Which tax component of FICA serves disability and survivor benefits?

Study for the AIPB Mastering Payroll Exam. Review flashcards and questions with explanations. Prepare effectively and boost your confidence!

The component of FICA that serves to provide disability and survivor benefits is the Old-Age, Survivors, and Disability Insurance (OASDI). This program is specifically designed to support individuals who are retired, those who have become disabled and are unable to work, and the beneficiaries of workers who have passed away.

OASDI is funded through payroll taxes collected under FICA, which helps ensure that these essential benefits are available to eligible individuals. This tax component plays a critical role in social safety nets, offering financial assistance during challenging times in a person's life, such as aging, disability, or loss of a breadwinner.

The other options do not align with this purpose: HI refers to Hospital Insurance, which funds Medicare, while supplemental wages and income taxes are related to different aspects of payroll and taxation that do not provide direct disability or survivor benefits.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy