Evening star., 1939-08-22

system. Today an insured worker
knows that his wife will not suffer
when he retires from work, or his
children If they are still young; that
his orphans will have some protec-
ton if he should die. An unmar-
ried worker knows that not only
does he have some degree of security
in his old age, but so do his parents
If he should die. These projections
are made possible to millions of
workers of this country because they
are insured under the old-age and
survivors insurance system.
Salient Provisions.
This is the overall picture. Now
for some of its details. AS is true
OF any kind of insurance, there are
certain "wherefores" and ifs" and
"Whens." These are necessary, but
for general purposes it is enough to
understand the following salient
points. Before I give them, may I
suggest that you provide yourself
with a paper and pencil so that you
may, If you wish, jot down some
figures or facts. These are your
benefits, and the points I'm going to
make are things you want and need
to know. Here they are:
l. Monthly benefits begin in 1910.
2. Monthly benefits are figured on
average monthly wages.
3. Dependents and survivors ben
eflts are provided in addition to in
dlvldual old-age retirement benefits,
4. Wages earned after age IS will
now be counted for both benefit and
tax purposes.
5. The eligibility requirements
have been made more flexible.
6. The tax rate has been frozen
at l per cent for three more years.
Point l. Monthly benefits begin in
1940-is clear without further elab-
Grafton. Under the liberalized pro-
visions OF the amended plan some
95O,OO0 people will probably be eligi-
Die or retirement benefits next year
II they chose to retire. And. as I
will explain in minute, there will
be family benefits, too.
Point 2. Monthly benefits are fic-
ured on the average monthly wage.
Under the old law, benefits were fig
ured on total wages. The amend
ment is an improvement on this for
1t maintains closer relationship
between rate of benefits and rate of
earnings.
Applies for All Years.
There is nothing complex in the
term average monthly wage" It
means exactly what it says. If a
worker earned s75 a month one year
and SIPS a month a second year. his
average monthly wage for the two
years is obviously s100. We carry
this computation over all his work.
ing years, dividing the total wages
In his social security account by the
number Of months he could have
been in the system.
once you have found mans
average wage his monthly benefit is
computed according to the following
formula:
First you take 40 per cent of the
first $50 of the average monthly
wage. To this you add 10 per cent
OF anything more, up to $3.50. Then
add credit of l per cent for each
year of qualified employment.
Thus it will be seen that the size
OF benefits varies with the individ-
uals wage record, but the smallest
monthly benefit that will be paid to
cover any individual workers 5ene-
ut rights is $40 month. The maxi
mum monthly benefit payable on
any account which covers a family
either during the lifetime or after
the death of worker is $85. In no
instance, however, can the total
family benefit exceed twice the
workers individual benefit or 80 per
cent OF his average monthly wage.
Now, let's see how this formula
works out IN the case of a worker
whose average monthly ware for
80 years of employment is 500. On
the first $50, he gets 40 per cent. or
$40. On the amount beyond this
hrst $50, in this case again $50, he
gets 10 per cent or IS, making $25
altogether. In addition, he gets
l per cent for each year Of work or
80 per cent of $25-that's another
$3.50. Added to the $25, this results
IN an individual benefit Of $3.50
a month. That's what the worker
would get for himself alone after
he retires
His Family Benefits.
Now, let's compute his family
benefits-and this will illustrate
point 3 relating to dependents and
survivors benefits. This workers
individual monthly benefit, we said
is $32.50. If he has a wife 65 or
over, she will get an additional so
per cent of this or $16.25: if he has
children less than 18 years old, each
child will also get an additional SO
per cent, or $16.25. But, the most
ne can receive to take care of him.
self and his family is twice his in
dividual benefit, or $65 a month.
Suppose, however, this worker dies
II or when his widow is IS, she will
get, for the rest of her life, a
monthly benefit equal to rs per cent
OF his individual benefit, or S2437 a
month. II the widow Is less than
90 but Is left with young children,
she Will also get this amount. s24 81,
for herself and, In addition, sie25
Tor each child under ls: again. up
to total family benefit OF s6b a
Nov. let's take the case OF an
unmarried worker who supports his