Social security

y It is primarily a social insurance program providing social

protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:
y Social insurance y Income maintenance y Services

y Social insurance (pensions, disability insurance, survivor

benefits and unemployment insurance.)

y Income maintenance (distribution of cash in the event of

interruption of employment, including retirement, disability and unemployment)

y Services (provided by administrations responsible for social

security. It may include medical care, aspects of social work )

Social security in USA 1935

y The original Social Security Act (1935) and the current

version of the Act, as amended encompass several social welfare and social insurance programs.

y The larger and better known programs are: y Federal Old-Age (Retirement), Survivors, and Disability Insurance y Unemployment benefits y Temporary Assistance for Needy Families y Health Insurance for Aged and Disabled (Medicare) y Grants to States for Medical Assistance Programs (Medicaid) y State Children's Health Insurance Program (SCHIP) y Supplemental Security Income (SSI) y Patient Protection and Affordable Care Act

The source of funds

y Primarily funded through dedicated taxes called Federal

Insurance Contributions Act tax (FICA).

y Tax deposits are formally entrusted to the Federal Old-

Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund

History
y The Social Security Act was enacted August 14, 1935. y The Act was drafted during Roosevelt's first term by the

President's Committee on Economic Security, and passed.

History
y The act was an attempt to limit what were seen as dangers

in the modern American life, including old age, poverty, unemployment, and the burdens of widows and fatherless children.
y By signing this act on August 14, 1935, President

Roosevelt became the first president to advocate federal assistance for the elderly.

Initial opposition of the law

y Social Security was controversial when originally

proposed, with one point of opposition being that it would allegedly cause a loss of jobs.
y However, proponents argued that there was in fact an

advantage: it would encourage older workers to retire, thereby creating opportunities for younger people to find jobs, which would lower the unemployment rate

Initial opposition of the law

y Initially most women and minorities were excluded from

the benefits of unemployment insurance and old age pensions.

y Job categories that were not covered by the act included

workers in agricultural labor, domestic service, government employees, and many teachers, nurses, hospital employees, librarians, and social workers.

y Exclusions exempted nearly half of the working

population.
y Nearly two-thirds of all African Americans in the labor

force, 70 to 80 percent in some areas in the South, and just over half of all women employed were not covered by Social Security.
y It was protested by saying that the Social Security Act is

a sieve with holes just big enough for the majority of Negroes to fall through

Implementation
y Payroll taxes were first collected in 1937, also the year in

which the first benefits were paid, namely the lump-sum death benefit paid to 53,236 beneficiaries.

Changes
y Officials have responded more to the concerns of women

than those of minority groups. y Social Security gradually moved toward universal coverage. y Changes in Social Security have reflected a balance between promoting equality and efforts to provide adequate protection.

Amendments - 1939
y Economic concern
y The Recession of 1937 was blamed on the government, tied

to the abrupt decrease in government spending and the $2 billion that had been collected in Social Security taxes.
y This Act shifted the conception of Social Security into

something of a hybrid system.

Amendments - 1939
y Creation of the Social Security Trust Fund
y The amendments established a trust fund for any surplus

funds.
y The managing trustee of this fund is the Secretary of the

Treasury.

Amendments - 1939
y The move toward family protection
y Calls for reform of Social Security emerged within a few

years of the 1935 Act.

y Women were covered under this act by the later

amendments.
y Support for widows was dependent on the husband being a

covered worker, African American widows were severely under represented and unaided by these changes.

Amendments 1950s
y Domestic labor, household employees working at least

two days a week for the same person were added in 1950, along with nonprofit workers and the self-employed. y Hotel workers, laundry workers, all agricultural workers, and state and local government employees were added in 1954. y Widows of covered workers were allowed to retire at 62 without the reduction in benefits.

Amendments 1960s
y The tax rate was increased from 4% to 6% . y Medicare and Medicaid were added in 1965.

Amendments 1970s
y 20% increases in benefits. y The average payment per month rose from $133 to $166. y The bill also set up a cost-of-living adjustment (COLA) to

take effect in 1975

Amendments 1980s
y In 1982, projections indicated that the Social Security

Trust Fund would run out of money by 1983, and there was talk of the system being unable to pay benefits. y A previously enacted increase in the payroll tax rate was accelerated, additional employees were added to the system, the full-benefit retirement age was slowly increased, and up to one-half of the value of the Social Security benefit was made potentially taxable income.

DATES 1935 1939

COVERAGE OF VARIOUS WORKERS All workers in commerce and industry (except railroads) under age 65. Age restriction eliminated; seamen, bank employees added; additional domestic workers and food-processing workers removed Railroad and Social Security earnings combined to determine eligibility for and amount of survivor benefits. Regularly employed farm and domestic workers. Nonfarm self-employed (except professional groups). Americans employed outside United States by American employer. Railroad workers with less than 10 years of service, for all benefits. Farm self-employed. Professional self-employed except lawyers, dentists, doctors, and other medical groups. Additional regularly employed farm and domestic workers. Homeworkers. State and local government employees. Members of the uniformed services. Remainder of professional self-employed except doctors. By referendum, firemen and policemen in designated States.

1946

1950

1951 1954

1956

DATES

COVERAGE OF WORKERS

1965

Interns. Self-employed doctors.

1967

Ministers (unless exemption is claimed on grounds of conscience or religious principles). Firemen under retirement system in all States.

1983

All federal civilian employees hired after 1983; members of Congress, the President and Vice-President and federal judges; all employees of nonprofit organizations. Covered state and local government employees prohibited from opting out of Social Security.

1990

Employees of state and local governments not covered under a retirement plan.

YEAR

BENEFICIARIES

AMOUNT ( $ )

1937

53,236

$1,278,000

1950

3,477,243

$961,000,000

1980

35,584,955

$120,511,000,000

1990

39,832,125

$247,796,000,000

2000

45,414,794

$407,644,000,000

2008

50,898,244

$615,344,000,000

y In the 1930s, the Social Security Administration (SSA)

was created, and the government mandated that all legal residents and citizens must have a valid social security card. y The Social Security Administration issues these numbers to applicants who meet their criteria.

y A Social Security card issued in Florida in 1983

y One of the most recent social security cards.

Procedure
y Bring Documents With You y Fill Out an Application Form y Waiting Period y Working Versus Non-Working Cards y Applying for a child

Facts about social security programme of USA

y Initially signed into law by President Franklin D.

Roosevelt in 1935 y By dollars paid, the U.S. Social Security program is the largest government program in the world and the single greatest expenditure in the federal budget. y TheSocial Security Administration is headquartered in Woodlawn, Maryland, just to the west of Baltimore.

The 2011 report by the program's Board of Trustees

y 54 million people were receiving Social Security benefits,

while 157 million people were paying into the fund.

y Of those receiving benefits, 44 million were receiving

retirement benefits and 10 million disability benefits.

y In 2011, there were 56 million beneficiaries and 158

million workers paying in.

y In 2023, total income and interest earned on assets are

projected to no longer cover expenditures for Social Security, as demographic shifts burden the system.
y By 2035, the ratio of potential retirees to working age persons

will be 37 percent there will be less than three potential income earners for every retiree in the population.
y The trust fund would then be exhausted by 2036 without

legislative action.