What do you think of when you hear the term “Social Security?”  Those words might conjure up additional thoughts like “senior citizens,” “retirement,’ or, perhaps, “golden years.”  And while those monikers are at least partially descriptive of the American Social Security program, in reality Social Security is so much more than just a retirement benefit for older Americans.  Indeed, it has been, and is, a very effective poverty reduction program for all Americans- a program which has worked exceptionally well for almost 90 years.  First, a little background.

A Bit of History

At a time when many Americans were suffering abject poverty during the so-called “Great Depression” of the 1930s, President Franklin Delano Roosevelt (FDR) commissioned an elite team of financial experts to develop a program which would help protect Americans from poverty. The result of that team effort, when signed into law by FDR,  was the Social Security Act of 1935, offering financial help to older Americans – essentially retired workers who reach 65 years of age – to prevent poverty. The crux of the program was to provide financial assistance in old age – not to provide all the retiree’s financial needs, but rather a program which would provide supplemental income meant to stem poverty. Program funding was provided by taxing the future beneficiaries themselves while they were still working and the employers for whom they worked, making the program self-sufficient and self-sustaining, characteristics which still hold true some nine decades later.

Even the Trust Fund which holds all Social Security funding suggests it is primarily for older Americans.  The main Social Security Trust Fund is called the “OASI” (Old Age and Survivor Insurance) fund, and it is from this Trust Fund that most SS benefits – retirement, spousal or dependent, and survivor benefits – are paid.

But even before the first monthly Social Security (SS) check was cut in 1940, FDR and his Congress realized that the program was lacking. Although it provided financial assistance for retired workers, it did nothing to sustain the worker’s family, who were also vulnerable to poverty in that era. Thus, the original 1935 Social Security Act was amended in 1939 to also accommodate Americans who are dependent on the covered worker.  And that substantially broadened the scope of the program to prevent poverty for the worker’s family as well. And that is what this essay is about – Social Security isn’t just for elderly Americans; it also provides anti-poverty resources for family members who are young and vulnerable.

But before we get into the specifics of SS benefits for family members, what about workers who, themselves, become disabled at a younger age?

The Social Security Disability Insurance (SSDI) Program

Social Security protects younger workers who aren’t yet age-eligible for SS retirement benefits.

The original Social Security program was expanded in 1956 to accommodate, and to prevent poverty in, workers who become disabled, resulting in a separate “DI” (Disability Insurance) Trust Fund to hold funds reserved for disabled workers. SSDI provides early Social Security retirement benefits to those who become unable to work before reaching normal Social Security retirement age. What that means is that even before a worker reaches the minimum age for Social Security retirement benefits (e.g., age 62), they can receive SSDI benefits to sustain them financially during their period of disability. The primary requirement is that they must have worked and contributed to Social Security for sufficient number of years prior to becoming disabled. At age 24, the disabled person would need to have at least 1 1/2 years working in the 3 year period immediately prior to the disability onset; those age 24-30 must have worked at least half the time between age 21 and the onset of their disability; and those over age 30 must have worked at least 5 of the 10 years prior to the onset of their disability. There are various other qualifying criteria as well, and SSDI benefits taken at a young age are typically quite low because benefits are based upon the disabled person’s work history to date. Nevertheless, SSDI provides important financial assistance to younger disabled Americans.  SSDI essentially pays the worker’s earned SS retirement benefit before they reach full retirement age. If permanently disabled, benefits can continue up to the disabled person’s normal SS full retirement age(FRA), at which point benefits transition to become their regular SS retirement benefit.

Note that SSDI benefits may also be provided to disabled children based upon a parent’s Social Security record (more on this later).

Now, about the Social Security recipient’s family:

SS Benefits for Younger Family Members

Today, those who are legal dependents of a person collecting SS retirement benefits can receive auxiliary Social Security family benefits. Most Americans know that Social Security benefits normally become available at age 62, but not everyone knows that Social Security is also there for younger Americans who are part of the family of someone who is collecting benefits. But before we get into the various types of family benefits available, it’s important to know about Social Security’s “Family Maximum” provision.

The Family Maximum

The Family Maximum is unique for each SS retirement recipient and is based upon that person’s “Primary Insurance Amount” or “PIA”[1]. Social Security calculates the family maximum for each recipient of SS retirement benefits. The Family Maximum amount can be determined by contacting Social Security (It is also available in the person’s personal Statement of Estimated Benefits from Social Security). The Family Maximum is typically somewhere between 150% and 188% of the “number holder’s”[2] PIA. The “number holder’s” own PIA is first deducted from the family maximum amount, leaving between 50-88% of the PIA to be shared among eligible dependents. For this reason, when multiple dependents collect from the same person, each dependent does not get the same amount provided when only one dependent is collecting. Essentially, the residual Family Maximum amount is equally distributed among eligible dependents. Just as a frame of reference, when two dependents are collecting benefits, they might equally share about 75% of the number holder’s primary insurance amount (PIA).

