Old Age Survivors and Disability Insurance Program (OASDI)
What it is:
The Old Age Survivors and Disability Insurance Program (OASDI), also known as health insurance to retired people, the disabled, the poor and other groups. The program started in 1935 with the signing of the Social Security Act, which was an effort to provide a safety net for the millions of people who had suffered through the Great ., is a federal program that provides and
How it works/Example:
The primary programs offered through OASDI:
Retirement benefits. The age at which a person qualifies for benefits depends on the of birth, but generally a person can receive full benefits at around age 66. In many cases, can opt to begin receiving benefits at age 62, but at a reduced rate. The Administration generally increases the amount of benefits by 8% for every that a delays receiving benefits (up to age 70). In general, people need to work for at least 10 years in order to qualify for these benefits. Payments are based on (thus, higher higher benefits) and the age at which the retires. In 2011, an average monthly benefit of $1,229 was paid to about 38.9 million people. As a result, the Congressional Budget Office expects the program to become insolvent by the 2033.
Disability benefits. People who have become disabled for at least five full months and may continue as long as the person’s medical condition has not improved and the person cannot work. Approximately 10.6 million people received an average monthly benefit under this program of $1,111 in 2011. People who receive disability benefits for 24 months are typically eligible for . Because applications increased dramatically during the Great , the Congressional Budget Office estimates that this become insolvent by 2017.
Survivors benefits. This program provides monthly payments to children and widows or widowers of . In 2011, 6.3 million people received an average of $1,185 per month under this program. Typically, survivors receive 75% to 100% of the ’s basic benefit. The limit that can be paid to a family as a whole generally equals 150% to 180% of the deceased’s benefits.
Supplemental Security (SSI). This program provides monthly payments to people at least 65 years old who are blind or disabled and have few financial resources (typically no more than $2,000, but this excludes the person’s personal residence, life insurance, car, burial plots, and $1,500 in burial ).
Why it matters:
and expenses constituted about 50% of the federal government’s outlays in 2011. The programs receive a substantial portion of their through the collection of from workers and employers. The has come under considerable scrutiny in recent decades because the generation is entering retirement and applying for benefits that cannot be sustained with from the younger generations remaining in the workforce.