Glossary

actuarial reduction (OASDI)

Reduction in monthly benefit amount payable on—

1. Entitlement prior to full retirement age if the beneficiary is a retired worker, a wife or husband of a retired or disabled worker (with entitlement not based on caring for a child beneficiary), divorced spouse, a widow(er), or a surviving divorced spouse; or
2. Entitlement, in case of disability, at ages 50–59 if the beneficiary is a widow(er) or surviving divorced spouse.

For formulas used to compute the reduction, see “Benefit Types and Levels” in the section Social Security (Old-Age, Survivors, and Disability Insurance).

administrative law judge—ALJ

An official of the Social Security Administration's (SSA's) Office of Disability Adjudication and Review who is specially qualified by education and experience to hold hearings and make independent decisions regarding eligibility for SSA programs based on all the evidence and testimony. ALJs conduct impartial hearings and issue decisions to individuals who have appealed previous determinations by SSA. See also administrative review process.

administrative review process (OASDI and SSI)

The procedures followed by the Social Security Administration (SSA) in determining one's right under Title II and Title XVI of the Social Security Act. The administrative review process consists of several steps, which must usually be requested within certain time periods, in the following order: initial determination, reconsideration, decision of the administrative law judge, and a review by SSA's Appeals Council.

1. Initial determination. A determination SSA makes about an individual's entitlement to benefits or about any other matter that gives that person a right to further administrative and/or judicial review.
2. Reconsideration. The first step in the administrative review process. When an individual disagrees with the initial determination, the individual may, within 60 days of receiving notice of the initial determination, ask SSA to reconsider the decision.
3. Hearing before an administrative law judge (ALJ). When an individual disagrees with the reconsidered determination, he or she may, within 60 days of receiving notice of the determination, request a hearing before an ALJ.
4. Appeals Council review. When an individual disagrees with the decision or dismissal by the ALJ, he or she may, within 60 days of receiving the hearing decision, request that the Appeals Council review that decision. The Appeals Council, within the Office of Disability Adjudication and Review, may deny or dismiss the request for review, or grant the request and either issue a decision or remand (return) the case to an ALJ. The Appeals Council may also review any ALJ action on its own motion within 60 days after the ALJ's action. The Appeals Council's decision, or the hearing decision if the Council denies the request for review, represents SSA's final decision in the administrative review process. See expedited appeals process and federal court review.

adult (SSI)

A person older than age 21, aged 18–21 who is not regularly attending school, or a person under 21 who is married or the head of a household.

age (OASDI)

In tables showing beneficiaries in current-payment status, the age classification is based on the age of the person at his or her last birthday. In tables showing awards data, age is the beneficiary's age in the month of award or age in year of the award, as specified.

aged beneficiary (OASDI)

A person who qualifies for benefits on the basis of age rather than on the basis of a disability or caring for a child.

aged person (SSI)

A person aged 65 or older.

allowance (DI)

A determination that a worker is entitled to a cash disability benefit award or to the establishment of a period of disability because of an inability to work by reason of any physical or mental impairment.

annual maximum taxable limit (OASDI)

The dollar amount above which earnings in Social Security-covered employment are neither taxable nor creditable for benefit computation purposes. (Also referred to as “contribution and benefit base,” “annual creditable maximum,” “maximum contribution and benefit base,” “taxable maximum,” and “maximum taxable.”) Under Medicare Part A (Hospital Insurance), there is no upper limit on earnings subject to taxes. See Table 2.A3.

auxiliary benefit (OASDI)

Monthly benefit payable to a spouse or child of a retired or disabled worker, or to a survivor of a deceased worker. (Also known as dependents benefit.)

average

See mean.

average indexed monthly earnings—AIME (OASDI)

The resulting average monthly earnings of a worker after indexing of actual earnings to reflect the value of the individual's previous earnings relative to national average earnings in the indexing year. A formula is then applied to this figure to compute the primary insurance amount (PIA) for most workers who attain age 62, become disabled, or die after 1978. The indexing year is the second year before the year in which the worker attains age 62, becomes disabled, or dies. Taxable earnings after the indexing year are included at their actual value. For widow(er)s first eligible after December 1984, the indexing year applicable to the deceased worker's earnings may alternatively be the second year before the widow(er)'s date of eligibility for survivors benefits if it results in a higher benefit.

Earnings are indexed by multiplying the worker's taxable earnings for each year after 1950 through the indexing year by the average wages of all workers for the indexing year, and dividing by the average wages of all workers for the year being indexed. Once the earnings have been indexed, the AIME is computed by—

1. Determining the number of computation years—the number of years elapsed after attaining age 21 (or 1950, if later) until the year in which the worker attains age 62, becomes disabled, or dies, minus the number (generally 5) of lowest-earnings years dropped out of the computation (the minimum number of computation years is 2);
2. Selecting the actual computation years, based on highest indexed earnings from any years after 1950; and
3. Dividing the sum of indexed earnings in the computation years by the total number of months in the computation years.

