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Social Security
The Social Security system is designed to provide insured workers
and their dependents or survivors with some protection against the
loss of worker's income due to retirement, disability, or death.
Created in 1935, the system is administered by the U.S. Social Security
Administration and is divided into four parts: Old Age, Survivors,
Disability, and Health Insurance Programs.
Coverage - Almost all workers are covered
automatically by the Social Security program. Workers in non-profit
organizations and government entities should check with their employers
to verify membership in the Social Security program.
Benefit Eligibility - Eligibility
is based on contributions to the system during the working life
of the individual. Benefits are financed by payroll taxes paid jointly
by employers and employees and by the self-employed. To receive
benefits, persons must have a sufficient number credits, usually
40 (10 years of work).
Social Security Protection Act of 2004 (Public Law 108-203) - Under this law, which covers retirements effective July 1, 2004, public employees are required to work in jobs covered by Social Security for the last five years (60 months) of their careers in order to be eligible for both Social Security and Pension Benefits. Under the previous law, if a person worked as little as the last day of their careers in jobs covered by Social Security they were eligible for both benefits.
Retirement Age/Benefits - Workers covered by Social Security may retire with full benefits at age 65 if they were born in 1937 or earlier. The normal retirement age for full benefits will begin increasing until it reaches age 67 for people who become 62 in 2022. If your full retirement age is older than 65 (that is, you were born after 1937), you still will be able to take your retirement benefits at age 62, but the reduction in your benefit amount will be greater than it is for people retiring now.
Here's how it works. If your full retirement age is 67, the reduction for starting your benefits at:
- 62 is about 30 percent;
- age 63 is about 25 percent;
- age 64 is about 20 percent;
- age 65 is about 13 and 1/3 percent; and
- age 66 is about 6 and 2/3 percent.
As a general rule, early retirement will give you about the same total Social Security benefits as full retirement over your lifetime, but in smaller amounts to take into account the longer period you will receive them.
Delayed Retirement Credit - The
delayed retirement credit increases Social Security benefits for
every month a person of normal retirement age remains employed and
delays receiving benefits. The amount of the delayed retirement
credit depends on the year you reach retirement age and the number
of months you are eligible for and do not receive benefits.
Earnings Limitations - Social Security
no longer places restrictions on earnings for beneficiaries above
the normal retirement age (NRA) if your earnings exceed a certain
level. The NRA is age 65 for those born before 1938, and it will
gradually increase to age 67. For clarification on how this change
will affect your benefits, contact Social Security.
Direct Deposit - Individuals who currently get Social Security or other federal benefits by check in the mail can now have those benefits deposited directly into their checking or savings accounts instead. Direct deposit is convenient and helps protect you from having your check and/or your identity stolen. To sign up for direct deposit call toll-free 1-800-333-1795, or sign up on-line at www.godirect.org. It takes just a few minutes and can make a big difference in your financial safety.
Social Security Benefit Statement/Taxes
- Some time in January of each year, the Social Security Administration
will send each beneficiary a Social Security Benefit Statement (Form
SSA-1099-SM). This statement tells you how much you received in
Social Security benefits during the previous year and provides a
worksheet to determine if any of your benefits are taxable. If the
only income you received was your social security or equivalent
tier I Railroad Retirement benefits, your benefits will not be taxed
unless your modified adjusted gross income is more than the base
amount for your filing status.
Social Security Toll-Free Service
To assist persons in knowing what their benefits are, or will be,
the Social Security Administration maintains a nationwide, 24-hour
toll-free service -- 1-800-772-1213. The telephone is staffed weekdays
between 7:00 AM and 7:00 PM. People who are deaf or hard of hearing
may call toll-free "TTY" 1-800-325-0778. All information is confidential
and must be requested by the recipient/prospective recipient personally.
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Disability Insurance
Eligibility - Workers who become
severely disabled while employed may be eligible for monthly benefits
before age 65. However, to be eligible for disability benefits,
a worker must be covered by Social Security and should apply for
such benefits as soon as possible after the onset of the disability.
Initial Determination of Impairment
- In NJ, the NJ Department of Labor and Workforce Development makes the initial determination
of disability. Evidence of medical impairment must be provided by
the doctor, hospital, or clinic providing treatment for the impairment,
and that, as a result of the impairment, "substantial gainful" employment
cannot be performed for at least twelve months. In addition to medical
impairments, vocational capacities, including age, education, and
work experience, is evaluated.
