Social Security--Your Payments While You Are Outside of the United States ______________________________________________ WHAT'S INSIDE * Introduction * When Are You Outside Of The U.S. ? * What Happens To Your Right To Social Security Payments When You Are Outside The U.S.? * Additional Residency Requirements For Dependents And Survivors * Countries To Which We Cannot Send Payments * What You Need To Do To Protect Your Right To Benefits * Things That Must Be Reported * How To Report * If Your Check Is Lost Or Stolen * Direct Deposit In Financial Institutions * Taxes * What You Need To Know About Medicare * Want More Information? INTRODUCTION This booklet explains how being outside the U.S. may affect your Social Security payments. It also tells you what you need to report to us so we can make sure you receive all the Social Security payments you are entitled to receive. Things That Must Be Reported tells what you need to report and How to Report, explains how to report. WHEN ARE YOU OUTSIDE OF THE U.S. ? When we say you are outside of the U.S., we mean that you are not in one of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa. Once you have been away from the U.S. for at least 30 days in a row, you are considered to be outside the country until you return and stay in the U.S. for at least 30 days in a row. WHAT HAPPENS TO YOUR RIGHT TO SOCIAL SECURITY PAYMENTS WHEN YOU ARE OUTSIDE THE U.S.? If you are a U.S. CITIZEN, you may receive your Social Security payments outside the U.S. as long as you are eligible for them. Regardless of your citizenship, there are certain countries where we are not allowed to send payments. If you are a CITIZEN of one of the countries listed below, your Social Security payments will keep coming no matter how long you stay outside the U.S., as long as you are eligible for the payments. Austria Greece Netherlands Belgium Ireland Norway Canada Israel Portugal Finland Italy Spain France Japan Sweden Germany Luxembourg Switzerland United Kingdom (This list of countries is subject to change from time to time.) If you are a CITIZEN of one of the countries listed below, you may also receive your payments as long as you are outside the U.S., unless you are receiving your payments as a dependent or survivor. In that case, there are additional requirements you have to meet--see section on Additional Residency Requirements for Dependents and Survivors . Antigua and El Salvador Micronesia, Barbuda Gabon Fed. States of Argentina Grenada Monaco Bahamas Guatemala Nicaragua Barbados Guyana Palau Belize Iceland Panama Bolivia Ivory Coast Peru Brazil Jamaica Philippines Burkina Faso Jordan Poland Chile Korea, Rep. of St. Christopher Colombia Latvia and Nevis Costa Rica Liechtenstein St. Lucia Croatia Macedonia, San Marino Cyprus Former Yugoslav Slovenia Denmark Rep. of Trinidad-Tobago Dominica Malta Turkey Dominican Republic Marshall Islands Uruguay Ecuador Mexico Venezuela Western Samoa (This list is subject to change from time to time.) If you are not a CITIZEN of the U.S. or a CITIZEN of one of the other countries listed on above, your payments will stop after you have been outside the U.S. for six full calendar months unless: * You were eligible for monthly Social Security benefits for December 1956; or * You are in the active military or naval service of the U.S.; or * The worker on whose record your benefits are based had railroad work which was treated as covered employment by the Social Security program; or * The worker on whose record your benefits are based died while in the U.S. military service or as a result of a service- connected disability and was not dishonorably discharged; or * You are a RESIDENT of a country with which the U.S. has a Social Security agreement. Currently, these countries are: Austria Greece Portugal Belgium Ireland Spain Canada Italy Sweden Finland Luxembourg Switzerland France Netherlands United Kingdom Germany Norway However, the agreements with Austria, Belgium, Germany, Sweden, and Switzerland permit you to receive benefits as a dependent or survivor of a worker while you reside in the foreign country only if the worker is a U.S. CITIZEN or a CITIZEN of the country; or * The worker on whose record your benefits are based lived in the U.S. for at least 10 years or earned at least 40 earnings credits under the U.S. Social Security system, but only if you are a CITIZEN of one of the countries in the following list. See Additional Residency Requirements for Dependents and Survivors. for additional requirements. Afghanistan Indonesia Sierra Leone Australia Kenya Singapore Bangladesh Laos Solomon Islands Bhutan Lebanon Somali Dem. Rep. Botswana Lesotho South Africa, Burundi Liberia Rep. of Cameroon Madagascar Sri Lanka Cape Verde Islands Malawi Sudan Central African Rep. Malaysia Swaziland Chad Mali Taiwan China, Peoples Mauritania Tanzania Rep. of Mauritius Thailand Congo Rep. Morocco Togo Ethiopia Myanmar Tongo Fiji Nepal Tunisia Gambia Nigeria Uganda Ghana Pakistan Yemen Haiti St. Vincent & Honduras Grenadines India Senegal (This list is subject to change from time to time.) If you are NOT a CITIZEN of one of the countries listed above, you cannot use this exception. If none of these exceptions applies to you, your payments will stop after you have been outside the U.S. for six months. Once this happens, they cannot be started again until you come back and stay in the U.S. for a whole calendar month. This means you have to be in the U.S. on the first minute of the first day of a month and stay through the last minute of the last day of that month. ADDITIONAL RESIDENCY REQUIREMENTS FOR DEPENDENTS AND SURVIVORS If you receive benefits as a dependent or survivor of the worker, special requirements may affect your right to receive Social Security payments while you are outside the U.S. If you are not a U.S. CITIZEN, you must have lived in the U.S. for at least five years. During that five years, the family relationship on which benefits are based must have existed. For example, if you are receiving benefits as a spouse, you must have been married to the worker and living in the U.S. for at least five years. Children who cannot meet the residency requirement on their own may be considered to meet it if it is met by the worker and other parent (if any). However, children adopted outside the U.S. will not be paid outside the U.S. even if the residency requirement is met. The residency requirement will not apply to you if: * You were initially eligible for monthly benefits before January 1, 1985; or * You are a CITIZEN of Israel or Japan; or * You are a CITIZEN or RESIDENT of one of the countries with which the U.S. has a Social Security agreement. These countries are: Austria Greece Portugal Belgium Ireland Spain Canada Italy Sweden Finland Luxembourg Switzerland France Netherlands United Kingdom Germany Norway (This list of countries is subject to change from time to time.); or * You are entitled on the record of a worker who died while in the U.S. military service or as a result of a service-- connected disease or injury. COUNTRIES TO WHICH WE CANNOT SEND PAYMENTS U.S. Treasury Department regulations prohibit sending payments to you if you are in Cuba, Cambodia (formerly Kampuchea), North Korea, or Vietnam. In addition, Social Security restrictions prohibit sending payments to individuals in areas (other than Estonia, Latvia, Lithuania, and Russia) which were in the former Soviet Union. You cannot receive payments while you are in one of these countries and we cannot send your payments to anyone for you. If you are a U.S. CITIZEN, you can receive all of your payments that were withheld once you leave that country and go to another country where we can send payments. Generally, if you are not a U.S. CITIZEN, you cannot receive any payments for months in which you live in one of these countries, even though you leave that country and satisfy all other requirements. WHAT YOU NEED TO DO TO PROTECT YOUR RIGHT TO BENEFITS If you are living outside the U.S., we will send you a questionnaire periodically to fill out and return. This informs us as to whether you are still eligible for benefits. You must return the questionnaire to the office that sent it to you as soon as possible; if you do not, your payments will stop. In addition to responding to the questionnaire, it is your responsibility to notify us promptly about changes that could affect your payments. If you fail to report something or deliberately make a false statement, you could be penalized by a fine or imprisonment. You may also lose some of your payments if you do not report changes promptly. THINGS THAT MUST BE REPORTED Listed below are things that must be reported. * Change of address * Work outside the U.S. * Disabled person can work again or disability improves * Marriage * Divorce or annulment * Adoption of a child * Child leaves the care of a wife, husband, widow, or widower * Child nearing 18 is a full-time student or is disabled * Death * Inability to manage funds * Deportation * Changes in parental circumstances * Eligibility for a pension from work not covered by Social Security HOW TO REPORT The following sections pages explain what you need to report. When you report, you can contact us in person, by mail, or telephone. If you live in Canada, you can send your report to the nearest U.S. Social Security office. If you live in Mexico, you can send your report to the nearest U.S. Social Security office, Embassy, or consulate. If you live in the Philippines, your report should be sent to: Veterans Affairs Regional Office SSA Division 1131 Roxas Boulevard Manila, Philippines In all other countries, you can report to the nearest U.S. Embassy or consulate. If you find it easiest to contact us by mail, send your report by airmail to the following address: Social Security Administration P.O. Box 1756 Baltimore, Maryland 21235-0001 USA Be sure to include your Social Security claim number. When you contact us, include all of the following information: * Name of the person or persons about whom the report is being made. * What is being reported and the date it happened. * The claim number that appears on the person's Social Security check and on all letters or other correspondence we send you.(This is a nine-digit number (000-00-0000) followed by a letter, or a letter and a number.) Change Of Address It is very important that you tell us if your address changes so your checks will not be lost or delayed. Even if your payments are being sent to a bank, you must report any change in your home address. When you write to the U.S. Embassy or consulate or the Social Security Administration about a change of address, please type or print your new address carefully and be sure to include the country and ZIP or postal code. Also, be sure to list the names of all of your family members who will be receiving payments at the new address. Work Outside The U.S. If you work or own a business outside the U.S. and you are under age 70, notify the nearest U.S. Embassy or consulate or Social Security office right away. It is important that you notify us promptly since failure to do so could result in a penalty which would cause the loss of benefits in addition to those which might be withheld under one of the work tests explained on the following pages. You must report your work even if the job is part time or if you are self-employed. Some examples of the types of work which should be reported are work as an apprentice, farmer, sales representative, tutor, writer, etc. If you own a business, you should notify us even if you do not work in the business or receive any income from it. If a child beneficiary (regardless of age) begins an apprenticeship, notify the nearest U.S. Embassy or consulate or the Social Security Administration. An apprenticeship may be considered work under the Social Security program. The following work tests may affect the amount of your monthly benefit payment. Work after age 70 does not affect the payment of benefits. The Foreign Work Test A monthly benefit is withheld for each month in which a beneficiary under age 70 works more than 45 hours outside the U.S. in employment or self-employment that is not subject to U.S. Social Security taxes. It does not matter how much you earned or how many hours you worked each day. A person is considered to be working on any day he or she: * Actually works as an employee or self-employed person; or * Has an agreement to work even if he or she does not actually work because of sickness, vacation, etc.; or * Is the owner or part owner of a trade or business even if he or she does not actually work in the trade or business or receive any income from it. Generally, if a retired worker's benefits are withheld because of his or her work, no benefits can be paid to any other people receiving benefits on his or her record for those months. However, the work of others receiving benefits on the worker's record affects only their own benefits. The Annual Retirement Test Under certain conditions, work performed outside the U.S. by U.S. CITIZENS or RESIDENTS is covered by the U.S. Social Security program. If your work is covered by U.S. Social Security, the same annual retirement test that applies to people in the U.S. will apply to you. NOTE: Work by some U.S. CITIZENS and RESIDENTS outside the U.S. is exempt from U.S. Social Security as a result of international Social Security agreements. The U.S. has Social Security agreements in effect with: Austria Greece Portugal Belgium Ireland Spain Canada Italy Sweden Finland Luxembourg Switzerland France Netherlands United Kingdom Germany Norway If you are working in one of these countries and your earnings are exempt from U.S. Social Security taxes because of the agreement, your benefits will be subject to the Foreign Work Test