What Is The Purpose Of Social Security

How Has Social Security Changed

Over the years, the Social Security Act has been changed or “amended” in several ways, but the basic principles are still the same. Under today’s Social Security Act, the SSA still manages the program, workers still make contributions from their paychecks, and monthly payments are still made to those who are eligible for benefits.

Most notably, in 1956, Congress amended the Social Security Act to create the disability insurance program. The new program, Social Security Disability Insurance , provided for benefits to be paid to disabled, insured workers between 50 and 65 years old as well as insured workers’ adult children who had become disabled as children.

What Is A Social Security Number

In the USA, the Social Security Number is the nine-digit number issued to US citizens, permanent residents, and temporary residents under section 205 of the Social Security Act.

The social security number is issued to each individual by the Social Security Administration, which is an independent agency of the US government. While originally, the purpose of the social security number was limited to tracking individuals and their work history as well eligibility for benefits and its calculation, today, it has become the de facto national identification number for taxation and other purposes.

Social Security Law: An Overview

Social security is designed, as the title suggests, to provide security. To protect individuals from unforeseen catastrophes, the government spreads certain risks among all members of society so that no single family bears the full burden of such occurrences.

In the United States, the Social Security Program was created in 1935 to provide old age, survivors, and disability insurance benefits to workers and their families. Unlike welfare, social security benefits are paid to an individual or his or her family at least in part on the basis of that person’s employment record and prior contributions to the system. The program is administered by the Social Security Administration . Since the establishment of the Medicare program in 1965, it and Social Security have been closely linked. While the original act used “Social Security” in a broader sense, including federally funded welfare programs and unemployment compensation within its scope, and the Medicare legislature took the form of amendments to that act, current usage associates the phrase with old age, survivors, and disability insurance.

While the Social Security Act 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.

For greater detail on all these points visit the LII’s Social Security Library.

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Demographic And Revenue Projections

In 2005, this exhaustion of the OASDI Trust Fund was projected to occur in 2041 by the Social Security Administration or by 2052 by the Congressional Budget Office, CBO. Thereafter, however, the projection for the exhaustion date of this event was moved up slightly after the recession worsened the U.S. economy’s financial picture. The 2011 OASDI Trustees Report stated:

Annual cost exceeded non-interest income in 2010 and is projected to continue to be larger throughout the remainder of the 75-year valuation period. Nevertheless, from 2010 through 2022, total trust fund income, including interest income, is more than is necessary to cover costs, so trust fund assets will continue to grow during that time. Beginning in 2023, trust fund assets will diminish until they become exhausted in 2036. Non-interest income is projected to be sufficient to support expenditures at a level of 77 percent of scheduled benefits after trust fund exhaustion in 2036, and then to decline to 74 percent of scheduled benefits in 2085.

Ways to eliminate the projected shortfall

Fact #: Social Security Provides A Guaranteed Progressive Benefit That Keeps Up With Increases In The Cost Of Living

Social Security benefits are based on the earnings on which people pay Social Security payroll taxes. The higher their earnings , the higher their benefit.

Social Security benefits are progressive: they represent a higher proportion of a workers previous earnings for workers at lower earnings levels. For example, benefits for a low earner retiring at age 65 in 2021 replace about half of their prior earnings. But benefits for a high earner replace about 30 percent of prior earnings, though they are larger in dollar terms than those for the low-wage worker.

Many employers have shifted from offering traditional defined-benefit pension plans, which guarantee a certain benefit level upon retirement, toward defined-contribution plans s), which pay a benefit based on a workers contributions and the rate of return they earn. Social Security, therefore, will be most workers only source of guaranteed retirement income that is not subject to investment risk or financial market fluctuations.

Once someone starts receiving Social Security, their benefits increase to keep pace with inflation, helping to ensure that people do not fall into poverty as they age. In contrast, most private pensions and annuities are not adjusted for inflation.

