Congressional Research Service Social Security Primer
Congressional Research Service (“CRS”) has put out a “primer” on SSA:
Social Security Primer
Congressional Research Service
The Social Security program was established in the 1930s and has been modified by Congress many times over the years. Today, Social Security provides monthly cash benefits to retired or disabled workers and their family members, and to the family members of deceased workers. Among the beneficiary population, approximately 82% are retired or disabled workers, and 18% are the family members of retired, disabled, or deceased workers. In November 2015, nearly 60 million beneficiaries received a total of $74 billion in benefit payments for the month, with an average monthly benefit of $1,227. Workers become eligible for Social Security benefits for themselves and their family members by working in Social Security-covered employment. An estimated 94% of workers in paid employment or self-employment are covered, and their earnings are subject to the Social Security payroll tax. In 2016, employers and employees each pay 6.2% of covered earnings, up to the annual limit on taxable earnings ($118,500 in 2016). Among other requirements, a worker generally needs 40 earnings credits (10 years of covered employment) to be eligible for a Social Security retired-worker benefit. Fewer earnings credits are needed to qualify for a disabled-worker benefit; the number needed varies depending on the age of the worker when he or she became disabled. A worker’s initial monthly benefit is based on his or her career-average earnings in covered employment. Social Security retired-worker benefits are first payable at the age of 62, subject to a permanent reduction for early retirement. Full (or unreduced) retirement benefits are first payable at the full retirement age (FRA), which is increasing gradually from 65 to 67 under a law enacted by Congress in 1983. The FRA will reach 67 for persons born in 1960 or later (i.e., persons who become eligible for retirement benefits at the age of 62 in 2022 or later). In addition to payroll taxes, Social Security is financed by federal income taxes that some beneficiaries pay on a portion of their benefits and by interest income that is earned on the Treasury securities held by the Social Security trust funds. In 2014, the Social Security trust funds had receipts totaling $884 billion, expenditures totaling $859 billion, and accumulated assets (in the form of Treasury securities) totaling $2.8 trillion. Projections by the Social Security Board of Trustees show that, based on the program’s current financing and benefit structure, benefits scheduled under current law can be paid in full and on time until 2034. The projections also show that Social Security expenditures will exceed income by about 19% on average over the next 75 years. Restoring long-range trust fund solvency and other policy objectives (such as increasing benefits for certain groups of beneficiaries) have made Social Security reform an issue of ongoing congressional interest and debate. This report provides an overview of Social Security financing and benefits under current law. Specifically, the report covers the origins and a brief history of the program; Social Security financing and the status of the trust funds; how Social Security benefits are computed; the types of Social Security benefits available to workers and their family members; the basic eligibility requirements for each type of benefit; the scheduled increase in the Social Security retirement age; and the federal income taxation of Social Security benefits.
Full text available here.