Old-Age Insurance Benefits, 1955
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will continue in the future, at l’east Table L-Estimated distribution of the aging of the population or the with respect to the proportion of old- OASI beneficiaries, OAA recipients, maturing of the old-age and sur- and beneficiary-recipients, by age vivors insurance program. On the age assistance recipients receiving and sex, February 1956 old-age and survivors insurance. As - other hand, it is cIear that the pro- the coverage of the insurance Pro- Beneticiary portion of old-age assistance recipi- Number recipients 1 ents who are receiving old-age and gram becomes virtually universal, (in thousands) as Percent of survivors insurance will increase this proportion will no doubt aP- ! I- - from the present figure. Thus it is preach loo percent. It will never Bene- OASI OAA OrtwA flciary- aged re- reach it, however, because many in- re- probable that in another 15 years at ,cip- pcy:: em- dividuals at the lowest economic lev- CIP- ients least 47 percent of the men aged 80 mnts tents 1 ries and over and 25 percent of the els (low-income farmers and migra- - I ! - women of that age who are receiving tory and occasional farm and domes- Total tic workers) will not qualify for old- old-age assistance will also receive age and survivors insurance benefits Total-.. 6,340 old-age and survivors insurance, with a ratio for the group of about 35 but will be in serious need of eco- 6549-- . 2,496 536 I 177 I 7.1 I 33 7(t74- _. __ _. 2,169 758 198 9.1 26 percent. For the younger age groups nomic aid upon reaching age 65. 75-79.. _. 1,161 It is known that the aged individ- 80 and over. 514 iit 10437 9.07.2 166 the overall ratio will probably be uals receiving both old-age and sur- I / I significantly higher. The figures giv- vivors insurance and old-age assist- Men en represent a ratio that is, of course, a bare minimum because the oId-age ance have an age and sex distribution Total...... 3,295 1,021 287 8.7 28 that is considerably different from ~__--- and survivors insurance program is 65439 -_ the distributions for those receiving 7c-74.....-.. 1,1731,146 % 1; 8.09.8 i:: far from maturity and the basic data 75-79- __. 659 262 60 9.1 23 used in this analysis do not reflect only old-age assistance or only old- SOandover.- 317 255 21 6. 6 8 age and survivors insurance. Unfor- the effect of the 1954 amendments tunately, however, information on Women extending coverage to farmers and these characteristics is not collected other groups. Total-.-- 3,045 1,513 229 7. d 15 regularly. Because such data give -__--__ some insight into future trends, esti- 65-69. _. _ _. 1,323 336 Ei 6.3 25 70-74..-..-.. 1,023 3”; 8.4 19 mates as of February 1956 of the age 7s79..-....- 502 8.8 12 Old-Age Insurance 3Oandover-. 197 354 :I! 8. 1 5 and sex distribution of all old-age - Benefits, 1955 assistance recipients and those re- 1 Receiving both OASI benefits and OAA Pay ceiving both assistance and insur- merits. Benefits Awarded ance payments have been made on During 1955, old-age beneflts were the basis of sample studies made in hand, considerable variation oc- awarded to almost 910,000 persons, early 1953.3 Similar data for all aged curred in the proportion of old-age a record number. New highs have insurance beneficiaries can be readily assistance recipients who were re- been recorded in 9 of the past 11 estimated. Actual data are available ceiving old-age and survivors insur- years, largely because of the contin- as of December 1955 and can easily ance benefits. This ratio was 20 per- uous growth in the number of fully be applied-with extremely high re- cent for the entire caseload; 28 per- insured persons aged 65 or over. In liability-to the total number receiv- cent of the men receiving old-age 1955 the number of awards was ing insurance benefits 2 months later. assistance also received old-age and swelled by claims arising from the Adjustments have also been made in survivors insurance, but only 15 per- liberalization in the retirement test the data to exclude beneficiaries liv- cent of the women recipients. In ad- under the 1954 amendments. These ing outside the United States, to dition, when the beneficiary-recipi- provisions, which became effective in count only once as a beneficiary those ents are distributed by age, each January 1955, changed the earnings women receiving both an old-age higher age group shows a sharp de- test for wage earners from a monthly benefit based on their own earnings cline in the proportion of old-age to an annual basis, raised to $1,200 and a wife’s benefit, and to exclude