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What Other Rights And Freedoms Relate To The Right To Social Security

The UN Committee has stated that the right to social security plays an important role in supporting the realisation of many of the rights in ICESCR. In particular, the right to social security may be relevant to:

• the right to work under article 6 of ICESCR
• the obligation in article 10 of ICESCR to provide protection and assistance to the family, including the obligation to accord working mothers paid leave or leave with adequate social security benefits during a reasonable period before and after childbirth
• the right to an adequate standard of living under article 11 of ICESCR
• the right to the highest attainable standard of health under article 12 of ICESCR.

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Dynamic Social Security And The Way Forward

The ISSA is fostering the concept of Dynamic Social Security , which promotes the innovative use of integrated, proactive and forward-looking social security policies with the near-term aim of building high-performing social security organizations. Underlying this idea is the view that effective and well governed organizations are vital for social security’s credibility and, ultimately, its sustainability. Building on this first step, the longer-term aim of DSS is to contribute to providing universal access, at least, to basic cash benefits and primary health care in all countries.

Throughout its history, social security has never stopped adapting, However, today, after more than a century of existence, the challenge remains one of making the right to social security for all’ a reality.

What Does Social Security Do Today

The Social Security Administration manages several programs offering benefits to seniors, disabled workers, and their families.

Retirement benefits. At age 66 or 67 , workers who contributed to the trust fund can apply for Social Security retirement benefits to help with everyday living and expenses and to offset the loss of income from their jobs.

You can retire as early as age 62, but you’ll get reduced payments if you collect benefits before reaching full retirement age. The more money you make and the more Social Security tax you’ve paid in, the higher your retirement benefits will be.

Survivors and death benefits. A worker’s spouse and dependent children can receive monthly payments in certain circumstances. Your family might be eligible for Social Security benefits if you die or become disabled or if your dependent child becomes disabled before age 22. The SSA also pays a small lump-sum death benefit to surviving family members to help pay for funeral expenses.

Disability benefits. Disability benefits help disabled workers who’ve paid into the Social Security trust fund for a certain amount of time. If you’ve paid enough Social Security tax and you have a serious mental or physical disability that prevents you from working, you should qualify for Social Security disability insurance benefits.

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Efforts To Keep Social Security Solvent

These efforts didnt prevent the program from facing a serious financial crisis in the 1980s, however, and President Ronald Reagan created a commission to examine how to keep Social Security in the black. In 1983, 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 2001, 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. Still, the Bush administration extended disability benefits and food stamps to qualified immigrants and their children, eliminated wage credits for the military and expanded Medicare prescription drug coverage.

President Obamas administration temporarily reduced the Social Security tax rate from 6.2 to 4.2 percent in 2011 and 2012. The move helped ease financial strain on American workers but did little to stop the risk of Social Security going into future debt.

Medicare: Medical Insurance For Social Security Recipients

In 1960, President Dwight D. Eisenhower approved legislation to allow Social Security benefits for disabled workers and their dependents.

The Social Security Amendments of 1965 provided medical insurance to Social Security beneficiaries age 65 and older. This new Medicare program also offered people 65 and older the chance to purchase supplemental medical insurance.

In 1972, 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.

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Application Process For Non

For non-immigrant visa holders like students, H1B, etc., the documents that would be required to get the social security number are:

• Application form SS-5. This can be found online or in any of the SSA offices.
• Original SEVIS I-20 or DS-2019
• A printout of your I-94 Arrival/Departure record
• Proof of employment eligibility. This can be a job offer letter, I-20 endorsed for CPT, or Employment Authorization Document card.
• Social Security letter from the OIS.

Impact Of The Great Depression

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.

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Claim That It Is A Ponzi Scheme

Critics have drawn parallels between Social Security and Ponzi schemes, arguing that the sustenance of Social Security is due to continuous contributions over time. One criticism of the analogy is that while Ponzi schemes and Social Security have similar structures , they have different transparencies. In the case of a Ponzi scheme, the fact that there is no return-generating mechanism other than contributions from new entrants is obscured whereas Social Security payouts have always been openly underwritten by incoming tax revenue and the interest on the Treasury bonds held by or for the Social Security system. The sudden loss of confidence resulting in a collapse of a conventional Ponzi scheme when the scheme’s true nature is revealed is unlikely to occur in the case of the Social Security system. Private sector Ponzi schemes are also vulnerable to collapse because they cannot compel new entrants, whereas participation in the Social Security program is a condition for joining the U.S. labor force. In connection with these and other issues, Robert E. Wright calls Social Security a “quasi” pyramid scheme in his book, Fubarnomics.