Here’s a closer look at the types of Social Security benefits available to family members who haven’t yet reached “senior citizenship:”

Minor Child Benefits

In today’s world, someone collecting Social Security retirement benefits may have a younger family. In that case, Social Security will provide auxiliary benefits to the beneficiary’s minor children under the age of 18 (up to age 19 if still in high school). The child(ren) will be provided a portion of the parent’s “Primary Insurance Amount,” or “PIA” (‘PIA” is the amount the parent is entitled to at full retirement age (FRA)), but the amount paid may be restricted by the Family Maximum. One minor child will get 50% of the parent’s PIA, but if multiple children (or other dependents) are also getting benefits from the same number holder, the amounts each receives will be less than 50%.

All children of the retired SS beneficiary who are under age 18 (or age 19 if still in high school) are eligible for auxiliary benefits from a parent who is collecting SS retirement benefits. This includes natural born children, stepchildren, and adopted children.[3] The main requirement is that they are the legal child of and dependent upon their parent, who would normally be designated as the child’s “Representative Payee” (thus collecting SS benefits for the child).

Disabled Minor or Adult Child Benefits

Some Social Security retirement beneficiaries care for disabled adult child and Social Security benefits, based upon a parent’s SS record, are available to those disabled adult children. Although regular minor child benefits are available to children under age 18, or up to age 19 if still in high school (see above), if a child has a disability which started before the age of 22, that child can receive SS disability insurance (SSDI) benefits based upon their parent’s SS record even into adulthood. It’s not unusual for a disabled child in their 30s or 40s (or more) to collect SSDI benefits based upon their parent’s Social Security record. Typically, a parent would be assigned as the child’s Representative Payee, obligated to use SS funds received for the benefit of the child. Just as with Minor Child benefits, the benefit for an adult disabled child can be as much as 50% of the parent’s PIA (but may be less if the family maximum applies).

Child Benefits versus Surviving Child Benefits

The benefit for a minor child, or an adult disabled child of a living SS beneficiary can be as much as 50% of the parent’s PIA (subject to the Family Maximum). However, if the parent on whose SS records the child’s benefit is based dies, survivor benefits for the surviving child(ren) continue, but at a higher rate. One minor or disabled child can get 75% of their deceased parent’s PIA, but when multiple dependents are collecting on the deceased person’s record, each dependent’s share will be less due to the Family Maximum.

Child-in-Care Spousal Benefits

The marital partner of someone who is collecting Social Security retirement benefits can receive Child-in-Care Spousal benefits, if they are caring for the couple’s child(ren) under the age of 16, or the couple’s disabled adult child.  Although spousal benefits are normally not available until the spouse reaches 62 years of age, child-in-care spousal benefits can be received at any younger age. A younger spouse can get up to 50% of the “number holder’s” Primary Insurance Amount, subject to the Family Maximum.  A younger spouse receiving child-in-care benefits will receive those benefits until the child(ren) being cared for reach 16 years of age (unless the child has a continuing disability), or until the spouse reaches normal SS retirement age. Child-in-care spousal benefits are not reduced due to claiming earlier than the normal spousal age (62). When the spouse reaches age 62, they can switch to normal spousal benefits; however, normal reductions for early claiming (before FRA) will apply. Also, Social Security annual earnings restrictions will apply to a spouse who works while receiving child-in-care benefits.

Child-in-care benefits are also paid to a surviving spouse caring for their deceased partner’s child(ren), and up to 75% of the deceased partner’s PIA can be paid (subject to the Family Maximum) to a surviving spouse receiving child-in-care benefits.

Early Surviving Spouse Benefits

Not to be forgotten are those spouses who have the misfortune of losing their marital partner at an age earlier than the normal age (62) at which they can claim Social Security retirement or spousal benefits. However, Social Security allows a surviving widow(er) to claim their surviving spouse benefit a bit earlier than the normal retirement age – a widow(er) can claim survivor benefits at age 60.  But if the surviving spouse is disabled, they can claim their surviving spouse (widow(er)’s benefit as early as age 50.

Social Security Helps Millions Avoid Poverty!

So, Social Security isn’t just for elderly people – it is an effective poverty reduction program for many family members who have not yet achieved their normal Social Security retirement age.  Statistically, about 25% of all Social Security beneficiaries are family members, and about 5% are minor children.  Disabled workers and their spouses account for about 10% of SS benefits paid to those not yet of retirement age.  With over 70 million total beneficiaries, those seemingly small percentages actually translate to many younger family members receiving Social Security benefits. Thus, today, Social Security continues its very important mission – to reduce poverty in the United States for American families.  Without Social Security, the poverty rate in America would exceed 20%, but the program currently accounts for keeping over 22 million Americans living above the U.S. poverty line. Emphasizing the reality that Social Security is not just for elderly Americans!

If you’re unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security, note that the AMAC Foundation provides a free-to-the-public advisory service to help Americans navigate the complexities of this program. All questions are answered quickly, at no charge.  Learn more about it here…

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.

[1] “PIA” is the amount the SS beneficiary is entitled to at full retirement age (FRA).

[2] “Number holder” refers to the SS retirement beneficiary from whom a dependent is receiving SS benefits.

[3] Simply having legal custody of a child does not entitle the child to auxiliary SS benefits. The child must be considered the number holder’s legitimate “child,” either natural born, by marriage, or adopted.