since I dont know how this is handeled in the US I give you an idea how this in europe , especially in germany works.
there are 2 sections:
latin
standard
(There is a special section 10 Dances Adult and Youth, too , only couples with minumim level A in one section and S level in the other section are allowed for these special competions)
we difference follwing classes:
kids <14
juniors 14-16
youth 16-18
I am not sure since his changes often 
-
adults both partner >18
adults II one partner >28
adults II are allowed to start at adults, too
-
seniors both partners >35
seniors 2 one partner >45
seniors 3 one partner >55
there are some restricted events for couples >66
-
levels D,C,B,A and S (special) level
you have to start at D and make your way up to S.
to move to next level the couple have to make an amount of finals (normaly 6or 10 times places 1-6 [D->C] or 1-3 [A->S] ) and an amount of points (120 - 200), for every couple beaten a couple gets 1 point, maximum is 20 per competition. It depends on how many couples are registered in one class/level of a region.
To reach S takes normaly several years. 
D have to perform 3 dances:
latin: ChaCha, Rumba, Jive
standard: Walt, Tango,Quickstep
C have to perfom 4 dances:
latin: Samba,ChaCha, Rumba, Jive
standard: Walt,Tango,SlowFox,Quickstep
B,A,S perform all 5 dances:
latin: S,Cha,R,PD,J
standard: W,T,VW,SF,Q
D,C class are low level , B mid level and A and S class are high level.since there is the possibility of partner change there are some cheaters, too.
The adult S top couples are unbeatable for "real" amateur couples because they do only dancing,eating,dancing,sleeping,dancing,...
At all I think its a fair system, since you are not forced to move to a weaker class ( adults is the strongest class). to move to adult II or senior classes is volunteer. Only the youngsters have to move up to adults.