described above. For further information on how your benefits may be affected by an agreement, contact the nearest U.S. Embassy or consulate or Social Security office. If your work is covered by the U.S. Social Security program, you can receive all benefits due you for the year if your earnings do not exceed the annual exempt amount. This limit changes each year. If you want to know the current limit, ask at any U.S. Embassy or consulate or Social Security office or write to us at the address shown under How To Report. If your earnings go over the limit, some or all of your benefits will be offset by your earnings. * If you are under 65, $1 in benefits will be withheld for each $2 in earnings above the limit. * If you are 65 through 69, $1 in benefits will be withheld for each $3 in earnings above the limit. * People who are 70 or older do not have an earnings limit. You must count your earnings for the whole year in figuring the benefits due you. For most people, this means earnings from January through December. The year your benefits start--In figuring your total earnings for the year in which you first become entitled to benefits, count earnings in that year for months both before and after you applied for benefits. The year you reach 18--Your benefits as a child stop at 18 unless you are a full-time student in an elementary or secondary school or you are disabled. Your earnings for the entire year in which you reach 18 count in figuring the amount of benefits due you for the year regardless of whether your payments continue or stop at 18. Disabled Person Can Work Again Or Disability Improves If you receive payments because you are disabled, let us know right away if your condition improves or if you go back to work. You can keep receiving payments for up to nine-months while you are working. This nine-month period is called a "trial work period." The trial work period gives you a chance to test whether or not you are able to work without worrying about having your payments stopped. If, after nine months, you are able to continue working, you will get payments for three more months before they stop. If you are not able to keep working, you will continue to receive disability benefits. Marriage Let us know if any person receiving benefits gets married. In some cases, Social Security payments stop after marriage. In other cases, the amount of the payments changes. This depends on the kind of benefits you receive and, sometimes, on whether the person you marry gets payments. Divorce Or Annulment You should notify us if your marriage is annulled or you get a divorce. Divorce or annulment does not necessarily mean your Social Security payments will stop. If you are receiving payments based on your own work record, divorce or annulment of your marriage will not affect your payments. Also, if you are a spouse 62 or older and you were married to the worker 10 years or more, your payments will continue even if you divorce. But you should still contact us if your name is changed as a result of the divorce so that we can show your new name on your payments. Adoption Of A Child When a child is adopted, let us know the child's new name, the date of the adoption decree, and the adopting parent's name and address. Child Leaves The Care Of A Wife, Husband, Widow, Or Widower If you are a wife, husband, widow, or widower receiving benefits because you are caring for a child who is under 16 or who was disabled before 22, you should notify us right away if the child leaves your care. Failure to report this could result in a penalty which would cause an additional loss of benefits. A temporary separation may not affect your benefits as long as you still have parental control over the child. You should tell us, though, if there is any change in where you or the child lives, or if you no longer have responsibility for the child. If the child returns to your care, you should tell us that also. Child Nearing 18 Is A Full-Time Student Or Is Disabled Payments to a child will stop when the child reaches 18 unless he or she is unmarried and either disabled or a full-time student at an elementary or secondary school. Twice a year we send each student a form which should be filled out and returned to us. If the completed form is not sent back to us, the student's payment will stop. In addition to filling out the required form if a child 18 or over is receiving payments as a student, we should be notified immediately if the student: * Drops out of school; * Changes schools; * Changes from full-time to part-time attendance; * Is expelled or suspended; * Is paid by his or her employer for attending school; * Marries; or * Begins working. If a child whose payments were stopped at age 18 either becomes disabled before age 22 or is unmarried and enters elementary or secondary school on a full-time basis before age 19, we should be notified so that we can resume sending payments to the child. Also, a disabled child who recovers from a disability can have payments started again if he or she becomes disabled again within seven years. Death If a person who receives Social Security benefits dies, a benefit is not payable for the month of death. For example, if a beneficiary died any time in June, the payment dated July 3 (which is payment for June) should be returned to the sender. Inability To Manage Funds Some people who receive Social Security payments cannot manage their own funds. When this happens, the person who takes care of the beneficiary should let us know. Then we can arrange to send the payments to a relative or other person who can act on behalf of the beneficiary. We call this person a representative payee. Deportation If you are deported from the U.S. for certain reasons, your Social Security benefits are stopped and cannot be started again unless you are lawfully admitted to the U.S. for permanent residence. Even if you are deported, your dependents can receive benefits if they are U.S. CITIZENS. If your dependents are not U.S. CITIZENS, they can still receive benefits if they can stay in the U.S. for the entire month. But they cannot receive benefits for any months if part or all of the month is spent outside the U.S. Changes In Parental Circumstances Payments to a child who is not a U.S. CITIZEN could stop or start when certain changes occur. Let us know when the child's natural, adoptive, or stepparent dies, marries, or gets a divorce (or annulment) even if that person does not receive Social Security payments. Eligibility For A Pension From Work Not Covered By Social Security If, after 1985, you become entitled to a U.S. Social Security retirement or disability benefit and you also start to receive a monthly pension, such as a foreign social security pension, which is based in whole or in part on work not covered by U.S. Social Security, your U.S. Social Security benefit may be smaller. A different formula may be used to