Blackwell Reference Online

Extract

This Act established the Old Age, Survivor, Disability, and Health Insurance Program (OASDHI). Included under OASDHI are: provisions for retirement, survivors and disability insurance, known collectively as social security benefits ; hospital and medical insurance for the aged and disabled, known as Medicare/Medicaid; black lung benefits for coal miners; Supplemental Security Income; unemployment insurance ( Federal Unemployment Tax Act of 1935 ); and public assistance and welfare services, including aid to families with dependent children (AFDC). Social Security and Medicare are paid for by taxes on employers and employees, authorized under the Federal Insurance Contributions Act (hence, FICA taxes). Medicaid is funded by the states; matching grants are made by the federal government from general revenues. FICA taxes are not levied on total salaries: in 2003 the salary subject to FICA taxes for Old Age and Survivor Insurance was $87,000; the tax rate was 6.2 percent for both employers and employees. Medicare taxes are levied on total salaries; in 2003 the tax rate was 1.45 percent for both employers and employees. Social Security was designed to be part of the “three‐legged stool” of retiree income replacement: company pensions and personal savings were to account for most retirement income. Social security benefits generally become available on retirement or disability; covered ... log in or subscribe to read full text