatically receive your personal Social Security Statement about three months before your birthday. The Statement will show your year-by-year earnings and will provide estimates of retirement, survivors and disability benefits you and your family may be able to receive now and in the future. If your Statement does not show earnings from a state or local government employer, the work may not have been covered either by a Section 218 agreement or by federal law. You should contact that employer if you have questions about the work.
As a State or local employee, there are two provisions of the law that may affect the amount of your Social Security benefits. The Windfall Elimination Provision (WEP) affects the way your Social Security retirement or disability benefits are computed. The Government Pension Offset (GPO) affects the amount of the Social Security benefits you receive as a spouse or widow(er).
7. Who is NOT covered under SSA’s programs?

Nine out of 10 workers in the U.S. are in employment or self-employment covered by the retirement, survivors, disability, and hospital insurance programs. You are not covered if you are a Federal civilian employee hired before 1984 unless you later changed to the Federal Employee Retirement System. However, all Federal civilian employees are covered by the hospital insurance program. You are also not covered if you are an employee of a State or local government who is a member of a qualifying retirement system and not covered by a Section 218 Agreement. Certain agricultural and domestic workers are also not covered.

8. How are State and local government employees covered By Social Security and Medicare?

Unlike workers in the private sector, not all State and local employees are covered by Social Security. Some are covered only by their public retirement pension program; some are covered by both public pensions and Social Security; and some are covered by Social Security only.

When it began, the Social Security program did not include State and local government employees. Over the years, the law has changed. Most employees have Social Security protection because their States and the Social Security Administration entered into special agreements called “Section 218 agreements.” Others are covered by a federal law passed in July 1991 when Social Security was extended to State and local employees who were not covered by an agreement and were not members of their agency’s public pension system.
Except for workers specifically excluded by law, employees hired after March 31, 1986, also have Medicare protection. States may also obtain Medicare coverage for workers not covered for Social Security who have been continuously employed by the same state or local governmental employer since before April 1, 1986. Those workers covered for Social Security under a Section 218 agreement are automatically covered for Medicare. State and local government employees who are covered by Social Security and Medicare pay into these programs and have the same rights as private sector workers.
Resource: Publication 05-10051 How State And Local Government Employeess
9. Why is insured status important and how is it determined?

You must be insured under the Social Security program before retirement, survivors, or disability insurance benefits can be paid to you or your family.

Social Security credits are used to determine your insured status. We consider the number of Social Security credits you earned to determine if you have fully insured status, currently insured status, or insured status for establishing a period of disability. You earn Social Security credits (previously called quarters of coverage) for a certain amount of work covered under Social Security.
Note: Under Section 211 of the Social Security Protection Act of 2004 ("SSPA," or Public Law 108-203), certain alien workers must meet additional requirements to be fully or currently insured and to establish entitlement to benefits based on the alien's earnings.
10. How do you earn Social Security credits?

You earn Social Security credits by working at a job covered by Social Security.

To earn credits for the years before 1978, you must have:

  • Earned at least $50 in wages for employment covered under the law in any calendar quarter beginning January 1, April 1, July 1, or October 1;

  • Earned at least $100 in annual wages paid for agricultural labor for years after 1954 and before 1978; or $50 in wages paid for agricultural labor in any calendar quarter in 1951 through 1954;

  • Earned at least $400 in annual net earnings from self- employment in taxable years 1951 through 1977; or

  • Earned the maximum taxable wages for that year. For maximum taxable wages.

For the years after 1977, the Commissioner of the Social Security Administration determines the amount of earnings that will equal a credit for each year. The amount of earnings is determined by using a formula in the Social Security Act that reflects a national percentage increase in average wages. The amount the Commissioner determines is published in the Federal Register on or before November 1 of the preceding year.

The table below shows the amount of wages or self-employment income needed to obtain a quarter of coverage for recent years:


Amount of wages or self-employment income necessary to obtain a quarter of coverage

































You may earn a maximum of four credits each year. The credits are based on your total earnings. Total earnings may consist of non-agricultural wages, military wages, railroad compensation, agricultural wages, and self-employment income. If self-employment income is not reported on a calendar year basis, it is assigned to each of the calendar quarters in the taxable year. This is done in proportion to the number of months completely included in each calendar year which are included completely in the taxable year. The month that the taxable year ends is considered to be completely within the taxable year. The term "calendar quarter" means a period of three calendar months ending March 31, June 30, September 30, or December 31 of any year.