For workers entitled to disability benefits after June 1980, the number of dropout years varies according to the age attained in year of disability onset. For workers aged 26 or younger, the number of dropout years is 0; for those aged 27–31, 32–36, 37–41, 42–46, and 47 or older, the numbers are 1, 2, 3, 4, and 5, respectively. After June 1981, however, disabled workers may obtain additional dropout years (up to 3, 2, and 1, respectively, for those aged 26 or younger, 27–31, and 32–36) for each year the workers had no earnings and were living with a child (their own or their spouse's) under age 3.

average monthly wage—AMW (OASDI)

The amount of earnings used as the basis for determining the primary insurance amount (PIA) for workers who attained age 62, became disabled, or died before 1979, and also under a transitional guarantee computation for workers who attained age 62 in 1979–1983 or survivors of such workers, if the resulting PIA is higher than under the average indexed monthly earnings (AIME) method. The AMW is computed by—

1. Determining the number of computation years—the number of years elapsed after attaining age 21 (or 1950, if later) until the year in which the worker attains age 62 (age 65 for men born before January 2, 1911, and the later of age 62 or the year 1975 for men born after January 1, 1911), becomes disabled, or dies, minus the number (generally 5) of lowest-earnings years dropped out of the computation (the minimum number of computation years is 2);
2. Selecting the actual computation years, based on highest earnings (up to the amount of the annual maximum taxable earnings in each year), from any years after 1950; and
3. Dividing the sum of earnings in the computation years by the total number of months in the computation years.

See the last paragraph under AIME for special dropout rules for disabled workers.

An alternative computation method takes into account the worker's earnings after 1936, if it yields a higher PIA.

award (OASDI)

A determination that an individual is entitled to a specified type of benefit. An award action is processed adding the individual to the Social Security benefit rolls maintained for that type of benefit and is counted as an award in a particular month. Award actions are processed not only for new beneficiaries but also for persons already on the rolls whose benefits in one category are terminated but who become entitled to another type of benefit. These actions are called conversions. When a disabled worker attains the full retirement age, the worker benefit and the benefits of spouses and children are converted to the retirement category. Upon the death of a disabled worker, benefits for children are converted to the survivor child category and benefits for spouses caring for these children are converted to widowed mothers and fathers benefits. Benefits for spouses of retired and disabled workers entitled because of age are converted to nondisabled widows and widowers benefits upon the death of the worker. The above conversions are counted in the award data.

base years (OASDI)

For computing Social Security benefits, the years after 1950 up to the year a person is entitled to retirement or disability benefits. For a survivor's claim, the base years include the year of the worker's death.

bend points (OASDI)

The dollar amounts defining the average indexed monthly earnings or primary insurance amount brackets in the benefit formulas. See Tables 2.A11 and 2.A13.

beneficiary (OASDI)

A person who has been awarded benefits on the basis of his or her own or another's earnings record. The benefits may be either in current-payment status or withheld.

benefit reduction (OASDI)

See actuarial reduction.

benefit termination (OASDI)

See termination.

benefits in force (OASDI)

The sum of the number of persons with benefits in current-payment status and persons with benefits withheld.

benefits withheld (OASDI)

See withholding.

blind (OASDI and SSI)

“Blindness” for Social Security purposes means either central visual acuity of 20/200 or less in the better eye with the use of a correcting lens, or a limitation in the fields of vision so that the widest diameter of the visual field subtends an angle of 20 degrees or less (tunnel vision).

child (SSI)

An unmarried blind or disabled person who is not the head of a household and who is either under age 18 or aged 18–21 and regularly attending school.

childhood disability benefit (OASDI)

See disabled child's benefit.

child's benefit (OASDI)

Monthly benefits payable to children of a retired or disabled worker or of a deceased worker who died either fully or currently insured. Benefits are payable to unmarried children under age 18 (up to age 19 if a full-time student attending elementary or secondary school) and to disabled children aged 18 or older who became disabled before age 22. Under certain circumstances, benefits can be paid to stepchildren, grandchildren, or adopted children. Benefits for disabled children may continue if they marry certain other Social Security beneficiaries.

claimant (OASDI and SSI)

The person on whose behalf an application for benefits is filed.

computation starting date (OASDI)

December 31 of either 1936 or 1950. Taxable earnings after the applicable starting date are counted in computing average monthly earnings (only starting date of December 31, 1950 is applicable in computing average indexed monthly earnings).

Consumer Price Index—CPI

A relative measure of inflation computed by the U.S. Department of Labor. The CPI charts the rise in costs for selected goods and services and is used to compute cost-of-living increases. In this report, references to the CPI relate to the CPI for Urban Wage Earners and Clerical Workers (CPI-W), unless otherwise noted.

continuing disability review (DI and SSI)

A periodic review to determine if a disabled individual is still medically eligible to receive benefits.

contributions (OASDI)

The amount based on a percentage of earnings, up to an annual maximum, that must be paid by—

1. Employers and employees on wages from employment under FICA (Federal Insurance Contributions Act),
2. The self-employed on net earnings from self-employment under SECA (Self-Employment Contributions Act), and
3. States on the wages of state and local government employees covered under the Social Security Act through voluntary agreements under section 218 of the Act.

