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Employee Benefits

Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?. Lesson Objective Determine disability benefits under independent retirement systems and under Social Security.

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Employee Benefits

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  1. Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?

  2. Lesson Objective Determine disability benefits under independent retirement systems and under Social Security. Content Vocabulary disability insurance Pays benefits to individuals who must miss work because of an injury or illness. • disability insurance

  3. Example 1 Alicia Walmsley had been working at Northern State University for 21 years when she became permanently disabled and could not continue to work. She was 52 years old and had planned to retire in 13 years at the age of 65.

  4. Example 1 (cont.) Her final average salary was $38,740. Northern State’s rate of benefits is 2 percent. What is her monthly disability benefit?

  5. Example 1 Answer: Step 1 Find the annual disability benefit. ( Years + Expected – Present) × Rate of × Final (Worked Retirement Age ) Benefits Average Age Salary (21 + 65 – 52) × 2% × $38,740 34 × 0.02 × $38,740 = $26,343.20

  6. Example 1 Answer: Step 2 Find the monthly disability benefit. Annual Disability ÷ 12 $26,343.20 ÷ 12 = $2,195.266 or $2,195.27

  7. Example 2 John Crawford has contributed to Social Security for the past 15 years. He becomes disabled while working and applies for Supplemental Security Income (SSI).

  8. Example 2 The basic monthly SSI disability check is $531 for one person and $796 for a couple. To qualify for SSI you need 20 quarter credits (5 years) in the last 10 years. If he qualifies for SSI, what will Crawford’s monthly benefit be for him and his wife?

  9. Example 2 Answer Step: Find the monthly disability benefit. Annual Disability ÷ 12 Crawford qualifies for SSI disability benefits under Social Security. Because they’re a couple, they’ll receive $796 per month.

  10. Practice 1 Joe Yanni worked for 31 years before becoming disabled at age 59. His expected retirement age was 70 and his final average salary was $65,285. His rate of benefits is 2 percent. What is Joe’s monthly disability benefit?

  11. Practice 1 Answer $54,839.40

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