Saturday, April 22, 2017

A reaction to Social Security

This reaction essay by a student is a bit more didactic than other reactions, but it offers a young adult’s understanding of the old age pensions provided by Social Security. 

Social Security is a social policy that was established by Franklin Delano Roosevelt and the Social Security Act of 1935. Social Security is the common name for, “Old Age, Survivors and Disability Insurance”. Social Security is a social insurance program but is not considered “welfare”, as that is known as public assistance. [interesting way to define welfare.  Public Assistance programs listed by the Illinois Department of Human Services include: SNAP, public housing, unemployment benefits, Temporary Assistance to Needy Families (TANF), Medicaid, and Supplemental Social Security (SSI). However, in Illinois I would think General Assistance (cash grants given by townships to poor residents) would also count.]  Social insurance programs and public assistance programs are the two categories of support programs that make up American social welfare. Old Age, Survivors and Disability Insurance is a universal program, and all Americans can participate as their social right [provided they aren’t excluded because they work abroad or work for an employer that has them in another program that substitutes for Social Security, and provided they are “Americans” by the definition of the American government, which doesn’t consider persons who grew up here to be Americans unless they were born here or their parents were citizens when they were born.] Participation in social security isn’t based on your financial need, but rather eligibility. Funding for this program is provided by a payroll tax that both an employee and employer must pay. Benefits of this social insurance are adjusted when the cost of living goes up. Social Security has been an effective way to raise individuals above the poverty line for several years.

In order for a person to receive benefits from Social Security, they must have paid their payroll taxes while they were working for a minimum of 10 years. In terms of Social Security, that is a total of 40 quarters. If an individual has paid their taxes and meets the age requirement at the time of retirement, they will be covered by this insurance permanently. The amounts of benefits that will be received are based on how much money was paid into the program. That makes up the “Old Age” part of the social insurance program. To be eligible for the “Survivor's” benefits of Social Security, an individual must be a child under 18 years of age, a dependent widow/widower, or a dependent parent. If he/she is one of those individuals and the insured worker dies, they will receive Social Security benefits. Along with that, to receive benefits from the “Disability” part of Social Security, an individual must be 18 to 64 years of age and unable to work. He or she will have to prove that they are disabled and unable to participate in “gainful employment”. When a disabled person turns 65, they will continue to receive benefits under the “Old Age” sector of Social Security. 

I believe that Social Security is a great form of insurance for eligible individuals. There are many different benefits it provides to such eligible individuals. As mentioned earlier, it has consistently lifted many people 65 and over above the poverty line [Yeah, it lifts about 22 million elderly Americans out of poverty]. It is a source of income for individuals who are unable to work, and it provides benefits to deceased individual’s families. However, there are certain problems that go hand in hand with the benefits that exist within the program today. Some employees that have paid into Social Security for many years aren’t getting the benefits they deserve. Part of that has to do with the budget issue that has arisen in Illinois within the last couple of years. As with any social welfare program, there are also ways to abuse the program that cause many problems. For example, a person who is insured under Social Security will receive benefits at the age of retirement which is their American right. But if such an individual has a family and is in the process of getting a divorce when he/she dies, their spouse will continue to get the benefits on behalf of the children. Although this is something that can’t exactly be monitored or fixed, it is a problem that happens more often that people think. The children should have the right to those Social Security benefits, but they should be set aside until they are 18 years of age. At 18 years old, the child will then have the option to do choose what to do with the benefits received from their deceased parent, as they are of an age to make responsible decisions. That is just one of the issues that prevails in the Social Security program. 

Any social welfare program will prove to provide a number of benefits to a range of different people. But as with all the other programs, social welfare policies will also have a number of abusers and issues that are existent within that program. Social welfare programs should continue to serve Americans but could stand to change a little for the better.

This is the first time I ever heard anyone raising this issue of survivor benefits going to a surviving spouse even if the surviving spouse and deceased Social Security Beneficiary were in an uncompleted process of divorce.  I think one reason there are survivor benefits for spouses is that we assume sometimes one adult works in the formal labor market and pays payroll taxes to get Social Security benefits, while the other adult works informally to rear children and keep house for the one who is working.  So, the spouse benefits are a reward for the working spouse who work just wasn't in the formal labor market.  It seems to me that such a spouse would deserve the benefits even if they were about to divorce the person who had paid the payroll taxes into Social Security.  Those payroll taxes were paid by a "household" as much as they were paid by the individual who earned them.  And, the spouse who didn't earn income may have been supporting the partner who did earn income for many years, and all those years of support don't get erased if in the final years the two part from each other. If the surviving spouse is taking care of the children, and paying for their living expenses, then it seems to make sense that the survivor benefits would go to that spouse.  But, yes, a surviving spouse might waste the survivor benefits on an addiction to gambling or substances, instead of using the benefits to care for the children.  That could happen.  Children's individual savings accounts are a good policy idea that could be made part of Social Security.  I think all children ought to get some money at birth, and have money added to it for various achievements in their lives.  The Child Individual Savings Accounts could be used to purchase a home, purchase education, invest in a business, pay for health expenses, and pay for relocation or moving expenses.  As adults people could continue adding money to this account, and then it could be passed on to children or grandchildren.  I'd have such savings accounts run as a supplement to the existing OASDI functions of Social Security.

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