Financial need is not a requirement but continuing to earn substantial sums is inconsistent with eligibility for certain benefits disability insurance and can reduce the benefit amount with others including retirement or survivors benefits. While the Social Security Act federal law governs an applicant's right to benefits, state substantive law governs some of the family relationship issues that may bear on that right such as the validity of a marriage.
Category: Public Benefits. Please help us improve our site! The main stipulation of the original Social Security Act was to pay financial benefits to retirees over age 65 based on lifetime payroll tax contributions. The Act also established the Social Security Board, which later became the Social Security Administration, to structure the Social Security Act and figure out the logistics of implementing it.
Tens of millions of people in the United States have received financial assistance through the Social Security Act since its inception. Still, the program was wrought with challenges from the start and has been a political hot topic for years, its existence threatened time and again. Economic security has always been a major issue in an unstable, unequal world with an aging population.
Societies throughout history have tackled the issue in various ways, but the disadvantaged relied mostly on charity from the wealthy or from family and friends. The Pilgrims brought these laws with them to the New World.
Eventually, colonial governments created new laws to care for the poor and destitute, deeming which citizens were worthy or unworthy of different types of assistance. Poorhouses or outdoor relief where people were given monetary or other assistance to keep them out of a poorhouse were common means of public assistance.
By the midth century, conditions in poorhouses were often deplorable. Yet thanks to deteriorating economic conditions they were also packed to the rafters, and local governments struggled to keep up with the overwhelming need. A large segment of American citizens received an early form of social security decades before President Franklin D. Roosevelt signed the Social Security Act of Starting in , hundreds of thousands of veterans disabled in the Civil War and their widows and orphans could apply for a government pension for veterans.
In , the law was amended to include any disabled Civil War veteran, regardless of how the disability occurred. In , the law was amended again to include old age as a criterion. Company pension plans came on the scene in when the Alfred Dolge Company created a pension fund for its employees. A handful of companies followed suit, but few employees received even a nickel. Most of the companies went out of business before the pensions could be distributed, or the pensions were never dispersed.
Prior to the Industrial Revolution, many people were farmers and managed to support themselves during hard times, and extended family often lived together on family farms and cared for one another as they aged or struggled.
The Industrial Revolution, however, enticed people to flock to cities for jobs that were often threatened by layoffs and recession, leaving many without a way to support themselves if they lost their job. The urbanization of American also found many people leaving their extended family behind to fend for themselves.
As sanitary and general conditions in America improved, the life expectancy of its citizens did, too. When more and more people grew older, many were unable to work or became sick and required care. The Great Depression left millions of people unemployed and struggling to put food on the table. It struck the elderly especially hard and many states passed legislation to protect their elder citizens. But most elder-assistance programs of the time were a dismal failure. They were underfunded, poorly run and, in some cases, flat out ignored by officials.
Those seniors who received assistance only got about 65 cents a day. As the depression raged on, government officials and frustrated private citizens alike moved to find ways to help struggling Americans and introduced plans to increase economic security. Most ideas were basically federal or state financed pension plans. Some included all citizens while others included only the elderly. None of the plans became law; however, many had huge followings and initiated spirited dialogue about how to care for the disadvantaged and the elderly.
Until Franklin D. Roosevelt became president, most social assistance plans in America were dependent on the government, charities and private citizens doling out money to people in need. He proposed a program in which people contributed to their own future economic security by contributing a portion of their work income through payroll tax deductions. Led by the first woman to hold a U.
After much debate, Congress passed the Social Security Act to provide benefits to retirees based on their earnings history and on August 14, , Roosevelt signed it into law.
After signing the Social Security Act, President Roosevelt established a three-person board to administer the program with the goal of starting payroll tax deductions for enrollees by January 1, Health and Safety. Unions and Right to Work. Retirement Planning Social Security. What Is the Social Security Act?
Roosevelt in It created benefits systems for retired, jobless, and disabled people, as well as dependent mothers and children. Benefits are funded via a payroll tax levied on workers and employers. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.
Investopedia does not include all offers available in the marketplace. Your Complete Guide to Social Security Tax This tax, levied on both employers and employees, funds Social Security and is collected in the form of a payroll tax or a self-employment tax.
What Is a Payroll Tax? A payroll tax is a percentage withheld from an employee's salary and paid to a government to fund public programs. Learn more about payroll taxes here. S payroll tax deducted to fund the Social Security and Medicare programs. What Are Social Security Benefits? Social Security benefits are payments made to qualified retirees and disabled people, and to their spouses, children, and survivors.
What Are Medicare Wages? Medicare wages are employee earnings that are subject to a U. Partner Links. Related Articles.
0コメント