11. Are you eligible for monthly Social Security benefits?

You may be eligible for monthly Social Security benefits if you are any of the following:

  • A disabled insured worker who has not reached full retirement age;

  • A retired insured worker age 62 or over;

  • The spouse of a retired or disabled worker entitled to benefits who:

    • Is age 62 or over, or

    • Has in care a child who is either under age 16, or over age 16 and disabled, who is entitled to benefits on the worker's Social Security record;

  • The divorced spouse of a retired or disabled worker entitled to benefits if you are at least 62 and married to the worker for at least 10 years;

  • The divorced spouse of a fully insured worker who:

    • Has not yet filed a claim for benefits if both you and your ex-spouse are at least 62,

    • Was married for at least 10 years, and

    • Has been finally divorced for at least two years in a row;

  • The dependent, who is an unmarried child of a wage earner who is retired, disabled, or a deceased insured worker is entitled to benefits if he or she is:

    • Under age 18;

    • Under age 19 and a full-time elementary or secondary school student; or

    • Age 18 or older but under a disability which began before age 22;

  • The surviving spouse (including a surviving divorced spouse) of a deceased insured worker if you are age 60 or older;

  • The disabled surviving spouse (including a surviving divorced spouse in some cases) of a deceased insured worker if you are age 50-59 and become disabled within the period specified in §513;

  • The surviving spouse (including a surviving divorced spouse) of a deceased insured worker, regardless of age, if you are caring for an entitled child of the deceased who is either under age 16 or disabled before age 22; or

  • The dependent parents of a deceased insured worker age 62 or over.

Note: In addition to monthly survivors benefits, a lump-sum death payment is payable upon the death of an insured worker.
12. Are your Social Security benefits subject to taxes?

Your Social Security benefits may be subject to taxes. If you have substantial income in addition to your Social Security benefits, up to 85 percent of your annual benefits may be subject to Federal income tax. The amount of benefits subject to Federal income tax is the smaller of:

  • One-half of your benefits; or

  • One-half of the amount by which your adjusted gross income, plus tax-exempt interest, plus one-half of your Social Security benefits exceeds:

    • $25,000 if you are single;

    • $25,000 if you are married and not filing a joint return and you did not live with your spouse at any time during the year;

    • $32,000 if you are married and filing a joint return; or

    • $0 if you are married and not filing a joint return and you did live with your spouse at any time during the year.

In January, we send you a Form 1099 (Social Security Benefit Statement), showing the amount of benefits you received in the prior calendar year. A worksheet (IRS Notice 703) is included for determining whether any portion of your Social Security benefits received is subject to income tax.

How do you know the amount of taxes withheld from your benefits? At the end of each year, we send a Form 1042S (Social Security Benefit Statement) to each beneficiary. This statement shows the amount of taxes withheld from your Social Security benefits.
13. Who issues Social Security benefits, when and how?

Social Security benefits and SSI payments are issued by the U.S. Treasury Department, not by SSA's processing centers. However, if you have any questions about your direct deposit or check, get in touch with a Social Security office.

14. What are the payment dates?

Your payment days if you filed for benefits before May 1, 1997. Social Security payments are usually dated and delivered on the third day of the month following the month for which the payment is due. For example, payments for January are delivered on February 3. If the third of the month is a Saturday, Sunday or Federal holiday, payments are dated and delivered on the first day preceding the third of the month which is not a Saturday, Sunday, or Federal holiday. For example, if the third is a Saturday or Sunday, payments are delivered on the preceding Friday.
Your payment days if you filed for benefits on or after May 1, 1997. If you file for Social Security benefits May 1, 1997, or later, you are assigned one of three new payment days based on the date of birth of the person on whose record your entitlement is established (the insured individual):

  • The payment day for insured individuals born on the 1st through the 10th of the month is the second Wednesday of each month;

  • The payment day for insured individuals born on the 11th through the 20th of the month is the third Wednesday of each month; and

  • The payment day for insured individuals born after the 20th of the month is the fourth Wednesday of each month.

Note: If the scheduled Wednesday payment day is a Federal holiday, payment is made on the preceding day that is not a Federal holiday.
You will receive your Social Security payment on the third of the month if you are any of the following:

  • A beneficiary who also receives SSI payment;

  • A beneficiary whose income is deemed to an SSI recipient;

  • A beneficiary whose Medicare premiums are paid for by the state in which you live;

  • A beneficiary living in a foreign country;

  • A beneficiary entitled to payments on the third of the month, who later became entitled on another record, as long as there is no break in your entitlement;

  • A recipient of garnished payments, tax levy case payments, or payments made via the critical payment system; or

  • A beneficiary entitled on the same record as one of the above.

