STATISTICAL HISTORY OF THE SOCIAL SECURITY PROGRAMS The Social Security Act of 1935 was signed into law on August 14, 1935. The immediate origin of this legislation was the Committee on Economic Security which had been charged by President Roosevelt with the task of devising safeguards "against misfortune which cannot be wholly eliminated in the man-made world of ours.' In addition to the Federal old-age retirement program (title II), the original Social Security Act also included grants-in-aid to States for: old-age pensions based on need (title I); unemployment compensation systems (title III); aid to dependent children (title IV); maternal and child welfare services, the care of crippled children and vocational rehabilitation (title VI). The original act has been amended on numerous occasions since 1935. However, the most significant changes to title II were made by the Social Security Amendments of 1939, 1950, 1954, 1956, 1965, 1972 and 1977. In addition, the medicare title XVIII program was added to the Social Security Act in 1965. Today the term "social security" is seldom used to refer to all of the programs included in the Social Security Act. The term is most often used to refer to either solely title II, the old-age and survivor program insurance program which now also includes the disability insurance program, or to both title II and to title XVIII, the hospital insurance program. This appendix presents historical data concerning the coverage, benefits and financing of each of the three programs. COVERAGE The original Social Security Act provided coverage on a mandatory basis under the old-age insurance program of all employees in commerce and industry (except railroad) under age 65. Specifically excluded from coverage "due to difficulties in collecting the tax" were the following services: agricultural labor; domestic services in a private home; casual labor not in the course of the employer's trade or business; and services performed by an officer or member of a crew on a documented vessel. Also specifically excluded were services performed in the employ of: the United States Government, a state or any political subdivision of a state; and non-profit (including religious) organizations. Coverage has been extended both on a mandatory and a voluntary basis. Mandatory coverage was extended to workers age 65 and over not otherwise excluded in 1939. In 1950 non-farm self-employed, regularly employed farm and domestic workers, and Federal civilian employees not under a retirement system were covered on a mandatory basis. In addition, the 1950 amendments provided elective coverage to State and local government employees not under a retirement system and employees of non-profit organizations. The most significant extensions of coverage provided by the 1954 amendments were to self-employed farmers on a mandatory basis and, on an elective basis, State and local government employees (except firemen and policemen) under retirement systems and ministers. Coverage was extended to members of the uniformed services in 1956. The principal changes in coverage since 1956 concern ministers and members of religious orders. The following two tables detail the extension of coverage under the social security program in terms of both jobs and wages: TABLE 1.-CIVILIAN EMPLOYMENT COVERED BY SOCIAL SECURITY SYSTEM, 1939-77 Source: Social Security Statistical Supplement, 1977-79, and Historical Statistics of the United States. TABLE 2. CIVILIAN WAGES COVERED BY SOCIAL SECURITY SYSTEM, 1946-77 In order to be fully insured, under the 1939 Amendments, a worker needed 2 quarters of coverage for each year elapsed since 1936 and before the quarter in which the worker died or turned 65. The Social Security Amendments of 1950 significantly increased the number of workers who were insured for monthly benefits by requiring only one quarter of coverage, which could be earned at any time, for each calendar year after 1950 or age 21, subject to the same maximum and minimum. The 1967 Amendments liberalized the insured status requirements for disability benefits for workers under age 31 which significantly increased the number of workers insured for disability beginning in 1969. The 1935 Social Security Act provided monthly benefits to retired workers age 65 and over and a lump-sum death benefit to these workers. The monthly benefits were to first be paid beginning January 1, 1942. The 1939 Social Security Amendments provided benefits to dependents and survivors-wives age 65 and over and children under age 18-of retired and deceased workers. In addition the 1939 Amendments provided that these benefits first be paid in 1940. Benefits which have been provided in retirement and survivors programs since 1939 include: retired women aged 62-65 (1956); retired men aged 62-65 (1961); widows aged 60-64 (1956 and 1965); widowers aged 60 and over (1950, 1961, and 1972). In 1956, benefits were extended to disabled workers aged 50-64 and to disabled children age 18 and over, if they became disabled prior to age 18. The Social Security Amendments of 1958 provided benefits to the dependents of disabled workers on the same basis as dependents of retired workers. Benefits for disabled workers under age 50 were provided in 1960. Monthly cash benefits have been increased in order to offset the effects of inflation on an ad hoc basis 10 times prior to the first automatic cost-of-living adjustment which was incorporated in the act by the Social Security Amendments of 1972. Beginning with the 1975 increase, benefits have been increased annually on an automatic basis. The following tables provide historical background concerning changes in insured status, benefit types, average amounts and increases, and OASDHI benefits paid: TABLE 3.-INSURED STATUS AND COVERED WORKERS, 1940-81 TABLE 3.-INSURED STATUS AND COVERED WORKERS, 1940-81-Continued 1 Persons currently unsured before July 1940, or currently insured after August 1950 and before July 1954, are also fully insured. 2 Preliminary. Source: Social Security Statistical Supplement, 1977-79 and Office of Research and Statistics. |