Thanks to better sanitation, health care and the effective health programs established by the government, Americans began to live longer. From to , the average life span of an American grew by a decade. It became the largest and most rapid increase in recorded history. Those who initially benefited first were not minorities and women. Also, if a worker was employed in the area of nursing, teaching, agriculture, library services, social work, government work, domestic service and hospital workers, social security would probably be denied as well.
If a worker did not work full time or they worked intermittently, they were excluded as well. All in all, this meant that nearly half of all working Americans did not qualify for Social Security benefits. For the first five years of the program until , the government paid Americans their benefits in one lump-sum payment.
These payments were meant to help people by giving back some of the money they put into the system. Most of the people who received lump-sum payments were ones who would not be contributing long enough due to age or work reasons.
They consisted of a Technical Board; an Advisory Council; an executive leadership council; and the Executive Director. Needless to say, this was an elusive challenge for many years. Before this, all of the distributions were the same. Rates will change every year and will depend on where you live. Overseas people will earn high COLA than someone living in the states. Before the Great Depression, the country had no regulated way for people to save their money for retirement and this posed a problem for America.
There was no disability income insurance and no government-mandated health insurance. The government was leaving the country to fend for itself.
That is where FICA came in. Social Security Administration. Pathways to the Past. Political Science. Social Security Reform. CPA Journal. Washington Post. Short History of Social Security. 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, It was a daunting task, but by November registration for the program began. Not everyone could participate, though. Self-employed professionals, field hands and domestic workers were excluded. To become eligible, workers completed an application at their local post office and received a national identity card with a unique, nine-digit identification number.
Within eight days of rolling out the program, over one million workers had Social Security numbers. Four months later, almost 26 million had enrolled despite most projected payouts being below poverty level. The Social Security card was—and still is—used to track workers earnings and benefits.
Many amendments have been passed to the original Social Security Act. For instance, originally, monthly payouts of old-age benefits were slated to start on January 1, Eligible people who turned 65 prior to that date received a lump sum payment. On August 10, , an amendment passed to move up the start date to receive monthly benefits to January 1, Another amendment extended eligibility to dependents and survivors of retired workers.
In the s, amendments were made which extended Social Security eligibility to domestic and farm workers, non-farm self-employed professionals and some federal employees. It also offered voluntary coverage to some state and federal employees, hundreds of thousands of nonprofit employees and workers in the Virgin Islands and Puerto Rico. In addition, benefits were increased for millions of beneficiaries and a new contribution schedule established.
In , President Dwight D. Eisenhower approved legislation to allow Social Security benefits for disabled workers and their dependents. The Social Security Amendments of provided medical insurance to Social Security beneficiaries age 65 and older.
In , President Richard M. Nixon signed legislation to provide an automatic cost of living allowance each year to offset the cost of inflation. Prior to the new law, annual increases required Congressional approval. By , it was clear Social Security was in financial peril. An amendment was passed changing the benefit qualification formula for people born after Other amendments were also passed including increasing the payroll tax and slightly decreasing benefits to help cut costs, leaving some beneficiaries with less money during difficult economic times.
In , he signed legislation that gradually increased the retirement age to 67, taxed Social Security benefits and provided Social Security benefits to federal workers. After taking office in , President George W. Bush appointed another Social Security Commission with its top priority being Social Security reform. No revolutionary changes were made to keep the program solvent long-term.
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