Further Information - Because Disability
Insurance is one of the most complicated of all Social Security
programs, you should call or visit Social Security for more in-depth
information.
Survivors Benefits
Social Security Survivors Insurance provides monthly cash benefits
to the spouse/divorced spouse or unmarried child(ren) of a deceased
worker based on the worker's earnings record. If the beneficiary
is employed, the amount of monthly benefits received will be affected
by his/her earnings and age. Survivor benefits can be paid only
if the deceased worker had credit for a certain amount of work in
employment/self-employment covered by Social Security. The exact
number of work credits needed depends on the age of the worker at
time of death.
Lump Sum Death Payment - In addition
to any monthly survivor insurance benefits, there is a special one-time
payment of $255. This payment can be made to your spouse or child if they meet certain requirements.
Information - Information on any of
the above entitlements is available from any Social Security office,
from their toll-free service, 1-800-772-1213, or their website,
www.ssa.gov.
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Supplemental Security Income Program (SSI)
The Supplemental Security Income Program (SSI) is a federally administered program, which provides income to eligible persons 65 or older, or blind, or disabled. People who get SSI usually qualify for Food Stamps and Medicaid/NJ FamilyCare also. SSI differs from Social Security in that it is based on a person's income and resources (assets), and is funded by the general revenues of the US Treasury, not by the Social Security Trust Funds.
Income Limitations - The amount of
income you can have each month and still get SSI depends partly
on the State in which you reside and your living arrangement. Social
Security does not count all of your income in deciding if you can
get SSI. For example, they do not count:
- Certain monthly unearned income
- Certain monthly income you earn from working and 1/2 of the
amount over
- Food Stamps
- Food, clothing, or shelter you receive from non-profit organizations
- Most home energy assistance
Resource Limitations - Resources
are things you own, such as personal belongings, bank accounts,
cash, or stocks and bonds. A single person may be able to get SSI
with resources of up to $2,000; a couple may be able to get SSI
with resources of up to $3,000.
Not counted as resources are:
- The home you live in and the land it's on
- Personal and household goods, depending on their value
- Car, if used for essential transportation, or if worth $4,500
or less
- Certain monies set aside for burial are not counted
- If you are blind or have a disability, some items may not count
if you plan to use them to work or earn extra income.
Payments - The SSI program is administered
through the US Social Security Administration. Payments to SSI recipients
are made monthly by the federal government, which includes a supplement
provided by the State of New Jersey. For the convenience of SSI
recipients, the State of New Jersey and the federal government have
agreed to include the amount in the federal payment. SSI recipients
receive one US government payment with federal and state money included.
Applications, Appeals, Information
- Persons who have been denied SSI, or had their payments stopped
or reduced, have certain appeals procedures available to them free
of charge. To apply for SSI, initiate an appeal, or request more
information, please contact the nearest Social Security office or
call their toll-free service, 1-800-772-1213.
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Railroad Retirement
Under the Railroad Retirement and Railroad Unemployment Insurance
Acts, the federal Railroad Retirement Board administers retirement
and survivor, unemployment and sickness benefit programs for railroad
workers and their families. In addition, the Railroad Retirement
Board has administrative responsibilities for certain benefit payments
and/or Medicare coverage for railroad workers. Railroad Retirement
beneficiaries should contact the Retirement Railroad Board 1-800-808-0772 (automated) or 312-751-7139 - www.rrb.gov
for answers to Medicare questions.
Annuities - The Railroad Retirement
Board pays retirement and disability annuities to railroad workers
with at least 10 years of service. (Annuities are also payable to workers with 5 years of service if performed after 1995.)
Full annuities are available at full retirement age with 10 years
of service, or age 62 with 30 years of service. Full retirement
age is gradually rising from 65 to 67. Reduced annuities are payable
at age 62 with 10 to 29 years of service or age 60 with 30 years
of service. Annuities are also payable to spouses/divorced spouses,
and to widow(er)s, remarried widow(er)s, children, and parents of
deceased railroad workers. Qualified persons also are covered by
Medicare in the same manner as Social Security beneficiaries.
Current Connection - Employees
having a current connection with the railroad industry, and disabled
for work in their regular railroad occupation, are eligible for
an occupational disability at age 60 with 10 years of service, or
at any age with 20 years of service. A "current connection with
the railroad industry" is required for an occupational disability
annuity. The current connection requirement is normally met if the
employee worked for a railroad in at least 12 of the last 30 consecutive
months before applying for a disability annuity.