Generally, employers withhold contributions from wages, add an equal amount of contributions, and pay both on a current basis. Also referred to as “taxes.” See Table 2.A3.

conversion of benefits (OASDI)

See award (OASDI).

cost-of-living adjustment—COLA

Social Security benefits and Supplemental Security Income payments are increased each year to keep pace with increases in the cost of living (inflation). The Consumer Price Index is used to compute COLA increases.

couple (SSI)

See eligible couple.

covered earnings (OASDI)

Earnings in employment covered by the OASDI programs.

covered employment (OASDI)

All employment and self-employment creditable for Social Security purposes.

covered worker (OASDI)

A person who has earnings creditable for Social Security purposes on the basis of services for wages in covered employment or on the basis of income from self-employment.

current-payment status (OASDI)

Status of a beneficiary who is paid a benefit for a given month, with or without deductions, provided the deductions add to less than a full month's benefit. The amount shown is prior to deduction for the Medicare Part B (Supplementary Medical Insurance) premium. A benefit in current-payment status at the end of a month is usually payable in the following month.

deeming (SSI)

Accounting for the income and resources of certain persons who live with an SSI recipient when determining the payment amount. These persons include the ineligible spouses of adult recipients, the ineligible parents of child recipients under age 18, and the immigration sponsor for certain noncitizens.

delayed retirement credit (OASDI)

A credit that increases the benefit amount for certain individuals who did not receive benefits for months after attainment of the full retirement age but before age 70. Delayed retirement credit increases are applicable for benefits beginning January of the year following the year the individual attains full retirement age.

Each monthly credit serves as a basis for increasing the monthly benefit (unless the benefit is based on a special minimum primary insurance amount [PIA]) by specified percentages that depend on the year the worker attains age 62. The monthly credit was ¹⁄₁₂ of 1 percent for workers who attained age 62 before 1979 and ¼ of 1 percent for workers who attained age 62 from 1979 through 1986. The corresponding monthly credits for workers who attain age 62 after 1986 are shown in Table 2.A20. The increase is applicable to the worker's monthly benefit amount but not to his or her PIA, therefore, auxiliary benefits are generally not affected. However, a widow(er)'s benefit may be increased based on the credit that had been applied to the benefit of the deceased worker or for which the worker was eligible at the time of death.

dependents benefit (OASDI)

Monthly benefit payable to a spouse or child of a retired or disabled worker.

direct deposit (OASDI and SSI)

A method of payment whereby beneficiaries have their monthly benefits sent electronically to financial institutions they designate. Also referred to as electronic funds transfer (EFT).

disability (DI)

The inability to engage in substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Special rules apply for workers aged 55 or older whose disability is based on blindness.

The law generally requires that a person be disabled continuously for 5 full months before he or she can qualify for a disabled-worker benefit.

disability (SSI)

The inability to engage in substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. This 12-month requirement does not apply to the blind.

The SGA criterion does not apply to children under age 18. The standard for them is a medically determinable physical or mental impairment which results in marked and severe functional limitations.

disabled child's benefit (OASDI)

A monthly benefit payable to a disabled person aged 18 or older—a child or stepchild or eligible grandchild of retired, deceased, or disabled worker—whose disability began before age 22. (Also referred to as “disabled adult child.”)

disabled surviving divorced husband's benefit (OASDI)

See widow(er)'s benefit.

disabled surviving divorced wife's benefit (OASDI)

See widow(er)'s benefit.

disabled widow(er)'s benefit (OASDI)

See widow(er)'s benefit.

disabled-worker benefit (DI)

A monthly benefit payable to a disabled worker under full retirement age insured for disability. Before November 1960, disability benefits were limited to disabled workers aged 50–64.

divorced husband's benefit (OASDI)

See husband's benefit.

divorced wife's benefit (OASDI)

See wife's benefit.

dropout years (OASDI)

Years dropped out of the computation period in determining average indexed monthly earnings (AIME). Dropout years are those with the lowest earnings during the worker's lifetime. The number of years dropped out of the computation period is generally the maximum of 5, but can vary, depending primarily on the worker's age at death or disability onset. Other factors may apply. See average indexed monthly earnings—AIME.

drug addiction and alcoholism (OASDI and SSI)

Legislation enacted in 1996 eliminated drug addiction and alcoholism as a basis for entitlement to Social Security and SSI disability benefits, effective January 1, 1997. Individuals for whom drugs and/or alcohol is deemed a contributing factor material to the determination of disability cannot be entitled to disability benefits.

dual entitlement (OASDI)

