Social Security: How to Apply for Benefits

Policy Selected 

Financial insecurity is one of the most significant social problems affecting the aging population in the United States today. Most of the elderly persons find themselves in a situation where it becomes hard or challenging for them to cater for their financial needs due to issues around financial instability, which exposes them to high risks of bankruptcy. The government has been on the forefront in adopting proactive policies aimed at dealing with this social issue with the intention of protecting the aging population in the country. One significant policy, which will be discussed further in this report, is social security. The implementation of social security has been seen as a strategic approach by the federal government to cut down on overall possibilities of financial insecurity by the elderly persons. The objective of this report is to examine the policy from multiple perspectives to help determine the value that it offers in dealing with the issue identified.

Level of the Policy 

An in-depth analysis of the social security policy indicates that it has been implemented at the federal level with the intention being towards ensuring that it is adopted across all states in the United States. Mehta, Elo, Engelman, Lauderdale, and Kestenbaum (2016) indicate that social security is one of the notable parts of the federal budget today with the government recognizing its responsibility to protecting the aging population from issues arising from financial instability. The social challenge that the policy intends to deal with financial insecurity, which is a problem that affects elderly persons all across the United States. Consequently, this means that its adoption at the federal level offers a greater guarantee of success in addressing the social issue much more effectively. If the policy was implemented at the state level, it would not have been as successful as it has been today considering that it would mean that a significant number of elderly persons would not have benefitted from it.

Policy Enactment, Proponents, and Opponents 

The Social Security Act was first enacted in 1935 by the 74th United States Congress. The bill was then signed into law by the then president, President Franklin D. Roosevelt (Geiger, Garthwaite, Warren, & Bambra, 2018). President Roosevelt had developed a New Deal domestic program, which was aimed at cushioning Americans from economic instabilities, especially focusing on matters associated with their inability to meet their financial obligations. The signing of the law was seen as a major step for President Roosevelt to achieve the set out objectives of the New Deal domestic program. During the enactment of the policy, it must be noted that it received support and opposition in equal measure. The proponents of the policy viewed it as a safety net for the aging population, as it focuses on persons over the age of 65 years.

On one hand, the policy received support from the democrats in the United States Congress, who believed in the president’s vision under the New Deal domestic program. The democrats viewed the president’s approach to dealing with economic issues as being rather effective considering that it sought to establish clear structures that would define what the people expected. On the other hand, the policy faced notable opposition from the republicans, who were the minority in congress. The republicans argued that the signing of the Social Security Act would mean that the federal budget would increase to accommodate programs under this law. Most of the republicans, opposed to the law, believed that it may have benefitted only a few Americans excluding the bigger percentage of the aging population in the country. However, this was not the case considering that the law has played a key role towards creating old-age programs funded by payroll taxes to support persons over the age of 65 years.

Stated Goals of the Policy 

The enactment of the social security policy was expected to achieve several key goals, which were stated as part of the debate during its enactment into law in 1935. The first key goal of the policy was to serve as a life insurance and disability insurance protection for persons over the age of 65 years. The aging population in the United States faces a key challenge due to issues associated with disability resulting from their age. In that view, the enactment of this policy was expected to offer insurance that would help protect this population from the financial implications associated with such disabilities. Over the years, the policy has played a critical role in supporting the livelihood of elderly persons, some of who suffer from disabilities all across the United States.

The second key goal of the policy was that it would provide a guarantee, progressive benefits that would cushion the aging population from the increasing cost of living. The enactment of the policy was seen as a key step to help prevent persons from falling into poverty as age progresses. Social security benefits are progressive considering that they are proportionate to other economic factors such as inflation among others. The basic expectation is that this would help prevent overall possibility of the aging population encountering challenges in meeting their financial obligations. Currently, it can be argued that social security offers a much better approach to dealing with financial insecurity compared to most private pensions and annuities, which are not adjusted to match economic conditions. Therefore, most of the people opting for private pensions and annuities find themselves in a situation where it becomes much harder for them to meet their financial obligations, especially in instances where inflation is much higher than anticipated.

The third key goal of the policy was to provide a foundation of retirement protection for nearly every American. The enactment of the policy was seen as a key step to creating a solid foundation for retirement with the view that every individual would be in a position allowing him/her to benefit. The need to benefit from social security has pushed a significant majority of workers to making payroll tax contributions, which is one of the key determinants of one receiving social security. Yoshida (2018) indicates that approximately 97% of elderly persons between the age of 60 and 89 years in the United States receive social security benefits, which is according to estimates provided by Social Security Administration. That shows the value that this policy has had towards promoting financial security for the elderly population even after their retirement to minimize their risk of poverty.

