Social Security Amendments of 1956: a Summary and Legislative History
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Social Security Amendments of 1956: A Summary and Legislative History by CHARLES I. SCHOTTLAND* N August 1, 1956, President monthly child's benefits (based on the from general revenue for the costs of Eisenhower signed H.R. 7225, earnings records of either retired or the gratuitous $160 monthly military O which thus became Public deceased insured workers) beginning wage credits granted to veterans who Law No. 880 (Eighty-fourth Con• January 1957. Benefit payments will served in the Armed Forces during gress), the Social Security Amend• also be made to a mother having such the period from September 16, 1940, ments of 1956. This new law amends a child in her care. to December 31, 1956, and for the the old-age and survivors insurance 3. The age at which women become costs of the special provision enacted provisions of the Social Security Act, eligible for benefits is lowered to 62. in 1946 that granted insured status to certain parallel provisions of the In• Full benefits are paid at age 62 to certain World War II veterans who ternal Revenue Code, the public as• women eligible for benefits as widows died within 3 years of leaving service. sistance and child welfare titles of the or dependent parents. Working wo• 8. Benefits are suspended for cer• Social Security Act, and the Railroad men and wives without child bene• tain aliens if they are outside the Retirement Act. ficiaries in their care who elect to United States for more than 6 As President Eisenhower stated receive a retired worker's or wife's months. when he signed the bill, "The new benefit while they are between the 9. A Judge may terminate the bene• law embraces a wide range of changes ages of 62 and 65 receive an actuari• fit rights of persons convicted of es• in old-age and survivors insurance, ally reduced benefit. As under the pionage, sabotage, treason, sedition, the public assistance programs, and old law, the wife of a retired worker or subversive activities as an added child welfare services." These changes will receive full benefits regardless of penalty for their crime. have major implications for the econ• age if she has a child beneficiary in 10. Employment for organizations omic security of the American people her care. registered or required to register by and for the field of public welfare. 4. About 900,000 persons in civilian final order of the Subversive Activi• The old-age and survivors insur• jobs are newly covered; the principal ties Control Board is excluded from ance system was also affected by groups consist of the previously coverage. Public Law No. 881 (Eighty-fourth excluded self-employed professional 11. The interest rate on certain in• Congress)—the Servicemen's and persons (other than doctors of medi• vestments held by the old-age and Veterans' Survivor Benefits Act— cine), additional farm owners and survivors insurance trust fund and which was signed by the President on operators, certain Federal civilian the disability insurance trust fund is August 1, 1956. This law substantially employees, and certain additional changed to reflect the essentially revamps the survivor benefit pro• State and local employees in specified long-term character of the invest• grams for the members of the uni• States. Coverage on a contributory ments. formed services. Included among its basis is extended, effective January 1, The following major changes in the provisions is the extension of old-age 1957, to nearly 3 million members of public assistance program are made and survivors insurance coverage to the uniformed services. by the Social Security Amendments this group (on a contributory basis 5. A separate trust fund is estab• of 1956: and. with certain special features). lished from which disability benefits 1. The Federal matching formula The major changes in the old-age will be paid. Contributions to the dis• is revised to increase the Federal and survivors insurance program as ability insurance trust fund from share in State assistance payments to a result of the 1956 legislation are as covered employees-and employers are needy persons who are aged, blind, follows: at the rate of 1/4 of 1 percent each, and or disabled and to dependent chil• 1. Permanently and totally disabled from covered self-employed persons dren. workers who are between the ages at the rate of 3/8 of 1 percent, effec• 2. A new basis is established for of 50 and 65, who meet certain re• tive January 1, 1957. Federal sharing in State expenditures quirements concerning the length and 6. Before each scheduled increase for medical care on behalf of recip• recency of covered work, and who in the tax rate, an Advisory Council ients, separately from money pay• serve a 6-month waiting period will on Social Security Financing is to be ments to them; the Federal Govern• be paid monthly benefits beginning established to review the status of ment will match dollar for dollar, July 1957. the Federal old-age and survivors in• within specified average maximums 2. Dependent disabled children aged surance trust fund and the Federal per person, the amounts spent by the 18 and over who were totally disabled disability insurance trust fund in re• States for this purpose. before attaining age 18 will receive lation to the long-term commitments. 