29
A Brief Explanation of Social Security Act
Excerpts from a P am phlet Published by the
Social Security Board, July, 1940.
The Social Security A ct is a national
law enacted to prevent and to relieve
the misfortunes that come when earn
ings are cut off by lack of work, old
age, blindness, or death; when children
are left with no one to support them
or when they lack necessary care; and
when the healthy of the community is
not properly protected.
The Social Security A ct is made up
of ten distinct but related programs.
These may be grouped under three
heads:
Social Insurance:
(a) Employment Security, including pub
lic employment service and unemploy
ment insurance.
(b) Old-Age and Survivors Insurance.
Public Assistance to the Needy:
(c) Old-Age Assistance.
(d) Aid to the Needy Blind.
(e) Aid to Dependent Children.
Health and W elfare Services:
(i)
(g)
(h)
(i)
Child-Welfare Services.
Services for Crippled Children.
Maternal and Child-Health Services.
Retraining for Disabled Workers.
(j) Public Health Service.
Only one of these programs— old-
age and survivors insurance— is admin
istered entirely by the federal govern
ment. The other nine are operated by
the states with federal cooperation and'
financial assistance.
B. Old-Age and Survivors Insurance
Old-Age and Survivors Insurance
provides monthly insurance benefits
for workers and their families when
the wage earner is old and stops work
or if he dies. Wage earners and their
employers share the cost by paying
special taxes into a fund in the United
States Treasury, out of which benefits
are paid.
These taxes, similar to premiums
paid on an insurance policy, represent
a percentage of the worker’s wage.
Employers deduct each worker’s tax
from his pay and turn it in to the
Bureau of Internal Revenue. A t the
same time they make a report show
ing the wages paid each employee.
The amount of the insurance bene
fits paid under this plan is based on
the worker’s own wages in jobs covered
by the law— and is, therefore, related
to the tax he has paid. Benefits are
weighted, however, in favor of three
groups: workers who are already too
near retirement age to have many years
in which to build up insurance credits;
low-paid workers; and workers with
dependents.
The worker’s wages, as reported by
his employer, are credited to the indi
vidual "social security account” kept
(Continued on page 30)
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