Posted in ssa on April 12, 2012
Although it is considered an independent agency, The Social Security Administration (SSA) operates under the auspices of the United States Federal Government. The agency was established by President Franklin D. Roosevelt in 1935, as part of his “New Deal” legislation. At the time, the SSA was funded by the Federal Emergency Relief Administration (FERA). Later that same year, FERA was disbanded and in 1936 the first Social Security office opened its doors in Austin, Texas. In 1937, the US Federal Government began collecting social security taxes from employed persons. The first monthly retirement benefit check was issued in 1940 and amounted to $22.54. In 1946, the Supplemental Security Income Program was adopted to provide monetary relief for those who are deemed “in-need,” or for elderly persons who are not yet old enough to receive the normal social security benefits, many of whom are blind or otherwise disabled. SSI benefits are available for those who meet certain requirements, such as US Citizenship, proof of financial assets under the amount of $2,000.00 and/or a monthly income of $694.00 or less.
Today, the Social Security Administration is responsible for determining the eligibility of disabled Americans, processing benefits for survivors of deceased recipients, as well as handling the accumulated payments made by employers and employees alike. In the 1960s, Medicare taxes were adopted as a standard deduction, along with social security taxes. The Federal Insurance Contributions Act (FICA) created a flat percentage to be assessed on an employee’s wages and matched by the employer in order to aid in payment for health care of the elderly. Due to the current economic situation in the US, the FICA tax has been temporarily reduced, and is now 4.2% of an employee’s gross wages, with a limit of $110,100 (for 2012). So, the maximum amount that may be withheld from an employee for the Social Security portion of the FICA tax is $4,624.20. The employee/employer contribution for Medicare taxes is currently 1.45% with no limit on the gross salary earned. At the end of every calendar year, employers are required to issue to employees a statement of earnings in the form of a W2 or a 1099, both of which are sent to the Internal Revenue Service for processing and dissemination to the SSA. In 1999, it became a mandatory practice for the Social Security Administration to send annual statements of estimated retirement, disability and survivor benefits based on the workers’ employment history and contribution. It is designed to help people better prepare for the future.