Income:
There is no income test as such and no reduction in benefits for earnings of employed workers who have reached the full retirement age (65 for persons born before 1938 and gradually increasing to 67 for persons born in 1960 or later). However, there are reductions in benefits for workers and their families who have not reached retirement age:

Early Retirement Earnings Deduction:
If a worker is under full retirement age, $1 in benefits will be deducted for each $2 in earnings above the annual limit ($14,160) in 2009.

• In the year a worker reaches "full" retirement age, his/her benefits will be reduced $1 for every $3 he/she earned over a different limit ($37,680) in 2009 until the month the worker reaches "full" retirement age. Then a worker can work without any reduction in the amount of monthly benefit, no matter how much he/she earns.

• If other family members receive benefits on a worker’s Social Security record, the total family benefits will be affected by his/her earnings. This means that not only are the worker’s benefits reduced, but those payable to the worker’s family as well. If a family member works, however, the family member’s earnings affect only his/her benefits.

Income from Pensions:
If a worker receives a pension, in addition to Social Security benefits, from work where he/she paid Social Security taxes, it will not affect his/her Social Security. However, if a worker receives a pension from work that was not covered by Social Security– for example, the Federal civil service, some state or local government employment or work in a foreign country – his/her Social Security benefit may be lowered or offset.

Assets:
No assets test.

Age:
Retired Workers:
Social Security distinguishes between “full retirement,” the age at which full benefits are paid, and “early retirement.” The full retirement age for persons born in 1937 and before is 65. For those born after that, it increases gradually until reaching 67 in 2027.

Delayed Retirement:
A delay in retirement can increase Social Security benefits (see below for Benefits):

Dependent Spouses and Children:
A spouse receives one-half of the retired worker's full benefit unless the spouse begins collecting benefits before full retirement age. In that case, the amount of the spouse's benefit is permanently reduced by a percentage based on the number of months before he/she reaches full retirement age;

A spouse is eligible at any age if he/she is caring for the worker’s child who is under age 16 or disabled prior to age 22 and receiving Social Security benefits;

The retired worker’s children are eligible if they are:

• unmarried and under age 18;

• under age 19 years and 2 months, but in elementary or secondary school as a full-time student;

• age 18 or older and severely disabled before age 22 (If the child’s disability occurs after age 22, the child is not eligible).

Divorced Spouses:
Divorced spouses must be at least 62 to receive benefits. (See below, for Other Eligibility Conditions.)

Survivors:
The age requirements for family members who can collect monthly Survivors’ Insurance (SI) payments based on the employment record of a deceased spouse or relative are:

• age 60 or older for a widow or widower;

• 50-60 for a widow or widower who is disabled;

• any age for a widow or widower if he/she is caring for a child under age 16 or a disabled child who is receiving Social Security benefits;

• under 18 for unmarried children or unmarried and age 19 and 2 months if full-time students enrolled in elementary or secondary school;

• age 18 or older if severely disabled before age 22.

Divorced Widow(er):
If the worker is divorced (even if remarried), the ex-spouse will be eligible for benefits on the worker's record when he/she dies. In order to qualify, the ex-spouse must:

• be at least 60 years old (or 50 if disabled) and have been married for at least 10 years;

• be any age if caring for a child who is eligible for benefits on the worker’s record;

• not be eligible for an equal or higher benefit on his/her own record; and

• not be currently married, unless the remarriage occurred after age 60 (or 50 if disabled).

In cases of remarriage after age 60, the ex-spouse will be eligible for a widow(er)'s benefit on the worker's record or a dependent's benefit on the record of his/her new spouse, whichever is higher. Remarriage after age 60 (50 if disabled) will not prevent benefit payments of a former spouse's record. And, at age 62 or older, he/she may get benefits on the record of the new spouse if they are higher.

If the ex-spouse receives benefits on the worker’s account, it does not affect the amount of any benefits payable to other survivors on the worker’s record.