3. The constructive aspects of pub• 7. The old-age and survivors in• lic assistance are emphasized through * Commissioner of Social Security. surance trust fund is to be reimbursed amendments relating to services in the public assistance programs, and these children may receive benefits as sons receiving old-age and survivors provision is made for grants for the long as they have child beneficiaries insurance benefits) under which ben• training of public welfare personnel. in their care. efits are suspended because earnings exceed a specified amount; the defini• Provision is made for grants for co• Disability Insurance Benefits tion of disability in itself precludes operative research or demonstration Disability insurance benefits are payment of benefits to anyone able projects. payable to totally disabled workers to engage in substantial gainful em• between the ages of 50 and 65 who ployment. Only one change was made in the qualify both as to work requirements When a beneficiary also receives child health and welfare programs. and disability standards after a wait• another Federal benefit based on dis• The amount authorized to be appro• ing period of 6 months. July 1957 is ability or a workmen's compensation priated for child welfare services was the first month for which disability benefit, the disability benefit under increased from $10 million to $12 benefits will be payable. No benefits old-age and survivors insurance is million for the fiscal year 1957-58 will be paid to dependents of quali• reduced by the amount of such bene• fied disabled workers. The procedures and subsequent years. fit. and practices for determining and de• Vocational rehabilitation will con• fining disability that were set forth in tinue as an important adjunct to the Old-Age and Survivors the previous law with respect to the administration of the disability freeze Insurance disability freeze are continued for and disability cash benefits. Appli• the new cash-payment program ex• cants for either the freeze or disa• cept that blindness does not consti• New Benefit Provisions bility insurance benefits will be re• tute presumed disability. For pur• ferred to the State agency for reha• poses of disability benefits, persons The disability "freeze" provisions bilitation, and monthly benefits will with visual impairments must be dis• in the old law permitted any extended be suspended if a beneficiary refuses abled to the same extent as those with period in which an insured worker to accept rehabilitation services other physical impairments—that is, was totally disabled to be disregarded without good cause. A beneficiary they must be unable to engage in any in determining his eligibility for and who is a member or adherent of any substantial gainful activity. the amount of his benefits. The 1956 recognized church or religious sect amendments provide for a system of The disabled person, to qualify for that relies on spiritual healing and disability insurance benefits, payable the disability insurance benefits, must who refuses to accept rehabilitation to insured workers between the ages be both fully and currently insured services is deemed to have done so of 50 and 65. that is separate from and must have had 20 quarters of em• with good cause. A beneficiary who the old-age and survivors insurance ployment covered by old-age and engages in substantial gainful activity system as far as financing is con• survivors insurance during the 40- under an approved State plan for vo• cerned. It is estimated that disability quarter period that ends with the cational rehabilitation purposes will insurance benefits could be payable quarter in which the disability begins. nevertheless be considered disabled for a year after he first engages in for July 1957 to 400,000 individuals An insured individual who is unable such activity. The provision that and that by 1975 a possible 900,000 to engage in any substantial gainful makes applicable the payment of persons could receive such benefits. activity is not necessarily entitled to benefits and the freeze only for im• Under the previous law, a child's disability insurance benefits even pairments that can be expected to be benefits stopped when he attained 18. though he is, in fact, severely dis• of long-continued and indefinite du• Under the new law, child's benefits abled. The disability must be ex• ration is not inconsistent with efforts are payable to the dependent adult pected to result in death or to be of toward rehabilitation, since it refers children of retired or deceased in- long and indefinite duration.