Explaining the System

[GailL1]

Just for information:

The Social System is made up of (3) different programs.  Each of these has their own eligibility requirements and other rules to which the beneficiary has to comply to get these specific benefits.

1.  Social Security Old Age or Retirement Benefits - also includes SPOUSAL benefits - sometimes shortened to SSOA or SSR by certain government entities.

2.  Survivors Benefits 

3.  Social Security Disability Benefits - SSDI

There is also another disability program that the Social Security Administration also oversees - The INDIVIDUAL Welfare based Supplemental Security Income program (SSI).  This is a disability program for those who are old (65), blind or disabled who are not eligible for Social Security benefits or who have not worked long enough to get a minimum benefit.  This also includes disabled children.  

[Winter2025VA]

@GailL1 , thanks for this info and here is a question IF you want to respond - thanks. I do ONLY the retirement one and was wondering IF the funds for my retirement benefits are SHARED BY ALL of these you mentioned?  🤔  Seems like ALOT going out versus NOT enough being added = yes, a future of either reduced or eliminated retirement benefits for us OLD FOLKS. Take care, Nicole  👵

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[*** @GailL1 wrote 4/3/25:

Just for information:

The Social System is made up of (3) different programs.  Each of these has their own eligibility requirements and other rules to which the beneficiary has to comply to get these specific benefits.

1.  Social Security Old Age or Retirement Benefits - also includes SPOUSAL benefits - sometimes shortened to SSOA or SSR by certain government entities.

2.  Survivors Benefits 

3.  Social Security Disability Benefits - SSDI

There is also another disability program that the Social Security Administration also oversees - The INDIVIDUAL Welfare based Supplemental Security Income program (SSI).  This is a disability program for those who are old (65), blind or disabled who are not eligible for Social Security benefits or who have not worked long enough to get a minimum benefit.  This also includes disabled children. ***]

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[GailL1]

@Winter2025VA 

• A beneficiary only gets (1) type of benefit at a time; each has its own rules for eligibility.  Well, the aged, blind or disabled really poor beneficiary may get a small amount from one of the Social Security benefits, if they are eligible, but if it is not very much, the welfare program of SSI (Supplemental Security Income) might add a bit to this amount to give them a very minimum total benefit.  
• You pay into all of them while working as a W2 employee or being self-employed or a 1099 contractor with employment taxes and matched by the employer.  The self-employed or 1099 contractor pays both portions.  
• If you pay taxes on your benefit, these taxes are also split between the (2) Trust Funds
• There are presently (2) Trust Funds - one (the largest) is the Social Security Trust Fund for Old Age (retirement, including spousal benefits) and Survivors benefits - this might be referenced as OAS
• The other is the Social Security Disability Trust Fund and a smaller portion of the contributions from payroll and self-employment and taxes on benefits go into this Trust Fund.  This is referenced as SSDI.
• There have been times in history (I remember one time during the Obama Administration) when the SSDI Trust Fund got very low and so it borrowed from the main Social Security OAS Trust Fund.  But then it was paid back.
•  Some of the proposals to fix the system want to merge the two Trust Funds into one - I don't see, in the long run, how this would do much except just make it easier to work with - but currently there are two (2) - the SSDI Trust Fund now is much healthier financially than the OAS Trust Fund.  But that has not always been the case.   
• Each month/year, we collect the contributions and pay out benefits - when there is more collected than benefits paid, we put the excess into special Treasury notes and the Government pays interest to the Trust Fund for these reserve funds.
• But now, a lot does go out; more than we take in currently - since 2021, we have not collected enough in the OAS Trust Fund to pay the current benefits we are taking out.  T So the Reserve is not getting any bigger, quite the opposite - we are cashing in those special treasuries to pay current benefits.  Since that means that we don't have as much money in reserve, the interest the government pays the Trust Fund is getting smaller too.

[Winter2025VA]

Thanks @GailL1 !!! Take care, Nicole  👵

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[*** @GailL1 wrote 4/6/25:

@Winter2025VA 

• A beneficiary only gets (1) type of benefit at a time; each has its own rules for eligibility.  Well, the aged, blind or disabled really poor beneficiary may get a small amount from one of the Social Security benefits, if they are eligible, but if it is not very much, the welfare program of SSI (Supplemental Security Income) might add a bit to this amount to give them a very minimum total benefit.  
• You pay into all of them while working as a W2 employee or being self-employed or a 1099 contractor with employment taxes and matched by the employer.  The self-employed or 1099 contractor pays both portions.  
• If you pay taxes on your benefit, these taxes are also split between the (2) Trust Funds
• There are presently (2) Trust Funds - one (the largest) is the Social Security Trust Fund for Old Age (retirement, including spousal benefits) and Survivors benefits - this might be referenced as OAS
• The other is the Social Security Disability Trust Fund and a smaller portion of the contributions from payroll and self-employment and taxes on benefits go into this Trust Fund.  This is referenced as SSDI.
• There have been times in history (I remember one time during the Obama Administration) when the SSDI Trust Fund got very low and so it borrowed from the main Social Security OAS Trust Fund.  But then it was paid back.
•  Some of the proposals to fix the system want to merge the two Trust Funds into one - I don't see, in the long run, how this would do much except just make it easier to work with - but currently there are two (2) - the SSDI Trust Fund now is much healthier financially than the OAS Trust Fund.  But that has not always been the case.   
• Each month/year, we collect the contributions and pay out benefits - when there is more collected than benefits paid, we put the excess into special Treasury notes and the Government pays interest to the Trust Fund for these reserve funds.
• But now, a lot does go out; more than we take in currently - since 2021, we have not collected enough in the OAS Trust Fund to pay the current benefits we are taking out.  T So the Reserve is not getting any bigger, quite the opposite - we are cashing in those special treasuries to pay current benefits.  Since that means that we don't have as much money in reserve, the interest the government pays the Trust Fund is getting smaller too. ***]

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[rolocedoc]

Latest post on msn.com - X your fingers!!! - 

Social Security will issue 2 checks to some people this April or next month!

[GailL1]

@rolocedoc 

You know what this click-bait heading really is don't you?  It only applies to those who have been affected by Windfall Elimination Provision or the Government Pension Offset which have been eliminated as of 12/2024 with the Social Security Fairness Act.  The SSA is working hard to get these folks their back pay (back to 01/2024) and recalculate their new benefit amount.  Oh yes, they are very happy.  But some are getting also some unintended consequences. You can't get more money and still get subsidized as you might have been before the windfall.  

[rolocedoc]

It’s a wait and see thing.