Hidden Goals and Objectives of the Policy 

Over and above the stated goals, as has been discussed, the policy also incorporates several hidden goals and objectives, which are important to evaluate as a way of determining the value that it has had for the elderly population. The first hidden objective is to ensure the elderly population receive an income irrespective of their age, which allows them to maintain the livelihoods. After retirement, majority of the elderly persons find themselves spending a significant amount of their time at home considering that they are not in any position to engage in any kind of work. Social Security Administration indicates that social security benefits account for more than 50% of the income for half of the elderly population over the age of 65 years and account for more than 90% of income in one out of every 4 seniors (Fitzpatrick & Moore, 2018). That shows the value that this policy has had towards ensuring the elderly population maintains some form of income.

The second hidden goal of the social security policy is that it helps in protecting the retirement of low-income populations, which are often marginalized for a wide array of reasons. A study conducted in the United States indicated that elderly persons from minority communities, which include African American and Hispanics, face over 2.5 times as high a risk of poverty compared to whites (CCC). The issue also affects women, who equally face significant challenges due to their marginalization within the workplace environment. The establishment of the social security policy was expected to help protect the marginalized populations from poverty. Although it has not been stated, it is clear that this policy has had significant success in ensuring that the marginalized populations avoid some of the underlying risks associated with poverty after their retirement.

The third hidden objective of adopting the social security policy was to deal with other social issues, such as child poverty. When enacting the policy, President Roosevelt was dealing with the issue of poverty, which did not only affect adults but also affected children, a significant number of who lived in families that did not have any source of income. The basic expectation when setting up this policy was to ensure that these children are protected from possible exposure to poverty. As of 2017, statistics indicated that approximately 6 million children, below the age of 18 years, lived in families that receive social security benefits with 1.4 million being lifted from poverty through the benefits offered (Turner, Zhang, Hughes, & Rajnes, 2019). From this perspective, it is clear that although the policy does not state this as a goal, it is one of the hidden objectives that ought to be taken into great consideration. The idea is ensuring that children, some of who face high risks of poverty, are able to get food, shelter, and education.

Programs Implemented as a Result of the Policy 

The policy has been of great value in implementation of several key programs, which are intended to help achieve the intended goals. The enactment of the policy has led to the implementation of several social welfare programs, each of which has a goal to protecting the American population from financial insecurities. The first program implemented is the Temporary Assistance for Needy Families (TANF). The objective of this program is to provide assistance to needy families, which would help them deal with poverty. Statistics from the Center on Budget and Policy Priorities indicate that approximately 23% of families living with poverty receive TANF assistance (Goldman, Frey, & Riley, 2018). The program has been of great importance to improving the welfare for millions of Americans in need of assistance for one reason or another.

The second program that has been implemented as a result of the social security policy is Medicaid and the Child's Health Insurance Program (CHIP). Medicaid is a program aimed at helping to pay for the health care of millions of Americans, especially the low-income population and the elderly. The basic idea is that this would help increase affordability of health care, which is one of the key areas of consideration for the elderly within the United States. The third program implemented based on the social security policy is Supplemental Nutrition Assistance Program (SNAP). SNAP, which is commonly referred to as food stamps, offers assistance to millions of Americans, especially the elderly, who are unable to cater for their food demands. The program has been of great value towards ensuring that the elderly population does not face a risk of malnutrition, which may result from inability to afford food matching their respective nutritional needs.

The fourth program implemented through the social security policy is Supplemental Security Income (SSI). SSI is a program that is specifically focused on providing extra cash assistance for adults, who have children with disabilities. The program focuses on ensuring that the adults are in a much better position to afford some of the key needs for their children; thus, avoiding possible exposure to poverty. Other programs implemented include Earned Income Tax Credit (EITC) and housing assistance. The adoption of these programs is seen as a key step in achieving success based on the projected value resulting from the implementation of the social security policy. Amendments made to the Social Security Act has paved the way for the introduction of some of these programs all of which have been focused on promoting social welfare for the affected populations.

Unintended Consequences of the Policy 

Although the enactment of the Social Security Act was seen as a key step to dealing with the social issue of financial insecurity among the elderly, it also introduced several unintended consequences. Understanding these consequences may help determine specific areas of improvement to avoid possibility of the policy failing to meet its objectives. The first consequence is that it has resulted in dwindling of funds aimed at supporting the elderly population. The social security system is partially funded, which means that every worker’s paycheck taxes help to fund part of the amount offered to retirees. Social Security Administration estimates that the demand for social security benefits will surpass the amount collected through payroll taxes by 2022 (Skinner, Meyer, Cook, & Fletcher, 2017). That would mean that the federal government is much more likely to increase its budgetary allocations meeting the expected demands for social security benefits. That is an unintended consequence, as the system was designed in a manner that would ensure it funds itself based on the taxes collected.

The second unintended consequence of the policy was that it has limited eligibility for the elderly adults, who were the main targets of the enactment of this policy. For an individual to qualify for social security, he/she must earn credits through the payroll taxes that they pay while working with one needing 40 credits to qualify. Additionally, it is expected that one would have a maximum of four credits awarded each year, which is determined by one’s work history. The unintended consequence seen from this outcome is that workers, who may not have achieved the qualifications indicated, find themselves locked out from the benefits associated with social security. In some cases, workers fail to achieve the expected number of units for a wide array of reasons, which limit their qualified for the expected benefits; thus, exposing them to a high risk of poverty after retirement.

