Social Security (redirected from State benefits)

social security, government program designed to provide for the basic economic security and welfare of individuals and their dependents. The programs classified under the term social security differ from one country to another, but all are the result of government legislation and all are designed to provide some kind of monetary payment to defray a loss of or a deficiency in income.

In Other Countries

A social security program was adopted first in Germany in the 1880s, when Chancellor Otto von Bismarck advocated social legislation not only in order to benefit the workers but also to forestall the program of the socialists and gain the support of the workers for his own party. Legislation setting up compulsory sickness insurance, for which the worker paid two thirds of the cost and the employer one third, was passed in Germany in 1883. Compulsory old-age insurance (see pension), the cost of which the employee, employer, and government shared, was adopted in 1889; unemployment insurance legislation, however, was not passed until 1927.

As economic insecurity among workers in the highly industrialized countries spread, an increasing number of social security programs were enacted. In Great Britain, the National Insurance Act, devised by David Lloyd George, was passed in 1911, and a compulsory unemployment insurance program as well as old-age insurance and sickness insurance programs were established. The unemployment insurance system excluded many workers, notably government employees, nurses, casual workers, and those who earned over £250 per annum. A survivors insurance program was adopted (1925); in 1942, Parliament was presented with a plan, by Sir William Henry Beveridge, for a more expanded social security program, much of which was enacted after World War II.

France adopted in 1905 a program of voluntary unemployment insurance and in 1928 made insurance plans for old age and sickness mandatory. Meanwhile, diverse social security programs were adopted throughout Europe, differing from country to country as to the kinds of insurance instituted, the categories of workers eligible, the proportions paid by employee, employer, and government, the conditions for receipt of benefits, the amounts of the benefits, and finally in the overall effects of the programs. In 1922, the Soviet Union adopted comprehensive social security plans as part of their socialist economy. Chile became (1924) the first Latin American country to adopt a social security program.

In the United States

The United States did not have social security on a national level until 1935, when the Social Security Act was passed as part of President Franklin Delano Roosevelt's New Deal program. The act established two social insurance programs: a federal-state program of unemployment compensation and a federal program of old-age retirement insurance. It also provided for federal grants to assist the states with programs for the disabled, the aged, child welfare services, public health services, and vocational rehabilitation. The compulsory old-age insurance paid benefits proportionate to prior earnings for persons over 65, with a reserve fund being accumulated through payroll taxes on employers and employees; the rate of the tax was originally set at 1%.

The original Social Security Act of 1935 covered only workers in commercial and industrial occupations, but since then several major amendments have increased the categories of persons eligible for benefits. The amendment of 1939 provided for benefits to the dependents and survivors of workers; an amendment in 1950 broadened the coverage to include full-time farm and domestic workers, many self-employed persons, employees of state and local governments, and employees of nonprofit organizations; later amendments extended coverage to members of the armed forces and to self-employed professionals; and a 1957 amendment provided benefits to insured workers 50 years of age and older who became permanently and totally disabled. The age of eligibility for retirement benefits was lowered from 65 to 62, but with lower benefits for persons retiring before 65.

In 1965, Congress enacted the Medicare program, providing medical benefits for persons over the age of 65, and an accompanying Medicaid program for the indigent regardless of age. A 1972 amendment tied increases in Social Security retirement benefits to increases in the Consumer Price Index. In 1974, Social Security insurance was taken over by the Social Security Administration, and in 1983 an amendment allowed partial taxation of the benefits given to upper-income recipients. In 1999, payroll deductions for Social Security were set at 6.2% of annual wages below $72,600, and payroll deductions for Medicare were 1.45% of annual wages (no upper limit), with employers contributing matching amounts.

Social Security funds are invested in federal securities, mainly long-term bonds. In 1997 a government advisory panel proposed that some of the revenues be invested in stocks and bonds to generate higher returns. The panel was divided over whether the money should be invested by the government or by individuals, as well as the amount that should be shifted from government bonds. Both approaches have their critics. Some regard government investment in stocks as a potential source of intrusive federal influence on U.S. businesses; others feel that allowing individuals to invest their Social Security funds would endanger the minimal postretirement "safety net" for all workers that the program is designed to provide if individuals invest unwisely. President George W. Bush, who campaigned for personal Social Security investment accounts, appointed (2001) a commission that offered several options for allowing individual investments in stocks and bonds as part of the Social Security program and for securing the program's financial health; it estimated that it would take as much as $3 trillion of additional revenue over the next 75 years and reductions in guaranteed benefits to accomplish both goals.

