Benefits for surviving children

This student's paper examines very briefly the survivor's benefits a child might receive through Social Security if a parent died or became disabled and unable to work.

Social Security

A Look Into Benefits for Surviving Children

No one ever thought the glorious United States of America would ever hit rock bottom, but those people were unaware of the events that were soon to transpire. A little over a decade earlier the U.S. began their recovery from the Great War. Men returning home from the war and acclimating themselves back into society and to their families and loved ones. In 1929, however, those men and women of a proud and economically strong country were struck with serious blows of economic turmoil. What started as a crash in the stock market eventually turned into a significant rise in unemployment and social and economic poverty. There were many programs and bills drafted during the 1930's to pull the economically weak United States back up from the mat after receiving, what was thought to be, a knockout blow.

In response to this economic downfall, the government put into motion a resolution designed to facilitate relief for the unemployed and poor, recovery of the economy to normal levels, and reform of the financial system to prevent a repeat depression. Authors of Making America: A history of the United States, affirmed such programs as being “aimed at relief, recovery, and reform” (Berkin, et al. Pg 629). The Social Security Act of 1935 and the current amended version, proposed by President Franklin Roosevelt, was designed to offer social justice and to limit what was seen as dangers in the modern American life, including old age, poverty, unemployment, and the burdens on widows and fatherless children.

 Social Security Survivor’s Benefits are just one sub-section of the act, and the following points will be addressed in reference to surviving children of the deceased or disabled insured worker:

·      Who is eligible for Social Security Survivor's benefits for Children?

·      What are the current benefits awarded to children of the insured workers?

·      How is the program funded?

·      Are there any issues with the program?

Eligibility

As with all policies, the government must ensure fairness and deter wrongful or unlawful abuse of its benefit-providing programs; therefore, whenever Congress provides benefits in the form of compensation or government assistance there must be specific requirements to restrict who has access. Designed within the Social Security Act is a list of how a person can be eligible or become eligible. In order to qualify for Social Security Survivor's benefits for children, the first requirement is that the person must be an unmarried child of an individual entitled to old-age or disability insurance benefits, or have a parent who died after having worked long enough to pay sufficently with Social Security taxes to become qualified for survivor’s benefits. Next, the child must be under the age of 18 or a full-time student of an elementary or secondary school not past grade 12 and has not yet reached 19 years of age. There are no exceptions with the age limit unless that child is 18 or older and disabled, but the disability has to occur before they are 22 years old. The child must also be a dependent of said parent. Once these requirements have been met then the child will be eligible to receive benefits after the application is approved and filed (42 U.S.C. § 402).

Benefits

The sole benefit of this program is designed to provide the child with support, in the form of compensation per month, to alleviate some of the financial burden caused by the loss of the insured parent. The loss of parent can either be defined as no longer being capable to support the child due to disability or due to death. According to the Social Security Administration, the "child may receive up to one-half of the parent’s full retirement or disability benefit, or 75 percent of the deceased parent’s basic Social Security benefit” (SSA 2012). If compensation is given, there must also be a limit to the amount of money the child is awarded. The child's award is added to the family's total amount of allowed Social Security and cannot exceed 180 percent of the parent's full entitlement. The payment is unique in amount and specific to what a person has earned by working and paying into Social Security. The Social Security Administration has calculated for 2015 that the average benefits awarded to retired or disabled workers are between $1,165 - $1,328 paid monthly (SSA 2015).

Funding the Program

No program or social reform can function properly without some form of aid. Whether that aid is paid through taxes or gained through charitable contributions it doesn't come free. Social Security is paid for by employee and employer taxation. In 2015, the Social Security Administration collected 6.2 percent from payments made by the employee and employer, who each paid 6.2 percent of their income into Social Security. Essentially, this is a 12.4% tax on most American workers to support Social Security, including old age pensions, disability insurance, and survivor’s insurance.  If a person is self-employed they are required to pay 12.4 percent of their income, rather than 6.2 percent. There is also a limit to the amount that can be taxed for Social Security and it can not be on any “earnings greater than $118,500” (SSA 2015).  This means that in actual practice a person earning, say, $237,000 per year would only 3.1% of their income in Social Security payroll taxes (or 6.2% if they were self-employed).

