The Social Security Act Overview

When people talk about the Social Security system, only a few programs seem to get all the attention. These include the retirement and disability programs. But Social Security is a more complex system of benefits that supports Americans, often when they need help the most.

Read on for more information about the history of the Social Security Act and how you may qualify for monthly benefits under other Social Security programs. If you have questions about your benefits, a Social Security attorney can help you understand your entitlements.

What Is Social Security?

Social Security is a federal insurance program that provides benefits to retired people, people who are disabled, survivors of workers who have died, and other intended beneficiaries. The Old Age, Survivors and Disability Insurance program (OASDI), the official name for Social Security, was created by the Social Security Act of 1935.

How Social Security Started

The Social Security Act was part of Roosevelt’s New Deal initiatives during the Great Depression. The Act paid federal old-age benefits and benefits to unemployed or disadvantaged Americans.

The Act has undergone various amendments. In 1939, the Senate and House of Representatives drafted amendments to the Act. These amendments were for payments called “dependents’ benefits.” Dependents’ benefits were payments to spouses and minor children of retired workers. The amendments also include survivor benefits paid to the worker’s family in the event of an untimely death. This program specifically provided benefits for dependents of a male wage earner.

In 1965, the Act was amended again to include Medicare and Medicaid.

How Social Security Retirement Benefits Work

Did you ever wonder how you pay into the Social Security retirement system? Perhaps you are curious about how the government calculates federal old-age assistance benefits.

If you are employed, you and your employer each pay a small percentage of your wages through a payroll tax. These taxes earn “credits” toward Social Security retirement benefits.

If you are self-employed, you must report your net earnings to the IRS and the Social Security Administration (SSA) every year. As of 2026, the self-employed tax rate is 15.3%. This rate consists of a 12.4% tax for Social Security and 2.9% for Medicare.

Your credits are used in combination with your birth year to determine when you receive retirement benefits. Full benefits are now available to retirees who are 66, depending on their birth year. Early retirees, starting at 62, may receive reduced benefits if they’ve paid Social Security taxes for 10 years or more. The SSA’s chart and calculator will help you determine how much you may be entitled to and when.

The following are some of the benefits available under an eligible worker’s record:

• Your qualifying spouse (and even ex-spouse) and children may receive a monthly payment from your record. This payment is up to one-half of your retirement benefit amount.
• If you die, SSA may provide survivor benefits to your eligible family members. This benefit is important for child welfare and child health. A worker’s widow or widower is entitled to early Social Security survivors benefits at age 60. But this will reduce their income by a fraction of a percent every month before full retirement age.

Pension plans no longer reduce benefits due to the Social Security Fairness Act. This Act became law in January 2025 and applied retroactively back to January 2024. Unemployment compensation will also not affect retirement benefits.

How Social Security Disability Insurance Works

The Act expanded again to create the Social Security Disability Insurance (SSDI) program. This expansion is found in Title II of the United States Code. This program is for workers who become disabled before retirement age and can no longer work.

A worker must be “fully insured” to receive SSDI benefits. This means you must have earned a minimum of 40 quarters of covered or at least one quarter of coverage every year since you turned sixteen. Evidence of the disabling condition is required. The worker must show that they can no longer work in their previous occupation due to severe impairment. They must also show they cannot perform their prior work or adjust to any other work.

Other Public Welfare Programs Created by the Social Security Act

The Social Security Act, as amended, created additional public welfare programs. Eligible individuals may be entitled to certain benefits.

Medicaid and Medicare

The Act created and governs the federal Medicaid and Medicare programs.

Medicare helps elderly and disabled beneficiaries receive medical treatment. Most people age 65 and older are entitled to public health services and medical insurance under Medicare.

Medicaid provides health insurance to people, regardless of age, who cannot afford health care.

Supplemental Security Income

This program helps meet the basic needs of low-income individuals and families. Supplemental Security Income is a welfare service that provides federal funds to elderly, blind, and disabled people. These benefits include children.

Eligibility requires that these individuals have little or no income of their own. The SSI payments have monthly maximums. The maximum payment amounts in 2026 are $994 for an individual and $1,491 for an individual with an eligible spouse. These amounts increase with annual cost-of-living increases.

Unemployment Insurance

Today, the Act doesn’t cover unemployment insurance. Now, the federal government partners with the state to jointly manage the programs and benefits. These benefits help workers who become involuntarily unemployed and are looking for new and suitable employment.

Every state, as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, has this type of insurance. Weekly unemployment benefits vary from state to state.

Administration of Social Security Programs

The SSA administers many of the nation’s social welfare programs, including those discussed above. The SSA also has its own process where individuals can appeal a denial of benefits.

The Administration has over 1,230 field offices throughout the United States.

The Social Security Advisory Board (also referred to as the Social Security Board) comprises experts on Social Security policy. The Social Security Board advises the President and other high-ranking officials.

Funding and Expenditures

Your Social Security taxes fund the Social Security programs. The money you pay in taxes isn’t held in a personal account for you to draw from when you retire. Instead, your taxes are used to pay people who are currently receiving benefits.

Any unused tax money goes into the two federal Social Security trust funds maintained by the U.S. Treasury. One of these trust funds is called the Old-Age and Survivors Insurance (OASI) Trust Fund. This fund pays retirement and survivors’ benefits. The other fund is called the Old-Age and Survivors Disability Insurance (OASDI) Trust Fund. This fund pays disability benefits.

Social Security is arguably the largest federal government program. About 73 million people per month receive benefits.

But will Social Security benefits be there for you? As the workforce ages, more people will either retire or experience a disability. Social Security payments far exceed Social Security tax revenues. According to current projections, the program’s trust will be exhausted by 2033. It is advisable to plan for retirement on an individual level in case public benefits are no longer available.

Discuss Your Benefits With an Attorney

You may have questions about federal assistance programs or benefits under the Act. A qualified Social Security attorney can help you evaluate your eligibility for these programs.

A Social Security lawyer can guide you through the application process if you decide to apply. They can assist with preliminary steps, such as gathering documents, including your Social Security card, to start the process. They can also guide you through the appeals process if you run into a problem due to a claim denial.