Social Security System of USA

8/2/2019 Social Security System of USA

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Social securityy 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


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

version of the Act, as amended encompass several social

welfare and social insurance programs.


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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 Familiesy Health Insurance for Aged and Disabled (Medicare)

y Grants to States forMedical Assistance Programs

(Medicaid)

y State Children's Health Insurance Program (SCHIP)y Supplemental Security Income (SSI)

y Patient Protection and Affordable Care Act


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The source of fundsy 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


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Historyy 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.


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Historyy 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.


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Initial opposition of the lawy 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


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Initial opposition of the lawy 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.


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y Exclusions exempted nearly half of the working

population.

yNearly two-thirds of all African Americans in the labor

force, 70 to 80 percent in some areas in the South, and justover half of all women employed were not covered by

Social Security.

y

It was protested by saying that the Social Security Act isa sieve with holes just big enough for the majority of

Negroes to fall through


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Implementationy 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.


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Changesy Officials have responded more to the concerns of women

than those of minority groups.

y Social Security gradually moved toward universalcoverage.

y Changes in Social Security have reflected a balance

between promoting equality and efforts to provide

adequate protection.


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Amendments - 1939y Economic concern

y

The Recession of1937 was blamed on the government, tiedto 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 intosomething of a hybrid system.


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Amendments - 1939y 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.


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Amendments - 1939y 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.


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Amendments 1950sy 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.

yWidows of covered workers were allowed to retire at 62without the reduction in benefits.


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Amendments 1960sy The tax rate was increased from 4% to 6% .

y Medicare and Medicaid were added in 1965.


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Amendments 1970sy 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


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Amendments 1980sy 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 SocialSecurity benefit was made potentially taxable income.


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DATES COVERAGEOFVARIOUS WORKERS

1935 All workers in commerce and industry (except railroads) under age 65.

1939 Age restriction eliminated; seamen, bank employees added; additional domesticworkers and food-processing workers removed

1946 Railroad and Social Security earnings combined to determine eligibility for and

amount of survivor benefits.

1950 Regularly employed farm and domestic workers. Nonfarm self-employed (except

professional groups). Americans employed outside United States by American

employer.

1951 R ailroad workers with less than 10 years of service, for all benefits.

1954 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.

1956 Members of the uniformed services. Remainder of professional self-employed

except doctors. By referendum, firemen and policemen in designated States.


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DATES COVERAGEOF 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 after1983; 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.


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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 securitycard.

y The Social Security Administration issues these numbers

to applicants who meet their criteria.


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y A Social Security card issued in Florida in 1983


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y One of the most recent social security cards.


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Procedurey Bring Documents With You

y

Fill Out an Application Formy Waiting Period

y Working Versus Non-Working Cards

y Applying for a child


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Facts about social securityprogramme of USA

y Initially signed into law by President Franklin D.

Roosevelt in 1935y 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 headquarteredin Woodlawn, Maryland, just to the west of Baltimore.


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The 2011 report by t

heprogram's Board ofTrustees

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.


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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.