At 18, fresh out of high school, a young worker feels invulnerable,
never thinking of sickness or disability, and with death not even a
remotely feared foe.
But accidents and illness can strike with devastating impact. A worker
might become so significantly ill or injured that he or she may never
be able to handle a job again. Or death may devastate a family, taking
away the breadwinner. Consider this: 30% of today's 20 year-olds will
experience disability at sometime before reaching retirement age;
nearly 40% of today's 20 year olds will face some disability, or will
die before they reach age 65. That's why Social Security bills itself
as a "family program for all ages."
Social Security offers generous insurance. For an average worker
(someone earning about $30,000 a year), Social Security is the
equivalent of a $322,000 life insurance policy for those with children
and a $200,000 disability policy.
Disability is a condition that will last at least a year and prevent a
person from any significant "gainful" activity. Contrary to popular
belief, persons with a disability may earn some money and still
collect disability benefits. The key is the amount.
Any earnings over $500 a month are considered substantial enough to
prevent a person from collecting disability payments, no matter how
severe the mental or physical condition. When earnings range between
$300 and $500 a month, the government makes a judgment on a
case-by-case basis. Anything up to $300 a month is acceptable as
earnings for a person with a disability.
Although Social Security is a federal program, the disability
decisions are made by state agencies, working under contract to the
Social Security Administration.
Typically, a person with a disability will take medical records to a
Social Security office, which will send the paperwork to the state
agency. The state can ask for additional records before making a
determination. The waiting period is five months, designed to assure
that only the seriously disabled receive benefits. Someone cannot
collect benefits for the first five months he or she has a disability.
Some people will recover sufficiently to return to work.
Social Security is paying $43 billion a year in disability benefits to
4.5 million workers. They must have paid Social Security taxes for
five of the last 10 years. They receive payments until age 65, when
they become eligible for full retirement benefits under Social
Security.
The recipients include 4.6 million workers with disabilities, 1.4
million of their children, and 200,000 spouses. The children living
with their parents receive benefits until they reach age 18.
Survivors' benefits go to widows or widowers who are 60 years or older
(or 50-59 if they have a disability); to widows or widowers at any age
who are caring for a child under the age of 16; and to children under
18 (or if they have a disability before 22).
The government is paying $56 billion a year in survivor benefits to 5
million widows and widowers 60 and older (or 50 with a disability); to
1.9 million children; and to 250,000 young widows or widowers with
children.
|
Average Monthly Benefits, January 1998
|
|
Beneficiary
|
Amount
|
|
Retired worker alone
|
$ 750
|
|
Retired worker and spouse aged 62 and over
|
1,288
|
|
Disabled worker (spouse under age 65, one or more children
|
1,198
|
|
Survivors:
|
|
Widowed mother or father and two children
|
1,509
|
|
Aged widow or widower alone
|
731
|
