What is Social Security and Why is it Important? Social Security is a welfare plan that is managed by the United States government which benefits retirees, disabled people, and also the people who survive a deceased worker. The funding for Social Security is primarily derived from the taxes that are levied on US citizens and are mandatory. It is one of the biggest programs in the world which pays billions of dollars each year.
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What is Social Security and Why is it Important
Present Status of Social Security and the Issues it Faces
The Government has to spend more on Social Security benefits than it earns via taxes which has made it somewhat difficult for the government to keep on paying to the beneficiaries and it will be able to payout the entire benefits only up to 2023 after that it has to borrow money or make other arrangements to pay the people.
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Social Security Trust Fund and is it Sufficient?
The taxes paid by the people for Social Security goes to the present retirees only in certain portions and the rest of it is deposited into the trust fund which is used when the collected revenues are not sufficient to pay the people. It has been estimated that this trust fund will only last till 2033 and the taxes accrued for Social Security will be sufficient to pay only 77% of benefits.
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Dependence on Social Security
In the year 2010, nearly 36 million people were dependent on the retirement income provided by Social Security. It is estimated that by 2030, nearly 25% of people will cross the age of 65 and the burden on this scheme to pay retirees will also increase.
So to be prepared for this situation, the government can take several steps to keep their income coming and be sufficient –The tax rate for Social Security can be raised from 12.4%, the current rate, to 14.4% and eventually to 15.2% to counter the entire shortage.
Payroll Tax Cap can be lifted which can eliminate as much as 71% shortfall, Adjusting the Ceiling of Income for Social Security so that when a person’s income goes up then the benefits from the scheme should be reduced and even eliminated completely
What can be done to reduce the burden of Social Security?
As science and medicine have advanced drastically since Social Security Scheme was introduced in the 1930s and the lifespan of people has increased significantly, thus the expenditure under the scheme has also gone up.
But there are a few recommendations which are being made to help increase the funding for the scheme and also take off some amount of burden from it –
Gradually increasing the retirement age from 65 to 70 by the year 2050 to cover a 21% shortfall as it will reduce the period that the person will be able to collect the benefits after retiring.
Reduction in the Annual Adjustment for Inflation – since the security benefits have to be increased according to the inflation rate based on the Consumer Price Index (CPI), this puts an additional burden on the scheme to increase the payment to retirees.
But if Chained CPI is used as a base to calculate the inflation, then the calculated rate will lower a bit and will eventually be able to cover the shortfall to about 20%.
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Social Security for the Disabled Individuals
Social Security provides great support to people who have been rendered disabled and are incapable of getting or maintaining stable employment and are paid under Social Security Disability Insurance is funded via the taxes levied on the citizens under Social Security.
The Application Process for Claiming Social Security by the Disabled Individuals
Social Security for the disabled has two programs that are categorized under the Social Security Act aimed to help individuals who are not able to work or get employment. These two programs are –
Social Security Disability Insurance or SSDI program
The SSDI benefits are given to people who are completely disabled and have been employed earlier and had contributed to Social Security from their salaries. So if the individual applies for the SSDI and is deemed eligible to receive the benefits, then the Social Security Administration will pay on a monthly basis depending on the earnings of the person and his total contribution to the scheme prior to becoming invalid.
Additionally, the children, dependent on the person, who are under 16 years old or the ones who are in high school and under 18, also get the benefits. The person is eligible to receive Medicare after twenty-nine months when the total disability kicks in.
Supplemental Security Income or SSI program
To avail of the benefits under SSI, the person should be completely disabled or be termed as “indigent” that is he or she has little to no source of income and his or non-exempt taxes should be less than 2 thousand dollars.
Additional to receiving the monetary benefits under the scheme, the person is also entitled to receive food stamps as well as a Medicare card to avail of either of these programs, the person has to go through identical medical tests, while the eligibility criteria for non-medical requirements vary.
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Social Security Benefits for People Suffering from Fibromyalgia, CFS
Though the benefits under Social Security cover a wide array of diseases, at times individuals who are afflicted with ailments such as Fibromyalgia or Chronic Fatigue Syndrome (CFS) can face issues while claiming the benefits under Social Security as the SSA’s regulations require objective proof to determine the type of disability. This proof requires concrete medical tests such as an MRI scan, an X-ray, tests for pulmonary functions, etc.
But in the case of Fibromyalgia and CFS, the tests are more subjective in nature as the severity of the condition cannot be measured by machines. Thus, several claims to avail of the benefits under SSI or SSDI get based denied mostly at the initial levels.
So if a person suffers from Fibromyalgia and Chronic Fatigue Syndrome or any other such diseases whose medical proofs are subjective in nature, then they should get their claims verified by visiting the specialists such as a rheumatologist or a pain specialist.
And if the claimant suffers from depression then they should get it treated by either a psychologist with a Ph.D. or an MD psychiatrist. This will really help the person to get the benefits with greater speed and without much of a hassle.