Underlying these proposals is the anticipation that the costs of the program as presently structured will outstrip the revenues raised and invested in the early to mid-21st cent. and that benefits will have to be paid from revenues alone, which are expected to be inadequate. If this occurs, Social Security will place a greater burden on the federal budget, and benefits may need to be reduced, or taxes increased, significantly. Although historical returns from investment in stock and bonds over the past century suggest that placing funds in those securities would forestall the program's financial difficulties, the dramatic fluctations in stock prices during and after the market bubble of the late 1990s has given many pause, particularly where individual investment accounts are concerned.

Administration of retirement, survivors, and disability insurance (OASDI) and supplemental security income (SSI) programs is vested in the Social Security Administration. The administration was part of the U.S. Dept. of Health and Human Services until becoming an independent agency in 1995. The Medicare and Medicaid programs are administered by Centers for Medicare and Medicaid Services of the Dept. of Health and Human Services. Unemployment insurance is administered by each state under the overall supervision of the U.S. Dept. of Labor. Contributions are collected by the Internal Revenue Service, while the preparation of benefit checks and the management of trust funds are the responsibility of the Dept. of the Treasury.

Bibliography

See J. Creedy and R. Disney, Social Insurance in Transition (1985); W. A. Achenbaum, Social Security: Visions and Revisions (1988); J. Quadagno, The Transformation of Old Age Security (1988).

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social security

Public provision for the economic security and social welfare of all individuals and their families, especially in the case of income losses due to unemployment, work injury, maternity, sickness, old age, and death. The term encompasses not only social insurance but also health and welfare services and various income maintenance programs designed to improve the recipient's welfare through public services. Some of the first organized cooperative efforts to provide for the economic security of individuals were instituted by workingmen's associations, mutual-benefit societies, and labour unions; social security was not widely established by law until the 19th and 20th centuries, with the first modern program appearing in Germany in 1883. Almost all developed nations now have social security programs that provide benefits or services through several major approaches such as social insurance and social assistance, a needs-based program that pays benefits only to the poor. See also Social Security Act; unemployment insurance; welfare; workers' compensation.

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social security

1. public provision for the economic, and sometimes social, welfare of the aged, unemployed, etc., esp through pensions and other monetary assistance

2. a government programme designed to provide such assistance

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Social Security 

in the USSR, a system of socioeconomic measures established by the state to provide financial security to elderly and disabled citizens, comprehensive benefits to mothers and children, and medical services and treatment for all citizens.

The introduction of a social-security system was one of the demands of the proletariat in prerevolutionary Russia. A system was formulated in the party program adopted in 1903 at the Second Congress of the RSDLP. At the Sixth All-Russian Conference of the RSDLP (Prague, 1912), the Bolshevik party again demanded the recognition of the proletariat’s right to social security, proposed appropriate organizational and legal forms of social security that would guarantee the full realization of this right (a state insurance system), and defined the instances in which a citizen is entitled to social security (mutilation, illness, old age, loss of breadwinner). These demands, formulated by V. I. Lenin, have become known as the Leninist workers’ insurance program. Lenin specified the most important principles on which a state insurance system should be organized. He believed that (1) state insurance should provide for all wage earners and their families, (2) workers should receive assistance in all cases of disability and in case of loss of earnings as a result of unemployment, (3) compensation should be equal to full prior earnings without any payments being imposed on the insured, and (4) insurance should be administered by uniform local agencies that are fully managed by the insureds themselves (see Poln. sobr. soch., 5th ed., vol. 21, pp. 146-49).

In the USSR, a system of social security based on Leninist principles has been established by law. Social security is provided in many different forms. State social insurance is available to industrial and nonindustrial workers and employees and individuals in positions of equivalent status, and their families. Social insurance for kolkhoz workers is paid out of a centralized union fund for social insurance, and social security for kolkhoz workers is paid out of a centralized social-security union fund. Social security is also paid by government agencies out of direct allocations from the state budget (this form is often called social security in the narrow sense). Supplementary forms of social security are paid out of the funds of individual kolkhozes and different unions, including the Writers’, Artists’, and Composers’ unions.

