Happy 80th Birthday, Social Security!

There are many anniversaries to celebrate in the history of Social Security in the United States. One is the anniversary of the introduction of the idea of pensions for retirees, which occurred on Jan. 4, 1935, 80 years ago. In his State of the Union message on that date, President Franklin Roosevelt proposed legislation to give assistance to the unemployed, the aged, homeless or destitute children and the disabled. This was the first formal unveiling of the idea that the federal government be responsible for such benefits, which before then had been the responsibility of states, counties and towns or of private charities and churches.

Legislative History of Social Security

Congress moved quickly once the president introduced the idea. Hearings and investigations took place in January. The American Medical Association (AMA) held emergency hearings and announced that it was not in favor of compulsory health insurance in February. In March, the name of the proposed bill was changed from the Economic Security Bill to the Social Security Bill.

In April, the bill passed the House of Representatives. It included provisions for old age assistance, public assistance, unemployment insurance programs and extension of public health programs, maternal and child health programs, services for crippled children and child welfare services, and vocational rehabilitation. However, in deference to the AMA, it did not include health insurance. The bill passed the Senate in June and became law on Aug. 14, 1935.

Program Name Changes Along the Way

The provisions of the law were to be administered by an entirely new agency, then called the Social Security Board (SSB). The SSB had no staff, no building and no money. In 1939, the agency was subsumed under a newly created sub-Cabinet department, the Federal Security Agency, where it remained until President Eisenhower created the Department of Health, Education and Welfare (HEW). This agency subsequently became the Department of Health and Human Services in 1980.

What Benefits Were First Available to Recipients?

The 1935 Social Security Act included provisions for old age assistance, unemployment compensation, aid to dependent children, and grants for maternal and child welfare. The first paycheck deductions and the first benefit payments occurred in 1937.

Disability Benefits Not Available Until the 1950s

Disability benefits were not part of the original Social Security bill. Payroll deductions were increased very slightly in 1956 to pay for disability. Other changes in the 1950s included provisions for household laborers who worked at least two days a week for the same person. Other employees added to the Social Security rolls in the 1950s included employees of nonprofit organizations, self-employed individuals, hotel workers, laundry workers, agricultural workers, and state and local government employees.

Why was disability insurance omitted from the original Social Security program? Initially, detractors believed that it would be too difficult to determine which claimants were too disabled to work. There were also widespread concerns about the potential cost of the program. Many private insurance companies that sold disability policies had lost money. This resulted in very restrictive and limited private disability insurance in the 1930s and 1940s. The experience of the private insurance companies informed how and when Social Security Disability insurance was implemented.

Disability Benefits Limited at First

The Social Security Disability program started small. It focused on rehabilitation so that employees could return to work, rather than on those who could no longer work at all. The first version of the act covered only disabled workers over age 50. It did not include benefits for children and dependents of disabled workers. With this configuration of beneficiaries, the rehabilitation aspect of the program never gained traction, as older workers were generally not good candidates for rehabilitation and a return to the workforce.

Changes in Eligibility and Coverage for Disability Benefits

After its introduction, the disability program administered by the Social Security Administration continued to grow and change. In 1958, dependents of disabled workers began receiving benefits. In 1960, the age requirement (50) for receiving benefits was eliminated. Benefits for disabled surviving spouses were enacted in 1968. Medicare coverage for beneficiaries was added in 1972; after receiving disability benefits for 24 months, SSD beneficiaries would be able to enroll in Medicare, whatever their age. In 1999, the Ticket to Work program was introduced, and SSD recipients were encouraged to reduce their dependence on the program by working.

A Program Serving Millions of Hard-Working People Every Year

Although the Social Security retirement benefit program has mostly been accepted by Americans, the disability program still faces challenges and continues to have detractors. However, the idea of Social Security Disability has been in place for 80 years; the program itself has been helping the disabled for almost 60 years. It serves more people than ever and continues to be a lifeline for millions of hardworking people who can no longer hold a job because of illness or disability. It is impossible to imagine a landscape in which SSD is not part of the social safety net. The program's detractors who wish to weaken or eliminate the program have an uphill battle.

News & Features

Doing Things Better & Nicer. A Binder Tradition.

We do the "little things" to make your experience great!Read More

Social Security Tax Tips from Harry J. Binder

You are allowed a deduction for every expense you incur...Read More