Social Security – Background

~~SOCIAL SECURITY-BACKGROUND

Social SecurityAs we continue building our laundry list of things we need to know and do in order to prepare to retire well, Social Security is a major item on our list.  The Social Security Act was signed on August 14, 1935 some 15 years after the Civil Service came into being on August 1, 1920.    When the Social Security Act first came into being, it was only a retirement program for the primary worker.  It was not until many years later around 1939, that benefits for survivors and the retiree’s spouse and children were added.  Disability benefits were not a part of the program until 1956.

Today we look at the Social Security Act from a much smaller view than it was originally structured.    The Act was extensive in its original format and contained provisions for national unemployment compensation, Aid for Dependent Children and assistance to states to support a number of health and welfare programs.
Today we think of Social Security as a core part of the retirement structure for employees of the Federal Employees Retirement System (FERS) as well as those employees under the CSRS Offset program.  Individuals under these systems have social security deducted from payroll, while employees under the old Civil Service Retirement System (CSRS) do not.
CSRS employees may, however, be eligible for social security benefits because they worked in non-federal jobs where they paid into social security or via spousal or survivor benefits because of a spouse’s covered employment.  The history of the Social Security Act and its expansion to cover the categories of spouses and survivors has been of great benefit to many families.
Two legal requirements may impact Social Security benefits for CSRS employees:  the *Government Pension Offset and the * Windfall Elimination Provision.  The Government Pension Offset does not affect CSRS Offset employees but the Windfall Elimination Provision might, depending on the beneficiary’s earned outside income while drawing Social Security benefits.
*DEFINITIONS:  Government Pension Offset – This law affects spouses, widows and widowers who may qualify to receive a pension from a federal, state or local government where Social Security taxes were not paid from your work and may cause your Social Security spouse’s widow or widower’s benefits to be reduced.
Windfall Elimination Provision – Your Social Security benefits may be reduced if you receive a pension based on work you performed in a government agency or employment in another country where your employer did not withhold Social Security taxes from your salary.
We will discuss both Government Pension Offset and Windfall Elimination Provision in greater detail in a subsequent post.
P. S. Always Remember to Share What You Know.

Click HERE for information on Windfall Elimination Provision

Click HERE for information on Government Pension Offset

Click HERE for information on Social Security

Click HERE for information on CSRS

Click HERE for information on FERS

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