These requirements are based on both age and payments made into the Social Security System through payroll taxes.
These are:[3] People attain fully insured status based upon their payments into the Social Security system through payroll taxes and the amount of time they have been working in jobs covered through the Social Security system.
[4] The United States uses English common law; because of this a person obtains their age on the day before their birthday.
There are several ways to apply for the benefits: The amount of a RIB payment is based upon several factors, including: social security payroll taxes paid into the Social Security Trust Fund, the age at which benefits are claimed, the current earned income of an individual, and military service.
A person who is already claiming RIB may also voluntarily decide to stop receiving their payments temporarily to accrue DRCs beginning at their Full Retirement Age.
[11] An earnings test has been part of the calculation of retirement benefits since the Social Security Act was signed in 1935.
The Senior Citizen's Freedom to Work Act of 2000, signed into law April 7, 2000, eliminated the use of these tests for beneficiaries who have attained their Full Retirement Age.
[17] The earnings test does not reduce lifetime Social Security benefits, on average.
[20] The MET is helpful for beneficiaries who retire in the middle of the year and who would be penalized for earlier earnings under the AET.
Beneficiaries who have been employed in work that does not pay into the Social Security Trust Fund and who receive a pension from that employment based upon earnings which were not covered by Social Security may see their benefits partially offset by the WEP.
[22] The WEP may reduce the benefit in various ways, taking various rules and computation methods into account (see main article).
Since those with less earnings on the record receive a comparatively larger percentage of their average income, under normal computations a beneficiary who paid in little to the Social Security system and who is drawing a separate pension may have what is perceived as an unfair advantage in their benefits.
Changes in the Full Retirement Age have been enacted, based upon the birthdate of the beneficiary as follows:[23] RIB payments, like all benefits paid under Title II of the Social Security Act, are generally paid on one of the following days depending on the beneficiary's payment cycle:[24] For Cycle 1 beneficiaries, payment is moved to the preceding Friday if the 3rd day of the month falls on Saturday or Sunday.
Cycling the benefits onto four different payment days began in 1997 as the result of unequal workloads in the beginning of the month which made it difficult for all beneficiaries to have easy access to the Administration.