Social Security began in 1935

The Social Security program was created in 1935 as part of President Franklin D. Roosevelt's New Deal response to the Great Depression. Congress passed the Social Security Act on August 14, 1935, and President Roosevelt signed it into law that same day. The program started collecting payroll taxes from workers in January 1936 and paid out its first monthly benefit check in January 1940.

The original program was much smaller than it is today. It covered only workers in commerce and industry — not farm workers, domestic workers, or the self-employed. The first person to receive a Social Security benefit was Ida May Fuller, a retired legal secretary from Vermont, who received a check for $22.54 in January 1940. She had paid into the system for only three years but lived to age 100 and collected more than $22,000 in total benefits.

Key Takeaways

  • Social Security was signed into law on August 14, 1935, and began collecting taxes from workers in January 1936.
  • The first monthly benefit checks were paid in January 1940, more than four years after the law was passed.
  • The program originally covered only certain types of workers and has expanded many times since 1935 to include farm workers, domestic workers, and the self-employed.
  • Understanding when Social Security started helps explain why the program works the way it does today and what changes have been made over time.

Why Social Security was created in 1935

The Great Depression left millions of older Americans without income, savings, or family support. Before Social Security, elderly people who could not work had few options — they relied on their children, charity, or local poorhouses. Many states had small pension programs, but they were inconsistent and often inadequate. President Roosevelt and Congress created Social Security to provide a basic income floor for retired workers and their families.

The program was designed as an insurance system, not a charity program. Workers and employers both paid into a fund, and workers earned the right to benefits based on their contributions. This approach made the program politically acceptable at the time — it was framed as workers getting back what they had paid in, rather than receiving government handouts.

How the program has changed since 1935

Social Security has been expanded and modified many times since its creation. In 1939, just three years after the law passed, Congress added benefits for the spouses and children of retired workers and for survivors of workers who died. In 1956, the program added disability benefits for workers under age 65 and their families. In 1965, Medicare was created as a companion program to provide health coverage for people over 65.

Coverage has also expanded dramatically. In 1935, the program excluded farm workers, domestic workers, and the self-employed — groups that included many Black workers and women. By 1950, farm workers and domestic workers were added. The self-employed were included in 1954. These expansions mean that today, Social Security covers nearly all workers in the United States.

The retirement age and benefit formulas have also changed. When Social Security started, the full retirement age was 65, and life expectancy was much lower. Today, the full retirement age ranges from 66 to 67 depending on your birth year, and people live much longer. The benefit amount you receive is calculated using a formula that has been adjusted many times to account for inflation and changes in wages.

What the 1935 law actually said about benefits

The original Social Security Act was much simpler than the program today. It provided monthly benefits only to retired workers age 65 and older. The benefit amount was based on how much a worker had earned and how long they had paid into the system. There was no minimum benefit, and the first checks were quite small — the average benefit in 1940 was about $22 per month, which was roughly equivalent to $450 in today's dollars.

The law also created a trust fund to hold the money collected from payroll taxes. This trust fund still exists today and is called the Old-Age and Survivors Insurance Trust Fund (OASI). A separate trust fund for disability benefits was created in 1956. These two trust funds are what people refer to when they talk about Social Security's financial status.

Why knowing the history helps you understand your benefits today

Understanding that Social Security started in 1935 helps explain several things about how the program works now. The program was designed when people lived shorter lives and retired at 65. Today, people often live 20 or 30 years after retirement, which puts pressure on the system. The program was also designed for a different workforce — mostly men working in factories and offices. Today, it covers women, self-employed people, and workers in many different fields.

The history also explains why certain rules exist. For example, the program still uses age 65 as a reference point for the full retirement age, even though the actual full retirement age is now higher. It still uses a formula based on your highest 35 years of earnings, which was designed when people had more stable, longer careers. Knowing this history can help you understand why the program works the way it does and what options are available to you.

Frequently Asked Questions

Did Social Security start paying benefits right away in 1935?

No. The law was signed in August 1935, but the program did not start collecting taxes until January 1936. The first monthly benefit checks were not paid until January 1940 — more than four years later. This delay gave the program time to set up its systems and collect enough money to begin paying benefits.

Who was may be able to access for Social Security when it started in 1935?

Only workers in commerce and industry were covered. Farm workers, domestic workers, railroad workers, and the self-employed were excluded. This meant that many workers, particularly in the South and in rural areas, could not receive benefits. These groups were added to the program over the next 20 years.

How much was the first Social Security check in 1940?

The first check, paid to Ida May Fuller in January 1940, was $22.54. The average benefit that year was about $22 per month. In today's dollars, that would be roughly equivalent to $450 per month, though the purchasing power was different then.

Has Social Security always covered disability?

No. The original 1935 law covered only retired workers age 65 and older. Disability benefits were added in 1956. Survivor benefits for the spouses and children of retired workers were added even earlier, in 1939.

Why did it take so long to start paying benefits after 1935?

The program needed time to build its administrative systems, hire staff, and collect enough payroll taxes to begin paying benefits. The law also required that workers contribute to the system for a certain period before they could receive benefits. This delay was intentional — it allowed the program to start on a more solid financial footing.