Social Security Act
The Social Security Act established the Social Security Administration and the Social Security program.
Contents
Description
The act established the Social Security Administration and the Social Security program. The program was funded by payroll taxes. The payroll tax rate is set by the Federal Insurance Contributions Act (FICA).
The act also established an unemployment insurance fund, also funded by payroll taxes. States were allowed to administer their own funds if the state administration maintained certain regulatory standards; states that separately funded unemployment insurance funds exceeding those standards were forgiven the federal payroll tax. The payroll tax rate and the regulatory standards are set by the Federal Unemployment Tax Act (FUTA).
The act also established the Aid to Dependent Children (ADC) program. This provided monthly income to families with absent, deceased, and disabled fathers.
History
Roosevelt proposed the Social Security program in early 1935.
The act was passed and signed into law in August 1935.
ADC was renamed to Aid to Families with Dependent Children (AFDC) in 1962.
The Personal Responsibility and Work Opportunity Act reformed AFDC into TANF.