Social Security Act

By: Umer Khan

In the 1930s the United States along with some other countries was going through The
Great Depression. The depression originated in the United States after the fall in stock prices that
began around September 4, 1929, and became worldwide news with the stock market crash of
October 29, 1929. The stock market crash was also known as Black Tuesday. After the stock
market crash the U.S. and many other countries went into depression which caused many people
to lose their jobs. Herbert Hoover was the president at that time, but in 1932 Franklin Roosevelt
was elected. In an effort to help people across the United States, Roosevelt created The New
Deal Program. The New Deal programs were a variety of programs to help people get jobs and
become financially stable again. In 1935 Franklin Roosevelt created the second New Deal
program which was Social Security. He created Social Security to financially help elderly
people.
The Social Security Act of August 14, 1935 was created to provide for the general
welfare by establishing a system of federal old-age benefits. This enabled the states to make
more adequate provision for aged people, blind people, dependent and crippled children,
maternal and child welfare, public health, and the administration of their unemployment
compensation laws. The money for this program comes from peoples paychecks not government
funds. To get money for this program the government just cuts a certain amount of money from
everyones paycheck to help pay for someones social security. To receive benefits from social
security an individual must be at least 65 years old. This act also provides a lump-sum benefit at
death.

The Social Security Act of 1935 directly impacts elderly people, retired people, disabled
people, and families with dependent children. These people receive a certain amount of money
each month to help them with their financial expenses. This act also impacts workers directly
because the money used to pay the beneficiaries doesnt come from the national budget; it comes
from peoples paychecks. Every month, the government cuts some money from everyones
checks to pay for the social security benefits. This also directly impacts the employers because
the employees are not the only people paying for the social security. The employers also have to
pay some money along with the money already being cut from their employees checks. This
act indirectly impacts everyone in the United States because the act also created social security
cards. After the act became law they began using social security cards as a form of identification.
The Social Security act of 1935 indirectly impacts the United States government because of the
baby boomers. From 1946-1964 76 million babies were born. Now these baby boomers are
reaching retirement age so they are starting to receive Social Security benefits, but there are more
baby boomers than workers so the workers and employers alone cannot pay for their benefits. So
then the government has to contribute some funds.
Sometimes people abuse the benefits given by the government. Some people lie to the
government about their health, wealth, income, disability, and employment to try and receive
benefits that they dont need. The government can impose up to $5,000 for each time a person
lied or upheld facts. They can also make the person repay up to twice the amount of the benefits
that they received fraudulently. These benefits are great for the legal beneficiaries, but if you are
caught illegally receiving benefits; you could be charged way more money than you received
from the benefits.

A woman in Washington was receiving Social Security benefits and the Social Security
Administration became suspicious because several members of her family were also receiving
benefits for disabilities such as low IQ and learning disabilities. The Social Security
Administration then investigated and found out that, although she claimed to be single, the
woman had been married for three years. Her husband also earned more than enough money to
disqualify her for government assistance. She had also recently graduated from college. Social
Security applicants and beneficiaries are required to give accurate information about their
income, living arrangements, medical condition, and other things that affect eligibility for
benefits. They also have to tell the Social Security Administration when this information change
for example, when they move, or start working. The Washington State woman admitted she
didnt tell the Social Security Administration she was married so she could continue receiving
Social Security benefits. At the same time, her husband was earning a sizable income; they even
owned several luxury vehicles. In all, the woman received over $18,000 that she was never
eligible for. At the end, they negotiated a deal with the woman and she agreed to pay $38,844.
That included her $18,844 Social Security overpayment and a $20,000 penalty.

References

http://www.ssa.gov/history/35act.html
http://www.ourdocuments.gov/doc.php?flash=true&doc=68
http://www.socialwelfarehistory.com/events/social-security-act-of-1935/
http://oig.ssa.gov/newsroom/blog/2012/08/pricey-penalties-social-security-fraud