Why Was Social Security Formed
The Social Security Act was signed into law on Aug. 14, 1935. It was enacted to address the issue of poverty among the elderly. The act was designed the help these individuals remain self-sufficient and less reliant on the charity of others for survival.
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Title I-Grants To States For Old Age Assistance
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Title I of the act created the requirement for states to develop or expand programs to supply needy, elderly individuals with economic assistance. The title also established the federal government's responsibility to provide each state with funding to help cover the costs of the programs.
Title II- Old Age Benefits
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Title II created a worker-pay system that is the heart of the current Social Security system. The act outlined the requirement that the U.S. Treasury have an Old Age Reserve Account where all payments made into the Social Security system would be held. The provision outlined the way workers would pay into the system as well as the monthly old-age benefit payments they would receive when they retired.
Further Expansions of the Program
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In the beginning, Social Security only covered workers. Legislation later expanded coverage to include spouses and children of workers and disabled individuals.
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References
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