In the United States of America, legislative regulation of the social security institution has been carried out since 1935. It is based on the application of two principles – insurance and assistance, or their combination in a particular social program. These areas are not isolated from each other and from other areas of social policy, which is reflected in the text of the relevant regulatory documents (programs).
As indicated above, social security administration for people living in the United States is carried out mainly through the federal and state programs adopted and implemented by the state authorities. At the same time, it should be noted that the main in the named sphere of relations is the Social Security program, which includes the Medicare section as a subprogram.
The Social Security program is based on the principle of social insurance, the essence of which is the payment of taxes on both social security and medical care. In particular, the social security tax is 6.2% of the employee’s (employer’s) labor income up to $ 106,800; from a private entrepreneur – 12.4% of labor income up to $ 106,800. At the same time, the tax on medical care from an employee (employer) is 1.45% of total labor income; from a private entrepreneur – 2.9% of total labor income.
Thus, social security within the framework of the main federal program is implemented in two main areas: social security itself (benefits, including pension benefits) and medical care, including hospitalization.
All types of benefits under the federal program “Social Security” can be divided into the following groups:
- retirement benefits;
- disability benefits;
- family benefits.
Retirement benefits include a monthly Retirement Benefits and a monthly Survivors Benefits.
In turn, the disability benefit is presented in the form of a monthly disability benefit (Disability Benefits). Keep in mind that the Social Security program does not regulate such type of payments as temporary disability benefits, since its legal mediation takes place in other programs (mainly in state programs and programs accepted by employers).
Family Members Benefits, however, include benefits paid to family members of people receiving either old-age benefit or disability benefit.
At the heart of the realization of the right to get retirement benefits is the so-called “grading scheme”, the essence of which is that a person throughout his life gains conditional points (Social Security Credits), which determine the amount of future benefits under the Social Security program. The maximum number of conditional points that can be earned in one year is 4. In most cases, 40 conditional points (10 years of work experience) must be earned to receive benefits. Persons under retirement age need fewer conditional points to get disability benefits or in connection with the loss of a breadwinner. If a person stops working without having the required number of points to qualify for benefits, the points are stored in the Social Security account (SSA account). When a person returns to work, they have the right to an increase in this number of points and, subsequently, to acquire the right to receive benefits. In the absence of the required points number, a citizen will not be able to confirm his right to receive a pension benefit.
The old-age benefit is granted to persons who have reached the age of 62 (the minimum retirement age) and have left the job with a sufficient number of conditional points.
The amount of the benefit depends on the average lifetime earnings and the age of retirement (the later you retire, the higher the amount of the benefit).
As a general rule, the retirement age ranges from 62 to 67 and depends on the person’s year of birth. In particular, for those born not earlier than 1960, the retirement age is 67 years; those born between 1943 and 1954 have a retirement age of 66, etc.
Separate rules relate to the pension rights of widows and widowers. In particular, they can start getting social security benefits at age 60, or at age 50 if they are disabled. In doing so, they can receive first a reduced benefit in one account, and then full benefit in another account. For example, a woman may receive a reduced widow’s benefit after age 60 or 62, and then, upon reaching full retirement age, switch to full (100%) retirement benefit.