Entitlement to a worker (primary) benefit and a higher secondary benefit, usually a spouse's or widow(er)'s benefit. The primary benefit is paid in full but the secondary benefit is paid only in the amount by which it exceeds the primary benefit. If the two benefits are financed from the same trust fund, the beneficiary is usually represented only once in the statistics, as a retired-worker or a disabled-worker beneficiary, and the benefit amount recorded is the larger amount associated with the auxiliary benefit. If the benefits are paid from different trust funds the beneficiary is represented twice, and the respective benefit amounts are recorded for each type of benefit.

early retirement (OASDI)

Retirement prior to the full retirement age.

earnings (OASDI)

All wages from employment and net earnings from self-employment, whether or not taxable or covered.

earnings test (OASDI)

The provision requiring the withholding of benefits if nondisabled beneficiaries under full retirement age have earnings in excess of certain exempt amounts. See Table 2.A29.

eligible couple (SSI)

Two persons living together as married, both of whom are eligible for SSI.

eligible individual (SSI)

An aged, blind, or disabled person eligible for SSI.

eligible worker (OASDI)

For retirement benefits, an individual who meets the insured status and age requirements for benefits whether or not he or she has filed an application; for Disability Insurance benefits, an individual who meets the insured status requirements and has established a period of disability.

emergency advance payments (SSI)

Payments available at initial application for individuals who need cash assistance before their first Supplemental Security Income payment arrives. This advance is withheld from the first check.

entitlement (OASDI)

The state of meeting the applicable requirements for receipt of benefits, including the filing of an application. Entitlement can be retroactive and thus precede the date of award. The retroactive period can be 12 months for disabled workers, their spouses and children, and disabled widow(er)s. The maximum retroactive period for other types of benefits is 6 months. Retroactive benefits for months before full retirement age are not payable to a retired worker, a spouse, or a widow(er) if a permanent reduction of the monthly benefit amount would result. However, persons filing for a widow(er)'s benefit in the month immediately following the month of the worker's death may elect a 1-month retroactivity, even if reduced benefits would result. A person can be entitled to more than one benefit simultaneously. See dual entitlement.

expedited appeals process (OASDI and SSI)

This permits an individual to go directly to a federal district court after review of the initial determination without first completing the administrative review process, if the only dispute is whether an applicable provision of the Social Security Act is constitutional. See administrative review process.

family benefit (OASDI)

The sum of the individual monthly benefits payable to all the beneficiaries entitled on the basis of a single earnings record. See maximum family benefit.

family classification (OASDI)

As used in statistical tables, the number and types of beneficiaries entitled to benefits on a single earnings record. Since the family classification is determined by the types of beneficiaries entitled, it can differ from actual family status. For example, a married couple is classified as a worker-and-spouse family if both persons are entitled on the earnings record of one of them. If both persons were entitled on their own earnings record they would be designated as two worker-only families.

father's benefit (OASDI)

A monthly benefit payable to a widower or surviving divorced father if (1) the deceased worker on whose account the benefit is paid was either fully or currently insured at the time of death and (2) an entitled child of the worker in his care is under age 16 or is disabled.

federal benefit rates (SSI)

The basic benefit standards used in computing the amount of federal SSI payments. Benefit levels differ for individuals and couples living in households and for persons in Medicaid institutions. Individuals or couples living in their own households receive the full federal benefit. The federal benefit is reduced by one-third if an individual or couple is living in another person's household and receiving support and maintenance there. The federal benefit rates are increased annually to reflect increases in the cost of living.

federal court review (OASDI and SSI)

When an individual disagrees with SSA's final decision he or she may request judicial review by filing a civil action in a federal district court. See administrative review process.

federally administered payments (SSI)

Federal SSI payments and state supplementation payments issued by the Social Security Administration on behalf of the states.

federally administered state supplementation (SSI)

Cash payments provided by a state and issued by the Social Security Administration, which is also responsible for the maintenance of payment records. See state supplementation.

Food Stamp Program

The former name of the Supplemental Nutrition Assistance Program.

full retirement age—FRA (OASI)

The age at which a person may first become entitled to unreduced retirement benefits. For persons attaining age 62 before 2000, the full retirement age is 65. Beginning with an increase to 65 years and 2 months for persons reaching age 65 in 2003, FRA rises in increments to 67 for persons reaching that age in 2027 or later. The higher full retirement age affects the benefit amount if a person chooses to receive benefits before attaining the FRA. See Table 2.A17.1.

government pension offset (OASDI)

A law that affects spouse's or widow(er)'s benefits. Benefits are subject to reduction by any government pensions payable to the spouse on the basis of his or her own earnings in noncovered employment. The offset reduces the Social Security benefit amount by two-thirds of the amount of the government pension.

