The Old Age, Survivors, and Disability Insurance form the basis of the Federal social security program aimed at providing benefits for the monthly upkeep of approved recipients, and they are based on the contributions made during the employment period. In short, a worker gets deductions in order to cater for the benefits.Normally, the benefits are supposed to help you after employement, that is after retirement and so on.
What Is OASDI-Who Benefits?
As the name suggest, this social security plan provides financial assistance to a number of groups such as:
1. The retired and OASDI.
Old age benefits are meant for retirees and this has been one of the elements catered for in the social security Act since 1935. There are various guiding principles that determine who qualifies for this benefits and who does not. For example, partial benefits are awarded to retirees who are 62 years old while full payments are for those aged from 65 years. There are specifications about the birth years that qualify for full or partial payments. People who were born before 1950 get benefits when they attain 65 years while those who were born between that year and 1960 must attain 66 years of age. On the other hand, anyone born after 1960 needs 67 years to qualify for the full payment. The spouses who were not employed get half of the benefits of their retired partners. The retirement benefits for 2012 are pegged at $1, 229 for all retired workers.
2. Survivors and OASDI
They are family members of a deceased worker. To qualify, the deceased worker must have worked for a substantial duration and met the contribution requirements. The benefits are issued on a monthly basis to cater for the family’s needs because of the gap created by loss of the breadwinner’s income. This benefit is meant for the spouse and young children of the deceased. These children should not be married in order to be considered as dependants. A widowed mother and two children should expect $2, 543 this year while a widower with no children is eligible for $1, 184.
3. Disabled workers and OASDI
This is meant for workers who develop disabilities that prevent them from performing in the workplace. They might lose the ability to work or have severe disabilities that are possibly chronic leading to death in the long run such as in the case of heart disease and kidney failure. To qualify, the worker must have adhered to this insurance policy’s payments before getting injured. The benefits can be monetary though monthly payments. In addition, the worker can receive medical insurance or vocational rehabilitation to cope with the disability. The procedure for claiming these benefits involve making an application so that the social security’s administration can valuate the degree of disability and it’s impact on the worker’s life. The amount expected for disabled persons in 2012 is $1, 111 and a disabled worker with a spouse and children get $1, 892.
What Is OASDI- The Deductions on Your Paycheck
Workers face a specified deduction on the paycheck while their employers are supposed to submit another percentage into the social security policy. The contribution percentage has an earnings limit that helps in calculating what a worker should pay. This limit is generated from the average wages for the country per year meaning the rates may change with increases or reductions in the average wages per year. For example, 2012 is using the annual earnings rate of $110, 100. This arose from the 3.6% cost of living adjustment (COLA) that was put on all social security income. The employer is expected to remit the monthly deductions along with the worker’s contributions.
Since this is a payroll tax, there are severe penalties for falling to submit contributions in time. For example, employers may get a 25% penalty and an additional percentage for ignoring the first penalty. Most people with questions about what is OASDI are worried about the benefits of the monthly deductions as well as the legal parameters that require them to accept them deductions made on their paychecks. Overall, this social security policy is important for workers and their family to cater for unexpected occurrences such as workplace accidents leading t disability or even old age. So, from now on when someone asks “What is OASDI?” you can politely educate them.