News / Article

Those Who Didn't Pay Social Security Taxes In Their Day Will Now Have To Pay For Medicare

Source: forbes.com - May 16, 2019

Back in the early days of my career, a friend, in his early 30s, had a government job. Tom heckled me a bit because he was not paying Social Security taxes and, on top of that, he had a great retirement package, the Civil Service Retirement System (CSRS). This system provided retirement, disability, and survivor benefits for certain Federal employees. (Starting January 1, 1984, all newly hired Federal employees had to pay Social Security taxes. The CSRS was no longer an option for them.)

So, why the concern? The CSRS is a closed system so it does not cover new employees. However, there are still people under this system and, like Tom, they have gotten older. Tom is now 70 and has one big problem. Because he did not pay Social Security taxes, he is not eligible for premium-free Medicare Part A, hospital insurance.

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Category: General Business