Social Security was signed into law on August 14, 1935, by President Roosevelt with the first payments being made in January of 1937. The Social Security Act was established to provide "old age," or retirement benefits, aid to dependent children, disability insurance, and unemployment insurance. In the 1930s millions of people were still out of work, and there was an alarming concern for the elderly and retired Americans who had lost everything. The Social Security program was intended to be and still is today, a social insurance program.
Social Security Today
Over the years, the Act was changed or "amended" in several ways, but the basic principals are still the same. Under today's Social Security Act, the SSA still manages the program, workers still make contributions from their paychecks, and monthly payments are still made to those who are eligible for the following benefits.
Retirement benefits. At age 66 or 67, workers who contributed to the trust fund may apply for payments to help with everyday living and expenses and to offset the loss of income from their jobs. You may retire at age 62, but payments are reduced if you collect benefits before age 67. The more money you make, the higher your retirement benefits will be.
Survivors and death benefits. A worker's spouse and/or dependent children may receive monthly payments in certain circumstances. The SSA also pays a small lump-sum death benefit to surviving family members to help pay for funeral expenses.
Disability benefits. Disability benefits are for workers who have paid into the trust fund for a certain amount of time, who have a serious mental or physical disability that interferes with their ability to work.
On the other hand, the Act now provides for Medicare, which provides health care benefits to those over 65 who have paid Medicare taxes for a certain number of years.