figure your U.S. Social Security benefit. For more information, ask at any U.S. Embassy or consulate or Social Security office for the factsheet A Pension From Work Not Covered By Social Security (Publication No. 05-10045). If Your Check Is Lost Or Stolen It usually takes longer to deliver checks outside the U.S. because of the longer distances and extra handling needed. Delivery time varies from country to country and your check may not arrive the same day each month, so we ask you to be patient. But, if you do not receive your check after a reasonable waiting period, or if it is lost or stolen, contact the nearest U.S. Embassy or consulate or write directly to the Social Security Administration. Our address is: Social Security Administration P.O. Box 1756 Baltimore, Maryland 21235-0001 USA We will replace your check as soon as possible. But please make every effort to keep your check safe, because it will take some time to replace a check while you are outside the country. If you are in the U.S. now and plan to be out of the country less than three months, you may want your payments to stay in the U.S. The people at any Social Security office can help you arrange this. DIRECT DEPOSIT IN FINANCIAL INSTITUTIONS You may wish your Social Security payment to be deposited directly into your account at either a financial institution in the country where you live or a U.S. financial institution. But, even if you use the direct deposit service, you must still keep us informed of any change in your current residence address. Direct deposit has several advantages. You never have to worry about your check being delayed in the mail, lost, or stolen. With direct deposit, you receive your payment much faster than if you are paid by check (usually one to three weeks faster than check deliveries). When direct deposit payments are sent to a financial institution, you also avoid check cashing and currency conversion fees. Some countries where direct deposit and other forms of electronic payments are available include Argentina, Canada, France, Germany, Ireland, Italy, Norway, Portugal, Spain, Sweden, and the United Kingdom. To determine if direct deposit is available in the country where you live--or to sign up for direct deposit--contact the U.S. Embassy or consulate. If you live in Canada, contact the nearest U.S. Social Security office or write to the Social Security Administration, P.O. Box 1756, Baltimore, Maryland 21235-0001, USA. TAXES If you are a U.S. CITIZEN or U.S. RESIDENT, up to 85 percent of the Social Security benefits received may be subject to the federal income tax. If you file a federal income tax return as an individual and your combined income is $25,000 to $34,000, you may have to pay taxes on up to 50 percent of your Social Security benefits. Combined income means your adjusted gross income plus nontaxable interest plus one-half of your Social Security benefits. If your combined income is over $34,000, you may have to pay taxes on up to 85 percent of your Social Security benefits. If you file a joint tax return, you may have to pay taxes on up to 50 percent of your Social Security benefits if you and your spouse have a combined income of $32,000 to $44,000. If your combined income is over $44,000, you may have to pay taxes on up to 85 percent of your Social Security benefits. If you are a member of a couple and file a separate return, you probably will pay taxes on your benefits. If you are not a U.S. CITIZEN or a RESIDENT, federal income taxes will be withheld from your benefits. The tax is 30 percent of 85 percent of your benefit amount. It will be withheld from the benefits of all nonresident aliens, except those who reside in countries which have tax treaties with the U.S. that do not permit taxing of U.S. Social Security benefits (or provide for a lower tax rate). It has been determined that alien residents of Egypt, Germany, Israel, Italy, Japan, Malta, Romania, and the United Kingdom (defined as England, Scotland, Wales, and Northern Ireland) are not subject to tax withholding. (This list of countries may change from time to time.) After the end of the year, you will receive a statement showing the amount of benefits you received during the year. Many foreign governments do tax U.S. Social Security benefits. U.S. residents planning to live in another country should contact that country's embassy in Washington, D.C., for information. Keep in mind that Social Security benefits are calculated in U.S. dollars. They are not increased or decreased because of changes in international exchange rates. WHAT YOU NEED TO KNOW ABOUT MEDICARE Medicare is a health insurance program for eligible people who are 65 or over or disabled. Medicare protection consists of two parts: hospital insurance and medical insurance. The hospital insurance part of Medicare helps pay hospital bills and certain follow-up care after you leave the hospital. Medical insurance helps pay doctor bills and other medical services. Medicare generally does not cover health services you get outside the U.S. The hospital insurance part of Medicare is available to you if you return to the U.S. No monthly premium is withheld from your benefit payment for this protection. If you want the medical insurance part of Medicare, you must enroll and there is a monthly premium which normally will be withheld from your payment. Since Medicare benefits are available only in the U.S., it may not be to your advantage to sign up and pay the premium for medical insurance if you will be out of the U.S. for a long period of time. But you should be aware that your premium, when you do sign up, will be 10 percent higher for each 12-month period you could have been enrolled but were not. If you are already covered by medical insurance and wish to cancel it, you should notify us. Medical insurance and premiums will continue for one more month after the month you notify us that you wish to cancel it. WANT MORE INFORMATION? If you want more information than this booklet gives or if you have any questions about Social Security, ask at any U.S. Embassy or consulate or Social Security office, or write to us at the appropriate address shown under How To Report. This publication is also printed in French, German, Greek, Italian, and Spanish. Social Security s Internet Address: http://www.ssa.gov Social Security Administration SSA Publication No. 05-10137 September 1996 ---------- Receiving Your Benefits By Direct Deposit Beginning August 1, 1996, people who apply for Social Security or Supplemental Security Income (SSI) will have their monthly benefit payments deposited directly into their bank accounts. With direct deposit your money is available the same day you would have received a check. The difference is your money is sent directly to your bank. Direct deposit is fast, efficient, cost effective and gives you the assurance of --  no paper check to be lost or stolen,  