Who is Entitled to Get Social Security Benefits?

Like the National Insurance Institute in Israel, the American Social Security Administration also referred to as the SSA, provides a variety of benefits to citizens, including those who live overseas. The following article will help you determine if you are entitled to retirement, disability, or survivor benefits.

Getting to know the United States Social Security Administration

Contrary to its capitalist nature, the United States also has a Social Security system, called the SSA, which stands for the United States Social Security.
The SSA was founded by President Roosevelt in 1935 and has since given many benefits to American citizens.
However, under certain circumstances, as detailed in the article, citizens who have lived their entire lives in Israel will also be entitled to various payments.

What if I get an allowance in Israel?

Israel and the United States are signed on a tax treaty.
However, contrary to the profits gained from the real estate market, which is comprehensively detailed in the treaty, the agreement does not cover payments paid to social security institutions in both countries.
Therefore, there may be a situation in which, alongside receiving payments from the Israeli authorities, you can also receive retirement, disability, and survivor payments from the SSA.

Old Age Pension in the U.S. – Retirement Benefits

The American old-age pension is very similar to its Israeli equivalent, but in most cases will pay a higher rate.
For example, in 2018, the average allowance rate was $1,368 per month, and the maximum benefit rate was $2,687 a month.
American citizens over the age of 62 are entitled to these retirement benefits.
It is important to know that a few matters might reduce the allowance rate:

A Cut by up to 40%

Insofar as a person is entitled to a pension allowance on behalf of his workplace in Israel, the rate of allowance to which he is entitled on behalf of the American government will be reduced. The cut-rate can reach up to 40%.

Working in the public service

Insofar as a person is entitled to an old-age pension due to public service work, including federal, national, and local authorities, as well as for working in non-profit organizations, the rate of payments may be reduced, in accordance with WEP directives.
When you reach the age of 62, the U.S. National Insurance Institute will contact you. When they do so they will outline the variety of procedures you are required to complete in order to receive the payments, along with the benefit rate you will receive.

Who is eligible for an old-age pension in the U.S.?

In addition to U.S. citizens, U.S. residents living in Israel as well as Israelis who worked in the United States and paid a certain amount of taxes are entitled to such payments. There are four conditions for getting an American retirement benefit:

A Working period of at least 10 years

A working period of at least 10 years is needed in order to be entitled to retirement benefits. It should be noted that there are also additional requirements regarding the range in question.

40 Quarterly Payments

The employee must complete 40 quarterly payments, also called credits, to the SSA.

Profit of more than $1,410 per quarter

The only quarters that will be considered, for the sake of calculation, will be those in which a person earned more than $1,410, which sums up to about $5,640 a year.

No option to accrue an increased amount

It is important to know that accumulating higher amounts is not possible. That is, whether a person’s quarterly salary was $ 1,410 or $ 12,500 per month, the payment would be the same.

Additional conditions:

● Working throughout the United States or as an independent in Israel (to those who hold U.S. citizenship)
● Regular and consistent reporting to the IRS.
● Regular payments of national insurance tax to SSA.

How much is the allowance?

As noted, in order to obtain eligibility for an old-age pension on behalf of the U.S. government, you must pay the SSA for 40 quarters of work. The steps of examining the procedure are as follows:
● Examining the beneficiary’s 10 most profitable years of work.
● Summing up the total earnings in those years.
● Dividing the total profits by 120, in order to calculate the average monthly income during the period.


monthly income

The average monthly income will be the basis for the actuarial calculation of the allowance rate to which you are entitled.
It should be noted that a person can choose when to start receiving the allowance. If he chooses to receive it at the age of 62, he will receive a reduced allowance of 75%.
If he chooses to start receiving it upon reaching retirement age, he will receive a full pension, and if he decides to start receiving it at the age of 70, as allowed by law, he will receive an increased allowance.

Disability Benefits in the United States

Another allowance provided by the U.S. government is a disability benefit, approximately 100,000 U.S. residents who paid SSA during their lifetime will be entitled to receive this allowance, even those who work in Israel on a regular basis. Receiving this benefit is subject to meeting the criteria set by the American National Insurance Institute.
If a person meets the SSA conditions, he should contact the authority’s representative at 1-800-772-1213 and request to initiate the relevant procedure.

Who is eligible for disability benefits in the United States?

Like the old age pension, in order to receive a disability pension, the holder of U.S. citizenship must meet the above criteria. However, unlike the old-age pension, for which 40 quarters of employment must be completed, in order to receive an old-age pension, there are different conditions.
The conditions required are different due to the fact that a person, who is entitled to a disability benefit, is unlikely to be able to complete 40 quarters of work, due to the likelihood of injury before they are completed.

U.S. citizens before age 24

A person can apply for an allowance as much as he has paid for 6 quarters of work, over a period of 3 years before the injury that led to the disability.

U.S. citizens between the ages of 31 and 24:

In general, it is possible to apply for disability benefits if the applicant worked for half the period of time that begins at age 21 and ends at the time of injury which resulted in the disability.
For example, if a person is injured at the age of 30, and the same injury has led to disability, he will be entitled to receive the allowance as long as he has worked for at least 4.5 years out of the 9 years between the ages of 21 and 30.

Citizens aged 31 and above

In general, people included in this category must complete 20 quarters of payment during 10 years of work, which preceded the injury that led to disability.

Survivor Benefits in the United States

Survivor Benefits, also known as “Shraim” allowances in Hebrew, are allowances that are intended to serve as an economic anchor for the rest of the deceased, including spouses and minor children. Although this is obvious, we note that the earlier a person dies and the younger he is, the fewer credits he will have to accumulate.

This allowance is unique in comparison to the two allowances above. Unlike those, where the bureaucracy is rigid, survivor benefits will also be given in a situation where that person has not accumulated the required accrual threshold and will receive an allowance as the deceased accumulated 6 credits over the course of 3 years prior to his death.
In addition, in cases where the deceased was eligible for retirement benefits and disability benefits, the rate of the allowance will be determined based on these.

Other important points

Back in the U.S., retirement age and Medicare
Anyone eligible for Social Security on behalf of the American authorities, who wish to return to the United States upon their retirement age, will receive a health insurance policy called Medicare.

Spouse eligibility provides up to 50% for those who are not eligible

If you are not eligible for an SSA allowance, but your spouse is eligible, you can receive an allowance of up to 50% of your spouse’s allowance.
For further questions and advice on taxation, reporting to the U.S. tax authorities, establishing companies and investments in the United States, contact the team of accountants and lawyers at Mas America.

The aforesaid should not be regarded as legal advice. It is advisable to consult with the MasAmarika team before any action. The service is provided by a professional team, fluent in English and Hebrew, and includes attorneys and accountants with American licenses.

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