Committee on Economic Security (CES)

Volume II. Old Age Security

Papers in Support of Old-Age Provisions of Bill


J.P. Harris and Staff

The Federal Social Security Bill does not propose to have the federal government pay old-age pensions directly to individuals. Instead it proposes that the federal government shall aid the states in paying such pensions by meeting one-half the cost.

This would enable the 28 states that now have old-age pension laws actually to make the payments. In some states the laws providing for old-age pensions exist only on paper, or appropriations for them are so inadequate that only a part of the needy aged are cared for simply because these states are financially unable to meet such obligations. The federal aid would assist these states to finance adequately the pensions needed.

It is expected that the 20 states which do not yet have old-age pension laws will be able to pass such laws when this federal aid becomes available. No old-age pensions will be available in any state until the state passes a proper old-age pension act, as the federal aid will be given to the state, not to individuals.

As a condition of the grant, the state laws will be required to meet certain conditions set up by the federal government. The age limit must eventually be lowered to 65 years, although the state may continue to pay pensions only to persons over 70 years of age until 1940. The state must not require more than five years residence in the state, out of the previous nine years, nor more than one year of residence in the state immediately before application for a pension. The amount of the old-age pensions which will be paid to needy aged persons will necessarily vary from state to state. It will depend upon the means of the individual, the cost of living, and the amount which the state and local governments will be able to provide when aided by the federal government.

When the state provides old-age pensions, the Social Security Bill proposes that the federal government will pay one-half of the cost up to $30 a month for any individual. The state may pay more than $30 a month, but in such cases the federal government will only pay $15 of the pension. If a pension of less than $30 is granted by the state, the federal government will pay half the amount.

The federal Social Security Bill has passed the House of Representatives but is yet to be considered by the Senate, which may change some of the above provisions. If the bill passes the Senate and becomes law, it will still be necessary for the state to enact a law meeting the federal requirements. If the state already has a law, it may be necessary for the state to change the law in order to obtain federal aid. (Many states require longer residence in the state than the federal bill would allow.) It will also be necessary for the individual to make application for old-age pension to the proper state or local agency where he or she resides. A list of the states that now have old-age pension laws in effect, with their main provisions, is attached.

(See chart)

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