For more information, see “Government Pension Offset” in the section Social Security (Old-Age, Survivors, and Disability Insurance).

gross domestic product—GDP

The total dollar value of all goods and services produced by labor and property located in the United States, regardless of who supplies the labor or property.

husband's benefit (OASDI)

Monthly benefit payable to a husband or a divorced husband (aged 62 or older) of a retired or disabled worker. See spouse's benefit.

institutionalization (SSI)

Living arrangements for persons in public or private institutions when more than 50 percent of the cost of their care is met by the Medicaid program.

insured status (OASDI)

The state of having sufficient quarters of coverage to meet the eligibility requirements for retired-worker or disabled-worker benefits or to permit the worker's spouse and children or survivors to establish eligibility for benefits in the event of his or her disability, retirement, or death. For qualifications, see “Insured Status” in the section Social Security (Old-Age, Survivors, and Disability Insurance).

interim assistance (SSI)

Payments made by a state or local government to Supplemental Security Income applicants while their claims are being adjudicated. Reimbursement is deducted from the first SSI payment.

life expectancy

The average number of years of life remaining at each tabulated birthday. See life table (period).

life table (period)

A period life table represents the mortality experience of an entire population during a relatively short period of time, usually 1–3 years. Such tables are useful for analyzing changes in the mortality experienced by a population through time. The table refers to a cohort of 100,000 people with the same birthday who experience the rate of mortality, or probability of death within 1 year, shown in the table, throughout their lives.

limitation of widow(er)'s benefit (OASDI)

The reduction of the widow(er)'s benefit due to the early retirement of the deceased spouse. The benefit for a nondisabled widow(er) is limited to the larger of 82½ percent of the deceased spouse's primary insurance amount, or the amount to which the deceased spouse would have been entitled if he or she were still alive. Thus, receipt of benefits by a worker before the full retirement age will result in a reduction of benefits for a widow(er), even if the widow(er) became entitled after his or her own full retirement age. Tables showing data on reduction for early retirement for nondisabled widow(er)s do not include those with limited benefits unless they became entitled before their own full retirement age. See widow(er)'s benefit.

lump sum death benefit (OASDI)

A one-time payment, generally $255, payable upon the death of a fully or currently insured worker. The lump sum is payable to the surviving spouse of the worker, under most circumstances. If there is no spouse, the lump sum is payable to the worker's entitled children.

mandatory minimum state supplementation (SSI)

Required by federal law for individuals converted to the Supplemental Security Income program from state assistance programs for the aged, blind, or disabled. This provision insures that monthly income will not be less than the amount received under the former state programs.

maximum family benefit (OASDI)

The maximum monthly amount that can be paid on a worker's earnings record. Whenever the total of the individual monthly benefits payable to all the beneficiaries entitled on one earnings record exceeds the maximum, each dependent's or survivor's benefit is proportionately reduced to bring the total within the maximum. Benefits payable to divorced spouses or surviving divorced spouses are not reduced under the family maximum provision. Tables 2.A13, 2.A14, and 2.A17 give the formulas for computing the maximum family benefit.

maximum taxable (OASDI)

See annual maximum taxable limit.

mean

The arithmetic mean is calculated by dividing the sum of all of the values of a variable by the number of cases. The term “average” used in this publication refers to the arithmetic mean. See also median.

median

The median is a measure of central value which identifies that value that divides a distribution in half such that an equal number of cases fall below it as there are above it. See also mean.

Medicaid

A federal-state program that provides medical assistance for certain individuals and families with low incomes and limited resources.

Medicare

A federally administered health insurance program that covers the cost of hospitalization, medical care, and some related services for most persons aged 65 or older. Also covers persons receiving Social Security Disability Insurance payments for 2 years, and persons with end stage renal disease. Medicare consists of four separate but coordinated programs—Part A (Hospital Insurance), Part B (Supplementary Medical Insurance), Part C (Medicare Advantage) and Part D (Prescription Drug Coverage).

military wage credits (OASDI)

Credits recognizing that military personnel receive wages in kind (such as food and shelter) in addition to their basic pay and other cash payments. Noncontributory wage credits of $160 are provided for each month of active military service from September 16, 1940, through December 31, 1956. For years after 1956, the basic pay of military personnel is covered under the Social Security program on a contributory basis. See Table 2.A2 for amounts of noncontributory wage credits for 1957–2001. Noncontributory wage credits were eliminated for all years after 2001.

minimum benefit (OASDI)

The lowest benefit (before actuarial reduction) payable to a retired worker, a disabled worker, or a sole survivor of a deceased worker. The minimum benefit was eliminated for most workers who attain age 62, become disabled, or die after 1981.

monthly benefit (OASDI)

The amount payable after reduction, if necessary, for age, family maximum, and other reasons but before any deduction for Supplementary Medical Insurance (SMI) premiums. Effective June 1982, the final benefit payment is rounded to the next lowest $1 (if not already a multiple of $1) after reduction for age, family maximum, and other reasons and after any deduction for SMI premiums. The tables in this publication reflect the monthly benefit credited (MBC) which is calculated as follows:

1. Subtract the SMI premium from the monthly benefit amount;
2. Round the above result down to the nearest whole dollar; and
3. Add back the SMI premium to the rounded result from 2 above.