no waiting for the check to be delivered or cashed, and  your knowledge that your money is in the bank every month. Most people who get Social Security already use direct deposit. Under a new law that applies to all federal government payments, direct deposit is required for new Social Security and SSI beneficiaries who have bank accounts. People who already get their Social Security and SSI benefits by check can continue to be paid by check for the present, unless they opt to change to direct deposit. Also, new beneficiaries who don't have a bank account will be paid by check. Besides the advantages to you, direct deposit saves the taxpayers money, saving 40› each time someone uses direct deposit instead of a check. It costs 42› to process and mail each check, compared to 2› for direct deposit. If the Social Security and Supplemental Security Income beneficiaries who still receive checks changed to direct deposit, the savings to the government would be $9.6 million a month. ---------- Social Security Administration How You Earn Credits SSA Publication No. 05-10072 January 1997 ----------------------- How You Earn Social Security Credits You earn Social Security credits when you work in a job covered by Social Security. During your working years, your wages are posted to your Social Security record, and you receive Social Security earnings credits based on those wages. These credits are used later to determine your eligibility for Social Security retirement benefits or for disability or survivors benefits if you should become disabled or die. In 1997, you receive one Social Security credit for each $670 of earnings, up to the maximum of four credits per year. In future years, the amount of earnings needed for a credit will rise as average earnings levels rise. The credits you earn will remain on your Social Security record even if you change jobs or have a period of no earnings. Special Rules For Some Jobs Special rules for earning Social Security coverage apply to certain types of work. If you have one of the following types of jobs, contact Social Security for information about how you earn credits. ----------------------- * Domestic work; ----------------------- * Farm work; ----------------------- * Work for a church or church–controlled organization that has been exempted from payment of Social Security taxes. If you are self--employed, you earn Social Security credits the same way employees do (one credit for each $670 in net earnings, but no more than four credits per year). However, special rules apply if you have net annual earnings of less than $400. For more information, call Social Security to ask for a free copy of the factsheet If You're Self--Employed (Publication No. 05--10022). If you are in the military, you earn Social Security credits in the same way that civilian employees do. You also may receive additional earnings credits under certain conditions. For more information about Social Security coverage of military service, contact Social Security to ask for the factsheet Military Service And Social Security (Publication No. 05--10017). Work Not Covered By Social Security The following workers are not covered by Social Security: ----------------------- * Most federal employees hired before 1984 (but since January 1, 1983, all federal employees have paid the Medicare hospital insurance part of the Social Security tax); ----------------------- * Railroad employees with more than 10 years of service; ----------------------- * Employees of some state and local governments that chose not to participate in Social Security; ----------------------- * Children under 21 who work for a parent (except a child 18 or over who works in the parent's business). How Many Credits Do You Need? The number of credits you need to be eligible for Social Security benefits depends on your age and the type of benefit. Retirement Benefits Everybody born in 1929 or later needs 40 credits to be eligible for retirement benefits. People born before 1929 need fewer credits. See the table below. +-------------------------+------------+---------+--------------+ Year of Credits Birth Needed +-------------------------+------------+---------+--------------+ 1929 or 40 later +-------------------------+------------+---------+--------------+ 1928 39 +-------------------------+------------+---------+--------------+ 1927 38 +-------------------------+------------+---------+--------------+ 1926 37 +-------------------------+------------+---------+--------------+ 1925 36 +-------------------------+------------+---------+--------------+ 1924 35 +-------------------------+------------+---------+--------------+ If you work for a nonprofit organization that was mandatorily covered by Social Security starting in 1984, a special provision applies that may allow you to receive retirement benefits with fewer credits. For more information, contact Social Security to ask for the factsheet If You Work For A Nonprofit Organization (Publication No. 05--10027). Disability Benefits The number of credits required for disability benefits depends on your age when you become disabled. If you become disabled before age 24, you generally need six credits during the three--year period ending when your disability begins. If you are 24 through 30, you generally need credits for half of the period between age 21 and the time you become disabled. If you are disabled at age 31 or older, you need the number of credits shown in the following table. Also, you must have earned at least 20 of the credits in the 10 years immediately before you became disabled. +-------------------------+------------+---------+--------------+ Disabled Credits At Age Needed +-------------------------+------------+---------+--------------+ 31 through 42 20 +-------------------------+------------+---------+--------------+ 44 22 +-------------------------+------------+---------+--------------+ 46 24 +-------------------------+------------+---------+--------------+ 48 26 +-------------------------+------------+---------+--------------+ 50 28 +-------------------------+------------+---------+--------------+ 52 30 +-------------------------+------------+---------+--------------+ 54 32 +-------------------------+------------+---------+--------------+ 56 34 +-------------------------+------------+---------+--------------+ 58 36 +-------------------------+------------+---------+--------------+ 60 38 +-------------------------+------------+---------+--------------+ 62 or older 40 +-------------------------+------------+---------+--------------+ Survivors Benefits The family of a deceased worker may be able to get survivors benefits, even though the deceased worker had fewer credits than are otherwise needed for retirement benefits. If you were born in 1929 or before, one credit is needed for each year after 1950, up to the year of death, in order for your family members to collect survivors