Which law affects SocialSecurity and Medicare for retired workers
Federal unemployment tax act
Federal insurance contribution act
Older workers benefit protection act
Federal employment compensation act
The law that affects Social Security and Medicare for retired workers is the Federal Insurance Contributions Act (FICA).
The law that affects Social Security and Medicare for retired workers is the Federal Insurance Contributions Act (FICA).
To understand how FICA affects Social Security and Medicare, let's break it down:
First, Social Security is a federal program that provides retirement, disability, and survivor benefits to eligible individuals. It is funded through payroll taxes, and these taxes are collected through the Federal Insurance Contributions Act (FICA).
FICA requires employees and employers to contribute a percentage of an employee's wages towards Social Security and Medicare. Currently, the Social Security tax rate is 6.2%, while the Medicare tax rate is 1.45%. This means that employees pay a total of 7.65% of their wages for FICA taxes, while employers also contribute an additional 7.65%.
The collected funds are then used to support retired workers who receive Social Security benefits, as well as funding Medicare, which provides healthcare coverage for individuals aged 65 and older.
In summary, the Federal Insurance Contributions Act (FICA) is the law that mandates the collection of payroll taxes to finance Social Security and Medicare for retired workers.