Pearson Vue - Social Insurance

CHAPTER SUMMARY: SOCIAL SECURITY

Key points to remember from this chapter include:

▪    Social Security is also referred to as OASDHI.

▪    Social Security is funded by payroll taxes that are collected from employees, employers, and those who are self-employed.

▪    The amount of Social Security benefits that a person receives is based on the individual’s average indexed monthly earnings (AIME) during her working years.

▪    The primary insurance amount (PIA) determines the full amount of retirement benefits for an eligible person at the age of 65.

▪    There are two types of insured statuses that qualify individuals for Social Security benefits:

‒      Fully insured

‒      Currently insured

▪    To receive maximum benefits, the eligible individual must be fully insured.

▪    A worker is considered to be fully insured if he has earned 40 quarters of coverage.

▪    Social Security also offers survivor’s and death benefits.

▪    The lump-sum death benefit is $255.

▪    The blackout period is the period between the insured’s death and the time that the surviving spouse is permitted to receive retirement income benefits.

▪    Full retirement age (FRA), also referred to as normal retirement age (NRA), is the age at which retirement benefits are equal to the covered worker’s PIA.

▪    Individuals who are eligible for a dual benefit are only permitted to collect the greater benefit.

▪    A disability describes an employee who’s unable to engage in any occupation.

▪    Medicare Part A covers Hospital Insurance.

▪    Medicare Part B covers Supplementary Medical Insurance.

▪    Medicare Part C is Medicare Advantage.

▪    Medicare Part D covers the Prescription Drug Plan.