Spouse Requirements
- Widow(er)s benefits are payable at age 60 or over. They are payable
at any age if the widow(er) is caring for an unmarried child of
the deceased employee who is under age 18 or a disabled child of
any age who became permanently disabled before age 22. Widow(er)s
benefits are also payable at aged 50 if the widow(er) is permanently
disabled and unable to work.
Applications, Denials, Appeals - Applications
for railroad retirement/survivor benefits should be filed with the
nearest Railroad Retirement Board. Prospective retirees should contact
the Board several months before their planned retirement date in
order to obtain annuity estimates and to verify eligibility dates.
Persons who have been denied Railroad Retirement benefits/annuities
or had their payments stopped or reduced, have certain appeal procedures
available free of charge. Contact the nearest Railroad Retirement
Board to initiate an appeal. The Railroad Retirement Board serving
northern NJ is located in Newark, and that for southern NJ in Philadelphia.
Their addresses are as follows:
Railroad Retirement Board
1-800-808-0772 (automated)
or 312-751-7139 - www.rrb.gov |
Veteran's Administration Building
20 Washington Place, Room 516
Newark, NJ 07102-3127
973-645-3990
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NIX Federal Building
900 Market Street,
Suite 301
Philadelphia, PA 19107-4232
215-597-2674 |
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Federal Civil Service Retirement
The federal Civil Service Retirement System provides retirement,
survivors, disability, and death benefits to most federal government
employees. For further information contact: Retirement Information
Office, US Office of Personnel Management, 1900 E Street, N.W.,
Washington, DC 20415, telephone toll-free 1-888-767-6738 or 202-606-0500
(taped message) for direction to the appropriate office.
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Private Pensions
Many persons are covered by a pension plan in addition to Social
Security. Generally, all employees must continue pension benefit
accruals for persons working beyond a plan's normal retirement age.
Plan limitations on the amount of benefits, years of service, or
years of participation are permissible if imposed without regard
to age.
Interpretation - The US Internal Revenue
Service (IRS) has responsibility for interpreting minimum standards
of the federal private pension laws and ensuring that company and
union pension plans are in compliance with those laws. The basic
law covering private pension plans is the Employee
Retirement Income Security Act of 1974 (ERISA). This law established
the federal pension insurance program and provided for individual
rights, funding requirements, and investment rules. Persons having
a question about the interpretation of a specific provision of these
laws should contact the Employee Plans Technical & Actuarial Division
of the IRS at 1111 Constitution Avenue NW, Room 6525, Washington,
DC 20224, telephone toll-free 1-877-829-5500 Monday through Thursday,
8:00 AM - 6:30 PM exclusive of holidays.
Termination - If a private defined
pension plan is terminated, the federal Pension Benefit Guaranty
Corporation (PBGC) offers protection against the loss of certain
benefits, telephone toll-free 1-800-400-7242 or 202-326-4000, www.pbgc.gov. For information about protection under a terminated plan,
please contact the PBGC at 1200 K Street, NW, Washington, DC 20005-4026,
telephone 202-326-4000. Be sure to have the name of the pension
plan and the employer's "Employer's Identification Number" (EIN).
Information, Complaints - For
more information on pension plan regulations in general, or to file
a complaint, contact: US Department of Labor, Employee Benefits Security Administration, Division of Technical Assistance & Inquiries,
200 Constitution Avenue NW, Room N-5658, Washington, DC 20210, telephone
202-219-8776, www.us.dol.gov. For
additional retirement and health benefit plan questions, call toll-free
1-866-275-7922. English, Spanish and Mandarin Language service available.
Additional information, referral or assistance for general inquiries
is available by calling 202-326-4000 or 1-800-400-7242. For inquiries
about plan administration please call 1-800-736-2444; for general
legal inquiries, please call 202-326-4020: or information is available
from the Pension Rights Center, 918 16th St., NW, Suite 704, Washington,
DC 20006, telephone 202-296-3776 or 1-866-444-3272.
Age related complaints, however, should be filed with the US Equal
Employment Opportunities Commission, 1 Newark Center, 21st Floor,
Newark, NJ 07102, telephone 973-645-6383 or call toll-free 1-800-669-4000.
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Welfare Plans
Private Welfare Plans - Private
welfare plans are also subject to federal regulations. Contact the
Employee Benefits Security Administration, as listed above, for
information on requirements of private welfare plans or to file
a complaint concerning their administration.
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