Issues with the program

There are negative implications involved with the current eligibility requirements and the current amount of individuals using Social Security benefits. If an insured worker dies while receiving benefits and has a child under the age of 18, then that child will receive a portion of their benefits without having to work. Social Security is designed to provide a form of retirement for workers who paid into the program and was not designed to compensate individuals who didn't pay into the said program. According to John G. Kilgour, a business professor retired from the California State University system, the Social Security program won't go broke until 2033 under the current rate of funding.  In reference to the current system Kilgour notes, “One obvious answer is that the division of the FICA tax revenue is imbalanced relative to the respective programmatic needs of the two funds” (Kilgour pg. 243). Under Kilgour's findings the current age of retirement will eventually reach 67 years of age to begin receiving benefits, which is a result of the baby boomer generation "draining" the current fund (Kilgour pg. 243). Another problem with this program is the cap for earnings taxed. If a person makes more than $118,500 per year then any additional earnings above that cap aren’t taxed for Social Security. The program also only taxes employment earnings and not all income earnings are employment related. For example, some people might inherit hundreds of thousands of dollars and live on dividends and interest from their investments, but those types of incomes won’t be taxed for Social Security. Unemployment also affects Social Security funding, since the tax relies on employment earnings.

Conclusion

Social Security remains a crucial element in providing social justice for the people of the United States. Social Security Survivor benefits for children are designed to provide support for children of deceased or disabled insured workers. There are certain eligibility requirements that must be met in order for a child to receive benefits. The child may then receive a portion or all of their parent's benefits if they qualify. The Social Security program is self-funded and under the current guidelines may not be able to sustain payments forever. Without this program these children, who have lost a parent, may end up in poverty and lose the quality of life they may have had with a supporting parent.   

References

Berkin, Carol, Christopher L. Miller, Robert W. Cherny, James L. Gormly, Douglas R. Egerton, and Kelly A. Woestman. (2010). Making America: A History of the United States. 6th ed. Vol. 2. Wadsworth Cengage Learning. 243. Print.

Kilgour, John G. (2014). The Social Security Disability Insurance Program. Compensation & Benefits Review. Vol 46(4) 239-246.      

Social Security Act of 1935, 42 U.S.C. § 402.

Social Security Administration. Social Security: Benefits for Children. SSA Publication No. 05-10085. August 2012.  

Social Security Administration. Social Security: Understanding The Benefits. SSA Publication No. 05-10024. June 2015.  

Social Security Survivor's Benefits

Here is an example of a student paper on a policy.

As Americans, we work hard to provide a life for our families. As soon as we enter the work force we pay taxes to help make our country better and to create a basic retirement plan for ourselves. Social Security is meant to be a guaranteed retirement program, so hard working Americans across the country can support themselves after they have earned the right to retire. But what happens if that person dies before retirement? Where does all that money go? In these unfortunate cases, Social Security can act as a sort of life insurance for the surviving spouse and children. Losing a husband or wife can be devastating enough, let alone having to worry about earning enough money to keep a roof over your head or food on the table. Social Security Survivor's Benefits make sure that the families of hard working Americans are supported even after their loved one has passed on. 

Social Security has been around since the 1930's as a response to the economic downturn and widespread poverty, especially among the elderly, as a result of the Great Depression. It acts as a federal entitlement program in the United States, where individuals who meet certain criteria are entitled by law to receive certain benefits. There have been several amendments to Social Security made, mostly in the 1960s and 70s. Social Security was designed to lower the overall poverty rate of post-retirement individuals and to help combat the effects of ageism in the work place. Older adults are often seen as senile, infantile, and useless and are therefore discriminated against when it comes to getting jobs. Without some source of income, many elderly individuals would not be able to care for themselves and meet basic needs. The theory is that a person pays into Social Security their entire life so that they can have a guaranteed retirement plan, which is especially helpful if their job doesn't offer one or they are intentionally laid off just before they hit retirement age. But this money from Social Security can also come in handy for disabled workers or families of the deceased. If a person dies before they retire or after they retire and still have Social Security benefits left, then the surviving spouse and/or children may receive some of the money that their loved one worked so hard for over the years. 