Can payment days be changed? If you are paid on the third of the month, you can volunteer to change your payment day as long as all beneficiaries receiving benefits on your record agree. The date-of-birth formula determines the payment cycle for beneficiaries. The decision to change to a cycled payment day is permanent.
Direct Deposit of Benefits. A "direct deposit" is a payment sent electronically to an account in a financial institution. The financial institution can be a bank, trust company, savings and loan association, or credit union. Direct deposit is now the standard way to receive Social Security and SSI benefits. The law requires that after December 1998, with limited exceptions, all Federal benefits must be paid through some form of direct deposit. You can sign up for direct deposit through your financial institution or by calling Social Security's toll free number, 1-800-772-1213.
If you live outside the U.S. We have an international direct deposit (IDD) program in certain countries outside the U.S. If you live in a country that has an IDD program, you must participate in the program. If you live in a country where no IDD program exists, you are exempt until such a program is available. However, you may have direct deposit to an account in the U.S. or any IDD country. For more information on payments if you are outside of the U.S., see SSA Publication No. 05-10137.
You should report the following to Social Security if you have direct deposit? If you have direct deposit, you must advise us if you change your account. You must also tell us if you change your address or residence. This is important so we can communicate with you and mail necessary forms, etc. when necessary. If you do not receive your payment in your account on the payment date, you should check with your bank and then call SSA's toll free number, 1-800-772-1213. It is important to have your claim number ready.
15. What are hospital and medical insurance benefits?

The Health Insurance Program, commonly known as "Medicare," provides comprehensive health insurance protection to the aged, disabled, and those with end-stage kidney disease. There are four parts to the Medicare program:

  • Medicare hospital insurance (Part A) helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care, and hospice care;

  • Medicare medical insurance (Part B) helps pay for physician services, outpatient hospital services, outpatient physical therapy, other medical services, and supplies and equipment that are covered by Part A;

  • Medicare Advantage Plans (Part C) are plans offered by private companies that contract with Medicare to provide all Medicare Part A and Part B benefits. Medicare Advantage Plans are HMOs, PPOs, or Private Fee-for-Service Plans. Some plans also offer prescription drug coverage; and

  • The Medicare Prescription Drug Benefit (Part D) provides outpatient prescription drug coverage for the aged and disabled.

Administering the Medicare program. The Centers for Medicare & Medicaid Services administers the Medicare program. It sets the standards for hospitals, skilled nursing facilities, home health agencies, hospices, and other providers and suppliers of services in order to receive payment for Medicare-covered services and items. The Centers for Medicare & Medicaid Services sets the standards to be used by Utilization and Quality Peer Review Organizations, intermediaries, and carriers in making payment and coverage decisions for health care furnished to individuals who have hospital and/or medical insurance.
The role of SSA in the Medicare program. We provide beneficiary services for the Medicare program. Social Security offices accept and process applications for enrollment in Part A and B. Social Security also responds to beneficiary and public inquiries. We also perform some data processing support and premium billing and collection activities.

How Medicare premiums are paid. Medicare Part B premiums must be deducted from Social Security benefits if the monthly benefit covers the deduction. If the monthly benefit does not cover the full deduction, the beneficiary will be billed. Beneficiaries may elect deduction of Medicare Part C (Medicare Advantage) from their Social Security benefit. Some Medicare Advantage plans include a reduction in the Part B premium. Social Security will take that reduction into account as soon as we are notified of the reduction by the Centers of Medicare & Medicaid Services. Beneficiaries may also elect deduction of their prescription drug plan premium from their Social Security benefit.

For more information about Medicare premiums go to our webpage, Medicare & You.
16. How do you contact Social Security?

Our website is a valuable resource for information about all of Social Security’s programs. You can access it by going to

In addition to using our website, you can call us toll-free at 1-800-772-1213. We can answer specific questions from 7 a.m. to 7 p.m., Monday through Friday. We can provide information by automated phone service 24 hours a day. If you are deaf or hard of hearing, you may call our TTY number, 1-800-325-0778. We treat all calls confidentially. We also want to make sure you receive accurate and courteous service. That is why we have a second Social Security representative monitor some telephone calls.
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