What year did social security start?

Before Social Security was introduced, retired workers did not receive any form of benefits to help them in old age. With retired workers being too frail to work and without an income, susceptibility to poverty increased. As a result, there was a need for a national social insurance program for retirees, disabled workers, and their dependents.

Social Security was established in August 1935 when President Franklin Roosevelt signed the Social Security act into law. The federal government started collecting payroll taxes in 1937, and it began making Social Security benefits in 1940. About 222,000 received Social Security payouts in 1940, and this number has risen to 66 million people as of 2022.

What is the Social Security Act?

The Social Security Act was enacted on August 14, 1935, as part of President Roosevelt's new deal, which was a set of government-directed initiatives to help the United States economy recover from the Great Depression. This established the Social Security program that would pay monthly benefits to retired workers who were 65 or older.

Though the primary purpose of the act was to support retired workers, it also provided unemployment insurance to workers who lost jobs, economic assistance to disabled workers, as well as economic assistance to dependents of eligible workers such as spouses and children.

An important element of Social Security is how it is funded. The act established a payroll tax to fund the program, where employers were required to withhold a portion of their employee's wages for taxes. The payroll tax was later renamed the Federal Insurance Contributions Act tax. The payroll tax would be collected from employers by the states, with both employees and employers contributing to the fund.

When was SSA established?

The Bureau of Federal Old-Age Benefits was established in December 1935, and it was the predecessor to today's Social Security Administration. The bureau was responsible for performing several functions including the maintenance of wage records, review and approval of claims, hearing, making actuarial estimates, and supervision of field offices.

In 1937, the bureau changed its name to the Bureau of Old-Age Insurance (BOAI). BOAI worked alongside the Social Security Board, which was responsible for old age insurance, unemployment compensation, and public assistance programs. Effective 1939, the Social Security Board was placed under the Federal Security Agency.

In 1946, the President’s reorganization plan No.2 established the Social Security Administration to replace BOAI. Subsequently, the Board was abolished and its functions were transferred to the Social Security Administration (SSA), which was now under the Federal Security Agency (FSA). Additionally, the FSA administrator created the position of Commissioner as the head of the Social Security Administration, and several functions of the Social Security Board were incorporated into the SSA.  

When was SSI established?

The Supplemental Security Income (SSI) program was established in 1972 through an amendment to the Social Security Act, and it replaced the federal-state adult assistance programs that were administered by state agencies. SSI is administered by Social Security, and it paid its first benefit in 1974.

SSI pays benefits to retired workers who are 65 or older and disabled individuals with limited resources and incomes. It pays participants a monthly benefit to help them pay for basic needs. Some states may also provide supplementary benefits to beneficiaries who receive SSI benefits.

When were Social Security Numbers (SSNs) created?

Social Security numbers were created and issued by the SSA in November 1936. The primary purpose of the SSNs was to track the earnings history of American workers and use the information to calculate benefits levels and Social Security benefits. There are over 453.7 million SSNs that SSA has issued to date.

Why was Social Security established?

The Social Security program was established during the Great Depression when there was widespread unemployment due to the collapse of industries, and escalating poverty levels among retired workers. Its purpose was to provide social insurance and economic security to workers in the United States.

Today, Social Security manages several benefits programs for American workers and their families. Here are the main benefits programs:

Retirement benefits

Employees who worked in covered jobs and paid Social Security taxes are eligible to receive retirement benefits when they retire. Generally, eligible workers can claim full retirement benefits at the full retirement age, which falls between ages 66 to 67.

You can also decide to start taking benefits as early as age 67, but you will receive reduced benefits for claiming benefits before the full retirement age. However, if you have incomes from other sources like state pension, 401(k), and 403(b) plans, you can delay taking benefits to allow your benefits more time to grow. If you claim benefits at age 70, you will receive higher monthly benefits than if you claim benefits at the full retirement age.

Survivor and death benefits

When an eligible worker dies or becomes disabled, his/her eligible dependents may be eligible to receive survivor benefits. Family members who may qualify to receive survivor benefits may include the spouse (s), ex-spouse, child, parents, grandchild, stepchild, and step-grandchild. In some cases, dependents may be required to prove their relationship with the deceased beneficiary before they can start receiving benefits.

Disability benefits

If you worked in a covered job and you became disabled, you may be eligible to receive Social Security disability insurance if you are no longer able to work. You must have accumulated a certain amount of credits and have a qualifying physical or mental impairment to qualify for Social Security disability insurance. You may also be required to provide medical documentation to provide your disability. In some cases, you may be required to undergo a medical evaluation with Social Security doctors to examine your disability.