SOCIAL SECURITY: TYPES OF BENEFITS

As its name implies, the Social Security program provides three principal types of benefits:

- Retirement (old-age) benefits

- Survivors' benefits

- Disability benefits

Retirement Benefits
A worker who is fully insured under Social Security is eligible to receive monthly retirement benefits as early as age 62. However, the election to receive benefits prior to the normal retirement age of 65 years results in a permanently reduced benefit.

In addition to the retired worker, the following dependents of persons receiving retirement benefits are also eligible for monthly benefits:

A spouse aged 62 or older. However, benefits are permanently reduced if this benefit is elected prior to the spouse's reaching age 65. This benefit is also available to a divorced spouse under certain circumstances if the marriage lasted at least 10 years.

A spouse of any age if the spouse is caring for at least one child of the retired worker who is (1) under age 16 or (2) disabled and entitled to a child's benefit as described below. This benefit is commonly referred to as a mother's or father's benefit.

Dependent, unmarried children under age 18. This child's benefit will continue until age 19 as long as a child is a full-time student in elementary or secondary school. In addition, disabled children of any age are eligible for benefits as long as they were disabled before reaching age 22.

It is important to note that retirement benefits as well as all other benefits under Social Security and Medicare are not automatically paid on eligibility but must be applied for.

Beginning in 2003, the normal retirement age for nonreduced benefits for workers and spouses will gradually increase until it reaches age 67 in 2027.

Survivors Benefits
All categories of survivors benefits are payable if a worker is fully insured at the time of death. However, three types of benefits are also payable if a worker is only currently insured. The first is a lump-sum death benefit of $255, payable in the following order of priority:

To a surviving spouse who was living with the deceased worker at the time of death

To a surviving spouse (other than a divorced spouse) who was not living with the deceased worker at the time of death if the surviving spouse is eligible for or entitled to benefits based on the deceased wage earner's record for the month of death

To children who are eligible for or entitled to benefits based on the deceased wage earner's record for the month of death

If none of these categories of survivors exists, the benefit is not paid

There are two categories of persons who are eligible for income benefits as survivors if a deceased worker was either fully or currently insured at the time of death:

Dependent, unmarried children under the same conditions as previously described for retirement benefits

A spouse (including a divorced spouse) caring for a child or children under the same conditions as previously described for retirement benefits

The following categories of persons are also eligible for benefits, but only if the deceased worker was fully insured:

A widow or widower aged 60 or older. However, benefits are reduced if taken prior to age 65. This benefit is also payable to a divorced spouse if the marriage lasted at least 10 years. In addition, the widow's or widower's benefit is payable to a disabled spouse at age 50 as long as the disability commenced no more than 7 years after (1) the worker's death or (2) the end of the year in which entitlement to a mother's or father's benefit ceased.

A parent aged 62 or over who was a dependent of the deceased worker at the time of death.

Disability Benefits
A disabled worker under age 65 is eligible to receive benefits under Social Security as long as he or she is disability insured and meets the definition of disability under the law. The definition of disability is very rigid and requires a mental or physical impairment that prevents the worker from engaging in any substantial gainful employment. The disability must also have lasted (or be expected to last) at least 12 months or be expected to result in death. A more liberal definition of disability applies to blind workers who are aged 55 or older. They are considered disabled if they are unable to perform work that requires skills or abilities comparable to those required by the work they regularly performed before reaching age 55 or becoming blind, if later.

Disability benefits are subject to a waiting period and are payable beginning with the sixth full calendar month of disability. In addition to the benefit paid to a disabled worker, the other categories of benefits available are the same as those described under retirement benefits.

As previously mentioned, certain family members not otherwise eligible for Social Security benefits may be eligible if they are disabled. Disabled children are subject to the same definition of disability as workers. Disabled widows or widowers must be unable to engage in any gainful (rather than substantial gainful) employment.

Eligibility for Dual Benefits
In many cases, a person is eligible for more than one type of Social Security benefit. Probably the most common situation occurs when a person is eligible for both a spouse's benefit and a worker's retirement or disability benefit based on his or her own Social Security record. In this case and in any other case when a person is eligible for dual benefits, only an amount equal to the higher benefit is paid.

Termination of Benefits
Monthly benefits to any Social Security recipient cease on death of the recipient. When a retired or disabled worker dies, the family members' benefits that are based on the worker's retirement or disability benefits also cease, but the family members are then eligible for survivors benefits.

Disability benefits for a worker technically terminate at age 65 but are then replaced by comparable retirement benefits. In addition, any benefits payable because of disability cease if the definition of disability is no longer satisfied. However, the disability benefits will continue during a readjustment period that consists of the month of recovery and two additional months.

As long as children are not disabled, benefits usually terminate at age 18 but may continue until age 19 if the child is a full-time student in elementary or secondary school.

The benefits of a surviving spouse terminate on remarriage unless remarriage takes place at age 60 or later.