For example, if a monthly benefit amount is $968.20, and an SMI premium of $135.50 is deducted, the MBC is $967.50 (calculated as follows: $968.20 − $135.50 = $832.70 rounded down to $832.00 + $135.50 = $967.50).

mother's benefit (OASDI)

A monthly benefit payable to a widow or surviving divorced mother if (1) the deceased worker on whose account the benefit is paid was either fully or currently insured at the time of his death and (2) the entitled child of the worker is in her care and is under age 16 or disabled.

nondisabled widow(er)'s benefit (OASDI)

See widow(er)'s benefit.

nonpayment status (OASDI)

See withholding.

normal retirement age (OASI)

See full retirement age.

old-age benefit (OASI)

See retired-worker benefit.

Old-Age, Survivors, and Disability Insurance—OASDI

The Social Security programs that pay monthly cash benefits to:

1. Retired-worker (old-age) beneficiaries and their spouses and children as well as to survivors of deceased insured workers (OASI), and
2. Disabled-worker beneficiaries and their spouses and children (DI). Rehabilitation services are also provided for disabled beneficiaries.

optional state supplementation (SSI)

May be provided by states to bring the combined Supplemental Security Income and state payment to an amount more nearly commensurate with their costs of living than is the SSI payment alone.

own household (SSI)

A definition used to determine the federal benefit rates. Applies to adults who either own their living quarters, are liable for the rent, pay their pro rata shares of household expenses, are living in households composed only of recipients of public income-maintenance payments, or are placed by agencies in private households; and to children living in their parent's household. See federal benefit rates.

parent's benefit (OASDI)

Monthly benefit payable to a dependent parent, aged 62 or older, of a deceased fully insured worker.

payment status (OASDI)

The state or condition of a benefit with respect to actual receipt by the beneficiary—that is, whether the benefit is in current-payment status or withheld.

presumptive disability or blindness (SSI)

For certain diagnoses, where there is high probability of a favorable medical determination of disability or blindness, payments may be made for up to 6 months before the formal determination if the applicant meets the other eligibility qualifications.

primary insurance amount—PIA (OASDI)

The primary insurance amount is related to a worker's average monthly wage or average indexed monthly earnings. The PIA is used to compute all types of benefits payable on the basis of an individual's earnings record. Retired workers electing benefits at the full retirement age and disabled workers who did not receive a retirement benefit reduced for age receive a benefit equal to the PIA. Dependents and survivors of workers receive specified percentages of the PIA subject to the family maximum and entitlement before the full retirement age.

primary insurance amount formula (OASDI)

The mathematical formula relating the primary insurance amount (PIA) to the average indexed monthly earnings (AIME) for workers who attain age 62, become disabled, or die after 1978. The PIA is equal to the sum of 90 percent of AIME up to the first bend point, plus 32 percent of AIME above the first bend point up to the second bend point, plus 15 percent of AIME in excess of the second bend point. Automatic benefit increases are applied beginning with the year of eligibility.

Prouty benefit (OASI)

See special age-72 benefit.

quarters of coverage (OASDI)

The crediting of coverage needed for insured status. A worker receives 1 quarter of coverage (up to a total of 4) for a designated amount of annual earnings reported from employment or self-employment. This dollar amount is subject to annual automatic increases in proportion to increases in average earnings. For amounts in years 1939 to present, see Table 2.A7. No more than 4 quarters of coverage may be credited for any calendar year, and no quarter of coverage is credited after the quarter in which death occurred or for a quarter entirely included in a period of disability.

Railroad Retirement

A federal insurance program designed for workers in the railroad industry. The Railroad Retirement Act provides for a system of coordination and financial interchange between the Railroad Retirement program and the Social Security program.

redetermination (SSI)

The periodic review of eligibility for each Supplemental Security Income recipient to ensure that eligibility continues and that payments are in the proper amount.

reduction for early retirement (OASDI)

See actuarial reduction.

representative payee (OASDI and SSI)

A person designated by the Social Security Administration to receive monthly benefits on behalf of a beneficiary when such action appears to be in the beneficiary's best interest. A representative payee is appointed for an adult beneficiary when the beneficiary is physically or mentally incapable of managing his or her own funds. In addition, a payee is usually appointed to receive benefits on behalf of a child under age 18.

retired-worker (old-age) benefit (OASI)

Monthly benefit payable to a fully insured retired worker aged 62 or older, or to a person entitled under the transitionally insured status provision in the law. Retired-worker benefit data do not include special age-72 benefits, unless indicated.

retirement age (OASI)

The age at which an individual establishes entitlement to retirement benefits. See full retirement age.

retirement earnings test (OASDI)

See earnings test.

secondary benefit (OASDI)

Monthly benefit payable to a spouse or child of a retired or disabled worker, or to a survivor of a deceased worker.

Section 1619(a) (SSI)

See special cash payments.

Section 1619(b) (SSI)

See special recipient status.

self-employed (OASDI)

One who derives income from the operation of a partnership or nonincorporated trade or business.

Social Security number (OASDI)

A nine-digit number used to identify the record of earnings an individual has in employment or self-employment covered by Social Security (and Medicare).

