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Federal HR Policies Affecting Schedule A Appointment

Social Security

Resources

Social Security Website
Chapter 9, Social Security Handbook (Special Coverage Provisions) Purpose

Purpose

Social Security was established in 1935 to pay retirement benefits to workers. The original social insurance program provided income to aged individuals and paid retirement benefits to the primary worker. In 1939 the law was changed, to add survivor benefits for the retiree's spouse and children. Several amendments were made in 1939 and one of them took the taxing provisions out of the Social Security Act and placed them in the Internal Revenue Code. As a result Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). Disability benefits were added to the Social Security program in 1956.

Eligibility

All employees are covered by Social Security (including Medicare). The terms Social Security taxes, OASDI (Old Age, Survivors, and Disability Insurance) taxes, and FICA taxes (Federal Insurance Contributions Act) all refer to the Social Security System in place today.

Prior to 1984, the Civil Service Retirement System (CSRS) was the civilian retirement system for most Federal employees and coverage under CSRS exempted employees from paying OASDI taxes. Amendments to the Social Security Laws in 1983 (Public Law 98-21) required that certain Federal employees be covered by OASDI. In addition, the Tax Equity and Fiscal Responsibility Act (Section 278 Public Law 97-248), which was effective on 1/1/83, required most Federal employees to pay Medicare tax even if they were not subject to OASDI. See Section IV J for additional information on Medicare.

Coverage

Employees covered by the Federal Civil Service Retirement Plan (CSRS) are not covered by OASDI taxes; They are required to pay Health Insurance (Medicare) Tax. Employees covered by the CSRS Offset Retirement Plan are covered by OASDI and they are required to pay Health Insurance Taxes (HIT). Employees covered by the Federal Employees Retirement System (FERS) are covered by OASDI and they are subject to HIT.

Benefits 

Social Security benefits are a part of the federal retirement plans be it CSRS, CSRS Offset, or FERS. The type of retirement coverage will determine the benefits to be paid to the Federal employee. In addition, the type of retirement coverage will determine if a deposit is required to receive credit for federal civilian service that was not subject to federal retirement plan deductions.

Credits for Social Security benefits earned while employed outside of the Federal retirement system may result in a Federal Employee being eligible for both Federal retirement and regular Social Security benefits. Non-Federal employment and/or Federal employment not covered by the Federal retirement system allows an employee to earn four credits a year and 40 credits are needed to qualify for Social Security benefits. Fewer credits are needed to qualify for disability or survivor benefits. Participants should receive a free estimate of earnings and benefits from the Social Security Administration annually.

Full Social Security benefits are payable at age 65 (starting in the year 2000, the full benefit age will gradually increase). Individual who delay receiving their benefits beyond the full retirement age receive an increase in their benefits. Benefits may begin as early as 62. However, retirement before the full retirement age will permanently reduce the monthly benefit payment.

Application for Benefits 

Applications for Federal retirement can be obtained from the CES Human Resources Offices and the CES Retirement Officers will counsel CES Federal appointees on their Federal Retirement applications and all related benefits including FICA, OASDI, and Medicare.

Federal appointees that appear to be eligible for Social Security, in addition to their Federal retirement, should start talking to a Social Security representative a year before their Social Security retirement is planned. Applications for Social Security benefits can be obtained from the local Social Security Office and should be made three months prior to the time benefits are to start.

Contact:

For more information regarding the Social Security program, contact a Social Security representative at 1-800-772-1213 or online at Online Claims & Services.

Back to CES HR Guidance Index