A social security payment can refer to a payment received or made by the US government. These payments are part of a program called Old Age, Survivors, and Disability Insurance (OASDI), which was established in the 1930s. Today, payments made by the government may come in several forms addressing the needs of a variety of people. Payments made to the government are the province of almost every US worker, who must contribute to the program to partially fund it.
The type of social security payment familiar to many people is the one that qualified people begin to collect when they retire. Having paid into the system for many years, they become eligible to collect a monthly payment when they reach certain age criteria and contribution criteria. People who are survivors of a person who has qualified for social security payments might also receive income. Survivors could include minor children or spouses.
Another form of social security payment may be collected for those who have qualified for social security and are permanently disabled. This could be called a disability payment, and provided a person remains disabled, they might eligible to collect this for life or until such time as they would be of an age to receive social security. Another form of income known as supplemental security income might be available for those who have never qualified for social security, such as children or young adults.
Other payments that come out of this program aren’t necessarily in the form of checks to individuals. Medicare, Medicaid and State Health Insurance Programs are funded through the social security program. In many cases unemployment, which is a direct payment, gets funded this way too.
As can be seen, the social security program makes a variety of payments and funds numerous programs. It would not be able to accomplish this without contribution from every worker. This contribution or the social security payment made to the government is usually removed from paychecks. Percentage or tax paid depends on federal law and amounts have changed periodically. They are always subject to change and can be amended.
Not only is percentage of tax amount set, but also amount of income that can be taxed is pre-determined. In the late 2000s this amount slightly exceeded $100,000 US Dollars. Any income made beyond the set limit is not subject to social security taxes and won’t become part of social security payments.
While many people who work pay a share matched by employers and have the convenience of their social security payment being automatically removed from checks, freelance workers must determine their contribution, using tax forms and possibly a good accountant. No matter whether a worker is employed or self-employed, the government holds them liable for this tax. The self-employed must be vigilant in this respect and often make a quarterly social security payment to avoid huge year-end taxes.