benefits. If you were born in 1930 or later, one credit is needed for each year after age 21, up to the year of death. Regardless of when you were born, your dependent children could get survivors benefits if you had six credits in the three years before your death. Their benefits could continue until they reach age 18 (or age 19 if they are attending an elementary or secondary school full time). Your widow or widower who is caring for your children who are under 16 or disabled may also be able to get benefits. Medicare The Social Security credits you earn also count toward eligibility for Medicare when you reach 65. You may be eligible for Medicare at an earlier age if you are entitled to disability benefits for 24 months or more. Your dependents or survivors also may be eligible for Medicare at 65 or if they are disabled. People who need kidney dialysis or a kidney transplant for permanent kidney failure may be eligible for Medicare at any age. For more information about the Medicare program, contact Social Security to ask for the publication Medicare (Publication No. 05--10043). For More Information You can get recorded information about Social Security coverage 24 hours a day, including weekends and holidays, by calling Social Security 's toll-free number, 1-800-772-1213. You can speak to a service representative between the hours of 7 a.m. and 7 p.m. on business days. Our lines are busiest early in the week and early in the month so, if your business can wait, it's best to call at other times. Whenever you call, have your Social Security number handy. People who are deaf or hard of hearing may call our toll--free "TTY" number, 1--800--325--0778, between 7 a.m. and 7 p.m. on business days. You also can reach us on the Internet. Type http://www.ssa.gov to access Social Security information. The Social Security Administration treats all calls confidentially— whether they're made to our toll–free numbers or to one of our local offices. We also want to ensure that you receive accurate and courteous service. That is why we have a second Social Security representative monitor some incoming and outgoing telephone calls. ---------- A Factsheet from Social Security _______________________________________________________________ Social Security Administration SSA Publication No. 05-10045 February 1997 (Recycle prior editions) A Pension From Work Not Covered By Social Security How It Affects Your Social Security Retirement or Disability Benefits If you work for an employer who doesn't withhold Social Security taxes, such as a government agency or an employer in another country, the pension you get based on that work may reduce your Social Security benefits. Your benefit can be reduced in one of two ways. One is called the "government pension offset," and applies only if you receive a government pension and are eligible for Social Security benefits as a spouse or widow(er). For more information on the offset, ask Social Security for the factsheet "Government Pension Offset" (Publication No. 05-10007). The other way--called the "windfall elimination provision"-- affects how your retirement or disability benefits are figured if you receive a pension from work not covered by Social Security. The formula used to figure your benefit amount is modified, giving you a lower Social Security benefit. This factsheet explains the computation formula. Who Is Affected? This provision primarily affects people who earned a pension from working for a government agency, and also worked at other jobs where they paid Social Security taxes long enough to qualify for retirement or disability benefits. It also may affect you if you earned a pension in any job where you didn't pay Social Security taxes, such as in a foreign country. The modified formula applies to you if you reach 62 or become disabled after 1985 and first become eligible after 1985 for a monthly pension based in whole or in part on work where you did not pay Social Security taxes. You are considered eligible to receive a pension if you meet the requirements of the pension, even if you continue to work. The modified formula is used to figure your Social Security benefit beginning with the first month you get both a Social Security benefit and the other pension. Why Is A Different Formula Used? Social Security benefits replace a percentage of a worker's pre-retirement earnings. The formula used to compute benefits includes factors that ensure lower-paid workers get a higher return than highly paid workers. For example, lower-paid workers could get a Social Security benefit that equals up to 90 percent of their pre-retirement earnings. The average rates of return for highly paid workers is about 42 percent. Before 1983, benefits for people who spent time in jobs not covered by Social Security were computed as if they were long-term, low-wage workers. They received the advantage of the higher percentage benefits in addition to their other pension. The modified formula eliminates this windfall. How Does It Work? Social Security benefits are based on the worker's average monthly earnings adjusted for inflation. When we figure your benefits, we separate your average earnings into three amounts and multiply the figures using three factors. For example, for a worker who turns 62 in 1997, the first $455 of average monthly earnings is multiplied by 90 percent; the next $2,286 is multiplied by 32 percent; and the remainder by 15 percent. The 90 percent factor is reduced in the modified formula and phased in for workers who reached age 62 or became disabled between 1986 and 1989. For those who reach 62 or become disabled in 1990 or later, THE 90 PERCENT FACTOR IS REDUCED TO 40 PERCENT. There are exceptions to this rule. For example, the 90 percent factor is NOT reduced if you have 30 or more years of "substantial" earnings in a job where you paid Social Security taxes. The first table on the back lists the amount of earnings we consider "substantial" for each year. If you have 21 to 29 years of substantial earnings, the 90 percent factor is reduced to somewhere between 45 and 85 percent. The second table shows the percentage used depending on the number of years of "substantial" earnings. ___________________________ Substantial Year Earnings ___________________________ 1937-50 $ 900(1) 1951-54 900 1955-58 1,050 1959-65 1,200 1966-67 1,650 1968-71 1,950 1972 2,250 1973 2,700 1974 3,300 1975 3,525 1976 3,825 1977 4,125 1978 4,425 1979 4,725 1980 5,100 1981 5,550 1982 6,075 1983 6,675 1984 7,050 1985 7,425 1986 7,875 1987 8,175 1988 8,400 1989 8,925 1990 9,525 1991 9,900 1992 10,350 1993 10,725 1994 11,250 1995 11,325 1996 11,625 1997 12,150 (1)Total credited earnings from 1937-50 are divided by $900 to get the number of years of coverage (maximum of 14 years). _______________________________ Years of Substantial Earnings Percentage _______________________________ 30 or more 90 