The United States Social Security Program


TheUnited States Social Security Program


Thisreport introduces a discussion around the development and thegovernance of the United States Social Security Program. The focalpoint will be on the history of the Social Security Program, itspresent structure, the mode of calculation of benefits to members,and other benefits that arrive with the plan. This discussion willcenter on the significant changes to the initial program anddemonstrate its current provisions to present a research report onthe social security program.

TheUnited States Social Security Program

Historyof the Social Security Program in the US.

Theprincipal purpose of the social security plan was to address economicchallenges during the period individuals were unable to work. Theturning point of the program was in 1935 after the signing of theSocial Security Act into law. The initial Act had provisions forretirement benefits payable every month to unemployed persons agedabove sixty-five years (Purcell, 2000). During that time, thebenefits were obtained from the cumulative earnings of a beneficiary.From the calculations, the benefits were less and payable for veryfew years. In 1939, there were amendments to the Act changing thecalculations of the benefits to base on the average wages (Luckey,1994). After the 1939 amendments, there was the unveiling of theretirement test incorporating members with a monthly income of lessthan fifteen US Dollars and better benefits (Purcell, 2000).

Withthe 1939 Amendment, there was a crucial development of the programwhich was the creation of benefits for dependents and survivors(Harrington, 2012). There were also benefits for the children ofretired or deceased employees. As the years progressed, the livingcost rose and consequently, there were amendments to the program toincrease the benefits and cover more jobs. Events of the World War IIand the Korean conflict resulted in the enactment of specialveterans’ legislation whose emphasis was to help the ex-servicepeople during an adjustment from military to civilian life(Harrington, 2012). There was also the 1965 law which led to theinitiation of the Medicare plan. Another important amendment to theplan was the introduction of assistance to the aged and thephysically challenged (Yin, 2014).

Thecurrent structure of the program

Overthe years, the precept of the basic benefit structure of the socialsecurity plan remains unchanged despite the amendments. Currently,the monthly benefits depending on the wage of the employee arepayable to the physically challenged and retired workers and theireligible families (Yin, 2014). The current calculation of benefitsensures a weighted formula from the recognition that the members witha low income have a greater economic need and the likelihood ofhigh-income earners having private savings and supplementary pensionschemes. The monthly average indexed earnings of a worker are used asthe basis for the computation of benefits. The present law sets asidefor the adjustment of benefits of the beneficiary after the firstcheck to ascertain they are at par with the rates of inflation(Purcell, 2000).

Thecalculation of benefits

Thecurrent procedure of computation of the benefits is indexed on pastearnings and results in more stable future levels of benefits(Harrington, 2012). There is an adjustment to the actual earningsduring the employment period to cater for changes from the time abeneficiary received the first and the last earnings. The socialsecurity then goes ahead to calculate the average indexed monthlyearning during which a beneficiary had the highest earnings inthirty-five years of service. A formula is applied to the earnings tocome up with the primary insurance amount, which is the amountreceivable at retirement age.

Otherbenefits available through the social security program

Apartfrom the basic benefit received at the full retirement age, thesocial security program comes with other benefit packages to themembers. There is public housing, medical aid to the aged persons,energy assistance to the low-income earners, social insurance for thephysically challenged, assistance to the needy people, and railroadretirement scheme. The dependents of the beneficiaries have benefitssuch as the school breakfast and lunch program and special supplementprograms for infants, children, and women.


Theadministration and the development of the social security programwere a crucial milestone in achieving financial freedom during oldage or when one was unable to continue working. There have beenseveral amendments to the program since its inception to ensure thatthe members get the best from the program. The calculation of thebenefits ensures all members benefit from the program in the bestmanner possible. The program as well comes with other benefits ashighlighted in the discussion.


Harrington,M. (2012). Changing Social Security in the US: RisingInsecurity?&nbspSocialPolicy &amp Society,&nbsp12(01),135-146.

Luckey,I. (1994). Implications of the Social Security Amendments of 1983 forOlder Blacks.&nbspJournalof Aging &amp Social Policy,&nbsp5(4),9-22.

Purcell,J. (2000). &quotOlder Workers: Employment and RetirementTrends.&quot&nbspMonthlyLabor Review&nbsp123(10)&nbsp

Yin,N. (2014). Partial Benefits in the Social Security DisabilityInsurance Program.&nbspJournalof Risk and Insurance,&nbsp82(2),463-504.