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Social Security Trust and Disability Insurance Funds

Tuesday, April 26th, 2011

According to the Congress FAQ, anyone born in 1929 or later needs to have worked for 10 years to be eligible for benefits through Social Security. In order to qualify, a person must have earned 40 credits. A worker earns one credit for every $1,120 in earnings, or up to a maximum of four credits per year. The Social Security Administration keeps track of credits and sends a yearly statement with an individual’s benefit qualifications and earnings. Additionally, the Social Security Trust Fund receives payroll taxes and splits them into two separate trust funds, one for the Old-Age and Survivors Insurance and one for Disability Insurance funds.

Social Security Disability Insurance is available to all individuals who are unable to work due to total disability, due to injuries or medical reasons. The Administration determines if a disability applicant meets the requirements and definition of disabled. The eligibility process looks if a claimant is unable to work as he or she did before and unable to adjust to other lines of work due to a medical condition. The program is not for short-term disability but for those who may not be able to work anytime in the future.
The Administration also looks at the age of an applicant when he or she becomes disabled. If an individual becomes disabled before age 24, the Administration generally looks for six credits earned. There is a shifting scale for older workers who have become disabled.

A percentage of payroll taxes is deposited in the Disability Insurance trust fund, about one dollar of every seven brought in is stored away for disability insurance.

Pelosi is Against Republican Plan to Privatize Social Security

Tuesday, March 22nd, 2011

According to The Hill, Speaker Nancy Pelosi (D-Calif.) said that House Republicans are trying to privatize the Social Security fund and that such a change would result in the trust fund incurring a massive loss. Pelosi mentions that a recent downturn in the stock market is a good idea how privatizing would bring down the SSA’s surpluses.

According to Pelosi, President Bush and his Republican allies pushed to privatize and cut Social Security five years ago. Had they succeeded seniors today would have lost trillions of dollars more in the financial crisis, says the Speaker. The recent American financial crisis lead families and household to loose more than $17 trillion in wealth.

Under President Bush’ proposal, a law would have allowed individuals to invest a percentage of their Social Security benefits in an investment instrument. The rate of those returns would have been greater than keeping the monies in the trust fund, claimed congressional Republicans. The plan wanted to make those funds transferable, meaning the monies would transfer to a surviving family members.

Republicans lost power to push such a measure and pass it in to law. According to Pelosi, it is good that the plan failed and the stock market has taken a plunge and Americans would have lost a significant amount of money on their retirement and benefit investments.

Republican Ryan Paul (Wis) is pushing a similar measure in the current administration, which would allow workers to invest their Social Security benefits in a personal savings account, which would provide a higher yield but contain a greater risk than the trust fund.