Significance of the Policy 

The significance of the social security policy can be seen from the fact that a significant percentage of the elderly population relies on social security benefits to cater for their overall needs. Without social security, many of the elderly persons would have relied on the traditional pensions offered by employers, some of which fail to achieve their intended objective to protect the retirees from poverty. Many of the workers today use social security to save for their retirement with the view that this would protect their financial security after they have retired, as majority of them may not have been able to save for their retirement. Social security benefits have helped create a platform through which the aging population is able to maintain a decent standard of living in retirement without fear of being exposed to poverty.

Another notable significance of the social security policy is that it helps create some form of equalization after retirement irrespective of the challenges that specific workers may have experienced while working. The ability to create some form of equality in income earned during retirement is one of the key benefits that social security has had in the United States. The fact that a significant population faces higher risks of poverty when compared to others serves as a clear indication of the value that ought to be placed on social security benefits, which have been adopted through the Social Security Act. Equalization is especially important for the marginalized population, who include women and minorities. The basic idea is that the policy helps ensure that these populations are well protected after their retirement, which enhances overall capacity to dealing with the high risk of poverty that they encounter.

Current State of the Policy 

Since its enactment, the Social Security Act has gone through several amendments with the view being that this would help improve on its ability to deliver on expected objectives. The last amendment to the act was in 1965, which introduced a raft of changes that are still in place today. As of 2019, 63 million people were receiving social security, which translates to 1 out of every 6 Americans, with the older adults accounting for 4 out of every 5 Americans receiving these benefits (Brown, Choi, Coile, & Woodbury, 2019). The population will receive benefits amounting to one trillion dollars, which is a significant growth compared to the early years when the policy was enacted into law. That serves as an indication of the fact that indeed social security has become an integral part of the American social system with a significant majority of Americans saving for their security in future.

Another important aspect to note when evaluating the current state of social security is that approximately 178 million workers, working in both private and public sector, are covered under social security based on their contributions for their retirement. Two-thirds of workers in the United States today are saving for their retirement through social security, which has increased their eligibility for the policy (Brown, Choi, Coile, & Woodbury, 2019). The remaining number of workers opt for privately-funded pensions offered by their employers depending on the benefits that they anticipate. It must be noted that it is not mandatory for a worker to contribute towards social security, which means that a worker may opt to contribute to a private pension scheme. Generally, this means that the payroll taxes that the Social Security Administration collects from the workers is able to cover the underlying benefits offered to retirees and other beneficiaries across the United States.

Alternative Policy and Obstacles to Implementation 

An alternative policy to social security would be a policy that will see every employer set up a pension for their employees. In this policy, employers will have the responsibility of paying pension for their employees through the schemes that they implement at a private capacity. The most significant obstacle to the implementation of this policy is lack of accountability by some of the employers. Although this policy may be of value in ensuring every employee saves for his/her retirement, some of the employers may lack accountability, which may result in employees losing their pensions. Another obstacle that may affect the implementation of this policy is lack of a legal framework to compel employers to set up pension schemes for their employees. Currently, employers are not compelled by law to set up pensions for their workers, which means that some of them offer employees the benefit of using social security as the most effective pension alternative.

References 

Brown, J. R., Choi, J. J., Coile, C., & Woodbury, R. (2020). Social Security and Financial Security at Older Ages.  Social Security Bulletin ,  80 (1), 31-40.

Fitzpatrick, M. D., & Moore, T. J. (2018). The mortality effects of retirement: Evidence from Social Security eligibility at age 62.  Journal of Public Economics ,  157 , 121-137.

Geiger, B. B., Garthwaite, K., Warren, J., & Bambra, C. (2018). Assessing work disability for social security benefits: international models for the direct assessment of work capacity.  Disability and rehabilitation ,  40 (24), 2962-2970.

Goldman, H. H., Frey, W. D., & Riley, J. K. (2018). Social Security and Disability Due to Mental Impairment in Adults.  Annual review of clinical psychology ,  14 , 453-469.

Mehta, N. K., Elo, I. T., Engelman, M., Lauderdale, D. S., & Kestenbaum, B. M. (2016). Life expectancy among US-born and foreign-born older adults in the United States: Estimates from linked social security and Medicare data.  Demography ,  53 (4), 1109-1134.

Skinner, C., Meyer, D. R., Cook, K., & Fletcher, M. (2017). Child maintenance and social security interactions: The poverty reduction effects in model lone parent families across four countries.  Journal of Social Policy ,  46 (3), 495-516.

Turner, J., Zhang, S., Hughes, G., & Rajnes, D. (2019). Irrational Expectations, Future Social Security Benefits, and Life Cycle Planning.  The Journal of Retirement ,  6 (3), 60-68.

Yoshida, K. (2018). The Stability of Social Security in the United States: The Need for a Durable Institutional Design.  Journal of Social Policy ,  47 (2), 397-415.