assistance recipients who are receiv- the amount that beneficiaries can wife beneficiaries under age 65 with ing old-age and survivors insurance. earn in a year before any benefits are child beneficiaries in their care. This ratio was 47 percent for men withheld, and lowered from 75 to The attached table summarizes the aged 65-69, in contrast to only 8 per- 72 the age at which beneilciaries can results of these estimates. It is inter- cent for men aged 80 and over. For receive beneflts regardless of the esting to note that there was little women, the corresponding figures amount of their earnings. Thus, many variation-either by age or by sex- were 25 percent and 5 percent. Persons between age 72 and age 75, in the proportion of aged insurance Consideration of these data leads and others under age 72 with mod- beneficiaries who were old-age as- to the conclusion that, if present erate earnings, who had delayed fll- sistance recipients. On the other trends continue, some 8 percent of ing for benefits because they were the old-age and survivors insurance working in covered employment, flled a Reci%nts of Old-Age Assistance in Eorlv beneficiaries aged 65 or over are their claims and began receiving 1953 (Part I-State Data), Public A&stance likely to be old-age assistance re- monthly beneflts. Report No. 26, June 1955. cipients in the future, regardless of Method of benefit computation.- Bulletin, October 1956 17 Table l.- Percentage distribution of old-age benqfZts awarded in 1955, by this group comprised 69 percent of all beneJit-computation method and sex persons to whom old-age beneflts [Based on N-percent sample] were awarded in 1955. In 1954, onls 16 percent of the old-age beneflts Beneflt-computation method awarded under the 1954 amendments were based on earnings after 1959 Total,,u,nber _.__________________-. ._____ -.-__- .__._.______..__ ______. and awarded to persons eligible for Totalpercent ________ _______________._._. _... __________._______.__ ..__ the dropout. Benefit b&w3 on eamings after 1936 ____.__ __-- ____-__- __.. _______. _____... For some workers, the dropout of Benefit based on earnings after 1950 .____. ____. .___..___..__..____....-.--- years with low earnings does not pro- Tot.81percent ._______._.____..___ ___..______.. -- __._.______..._____._____ duce a significant increase in the Benefloiary not eligible for the dropout .._._. -__-_.. _. .._. __.....___...._._ Benefjt based on earnings after 1936_.___. ._ _._-.. ._ __._.____..___ _._.._._ _ average monthly wage. If the work- Benefit bsysd on eamings after 1950 __.._____ --__-_- .____ -___ ___._.___.... er had low earnings, it is often to his Beneflclary eligible for the dropout . .._.__. ..- __.___._..___...... _._. ..___._. Benefit based on eamings after 1936 _..__ -_-- ._._. -,- _...___...__._._....--. advantage to have the 1952 benefit Benefleiary not eligible for benefit based on esrnmgs after 1950..--...... Beneficiary eligible for beneflt based on earnings after 1950 _______..__... formula applied to the average Benefit based on earnings after 1950 _..__ -- ._____ ___....__..__.__....--.-. monthly wage, calculated without the 1952 benefit formula plus 1954 conversion table- __._.__..____.--____-.-.- 1951bene5tformula......~.~~-~.~.--------.--.--------~..----..-.---.... dropout, and to have the resulting amount increased by means of the 1954 conversion table. Of those About 86 percent of the beneficiaries beneficiaries qualifying for the drop- workers eligible for a beneflt compu- awarded old-age benefits in 1955 were out would increase rapidly, leaving tation based on earnings after 1950 eligible for the dropout-that is, UP unable to qualify only a small grOUP with the dropout, about 4 percent to 5 years of lowest earnings could -those who have been eligible for were awarded higher old-age insur- be excluded in the calculation of benefits since August 1954 or earlier ance benefits under this alternative their average monthly wage (table 1). and who do not have sufficient work method of computation (for men, 3 The dropout provision may be aP- after June 1953. The figure for 1955 percent: for women, 9 percent). The plied if the worker has 6 quarters of also showed the effect of the liberal- number of benefits based on this al- coverage after June 1953, or if he ized retirement test; virtually all ternative computation is expected to first becomes eligible (that is, fully workers filing because of that pro- decrease slightly during the next few insured and aged 65 or over) for old- vision qualify for the dropout. years; in the long run, however, the age beneAts after August 1954.