percent 29 85 percent 28 80 percent 27 75 percent 26 70 percent 25 65 percent 24 60 percent 23 55 percent 22 50 percent 21 45 percent 20 or less 40 percent _______________________________ Some Exceptions The modified formula does not apply to survivors benefits. It also does not apply to you if: * You are a federal worker hired after December 31, 1983; * You were employed on December 31, 1983, by a nonprofit organization that was exempt from Social Security and it became mandatorily covered under Social Security on that date; * Your only pension is based on railroad employment; * Your only work where you did not pay Social Security taxes was before 1957; or * You have 30 or more years of substantial earnings under Social Security (as explained earlier). Guarantee Workers with relatively low pensions are protected because the reduction in the Social Security benefit under the modified formula cannot be more than one-half of that part of the pension attributable to earnings after 1956 not covered by Social Security. Any Questions? You can get more information 24 hours a day by calling Social Security's toll-free number, 1-800-772-1213. You can speak to a service representative between the hours of 7 a.m. and 7 p.m. on business days. Our lines are busiest early in the week and early in the month, so if your business can wait, it's best to call at other times. Whenever you call, have your Social Security number handy. Recorded information and services are available 24 hours a day, including weekends and holidays. You also can reach us on the Internet. Type http://www.ssa.gov to access Social Security information. People who are deaf or hard of hearing may call our toll-free "TTY" number, 1-800-325-0778, between 7 a.m. and 7 p.m. on business days. The Social Security Administration treats all calls confidentially--whether they're made to our toll-free numbers or to one of our local offices. We also want to ensure that you receive accurate and courteous service. That's why we have a second Social Security representative monitor some incoming and outgoing telephone calls. ---------- A Factsheet from Social Security _______________________________________________________________ Social Security Administration SSA Publication No. 05-10006 April 1997 (Recycle prior editions) A "Snapshot" This factsheet provides a snapshot of the most important features of the Social Security, Supplemental Security Income (SSI) and Medicare programs. If you need specific information about any one of these programs, call our toll-free number, 1-800-772-1213, to ask for other Social Security publications or to speak to a Social Security representative. You also can reach us on the Internet. Type http://www.ssa.gov to access Social Security information. THE SOCIAL SECURITY NUMBER The benefits you'll receive from Social Security will be calculated on the earnings and other information recorded under your Social Security number. So it's important that you always use the proper number. Also, you should make sure the name you use at work is the same as the name shown on your Social Security card. If you ever change your name, you should change the name on your Social Security card, too. Social Security does not charge for this service. Even young children have Social Security numbers because parents must show the number on their tax return to claim them as dependents. PAYING SOCIAL SECURITY TAXES If you work for someone else, your employer withholds Social Security and Medicare taxes from your paycheck, matches that amount, sends those taxes to the Internal Revenue Service (IRS) and reports your earnings to Social Security. If you're self-employed, you pay your own Social Security taxes when you file your tax return, and IRS reports your earnings to Social Security. You pay a rate equal to the combined employee/employer share, but there are special deductions you can take that offset your tax rate. EARNING SOCIAL SECURITY "CREDITS" As you work and pay taxes, you earn credits that count toward eligibility for future Social Security benefits. You can earn a maximum of four credits each year. Most people need 40 credits (10 years of work) to qualify for benefits. Younger people need fewer credits to qualify for disability or survivors benefits. FIGURING SOCIAL SECURITY BENEFITS Your Social Security benefit is a percentage of your earnings averaged over most of your working lifetime. Social Security was never intended to be your only source of income when you retire or become disabled, or your family's only income if you die. It is intended to supplement other income you have through pension plans, savings, investments, etc. Low income workers receive a higher rate of return than those in the upper income brackets, but a worker with average earnings can expect a retirement benefit that represents about 42 percent of his or her average lifetime earnings. To get a free estimate of the retirement, disability and survivors benefits that would be payable to you and your family, call Social Security at 1-800-772-1213. SOCIAL SECURITY BENEFITS There are five major categories of benefits paid for through your Social Security taxes: retirement, disability, family benefits, survivors and Medicare. (SSI benefits, which are NOT financed by Social Security taxes, are discussed in another section.) Retirement Full benefits are payable at age 65 (with reduced benefits available as early as 62) to anyone with enough Social Security credits. The age at which full benefits are paid will rise in future years. People who delay retirement beyond age 65 receive a special increase in their benefits when they do retire. Disability Benefits are payable at any age to people who have enough Social Security credits and who have a severe physical or mental impairment that is expected to prevent them from doing "substantial" work for a year or more or who have a condition that is expected to result in death. Generally, earnings of $500 or more per month are considered substantial. The disability program includes incentives to smooth the transition back into the workforce, including continuation of benefits and health care coverage while a person attempts to work. Family Benefits If you are eligible for retirement or disability benefits, other members of your family might receive benefits, too. These include: your spouse if he or she is at least 62 years old or under 62 but caring for a child under age 16; and your children if they are unmarried and under age 18, under 19 but still in school or 18 or older but disabled. If you are divorced, your ex-spouse could be eligible for benefits on your record. Survivors When you die, certain members of your family may be eligible for benefits if you earned enough Social Security credits while you were working. The family members include: a widow(er) age 60 or older, 50 or older if disabled or any age if caring for a child under age 