 If the deceased has worked long enough and contributed enough to Social Security, their surviving family may be entitled to some benefits. Some of these benefits include the spouse receiving a payment on a one-time basis, so long as the spouse was living with the deceased or was at least receiving certain benefits under the deceased. In the absence of a spouse, the child becomes eligible for the benefits (Social Security Administration, 2015, p. 5). There are monthly benefits available for certain members of the deceased's family; any widows or widowers who are 60 years or older, or age 50 if they are disabled, any surviving spouse who is caring for a child of the deceased who is under the age of 16 and disabled, unmarried children of the deceased who are under the age of 18 (19 years of age in certain circumstances), any child 18 years of age or older who was diagnosed with a disability before age 22, stepchildren, grandchildren, or adopted children in certain circumstances, any dependent parents of the deceased over the age of 62, and in special circumstances, divorced spouses (Social Security Administration, 2009, p. 1).

So what are the benefits that your family will receive if you pass on? According to the Social Security Administration in 2015, "How much your family can get from Social Security depends on your average lifetime earnings. The more you earned, the more their benefits will be" (p. 6). Once the death has been reported to the Social Security Administration, the process for receiving benefits can begin. A one-time payment of $255 can be paid to qualifying survivors, but the amount is dependent on how long the deceased worked and paid into the program (Social Security Administration, 2015, p. 6). The amount of the following payments is also determined by how long the deceased worked, and by the survivor's relationship to the deceased, but the maximum amount that can be paid is around 150-180% of the deceased's total benefits (Social Security Administration, 2015, p. 9). Surviving children, or spouses with children under the age of 16 will receive 75% of the deceased's benefits, while widows or widowers who are under retirement age generally receive somewhere between 71-99% (Social Security Administration, 2015, p. 9). The only group that receives the full amount of the deceased's benefits are widows or widowers who are at full retirement age at the time of their spouses death or at the time of application for Survivor's Benefits (Social Security Administration, 2015, p. 8). There are several resources available for an individual to check to see what benefits they would be leaving behind for their families. 

Social Security is a publicly funded program through the government. The funding comes from a mandatory tax on income, up to $118,500 (Office of Retirement and Disability Policy, 2015, p. 1). Fortunately, there has always been a surplus created by Social Security, so on its own it would provide all the funding necessary for the payment of benefits. Unfortunately, the government continues to borrow from this surplus instead of simply investing all of it into Treasury bonds. This lack of responsibility and long-sightedness could potentially lead to cutting of the program to fill the government budget deficit. 

 While the theory of Social Security may seem like a simple idea, the practical application is much more complicated. Social Security on the whole is meant to be a supplement to private retirement plans and personal savings. But in recent years, it has become more difficult for individuals to save money, especially with the decrease in companies offering private pensions or guaranteed retirement plans. And since Social Security benefits are only meant to be supplemental, they are often not enough to cover basic needs, particularly for families. Another aspect that can make receiving these benefits is the red tape surrounding the application process. The last thing anyone wants to do when a loved one has passed on is deal with filing an application through the government. To apply, survivors will need birth certificates, death certificates, Social Security cards, W-2 forms for the deceased, marriage certificates, and bank account numbers (Social Security Administration, 2015, pp. 7-8). And Social Security benefits alone are not able to sustain families above the poverty line. So if the deceased was the sole breadwinner for the family, the survivors then have to make do with a fraction of the income they previously had. However, if the surviving family is simply a spouse who also receives Social Security Benefits, they may be able to get by slightly easier with this supplemental benefit. 

All told, Social Security is a great supplemental retirement and life insurance program, but it is just that: supplemental. For the surviving spouses and children of the deceased, this supplemental income may not be enough to sustain them. Children particularly who may be in high school or going through college that have lost a source of income may now be solely reliant on a portion of their deceased parent's benefits. While the program is better than nothing, it should not be entirely relied upon by surviving loved ones as a practical life insurance program.

References

Office of Retirement and Disability Policy (2015). OASDI and SSI program rates & limits.Retrieved from http://www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2015.pdf

Social Security Administration (2009). How Social Security can help you when a family memberdies. Retrieved from http://www.ssa.gov/pubs/EN-05-10008.pdf

Social Security Administration (2015). Survivors Benefits. Retrieved from http://www.ssa.gov/ubs/EN-05-10084.pdf