Legal Definitions - Old Age, Survivors, Disability Insurance (OASDI)

Old Age, Survivors, Disability Insurance (OASDI) is the official name for the federal program commonly known as Social Security in the United States. It is a comprehensive federal insurance program designed to provide financial protection to American workers and their families.

OASDI offers monthly benefit payments to individuals who:

• Are retired (Old Age benefits)
• Are unable to work due to a severe, long-term medical condition (Disability benefits)
• Are the surviving family members (spouses, children) of a worker who has passed away (Survivors benefits)

These benefits are calculated based on a worker's earnings history during their working years and are funded primarily through payroll taxes paid by current workers and their employers. The program aims to partially replace income lost due to retirement, disability, or the death of a primary wage earner.

Here are a few examples illustrating how Old Age, Survivors, Disability Insurance (OASDI) applies:

• Retirement Income: After working for 40 years as an elementary school teacher, Maria decides to retire at age 67. Having contributed to Social Security throughout her career, she begins receiving monthly OASDI benefits. These payments provide a steady stream of income, supplementing her savings and pension, allowing her to maintain her standard of living in retirement.

  This example demonstrates the "Old Age" component of OASDI, providing financial support to individuals who have reached retirement age after a career of contributing to the system.

• Support for Surviving Family: David, a construction worker, tragically passes away in an accident, leaving behind his spouse, Sarah, and their two young children. Because David had worked and paid Social Security taxes for many years, Sarah and the children become eligible for "Survivors" benefits under OASDI. These monthly payments help Sarah cover living expenses and the children's needs, partially replacing the income David would have provided.

  This illustrates the "Survivors" aspect of OASDI, offering crucial financial assistance to families who lose an insured worker, helping them cope with the economic impact of their loss.

• Disability Assistance: John, a software engineer, develops a severe neurological condition that progressively impairs his motor skills, making it impossible for him to perform his job duties or any other substantial gainful activity. After a thorough application process, he is approved for "Disability" benefits through OASDI. These monthly payments provide him with essential income, allowing him to cover medical expenses and daily living costs when he can no longer work.

  This example highlights the "Disability" component of OASDI, providing a safety net for workers who become medically unable to work and earn a living, ensuring they have a source of income.