Disability:
Not a condition, except for:

• children over 18 who must have been disabled before the age of 22. Dependents’ benefits normally stop when a child reaches age 18 (or 19 if the child is a full-time student). However, those benefits can continue to be paid into adulthood if the child is disabled. To qualify for these benefits, an individual must be eligible as the child of someone who is getting Social Security retirement or disability benefits, or of someone who has died, and that child must have a disability that began prior to age 22. Although most of the people getting these benefits are in their twenties and thirties (and some even older), the benefit is considered a "child's" benefit because it is paid on the basis of a parent's Social Security earnings record.

• a widow/er who is 50 or older but under 62. A disabled widow or widower can get benefits at 50-60. The surviving spouse's benefits may be reduced if he/she also receives a pension from a job where Social Security taxes were not withheld.

Note:
See Social Security: Disability Insurance for benefits for disabled.

Presence of Spouse:
Not a condition.

Presence of Children:
A spouse who is taking care of a child who is under age 16 or disabled and receiving Social Security benefits gets full benefits, regardless of age. A widow/er at any age who is taking care of the worker’s child under 16 or disabled who is eligible for benefits. A former spouse does not have to meet the length-of-marriage rule if he/she is caring for a child under 16 or disabled who is also getting benefits on the divorced worker’s record. The child must be the former spouse's natural or legally adopted child. A parent who is younger than retirement age ceases to be eligible for benefits when the youngest child reaches the age of 16, even if the children continue to be eligible longer (See Age, above).

Prior Contribution:
A worker must have worked in covered employment (employment covered by Social Security) and have paid his/her share of the payroll tax. In 2009, the worker and his/her employer each pay 6.2% up to the taxable maximum ($106,800) of the worker's gross pay. Self-employed persons pay both employer and employee taxes or 12.4%. An additional 1.45% tax is placed on all earnings. The maximum taxable income is altered yearly to reflect changes in the average wage. Credit for a certain amount of work in covered employment is required in order to be eligible for Social Security benefits. Most workers need 40 credits (10 years of work) to qualify for benefits. Credits can also be awarded for a certain amount of earnings, $1,090 per credit in 2009, but credits are limited to 4 per year or a total of $4,360. The amount of money needed to earn 1 credit goes up every year. Deceased workers need to have earned fewer credits for his/her family members to be eligible for SI.

Exhaustion of Benefits From Other Programs:
Not a condition. If a worker worked for a federal, state, or local government at which he/she did not pay Social Security taxes, the pension the worker receives from that agency may reduce any Social Security benefits for which the worker qualifies. (All Federal employees hired on or after January 1, 1984 are covered under Social Security.) In addition, some or all of the Social Security benefit of a spouse or widow(er) may be offset if the worker received a pension from a job where he/she did not pay Social Security taxes.

Job Search:
Not a condition.

Participation in Work Program:
Not a condition.

School Attendance:
Unmarried children under age 18 are eligible for benefits whether or not they attend school. However, full-time school attendance is a requisite for receipt of benefits by unmarried children between the ages of 18 and 19 years and 2 months.

Citizenship:
U.S. citizenship or legal-immigrant status is required for eligibility. If a dependent or survivor is not a U.S. citizen, he/she must have lived in the U.S. for at least 5 years during which time the family relationship on which benefits are based must have existed. Benefits are suspended to alien dependents and survivors when they have been outside the U.S. for more than 6 full calendar months (except under special considerations). Benefits are resumed after he/she returns for 1 whole calendar month.

Other Eligibility Conditions:

Length of Marriage
Surviving Spouse:
Must be married at least 9 months to be eligible for Survivors’ Insurance (SI), although there are exceptions.

Divorced Spouse:
Must have been married to the retired or deceased worker at least 10 years, be unmarried, and ineligible for an equal or higher benefit on his/her own Social Security record, or on someone else’s Social Security record.

Parents of a Deceased Worker:
Must have been dependent on the worker for at least half of their support.

Type:
Monthly cash payments to retired workers, the worker’s dependents, and survivors.

Level:
Social Security benefits are based on a worker's earnings averaged over a working lifetime. They are not based on the last 5 years or the highest 3 years. This is different from many private pension plans. Benefits are calculated in the following way:

Step 1.
The number of years of earnings to use is determined. The base is the 35 highest years of earnings.