Social Security Act

Public Law 74-271, enacted August 14, 1935, with subsequent amendments. The Social Security Act consists of 21 titles, of which three have been repealed.

special age-72 benefit (OASI)

Monthly benefit payable to men who attained age 72 before 1972 and to women who attained age 72 before 1970 and who did not have sufficient quarters of coverage to qualify for a retired-worker benefit under either the fully or the transitionally insured status provisions. (Also known as Prouty benefits.)

special cash payments (SSI)

Continuing cash benefits for disabled individuals whose gross earned income is at the amount designated as the substantial gainful activity level. The person must continue to be disabled and meet all other eligibility rules.

special minimum PIA (OASDI)

An alternative primary insurance amount (PIA) based on the worker's length (years) of covered employment. It is designed to help those who worked in covered employment for many years but had low earnings. See Table 2.A12b for computation of the special minimum PIA.

special recipient status (SSI)

For Medicaid purposes, provides special status to working disabled or blind individuals when their earnings make them ineligible for cash payments.

spouse's benefit (OASDI)

Monthly benefit payable to a spouse or a divorced spouse of a retired or disabled worker under one of the following conditions:

1. The spouse is aged 62 or older or has an entitled child of the worker in his or her care who is under age 16 or is disabled; or
2. The divorced spouse is aged 62 or older and was married to the worker for 10 years before the divorce became final. Effective with benefits payable after December 1984, a divorced spouse of an eligible worker can be entitled to benefits if he or she meets the requirements for entitlement and has been divorced for at least 2 years, regardless of whether the worker has filed for benefits or has benefits withheld due to the earnings test. Effective with benefits payable beginning January 1991, the 2-year period is waived if the worker was entitled to benefits before the divorce. The earnings test will continue to apply to the divorced spouse's own earnings; or
3. Effective with benefits payable beginning January 1991, a deemed spouse (including a divorced deemed spouse), regardless of whether the legal spouse is entitled to benefits on the same earnings record. A deemed spouse is a person who entered into an invalid ceremonial marriage in good faith.

state-administered supplementation (SSI)

See state supplementation.

state supplementation (SSI)

Payments to eligible persons made under state provisions. These payments may vary by the recipient's living situation and by geographic area within the state. The payments are federally and state administered.

student benefit (OASDI)

Child's benefit payable to a full-time unmarried elementary or secondary school student aged 18–19. Student benefits continue through the earlier of the month the course is completed, the second month after the month the child attains age 19 if the school operates on a yearly basis, or the final month of the quarter or semester that is in progress when the child reaches age 19 if the school operates on a quarterly or semester basis.

substantial gainful activity (DI and SSI)

Remunerative work that is substantial, as determined by the amount of money earned, the number of hours worked, and the nature of the work. See Table 2.A30 for money amounts.

Supplemental Nutrition Assistance Program

Formerly known as Food Stamps, the program provides benefits through electronic benefit transfer to help individuals and families with little or no income to buy food.

Supplemental Security Income—SSI

Program for the needy aged, blind, and disabled. Replaced the former federal-state programs of Old-Age Assistance, Aid to the Blind, and Aid to the Permanently and Totally Disabled.

surviving divorced father's benefit (OASI)

See father's benefit.

surviving divorced mother's benefit (OASI)

See mother's benefit.

surviving divorced spouse's benefit (OASI)

See widow(er)'s benefit.

survivors benefit (OASI)

Benefit payable to a survivor of a deceased insured worker.

suspended benefit (OASDI)

A benefit not in current-payment status.

taxable earnings (OASDI)

Wages in covered employment and/or covered self-employment income at or below the annual maximum taxable amount (see Table 2.A3 for amounts).

For wage earners, taxable earnings may consist of:

1. Social Security taxable wages. For each employee, employers are required to report calendar-year wages paid up to the taxable limit, and pay the employer share of Social Security tax on this reported amount. Multiple jobholders whose total reported wages exceed the taxable limit are due a refund on taxes withheld beyond the limit. Employers are not due a refund on their share of these taxes. Reported tip income is taxable (subject to the taxable limit) for employees beginning in 1966 and for employers beginning in 1988. For employers from 1980 through 1987, only the amount of tips added to wages to ensure an employee was paid the federal minimum wage was taxable.
2. Medicare taxable wages. Wages were first taxable for Medicare in 1966. Through 1982, employment covered by Social Security was also covered by Medicare. Beginning in 1983, the wages of all federal civilian employees in the Civil Service Retirement System are covered by Medicare only. Also, all state and local government employees hired for positions not covered by Social Security on April 1, 1986 and later are covered by Medicare only. The Medicare annual maximum taxable limit was the same as that for Social Security from 1966 through 1990. The limit was set by law at $125,000 for 1991, indexed for 1992 and 1993, and eliminated beginning in 1994.