Each form of social security is unique in terms of the individuals insured, but the same general principles are used in establishing the fund from which payments are made and the agencies that make the payments. These general principles include the following: (1) the universality of social security, that is, the equal right of all working people in the USSR under certain conditions to receive specified forms of social security regardless of race, sex, or religious belief; (2) the comprehensiveness of social security and the multiplicity of its forms, for example, pensions, benefits, care provided in homes for invalids and for the aged, prosthetic services, and the training and job placement of invalids; (3) the payment of social security out of state and public funds without withholdings from wages; and (4) the payment of social security in amounts large enough to satisfy the Soviet population’s most essential needs and other material and nonmaterial requirements.

The most important forms of social security are pensions and benefits. Pensions include old-age, disability, seniority, and survivors insurance. Benefits are granted to temporarily disabled workers, pregnant women, new mothers, the children of low-in-, come families, mothers with many children, and unwed mothers. Benefits are also granted to cover the travel expenses of those who need sanatorium treatment.

Social service plays an important role in the provision of social-security benefits to the disabled and the aged. A large network of special homes has been established, including state-supported homes for handicapped children. Prosthetic services are available, and transportation is provided either free of charge or at special rates. Invalids and certain other pensioners are granted special rates for travel on mass transit, airplanes, boats, ships, and railroads and are eligible for rent-and-service discounts and special tax benefits. Social-security agencies administer technicum and vocational-technical boarding schools offering the handicapped professional training.

Social security is supplemented by free medical care, free hospitalization, and treatments at sanatoriums and health resorts. Also available are state and public child-care and educational establishments, including preschool institutions, homes for children, Pioneer camps, and children’s sanatoriums.

The level of financial security provided for Soviet citizens is expected to rise in the future through increased wages and social consumption funds, the greater part of which are allocated to social security.

In capitalist countries, the bitter class struggle has resulted in the bourgeoisie conceding to the workers fundamental rights, including the introduction of social security. Bourgeois propaganda has asserted that with the concession of these rights the nature of the modern bourgeois state has changed, that capitalism has been transformed into people’s capitalism, and that a universal welfare state has been established with the elimination of financial insecurity in capitalist society. These assertions are contradicted by reality. In the new stage of the general crisis of capitalism, the monopolistic bourgeoisie is waging an offensive against the gains won by workers. The movement of workers in defense of their social rights, including the right to social security, is supported by the World Federation of Trade Unions and by communist and workers’ parties in various countries. These organizations regard the movement to be part of the class struggle against monopoly domination and for major social changes in the existing system.

In capitalist countries social-security benefits are provided through three major systems—social insurance, social assistance, and public service. Social insurance, the most common social-security system, involves the obligatory withholding of insurance contributions, from the wages of workers. Pensions and benefits are paid after the termination of a specified period, after a certain age has been reached, or after certain other conditions have been met, regardless of the financial situation of the insured’s family.

Social assistance is financed entirely from the funds of the state budget. Not all workers deprived of their earnings as a result of disability or unemployment are eligible, but only those who after the investigation of the incomes of all family members are recognized as being unable to support themselves. The granting of assistance is supervised by administrative agencies. In most bourgeois countries social assistance is used to supplement an inadequate system of social insurance. In some countries, including Australia and New Zealand, it is the main form of social security.

Public service primarily involves the payment of pensions. This system is characteristic of Sweden, Finland, Norway, Canada, and Iceland. Depending on the circumstances, every citizen may be eligible for an old-age pension, an invalidity pension, or a survivors pension. Pension payments are made at fixed rates that are the same for all. A special tax paid by all citizens from the ages of 16-18 until retirement age is used to raise funds for public-service programs. Pensions are very small, and citizens retire at a relatively old age, for example, in Sweden, Norway, and Iceland both men and women retire at 67, and in Ireland at 70.

All bourgeois social-security systems differ radically from the social-security system in the USSR. The management of the social-security system is not entrusted to workers’ representatives in any capitalist country, and the retirement age is five to ten years higher than in the USSR. Benefits are paid only after a waiting period of two to five days, and the percentage of prior wages compensated for by pensions and benefits is substantially lower. The payment of benefits at the rate of 100 percent of wages is very common in the USSR and does not exist at all in capitalist countries.

REFERENCE

Andreev, V. S. Pravo sotsial’nogo obespecheniia v SSSR. Moscow, 1974.

V. S. ANDREEV and V. I. USENIN