Step 2.
The earnings are adjusted for wage inflation (indexing).

Step 3.
The average adjusted monthly earnings are based on the number of years in Step 1.

Step 4.
The average adjusted monthly earnings are multiplied by percentages in an annually adjusted formula. The Social Security benefit formula is weighted in favor of low-income workers who have less opportunity to save and invest during their working years. Consequently, the percentage is lower for people in the upper income brackets and higher for people with low incomes. The 5 years of lowest earnings are dropped when determining benefits. The number of years considered in computing benefits depends on when a worker reaches the age of 62. Individualized computations are required for each claimant.

Work Recomputations:
A worker’s benefit may be recomputed one or more times after the first computation when the individual became entitled to retirement benefits. This is done automatically if the worker has substantial additional covered earnings in the year he/she first became entitled to benefits, or in later years. Whether the benefit adjustment is for a retired worker or a survivor the benefit adjustment is made retroactive to January of that same year. A recomputation never decreases a benefit.

Delayed Retirement Credits:
Delayed retirement credits increase the benefit for workers who continue to work after “full” retirement age. The benefit will be increased by a designated percent if the worker chooses to delay receiving retirement benefits. These increases will be added automatically from the time the worker reaches full retirement age until he/she starts collecting benefits or reaches age 70. The benefit increase stops when a person reaches age 70. The percent increase varies, depending on the year of the worker’s birth.

Benefits for Dependents and Survivors:
A spouse is entitled to one-half of the retired worker’s full benefit unless the spouse begins collecting benefits before reaching full retirement age. However, if a spouse is taking care of a child who is under age 16 or disabled and receiving Social Security benefits, the benefit is not affected by age. Spouses eligible for their own retirement benefits and spousal benefits are entitled to the higher of the two.

Benefits for survivors depend on their age and the type of benefit for which they are eligible. For example, a widow or widower, at full retirement age, gets 100% of the deceased worker’s benefit; widows and widowers between 60 and full retirement age get reduced benefits, beginning at 71.5% of the deceased worker’s benefit at 60 years of age and increasing with each subsequent year. Starting in 2005, the age at which widows and widowers get 100% of the deceased spouse’s benefits will be increased gradually until it reaches age 66 in 2011 and 67 in 2029.

Dependent children each get 50% of the benefit of the retired or 75% of the deceased worker’s benefit, but there are maximum family benefits.

Maximum Benefits:
Since the amount of the benefit depends on the birth date of the worker and his/her average earnings over a period of years, maximum benefits will vary from year to year. In 2009, the maximum monthly retirement benefit for a worker is $2,323. An individual may use Social Security’s benefit planners/calculators to calculate retirement, disability and survivors benefits. This can be done at any time. This is especially useful if an individual has special circumstances concerning retirement plans. The website for the planner is http://www.socialsecurity.gov/planners/

Minimum Benefits:
There is no fixed minimum benefit for workers, their survivors, or dependents.

Taxation of Benefits:
If a worker files a federal income tax return as an “individual,” and his/her combined income is between $25,000 and $34,000, the worker is required to pay taxes on 50% of Social Security benefits. Above $34,000, the proportion of the benefit that is taxed rises with income to a maximum of 85%. Benefits of persons with incomes below $25,000 are not taxed.

If a worker files a joint, federal income tax return, he/she is required to pay taxes on 50% of the benefits, if the joint combined income is between $32,000 and $44,000. Above $44,000, the proportion of the benefit that is taxed rises with income to a maximum of 85%.

Monthly Retirement Benefits:
Average monthly benefits in 2007 are $1,044 for a retired worker alone, $1,713 for a couple, $1,008 for an aged widow/widower, and $2,167 for a survivor family (widow/widower and two children). Benefit levels vary according to the year in which the covered individual reached the age of 62.

Although higher-paid workers get higher benefits, the replacement rates or ratio of
benefits to former earnings is higher for lower-paid workers. The reason is that the Social Security benefits formula is weighted in favor of lower-income workers who have less opportunity to save and invest during their working years. The formula resulted in benefits in 2007 that replaced about 43% of earnings for people who had average earnings during their working years. The percentage is lower for people in the upper income brackets and higher for people with low incomes.

