Old Age, Survivors and Disability Insurance Program (OASDI)

What is the Elderly, Survivors and Disability Insurance Program (OASDI)?


The federal Old Age, Survivors, and Disability Insurance (OASDI) program is the official name for Social Security in the United States. The OASDI tax noted on your paycheck funds this comprehensive federal benefits program that provides benefits to retirees and the disabled – and their spouses, children and survivors. The purpose of the program is to partially replace income lost due to old age, the death of a qualified spouse or former spouse, or disability.


Main advantages

  • The OASDI federal program is the official name of Social Security.
  • Offers benefits for retirees and people with disabilities.
  • OASDI taxes, also known as FICA payroll taxes, fund the program.
  • The amount of an individual’s monthly payment is based on earnings during the working years.

Understanding the Elderly, Survivors and Disability Insurance Program (OASDI)


The US Social Security program is the largest such system in the world and also the largest expense in the federal budget, projected to cost $1.2 trillion in 2021. Nearly nine out of 10 people aged 65 and over earn Social Security benefits, according to the Social Security Administration (SSA). Social Security calculates your indexed average monthly income (AIME) over the 35 years you earn the most.


The program was implemented through the Social Security Act, signed by President Franklin D. Roosevelt on August 14, 1935, when the US economy was at the height of the Great Depression. The program has grown enormously over the decades, along with o US population and economy. In 1940, about 222,000 people received an average monthly benefit of $22.60. In December 2020, that number was nearly 70 million. For 2021, the average monthly benefit is $1,543. 

OASDI payroll tax


Payments to Eligible Persons are financed through OASDI taxes, which are payroll taxes levied by the government, known as FICA (short for Federal Insurance Contributions Act) and SECA (short for Self-Employed Contributions Act) taxes. In 2021, the Social Security tax rate is 6.2% for employees and 12.4% for the self-employed.


These revenues are held in two trust funds:

  • Old Age and Survivors Insurance Trust Fund (ASI) for retirement
  • Disability Insurance (DI) Trust Fund for people with disabilities


These trust funds pay the benefits and invest the rest of the income they collect.

There is a limit to the annual earnings you pay Social Security tax on. In 2021, the maximum income subject to tax is $142,800.

OASDI Program Criteria


The OASDI program offers payments to people who meet certain criteria. For old-age payments, the money is paid to eligible persons aged 62 and over. The full retirement age depends on the date of birth and is 67 for everyone born in 1960 or later. Eligible people who wait until age 70 (but not later) to start receiving benefits, it is possible to get more benefits highs and maximums due to late retirement credits.


Payments are calculated based on people’s wages earned while they were of working age. Survivor payments are made to surviving spouses or eligible children of deceased or retired workers.  Disability payments are made to eligible persons who can no longer participate in a substantially profitable activity and who meet additional criteria.


To qualify for retirement benefits, a worker must be fully insured. A worker can become fully insured by accumulating credits (also called quarters) of coverage. Credits or quarters are accumulated based on covered wages received for a given period. By 2021, a quarter of coverage is awarded to a worker for every $1,470 earned. The dollar value is indexed every few years for inflation. A worker can earn up to four credits or quarters of coverage per year, and 40 credits are required to qualify for benefits. 

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