UNITED STATES

GOVERNMENT PRINTING OFFICE

DIVISION OF PUBLIC DOCUMENTS

WASHINGTON, D.C. 20402

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U.S. GOVERNMENT PRINTING OFFICE

The Social Security Bulletin is for ale by the Superintendent of Docunents, U. S. Government Printing Office, Washington, D. C. 20402.

Price: $4.00 a year in the United States, Canada, and Mexico; $5.00 n all other countries; single copies, 35 cents. Price of the 1955 Supplenent, 40 cents; 1956 Supplement, 15 cents; 1957 Supplement, 50 cents; 1959 Supplement, 55 cents; 1960 Supplement, 60 cents; 1962 Supplement, 60 cents; 1963 Supplement, 60 ents; 1964 Supplement, 50 cents; 1965 Supplement, 60 cents; 1966 Supplement, 70 cents.

Use of funds for printing this pubication has been approved by the Director of the Bureau of the Budget (April 7, 1964).

NOTE: Contents of this publication are not copyrighted; any items may be reprinted, but citation of the Social Security Bulletin as the

The old-age, survivors, disability, and health insurance (OASDHI) program provides monthly cash benefits to retired and disabled workers and their dependents and to survivors of insured workers; it also provides health insurance benefits for persons aged 65 and over. Oldage retirement benefits were provided by the original Social Security Act of 1935, benefits for dependents and survivors by the 1939 amendments, benefits to the disabled by the 1956 amendments, and benefits for dependents of disabled workers by the 1958 amendments. The 1965 amendments initiated health insurance for the aged, generally known as Medicare.

The historical summary of OASDHI legislation at the end of the Supplement sets forth in some detail the changes in the program. A brief description of provisions before the Social Security Amendments of 1967 (enacted January 2, 1968), including definitions of terms applicable to data in the Supplement tables, is presented below in three sections: General, Cash Benefits, and Health Insurance Benefits. Included in the General section are provisions and terms that apply to both the cash benefit and the health insurance parts of the OASDHI program.

General

A worker builds up protection under the OASDHI program through employment covered under the law. Coverage is in general compulsory. During his working years, an individual is required to pay contributions out of his wages or self-employment income up to a maximum stated in the law.

Employee contributions are deducted from the worker's pay by the employer who must match the worker's contributions (see table 21 for contribution rates and maximum taxable earnings). All contributions are deposited in the trust funds that are the sources of payments for (1) cash benefits when the worker retires, dies, or is severely disabled; (2) service benefits when he and his dependents or survivors incur hospital expenses at age 65 or over; and (3) vocational rehabilitation services when disability benefits are being received.

DEFINITION OF TERMS

Account Number

An identifying number issued to an applicant by the Social Security Administration, indicating that an account has been established for him. Taxable wages and self-employment income are reported by employers and self-employed individuals and credited to the worker's record under his account number.

*Provisions as of December 31, 1967. For changes in the program effective after that date, see the Historical Summary of Old-Age, Survivors, Disability, and Health Insurance Legislation, pages 130-139.

Contributions

The amount, based on a statutory percent of payroll or earnings up to an annual maximum taxable limit (see table 21), that must be paid by:

(1) Employers and employees on earnings in employment covered under the Federal Insurance Contributions Act;

(2) the self-employed on earnings under the SelfEmployment Contributions Act; and

(3) State and local government employees and their employing governmental units by voluntary agreement under section 218 of the Social Security Act.

Employers, including governmental units, withhold contributions from wages, add their equal contributions, and pay both currently. The self-employed pay their contributions together with their Federal income tax.

Earnings

Earnings credits.-Taxable wages and/or taxable selfemployment income up to the annual maximum creditable amount used in benefit computation.

Maximum taxable earnings.-Statutory annual dollar limit ($6,600 in 1967) above which earnings in covered employment are neither taxable nor creditable for benefit computation purposes. Also referred to as "annual maximum taxable wages" and "maximum earnings base."

Military wage credits.-Monthly wages of $160 credited gratuitously for each month of military service from September 16, 1940, through December 31, 1956 (after which military service became covered on a contributory basis). Term also applied to the fully insured status and (lifetime) average monthly wage of $160 awarded gratuitously to World War II veterans who died within 3 years of discharge.

Taxable earnings.-Wages and/or self-employment income reported under the prevailing annual maximum earnings base (see table 21 for annual maximum taxable limits in effect since beginning of program).

Taxable self-employment income.-Net earnings up to the annual maximum taxable and creditable for a calendar or other fiscal year derived from self-employment, less any taxable and creditable wages in the same year. Taxable wages.-Wages and salaries received by an employee for services rendered in covered employment up to the annual maximum taxable amount with each employer.

Total earnings.-Unless otherwise qualified, represents sum of taxable and nontaxable wages and/or selfemployment net earnings of workers in covered employment.

Employment

Services rendered by an employee and self-employment in a trade or business.

Covered employment.-All employment covered by law under old-age, survivors, disability, and health insurance.