Change in Recipient Status:
Employed, Retired Workers:
If a recipient works and is under the full retirement age, benefits are subject to the earnings test, as described in Eligibility: Income, above.

Employed Survivors:
Benefit reductions also apply to employed survivors.

Remarriage of Widow(er):
In cases of remarriage after the age of 60 (or 50 if disabled), a widow(er) will be eligible for a widow(er)’s benefit from the deceased spouse or a dependent’s benefit on the record of his/her new spouse, whichever is higher.

Children:
Benefits for children are terminated at age 18, or 19 years and 2 months for full-time students.

Changes in Benefit Levels:
Automatic cost of living adjustments (COLAs) insure beneficiaries against the erosion of benefits from inflation. The COLA adjustment in January 2009 was 5.8%. Changes in the COLA other than the automatic change or in benefits aside from the COLA required an Act of Congress and the signature of the President.

Where and How to Apply:
An applicant may file online at www.socialsecurity.gov. Application for all benefits may also be handled in person or by telephone. Call the toll free number at 1-800-772-1213 to arrange an in-office or telephone appointment or to determine what documents are needed.

Financing:
Through a payroll tax on employer and employee. In 2009, the payroll tax for OASDI is 12.4% for the employee and the employer on the first $106,800 of a worker’s income, or 6.2% for each. Self-employed persons pay the full 12.4%. This includes Disability Insurance. Medicare (Health Insurance) is an additional 1.65%. Therefore, the total payroll tax is 15.3% or 7.65% each.

Administration:
By the Social Security Administration of the Federal government through about 1,300 branch offices throughout the United States.

Procedures for Appeal:
Generally there is a 60-day limit for any type of appeal. There are 4 levels of appeal:

1. Reconsideration:
This is a complete review of a claim by a member of the SSA staff who did not take part in the first decision. Most reconsiderations involve a review of files without the need for the claimant to be present.

2. Hearing by an Administrative Law Judge (ALJ):
If a claimant disagrees with the consideration decision, he/she may ask for a hearing. The hearing will be conducted by an administrative law judge who had no part in the first decision or the reconsideration of the case. The hearing is usually held within 75 miles of the claimant's home. The ALJ will notify the claimant of the time and place of the hearing. The claimant and his/her representative, if there is one, may come to the hearing and explain the case in person. The claimant may look at his/her file and give new information. The ALJ will question the claimant and any witnesses he/she brings to the hearing.The claimant and the representative also may question the witnesses. It is usually to the advantage of the claimant to attend the hearing. If he/she decides not to attend, it must be done in writing. Unless the ALJ believes that the claimant's presence is needed to decide the case, he/she will make a decision based on all the information in the case, including any new information given. After the hearing, a new letter and a copy of the ALJ's decision will be mailed to the claimant.

3. Review by Appeals Council:
If the claimant disagrees with the hearing decision, he/she may ask for a review by SSA’s Appeals Council. The Appeals Council looks at all requests for review, but it may deny a request if it believes the hearing decision was correct. If the Appeals Council decides to review the case, it will either decide the case itself or return it to an ALJ for further review. A copy of the Appeals Council decision will be mailed to the claimant.

4. Federal Court Review:
If a claimant disagrees with the Appeals Council’s decision, or if the Appeals Council decides not to review the case, the claimant may file a lawsuit in a Federal district court. The action must be taken within 60 days of the Appeals Council's decision.

Many people handle their own appeals with free help from the SSA. Claimants can, however, choose a lawyer, a friend or someone else to help them. Someone who helps is called a "representative." A representative can act in most Social Security matters and will receive a copy of any decisions made about a claim. A representative cannot charge or collect a fee from the claimant without first getting written approval from the SSA.

Any recorded information regarding appeals can be obtained 24 hours a day, including weekends and holidays, by calling toll-free, 1-800-772-1213. A service representative is available between 7:00 A.M. and 7:00 P.M. on business days. People who are deaf or hard-of-hearing may call toll-free, 1-800-325-0778. Social Security information can be obtained on the Internet at http://www.socialsecurity.gov