Support With You Through Life’s Journey

Social Security is committed to helping maintain the basic well-being and protection of the people we serve. We pay to about 64 million people including retirees, children, widows, and widowers. From birth, to marriage, and into retirement, we are there to provide support throughout life’s journey.

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Restrictions On Potentially Deceptive Communications

Because of the importance of Social Security to millions of Americans, many direct-mail marketers packaged their mailings to resemble official communications from the Social Security Administration, hoping recipients would be more likely to open them. In response, Congress amended the Social Security Act in 1988 to prohibit the private use of the phrase “Social Security” and several related terms in any way that would convey a false impression of approval from the Social Security Administration. The constitutionality of this law was upheld in United Seniors Association, Inc. v. Social Security Administration, 423 F.3d 397 , cert den 547 U.S. 1162 126 S.Ct. 2346 .

Fact #: Social Security Is Especially Beneficial For Women

Social Security is especially important for women, because they tend to earn less than men, take more time out of the paid workforce, live longer, accumulate less savings, and receive smaller pensions. Women represent more than half of Social Security beneficiaries in their 60s and 7 in 10 beneficiaries in their 90s. In addition, women make up 96 percent of Social Security survivor beneficiaries.

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When Opening An Account With Any Us Financial Institution

Since 1970, the federal government has required banks to obtain customers Social Security numbers or an Individual Taxpayer Identification Number .Financial institutions use your SSN to check your credit, to report your interest and investment income or losses to the IRS, to report your tax-deductible mortgage interest to the IRS, and to manage your account.

As an alternative, some financial institutions will accept a taxpayer identification number , which youll need to apply for through the IRS.

Provision For Disability And Incapacity

Disability and incapacity are often confused, but the benefitsintended to respond to them depend on different criteria, and thecircumstances need to be dealt with distinctly. The kind of disabilitywhich is generally being responded to by benefits systems – which isnot the full range of circumstances by any means – is likely to beeither a physical impairment, or a functional limitation in ordinaryactivity. Provision for disability in these senses is made manyreasons, including

• compensation for disability
• meeting the extra financial costs of disability
• providing for people who are likely to be on low incomes in thelong term
• rehabilitation ,
• equal opportunities, or
• social inclusion and participation in society.

Incapacity, by contrast, refers to the situation where people aretoo sick to work, or unable to do work that they did previously.Disability might be one reason for incapacity, but so might besickness, or a range of fluctuating conditions which affect people fromday to day or month to month. The aims of provision for incapacityinclude

• social protection and insurance
• income maintenance, and income smoothing
• economic efficiency, by excusing some people from work, or
• early retirement.

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Contrast With Private Pensions

Although Social Security is sometimes compared to private pensions, the two systems are different in a number of respects. It has been argued that Social Security is an insurance plan as opposed to a retirement plan. Unlike a pension, for example, Social Security pays disability benefits. A private pension fund accumulates the money paid into it, eventually using those reserves to pay pensions to the workers who contributed to the fund and a private system is not universal. Social Security cannot “prefund” by investing in marketable assets such as equities, because federal law prohibits it from investing in assets other than those backed by the U.S. government. As a result, its investments to date have been limited to special non-negotiable securities issued by the U.S. Treasury, although some argue that debt issued by the Federal National Mortgage Association and other quasi-governmental organizations could meet legal standards. Social Security cannot by law invest in private equities, although some other countries and some states permit their pension funds to invest in private equities. As a universal system, Social Security generally operates as a pipeline, through which current tax receipts from workers are used to pay current benefits to retirees, survivors, and the disabled. When there is an excess of taxes withheld over benefits paid, by law this excess is invested in Treasury securities as described above.