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A pension is a fund into which a sum of money is added during an employee's employment years, and from which payments are drawn to support the person's retirement from work in the form of periodic payments. A pension may be a "defined benefit plan" where a fixed sum is paid regularly to a person, or a "defined contribution plan" under which a fixed sum is invested and then becomes available at retirement age. Pensions should not be confused with severance pay; the former is usually paid in regular installments for life after retirement, while the latter is typically paid as a fixed amount after involuntary termination of employment prior to retirement.
In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program and is administered by the Social Security Administration. The original Social Security Act was signed into law by President Franklin D. Roosevelt in 1935, and the current version of the Act, as amended, encompasses several social welfare and social insurance programs.
The Social Security Act of 1935 is a law enacted by the 74th United States Congress and signed into law by President Franklin D. Roosevelt. The law created the Social Security program, establishing a basic right to a pension in old age, as well as insurance against unemployment. The law was part of Roosevelt's New Deal domestic program.
The Federal Old-Age and Survivors Insurance Trust Fund and Federal Disability Insurance Trust Fund are trust funds that provide for payment of Social Security benefits administered by the United States Social Security Administration.
Welfare is a type of government support for the citizens of that society. Welfare may be provided to people of any income level, as with social security, but it is usually intended to ensure that the poor can meet their basic human needs such as food and shelter. Welfare attempts to provide poor people with a minimal level of well-being, usually either a free- or a subsidized-supply of certain goods and social services, such as healthcare, education, and vocational training.
Public finance is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
Unemployment benefits are payments made by back authorized bodies to unemployed people. In the United States, benefits are funded by a compulsory governmental insurance system, not taxes on individual citizens. Depending on the jurisdiction and the status of the person, those sums may be small, covering only basic needs, or may compensate the lost time proportionally to the previous earned salary.
Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee’s wages, and taxes paid by the employer based on the employee's wages. The first kind are taxes that employers are required to withhold from employees' wages, also known as withholding tax, pay-as-you-earn tax (PAYE), or pay-as-you-go tax (PAYG) and often covering advance payment of income tax, social security contributions, and various insurances. The second kind is a tax that is paid from the employer's own funds and that is directly related to employing a worker. These can consist of fixed charges or be proportionally linked to an employee's pay. The charges paid by the employer usually cover the employer's funding of the social security system, medicare, and other insurance programs. The economic burden of the payroll tax falls almost entirely on the worker, regardless of whether the tax is remitted by the employer or the employee, as the employers’ share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid. Because payroll taxes fall exclusively on wages and not on returns to financial or physical investments, payroll taxes may contribute to underinvestment in human capital such as higher education.
The Federal Insurance Contributions Act is a United States federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.
In a tax system, the tax rate is the ratio at which a business or person is taxed. There are several methods used to present a tax rate: statutory, average, marginal, and effective. These rates can also be presented using different definitions applied to a tax base: inclusive and exclusive.
The U.S. Railroad Retirement Board (RRB) is an independent agency in the executive branch of the United States government created in 1935 to administer a social insurance program providing retirement benefits to the country's railroad workers.
This article concerns proposals to change the Social Security system in the United States. Social Security is a social insurance program officially called "Old-age, Survivors, and Disability Insurance" (OASDI), in reference to its three components. It is primarily funded through a dedicated payroll tax. During 2015, total benefits of $897 billion were paid out versus $920 billion in income, a $23 billion annual surplus. Excluding interest of $93 billion, the program had a cash deficit of $70 billion. Social Security represents approximately 40% of the income of the elderly, with 53% of married couples and 74% of unmarried persons receiving 50% or more of their income from the program. An estimated 169 million people paid into the program and 60 million received benefits in 2015, roughly 2.82 workers per beneficiary. Reform proposals continue to circulate with some urgency, due to a long-term funding challenge faced by the program as the ratio of workers to beneficiaries falls, driven by the aging of the baby-boom generation, expected continuing low birth rate, and increasing life expectancy. Program payouts began exceeding cash program revenues in 2011; this shortfall is expected to continue indefinitely under current law.
Benefit fraud is a form of welfare fraud as found within the system of government benefits paid to individuals by the welfare state in the United Kingdom.
For the Old Age, Survivors and Disability Insurance (OASDI) tax or Social Security tax in the United States, the Social Security Wage Base (SSWB) is the maximum earned gross income or upper threshold on which a wage earner's Social Security tax may be imposed. The Social Security tax is one component of the Federal Insurance Contributions Act tax (FICA) and Self-employment tax, the other component being the Medicare tax. It is also the maximum amount of covered wages that are taken into account when average earnings are calculated in order to determine a worker's Social Security benefit.
Social security, in Australia, refers to a system of social welfare payments provided by Commonwealth Government of Australia. These payments are administered by Centrelink, a branch of the Department of Human Services. In Australia, most benefits are means tested.
Welfare rights means the rights of people to be aware of and receive their maximum entitlement to state welfare benefits, and to be treated reasonably well by the welfare system. It has been established in the United Kingdom since 1969 and has also been developed in other countries including Ireland, Australia and the United States. It became necessary because of the complexity of the UK social security system and had links at the time with a growing Claimants Union movement. As local authorities realized the advantages of having well-informed front-line staff such as housing officers and social workers, who often have to deal with benefit queries as part of their wider tasks, they turned to welfare rights staff to provide that expertise for both training and handling complex cases. In the 1980s, as local authorities took on the wider 'equalities' agenda, anti-poverty work was seen as a valid local activity in itself. Increasing benefit income helps individuals but also boosts the local economy.
Welfare in France includes all systems whose purpose is to protect people against the financial consequences of social risks.
A limited form of the Social Security program began as a measure to implement "social insurance" during the Great Depression of the 1930s, when poverty rates among senior citizens exceeded 50 percent.
Totalization agreements are international tax treaties that seek to eliminate dual taxation with regards to Social Security and Medicare taxes in the United States. These agreements are made in order to accommodate foreign workers who pay FICA taxes but receive no Social Security or Medicare benefits after reaching age 65. The agreements are made between the U.S. and other individual countries, and govern international taxpayers who earn money in the U.S. The goal of totalization agreements is to eliminate dual taxation on a foreigner's income made in the U.S. as well as provide proportional Social Security benefits for the same foreign workers. Issues considered to determine if a worker is covered under either Social Security and Medicare in the United States, or the social security system in a foreign country include where the worker resides and whether the employment in a foreign country is short-term or long-term. As of August 2017, U.S. has 26 active totalization agreements.
References
- ↑ Term used by Diamond, P. A. and P. R. Orszag (2005). "Saving Social Security." Journal of Economic Perspectives 19(2): 11-32., probably not for the first time.
- ↑ L. (1996). "Details of Ida May Fuller's Payroll Tax Contribution." Retrieved February 1, 2015.