For the self-employed, earnings are likewise subject to both Social Security and Medicare taxes. Taxable earnings consist of net self-employment income which, when combined with any taxable wages for that individual, is at or below any applicable annual maximum taxable amount.

taxable maximum (OASDI)

See annual maximum taxable limit.

taxable self-employment income (OASDI)

See taxable earnings.

taxable wages (OASDI)

See taxable earnings.

taxes (OASDI)

See contributions.

technical entitlement

A technical entitlement occurs when a beneficiary is entitled to benefits on more than one earnings record but is eligible to receive benefits on only one earnings record. There are two types of technical entitlement: (1) Simultaneous technical entitlement, in which the beneficiary is entitled to the same type of benefit on more than one earnings record; and (2) Potential dual entitlement, in which the secondary benefit amount potentially exceeds the primary benefit, but reduction for age or family maximum causes the primary benefit to exceed the secondary benefit amount.

termination (OASDI)

Cessation of payment of a specific type of benefit because the beneficiary is no longer entitled to receive it. For example, benefits might terminate as a result of the death of the beneficiary, the recovery of a disabled beneficiary, or the attainment of age 18 by a child beneficiary. In some cases, the individual may become immediately entitled to another type of benefit (such as the conversion of a disabled-worker beneficiary at full retirement age to a retired-worker beneficiary).

totalization (OASDI)

International agreements that coordinate the U.S. Social Security programs with the Social Security programs of other countries are called “totalization agreements.”

trust fund (OASDI)

Two separate accounts in the U.S. Treasury in which are deposited the equivalent of taxes received under the Federal Insurance Contributions Act, the Self-Employment Contributions Act, contributions dealing with coverage of state and local government employees, any sums received under the financial interchange with the railroad retirement account, and transfers of federal general revenues. Funds not withdrawn for current monthly or service benefits, the financial interchange, and administrative expenses are invested in interest-bearing federal securities, as required by law.

The interest earned is also deposited in the trust funds.

1. Old-Age and Survivors Insurance (OASI). The trust fund used for paying monthly benefits to retired-worker (old-age) beneficiaries and their spouses and children and to survivors of insured workers.
2. Disability Insurance (DI). The trust fund used for paying monthly benefits to disabled-worker beneficiaries and their spouses and children and for providing rehabilitation services to the disabled.

Two additional trust funds serve similar purposes for Medicare. Deposits to those funds are also received from voluntary hospital and medical insurance premiums.

1. Hospital Insurance (HI). The trust fund used for paying part of the costs of inpatient hospital services and related post-hospital care for aged and disabled individuals who meet the eligibility requirements.
2. Supplementary Medical Insurance (SMI). The trust fund used for paying part of the costs of physicians' services, outpatient hospital services, and other related medical and health services for voluntarily insured aged and disabled individuals.

widowed father's benefit (OASI)

See father's benefit.

widowed mother's benefit (OASI)

See mother's benefit.

widow(er)'s benefit (OASDI)

Monthly benefit payable to a widow(er) or surviving divorced widow(er) of a worker fully insured at the time of death, if he or she is (1) aged 60 or older or (2) aged 50–59 and has been disabled throughout a waiting period of 5 consecutive calendar months that began no later than 7 years after the month in which the worker died or after the end of his or her entitlement to benefits as a widowed mother or father.

A surviving divorced widow(er)'s marriage to a worker must have lasted 10 years before the divorce became final. Effective for benefits payable after December 1983, benefits are continued for disabled widow(er)s and surviving divorced widow(er)s who remarry after the age of first eligibility for benefits.

Effective January 1991, benefits may be payable to a deemed widow(er), including a divorced deemed widow(er). A deemed widow(er) is a person who entered into an invalid ceremonial marriage in good faith.

wife's benefit (OASDI)

A monthly benefit payable to a wife or divorced wife of a retired or disabled worker. See spouse's benefit.

windfall elimination provision—WEP (OASI and DI)

A modified benefit formula for determining the primary insurance amount, which eliminates the windfall in benefits for individuals who have only minimal Social Security coverage and will receive a pension based on years of work in noncovered employment. This formula prevents a windfall to persons who receive a pension from a job for which they did not pay Social Security taxes, but who would benefit from provisions aimed at low earners. The WEP reduces the PIA for retired and disabled workers and affects the computation of benefits for these workers and their spouses and children, but does not apply to survivor benefits.

For information about the WEP computation, see “Windfall Elimination Provision” in the section Social Security (Old-Age, Survivors, and Disability Insurance), and Table 2.A11.1.

withholding (OASDI)

Suspension of benefit payments until the condition(s) causing deductions are known to have ended. The suspension does not affect eligibility for Hospital Insurance benefits.

worker (OASDI)

A person who has earnings creditable for Social Security purposes on the basis of services for wages in covered employment or on the basis of income from covered self-employment. Data on covered self-employment exclude self-employed persons who had no self-employment income taxable or creditable under Social Security because they had wages or salaries reaching the annual taxable maximum reported for the same year.

workers' compensation and public disability benefit offset (DI)

A requirement that reduces the benefits to a disabled worker and dependents if the worker also receives workers' compensation (WC) or other public disability benefits (PDB). The reduction continues until the month the worker reaches age 65 or the month the WC/PDB payments stop, whichever comes first.