Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Q&A: Explaining types of Social Security benefits

Social Security benefit types

Is it possible for someone to receive Social Security benefits if they've never put any money in?

There are two major Social Security programs. The first type of Social Security is financed with Social Security taxes paid by workers, employers and self-employed individuals, according to the Social Security Administration.

Workers earn sufficient credits based on taxable work to be "insured" for Social Security purposes. But benefits also are payable to the spouse, child, widow/widower and/or the worker's surviving child. The benefit is based on the Social Security earnings record of the insured worker.

For the second type of Social Security called Supplemental Security Income, no prior earnings are required. It is financed through general revenue and payable to people who have low income and are disabled, blind or 65 or older.

Basis is adjusted gross income

When politicians talk about "couples receiving income of $250,000 a year," what does that mean?

The $200,000/$250,000 income thresholds are based on adjusted gross income, according to a U.S. Treasury spokeswoman.

Why PMI couldn't avert crisis

If everyone who bought a home without putting 20 percent down was forced to pay private mortgage insurance (PMI), why are we having this housing crisis? Shouldn't PMI have paid the bank for these foreclosures?

Private mortgage insurance was required if the loan exceeded 80 percent of the home's appraised value and the bank wanted to sell it to a government-sponsored enterprise such as Fannie Mae, Freddie Mac or a Federal Home Loan Bank, Michael Eriksen, an assistant professor of real estate at the University of Georgia, told the Atlanta Journal-Constitution.

The "borrower would pay a monthly premium to an outside company that would reimburse the lender the first 20 percent of any loss should the borrower stop making payments. However, the lender would still be responsible for any losses over the 20 percent threshold," Eriksen said.

"This limitation of loss by the PMI company explains why some banks are still incurring losses after house prices recently dropped by more than 20 percent." Eriksen added that banks didn't require borrowers with less than a 20 percent down payment to pay PMI in the past decade. Banks instead offered two loans.

The first loan would be equal to 80 percent of the home's value and that lender would be reimbursed from the proceeds of foreclosure if the borrower stopped making payments. The second loan, usually called a home equity line of credit, would be for the remainder of the balance.

Banks often sold the first loan to an outside investor and kept the higher interest payments of the second. If the borrower stopped making payments, the banks recovered losses only after the first lender was paid in full.

Q&A: Explaining types of Social Security benefits 05/10/11 [Last modified: Tuesday, May 10, 2011 12:13am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Siesta Beach tops Dr. Beach's rankings of best locations in America


    Three beaches in Florida made it on a highly coveted list of the top 10 in America this year, ranked by Dr. Stephen Leatherman, a.k.a. "Dr. Beach."

     Dr. Stephen Leatherman, a.k.a. "Dr. Beach," ranked Siesta Beach in Sarasota as the No. 1 beach in America.
[TImes file photo]
  2. Tattooed 'Joker' accused of pointing gun at Miami traffic

    Bizarre News

    MIAMI — Police in Miami-Dade County have managed to arrest the Joker without Batman's help following reports of a green-haired man with tattoos on his face pointing a gun at traffic.

    This photo provided by the Miami-Dade Corrections and Rehabilitation Department shows Lawrence Sullivan, who was arrested in Miami-Dade County, Fla., on Tuesday, May 23, 2017, and charged with carrying a concealed firearm. Police say the self-described "tattoo model" was pointing a gun at moving vehicles. [Miami-Dade Corrections and Rehabilitation Department via AP]
  3. Deputies: Two men, teen intentionally set fire, left it to burn within Weedon Island Preserve


    ST. PETERSBURG –– Two men and a teen face charges after deputies say they deliberately started a fire within Weedon Island Preserve last month.

    Adam Grote, 19, left, and Brandon Kholos, 20, along with a 17-year-old, face charges after deputies say they intentionally started a fire on April 15, 2017, that burned about six acres on Googe Island within Weedon Island Preserve in St. Petersburg. [Pinellas County Sheriff's Office]
  4. Police chief: Manchester searches turn up valuable info in concert bombing


    MANCHESTER, England — Home searches across Manchester have uncovered important items for the investigation into the concert bombing that left 22 people dead, Manchester's police chief announced Thursday, while other British authorities complained bitterly about information leaks blamed on U.S. officials.

    A police officer at the scene at an address in Nuneaton, England Thursday May 25, 2017 where they arrested a seventh suspect in the investigation into the Manchester Arena bombing. British police have arrested a seventh person in connection with the Manchester Arena bombing. The man was held Wednesday after police carried out searches in the English town of Nuneaton, which is about 161 kilometers (100 miles) south of Manchester. [Joe Giddens | PA via AP]
  5. Joe Henderson: Only unanimous jury vote justifies extreme act of execution


    A ruling last week by the U.S. Supreme Court on Florida's death penalty law didn't generate a lot of chatter, but don't let that fool you.

    A jury recommended execution for Dontae Morris of Tampa by a 10-2 vote in one of his murder trials. The recommendation was unanimous when he was tried in the shooting deaths of two Tampa police officers.