Taxes

Finding Value—and my Social Security—in light of Budget Cuts

January 9, 2017 • By

Last Updated: January 14, 2021

man and woman on computerEvery payday, you have Federal Insurance Contributions Act (FICA) and Self-Employed Contributions Act (SECA) taxes deducted from your paycheck. Nearly all of these contributions are used to pay Social Security benefits to more than 60 million retired, disabled, and widowed workers and their children, as well as to Medicare beneficiaries. A very small amount also helps pay for the work it takes to manage Social Security programs.

Providing Social Security services to the public is a big job. We have fewer than 64,000 employees in offices across the country handling millions of transactions yearly — taking applications, answering questions in person and on the phone, verifying benefit amounts, and reviewing appeals, among other things. The cost of doing these services is less than one penny out of each dollar paid in FICA and SECA taxes, which is a very good value.

Lawmakers in Congress decide each year how much money we can use to manage our programs and pay our staff. Because that hasn’t been settled yet, we’re operating under a continuing resolution (CR) with less funding than last year. This is not new for us. In fact, the amount we have to run our programs is 10 percent lower than it was in 2010, after adjusting for inflation. At the same time, the number of beneficiaries we serve has gone up by 13 percent. So, we have fewer resources to serve more people.

We made some difficult decisions because of these latest budget limits. During the past year, we began a hiring freeze that will reduce our staff to the lowest level since FY 2013. We use a lot less overtime now, which affects our ability to reduce critical backlogs. Over a million people are waiting for a hearing to see if they are eligible for disability benefits.

Today, we are taking another cost-saving step. We will mail fewer paper Social Security Statements. Paper Statements will only be sent to people age 60 and over, who are not getting benefits and don’t have a my Social Security account. This will bring down the costs of processing and mailing paper Statements by $11.3 million in FY 2017.

We know that our cutbacks will affect many of you, but we have no choice. We will continue to serve you and work for you as best we can. Congress has until April 28, 2017, to pass a spending bill for the full year or pass another CR. While we can’t predict our budget level for the rest of the fiscal year, we think there may be more bumps in our journey together. We’ll do our best to get through them so you will have a secure today and tomorrow.


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About the Author

Deputy Commissioner, Office of Communications

Comments

  1. E.A. C.

    I have worked in the public sector all of my working life and had many, many thousands of dollars taken out of my pay checks.
    Now that I am drawing Social Security benefits I am still having to have many thousands of dollars taken out of my checks for income taxes. I would like to have it explained to me why I still have to income taxes taken out of my Social Security checks which came out of my pay checks that I already paid taxes on. Seems to me that I am being taxed double on the money I have already pain taxes on!
    Anyone have an answer?

    • Ray F.

      Some people who get Social Security must pay federal income taxes on their benefits. You must pay taxes on your benefits if you file a federal tax return as an “individual” and your “combined income” exceeds $25,000. If you file a joint return, you must pay taxes if you and your spouse have “combined income” of more than $32,000. If you are married and file a separate return, you probably will have to pay taxes on your benefits. See our Benefits Planner: Income Taxes and Your Social Security Benefits for more information. Thanks!

    • PAW

      Think! Your paycheck does not state you were taxed on SS. I believe Federal and State tax is only on the money you earned minus SS contribution. Therefore, once you start collecting SS benefits over a certain amount, you pay taxes on it like you did when you worked. Perhaps everyone should look at SS as a pension plan you surely pay taxes on certain withdrawals based upon criteria. I stand to be corrected.

      • Ray F.

        Some people who get Social Security must pay federal income taxes on their benefits. Please visit our Frequently Asked Questions web page for more information.

  2. Dena

    There are some interesting points in time in this article but I don’t know if I see all of them center to heart. There is some validity but I’ll take maintain opinion till I look into it further. Good article , thanks and we would like extra! Added to FeedBurner as well

    http://beingsbook.net/blogs/159576/143140/you-can-not-allow-yourself-to-no

  3. EARL D.

    what are mmy social security benefits with deductions
    I HAVE LOST THIS INFORMATION YOU PROVIDED

    claim number is544–a18-5466

  4. EARL D.

    what are mmy social security benefits with deductions
    I HAVE LOST THIS INFORMATION YOU PROVIDED

    claim number is544–a18-5466

  5. EARL D.

    what are mmy social security benefits with deductions

    claim number is544–a18-5466

  6. Louis

    There are numerous broken links on the SSA web site. Even the link to request a replaced SSA-1099 is broken. Do you even test anything?

    • Ray F.

      Hi Louis, we are sorry that you are having trouble, but our website and all of the links appear to be up and running. The SSA-1099 is mailed by January 31 each year. If you currently live in the United States and you don’t receive an SSA-1099 or SSA-1042S for tax year 2016 by January 31, 2017, you can get an instant replacement form SSA-1099 or SSA-1042S by using your online my Social Security account beginning on February 1, 2017. Thanks!

  7. Pete

    SS was, as mentioned in at least one post, designed to supplement retirement income to ensure ample funds to cover living expenses for our elderly after they retire. The government discovered there were funds available so they did the unforgivable and took funds to pay for something that should never have come into the picture. Our government should pledge to leave this fund alone and let it move forward to take care of our retirees.

  8. Mary f.

    My husband became disabled in 2014 after 35 years in the workforce and also the military. We has over 1500 pages of medical documents, as well a 2 RFC and 2 medical source statements with a letter that clearly states that he should not be working. It took him 6 months and two congressional inquirees to get the VA care that he needed and earned. We were paying out of pocket before he was finally seen by the VA. The denial has caused us severe financial destruction and his mental health is now on a downword spiral. He has been suicidal and now suffers from several mental health issues. The congress and the SSA do not give a crap about people. We have been dealing with these two dysfunctional government entities for 3 years now.

  9. Robert D.

    My issue with the reduced paper mailing policy is that I can’t find MY personal info. I have access online, BUT I chose File & Suspend when I turned 66 over three years ago and the online system indicates that I’ve applied for my benefits and don’t need a statement. And, I don’t get a paper statement. And, I get the same response when I call the 800 number……….it’s whatever it was when you did the file and suspend. It would be VERY helpful if I could occasionally obtain an update as to what the current payout (or estimated payout) would be.

    • Ann

      You can still use the online retirement estimator.

      • Deon

        OHSGHOMI! These look soooo good. I love pecans. I never get them here because I never know what to do with them. Problem solved now! :)Thanks so much for sharing!

  10. Dan L.

    I just read that the SSA is going to reduce the amount of paper SS statements it mails out to cut costs. I commend your efforts to find new ways to save taxpayer money. I also think it’s necessary for taxpayers to learn to access the internet for paperless data to support these cost-saving moves. Thank you.

    • Jenna Y.

      Thank you for your feedback, Dan!

      • Jeanette

        It’s great to find an expert who can exilpan things so well

Comments are closed.