CHAP3 - SocialSecurityBenefits Chapter3...

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Social Security Benefits Chapter 3
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Facts: Beneficiaries and Benefits  In 2010, 53 millions will receive over $703  billion in benefits Old Age Insurance   Retired workers       35 million  $41.6 billion   $1,181 monthly benefit dependents    2.8 million   $1.6 billion    Disability Insurance Disabled workers          8.4 million  $9.0 billion     $1,070 monthly benefit              dependents    1.9 million   0.6 billion       $317 Survivors  Insurance                             Widow(ers)   4.2 million   $4.7 billion       $1,129 monthly benefit                Children       1.86            $0.5 billion       $753 Retirement Benefits represent  69%  of total benefits paid Disability benefits represent     19%  of total benefits paid  Survivor  benefits represent     12%  of total benefits paid
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Importance of Social Security as a Source  of Income for the Elderly (65 and over) Nine out of ten age 65 and older receive Social Security  benefits. Social Security benefits represent 40% of the income of  the elderly Among Social Security beneficiaries,  52% of married couples and 72% of unmarried,  Social Security benefits represent at least 50% of  their income and     20% of married couples and 41% of unmarried  individuals Social Security benefits represent at least  90% of their income.   
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I. Reasons for Social  Insurance To solve major societal problems Private insurance not possible People’s expectations to be provided for  by the government
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II. Characteristics of Social  Insurance Compulsory Employer and/or employee financing Benefits prescribed by law Benefits as a matter of right Emphasis is on social adequacy
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III. OASDHI A. Extent of Coverage: over 93 % of workers  are covered (estimated 156 million workers).  Certain groups are excluded: * government employees hired before1984 * Railroad workers * State and government employees covered  under their plan * Ministers because of religious principles * student workers and nurses, newspapers  carriers, domestic workers
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B. Financing: OASDI-HI is financed by payroll taxes =  7.65 % paid by the employee (matched by employer)    6.20% OASDI on the first $106,800 (2011): OASI (Old Age Survivors Insurance: 5.3%            DI (Disability Insurance): 0.90%      HI (Health Insurance better known as Medicare Part A  1.45% (with no maximum limits on income)     Self-employed: pay 15.3%     
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Method of financing: pay-as-you-go with assets ~ $2.4 trillion
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CHAP3 - SocialSecurityBenefits Chapter3...

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