16; your children if they are unmarried and under age 18, under 19 but still in school or 18 or older but disabled; and your parents if you were their primary means of support. A special one-time payment of $255 may be made to your spouse or minor children when you die. If you are divorced, your ex-spouse could be eligible for a widow(er)'s benefit on your record. Medicare There are two parts to Medicare: hospital insurance (sometimes called Part A ) and medical insurance (sometimes called "Part B"). Generally, people who are over age 65 and getting Social Security automatically qualify for Medicare. So do people who have been getting disability benefits for two years. Others must file an application. Part A is paid for by a portion of the Social Security tax of people still working. It helps pay for inpatient hospital care, skilled nursing care and other services. Part B is paid for by monthly premiums of those who are enrolled and from general revenues. It helps pay for such items as doctor's fees, outpatient hospital visits, and other medical services and supplies. SUPPLEMENTAL SECURITY INCOME BENEFITS SSI makes monthly payments to people who have a low income and few assets. To get SSI, you must be 65 or older or be disabled. Children as well as adults qualify for SSI disability payments. As its name implies, Supplemental Security Income "supplements" your income up to various levels--depending on where you live. The federal government pays a basic rate and some states add money to that amount. Check with your local Social Security office for the SSI rates in your state. Generally, people who get SSI also qualify for Medicaid, food stamps and other assistance. SSI benefits are NOT paid from Social Security trust funds and are NOT based on past earnings. Instead, SSI benefits are financed by general tax revenues and assure a minimum monthly income for elderly and disabled persons. WHEN AND HOW TO FILE FOR SOCIAL SECURITY OR SSI You should file for Social Security or SSI disability benefits when you become too disabled to work and for survivors benefits when a family breadwinner dies. When you're thinking about retirement, you should talk to a Social Security representative in the year before the year you plan to retire. It may be to your advantage to start your retirement benefits before you actually stop working. To file for benefits, get information or speak to a Social Security representative, call our toll-free number-- 1-800-772-1213. You also can use that number to set up an appointment to visit your local Social Security office. Our lines are busiest early in the week and early in the month, so, if your business can wait, it's best to call at other times. When you file for benefits, you need to submit documents that show you're eligible, such as a birth certificate for each family member applying for benefits, a marriage certificate if your spouse is applying and your most recent W-2 form (or tax return if you're self-employed). The Social Security Administration treats all calls confidentially--whether they're made to our toll-free numbers, or to one of our local offices. We also want to ensure that you receive accurate and courteous service. That is why we have a second Social Security representative monitor some incoming and outgoing telephone calls. ---------- Social Security Administration When You'll Get Your Benefit SSA Publication No. 05-10031 May 1997 -------------------------------------- When Will I Receive My Benefit Payment? From now on, most people applying for Social Security will receive their benefits on the second, third or fourth Wednesday of each month. When you apply for benefits, the Social Security representative will tell you when to expect your benefit payment. Your Social Security benefit award notice will also have this information. Generally, the day in the month you receive your benefit depends on the birth date of the person on whose record you receive benefits. For example, if you receive benefits as a retired or disabled worker, your benefit will be determined by your birth date. If you receive benefits as a spouse, your benefit payment day will be determined by your spouse's birth date. Here's how it works: +----------------------------------------+----------------------+ Birth date between the: Benefit paid on the: +----------------------------------------+----------------------+ 1st - 10th Second Wednesday +----------------------------------------+----------------------+ 11th -20th Third Wednesday +----------------------------------------+----------------------+ 21st - 31st Fourth Wednesday +----------------------------------------+----------------------+ People who currently get Social Security will continue to receive their benefits on the third of the month. The same is true for people who begin receiving both Social Security and Supplemental Security Income (SSI) benefits. For them, Social Security benefits will be paid on the third of the month and SSI on the first of the month. May I Change My Benefit Payment Day? No. Social Security requires new beneficiaries to receive benefits on the Wednesday indicated by the birth date. The reason is to help balance the number of beneficiaries who receive benefits on the second, third or fourth Wednesday. Will This Affect The Amount Of My Social Security Benefit? No. It doesn't change the way benefits are figured. Social Security continues to follow the same rules in determining benefit amounts. My Wife And I Are Retiring. When Will We Get Our Benefits? Let's assume your birthday is on the 15th of the month and your wife's is on the fourth of the month. Your benefit payment day will be the third Wednesday. If your wife receives a spouse's benefit, her payment will also be the third Wednesday. But if she gets benefits on her own work record, she'll receive her benefit on the second Wednesday. This will be true even if she receives partial benefits on your earnings record. Why Add New Benefit Payment Days? The current Social Security and SSI beneficiary population is nearly 50 million. By the year 2020, an estimated 76 million people will be receiving monthly benefits. The added payment days allow Social Security to continue providing high quality service to this increasing customer population by spreading the workload throughout the month. How Does Adding New Payment Days Help Me? Adding new benefit payment days lets Social Security give better service to you and other beneficiaries, workers and other members of the public. This means your calls to our toll--free number, 1--800--772--1213, will be answered faster and your visits to our field offices will take less time. Calls and visits to report non-receipt of a benefit payment, to question the amount of a benefit payment or to ask about other payment--related matters will be spread throughout the month, rather than concentrated in a few days at the beginning of the month