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The Social Security Act: Protecting the Welfare of the Retired

August 13, 2021 | By Jeramy Gordon

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In the early 1930s, the US was the only “modern industrial country without any national system of social security.” Deep in the throes of the Depression, the government worked to address this national need, creating the Social Security Act of 1935 (SSA), enacted by the 74th United States Congress and signed into law by US President Franklin D. Roosevelt.

The law created several national benefits, including establishing the Social Security program – the system of “old-age benefits” for workers designed to pay retired workers aged 65 or older a continuing income after retirement.

The SSA also created an unemployment insurance program administered by the states, the Aid to Dependent Children program which provided aid to families headed by single mothers, and was later amended by the Social Security Amendments of 1965 to establish both Medicare and Medicaid.

The Act also launched The Social Security Board (SSB), an entirely new entity (renamed the Social Security Administration in 1946), created to administer the retirement, survivors, and disabled social insurance programs.

Social Security Today

Fast forward to 2021, where more than 50 million people depend on Social Security benefits as part or all of their income during retirement. This program has evolved to cover four major benefits, based on the recipient of those benefits. Let’s explore each of these benefits provided by our country and the SSA.

  • Retirement Benefits: This is the benefit most people think of in regards to Social Security, now available for people 62 or older who have worked at least 10 years. Benefit amounts are determined using a percentage of your pre-retirement income based on lifetime earnings; the portion of pre-retirement wages that Social Security replaces is based on the highest 35 years of earnings, varying by how much you earn and when you choose to start benefits. It is important to note that a person’s spouse or divorced spouse may be eligible for Social Security retirement benefits, even if he or she has not paid into the program.
  • Disability Benefits: Supporting those who cannot work because of disabilities, Social Security Disability Insurance (SSDI) benefits are available for those who have not yet reached retirement age but are considered disabled under the Social Security program’s medical guidelines, receiving roughly equal to what full retirement benefits would be. Similar to the retirement benefits above, recipients need to have worked a certain number of years to be eligible, with the amount of work needed based on age and pre-disability salary. (Also similar to above, SSDI benefits may be available for your spouse or divorced spouse.)
  • Survivors Benefits: Helping to offset the burden of losing a loved one, survivors benefits help provide for survivors of workers and retirees, most often including help for widows and widowers, divorced spouses and children. The level of benefits is based on the worker’s age at death, salary, the survivors’ ages and relation to the deceased. Additionally there is a “death benefit” for survivors – a one-time payment of $255 that goes to the spouse or children of a deceased worker.
  • Supplemental Security Income Benefits: For those unable to earn sufficient wages on their own, Supplemental Security Income (SSI) is available. Eligible parties include adults with disabilities, children with disabilities and people 65 or older. Those qualifying with enough work history may be eligible to receive SSI in addition to existing disability/retirement benefits.

One additional key provision to note is the 2015 U.S. Supreme Court decision, Obergefell v. Hodges, allowing same-sex couples the constitutional right to marry in all states. Since this ruling, Social Security has granted eligibility for benefits to same-sex couples and spouses who are married.

Ultimately, the SSA was an Act that provided protection for our nation, as individuals reach the age of retirement, and many may find themselves facing challenges such as unemployment, becoming a single parent, or needing Medicare.

As Frank Bane, the first Executive Director of the original Social Security Board, said, “But most important perhaps, the Social Security Act revolutionized our whole political and social philosophy concerning the responsibility of government–that is, all of us–for the welfare of each of us.”

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