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What is the Social Security Act of 1935?

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Quick Answer

The Social Security Act of 1935, signed into law on August 14 of that year, created programs such as old-age and unemployment insurance, as well as Aid to Families with Dependant Children, notes the U.S. Social Security Administration. Congress has modified the act several times, adding or cutting programs and clarifying eligibility rules.

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Full Answer

The Social Security Act of 1935 grew from the work of President Franklin D. Roosevelt's Committee on Economic Security, and called for a 1 percent payroll tax from both employers and employees on the first $3,000 of yearly earnings, to begin in 1937, states the U.S. Social Security Administration. Workers who paid into the program were not set to receive benefits until 1942, to allow cash reserves for payments to build. While the Social Security Act of 1935 did allow for health insurance research, Medicare was not part of the act and did not exist until 1965.

Amendments in 1939 added dependant and survivor benefits to the Social Security Act, and changed the year in which benefits began to 1940, according to the U.S. Social Security Administration. In 1950, Social Security benefits were expanded to include farm and domestic workers, and other groups such as the self-employed. While the original Social Security Act of 1935 only covered workers in commerce and industry, it has been expanded to cover more than 95 percent of jobs in the United States, as of 2015.

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