CHART II ESTIMATED NUMBER OF VETERAN AND SURVIVOR CASES ON VA PENSION ROLL ASSUMING SERVICE PENSION under present income limitations of $1,400 and $2,700 per year on outside income exclusive of Veterans' Administration benefits, would go a long way in the direction of a "service pension." For example, statistics indicate that in 1954, 78 percent of the World War I veterans in the over 65 age group had total incomes (including Government benefits) of less than $3,500, and 67 percent had incomes below $2,500. A substantial number, 29 percent had incomes of less than $1,000. The private incomes of these veterans were, of course, somewhat lower than their total in comes, since about one-third of the World War I veterans in the age 65 and over group were already receiving veterans' pensions in 1954. THE GENERAL SOCIAL SECURITY PROGRAMS The main function of the veterans' pension programs has been to provide support to veterans when they were in actual or presumed need because of disability or old age, or to their dependents after the veteran had died. Since no other programs were available to meet these legitimate needs, it can be said that the veterans' pension programs pioneered in the income maintenance field in the United States. With the passage of the Social Security Act in 1935, however, a new era in social welfare legislation began. The bulk of the wage earners, including most of the veterans, were provided benefits comparable to some of those which had been available only to veterans. In rapid succession, the various social insurance features of the act took effect, beginning with the payment of lump-sum death benefits in 1937, unemployment compensation benefits in 1938, and survivor and old-age benefits in 1940. Moreover, the traditional "last resort" programs of public assistance were substantially bolstered, expanded, and afforded a measure of respectability by anchoring certain categories of benefits in Federal law and supporting them by Federal grants. Purpose and Scope of Social Security Programs As the framers of our social security program conceived of it, and as subsequent developments have to a large extent borne out, the program, consisting of several constituent parts, was designed to provide safeguards against the major risks of economic insecurity. Thus, the social security system provides protection in the form of income maintenance to the worker and his dependents when the family's usual income is cut off by such common hazards as unemployment, retirement, or death of the breadwinner. Old-age and survivors insurance (OASI), the largest component of the social security program has become the basic social insurance protection for persons in gainful employment and for their dependents. Financed from contributions by the wage and salary earners of the country, by their employers, and by the self-employed, this program pays benefits based on past earnings to aged persons insured under it who retire from fulltime work, to their aged wives and minor children. Upon the death of the family provider insured under the program, it pays survivor benefits to his widow provided she is aged or has minor children in her care. This general program has been broadened through successive amendments so that in 1955, practically universal coverage had been achieved. By the middle of that year, out of 64.6 million persons working, 56 million (87 percent) were covered under OASI. Of the 8.6 million not so covered, Federal civilian workers accounted for 1.8 million. They have their own retirement and survivorship program. Efforts to coordinate that program with OASI are currently under way. Three million were in the Armed Forces. While not permanently covered under OASI, members of the Armed Forces have "temporarily" received free wage credits for every month served since September 1940. Many have thus acquired fully insured status for life and others have acquired substantial wage credits of $160 per month toward OASI-insured staus. This temporary coverage provision expired on March 31, 1956, but a bill to make OASI coverage for the Armed Forces permanent is now before the Congress. For those who have left the Armed Forces, the chances are better than 9 out of 10 that they have entered civilian jobs which are covered under OASI. The OASI program has grown into its own as the basic economic security program only in the last few years. In 1940 only two-fifths of all male workers were insured and eligible for benefits (see chart III). Of the males over age 65, only one-tenth were eligible. Today, four-fifths of all male workers are insured. Of all the aged males (65 and over) living today, more than three-fifths are eligible for OASI benefits. Among the males currently reaching age 65, three-fourths are eligible. Of all men dying, more than one-half leave their survivors eligible to draw an OASI benefit. CHART III PERCENT OF MALE POPULATION INSURED UNDER OASI Source: Department of Health, Education and Welfare. In future years, the extent of OASI protection will be even more inclusive. Under existing laws, in 1965 and thereafter, about 9 out of 10 male workers will be not only covered but insured under that program. Thus 9 out of every 10 males reaching age 65 will be entitled to benefits upon retirement and, in the event of death, their survivors will be so entitled. Along with the broadening of the OASI program, there has also taken place a marked improvement in the adequacy of benefit amounts. In 1940 the average monthly benefit paid to a retired male worker without dependents was $23 and to one with a wife age 65 or over, $35. By 1955, average benefits for these categories of beneficiaries had increased to $64 and $102, respectively. As chart IV indicates, the future will bring further increases in the adequacy of OASI benefits. By 1965, the individual retired worker will receive, on the average, $83 and one with a wife over 65 will receive $126 per month. Further increases will materialize in the years following. |