Old-Age, Survivors, and Disability Insurance (OASDI) is a federal social insurance program in the United States. It is funded through payroll taxes collected under the Federal Insurance Contributions Act (FICA) and the Self-Employed Contributions Act (SECA). OASDI aims to provide financial security to individuals in retirement, those who have lost a wage-earning spouse or parent, and individuals who are unable to work due to disability.
Breakdown of OASDI Components
Old-Age Insurance
Old-Age Insurance provides retirement benefits to individuals who have reached a certain age, commonly referred to as the retirement age. The benefits are designed to replace a portion of the income that individuals lose upon retiring from their jobs.
Survivors Insurance
Survivors Insurance offers financial support to family members of deceased workers. Eligible beneficiaries can include widows, widowers, minor children, and dependent parents.
Disability Insurance
Disability Insurance assists workers who become unable to work due to a serious, long-term disability. To qualify, individuals typically must meet certain work requirements and have a medically determinable physical or mental impairment.
How Is OASDI Funded?
The funding for OASDI primarily comes from payroll taxes. Employers and employees each contribute 6.2% of wages up to the taxable maximum, while self-employed individuals pay 12.4%. The funds are managed by the Social Security Administration and are held in the Social Security Trust Funds.
Historical Context
Old-Age Insurance was first introduced in 1935 through the Social Security Act, as part of President Franklin D. Roosevelt’s New Deal. The program was later expanded to include survivors and disability benefits. Over the decades, OASDI has undergone various amendments to adapt to changing socio-economic conditions.
Eligibility and Application
Eligibility Criteria
To qualify for OASDI benefits, individuals must fulfill specific criteria:
- Old-Age: Must have reached the retirement age (currently 66-67, depending on birth year) and have accumulated enough work credits.
- Survivors: Dependents of deceased workers who had sufficient work credits.
- Disability: Must meet specific medical criteria and have enough work credits based on age at the onset of disability.
Application Process
Applications for OASDI benefits can be submitted online, over the phone, or at a Social Security office. Upon application, the Social Security Administration reviews and determines eligibility based on provided information and documentation.
Comparisons and Related Terms
Medicare
Medicare is a federal health insurance program, distinct from OASDI, primarily for individuals aged 65 and over, and certain younger people with disabilities. While both are funded by payroll taxes, they serve different purposes.
Supplemental Security Income (SSI)
SSI is a separate program that provides financial assistance to elderly, blind, and disabled individuals based on need, rather than work history. Unlike OASDI, SSI is funded through general tax revenues and not Social Security taxes.
FAQs
What is the full retirement age for OASDI benefits?
Can I receive both Social Security Disability Insurance (SSDI) and Old-Age Insurance benefits?
How are the benefit amounts calculated?
References
- “The Social Security Act of 1935” - Social Security Administration.
- “OASDI Trustees Report” - United States Department of the Treasury.
Summary
OASDI, or Old-Age, Survivors, and Disability Insurance, represents a cornerstone of the U.S. social insurance system. Funded by payroll taxes, it provides vital financial support to retirees, survivors of deceased workers, and individuals with disabilities. Understanding the components, funding mechanism, and historical background of OASDI can help individuals navigate and maximize their benefits within this federal program.
