What is Social Insurance? All Social Insurance is community financial support for others. It is an umbrella term, that covers Social Security, along with Medicare, disability insurance, and unemployment and compensation insurance. Many people forget, because it’s such a big program, but Social Security is citizen funded and only overseen by the government. Rachel Murphy, for Investopedia, offers a breakdown of Social Insurance and its history.
Social Insurance is different from Public Assistance. For a program to qualify, you have to pay into it. What you pay into dictates the level or number of benefits you receive from the program. Public Assistance programs aren’t publicly funded; programs like Supplemental Nutrition Assistance Program don’t require recipients to pay into the program, like you would with Social Security. Public Assistance programs are also fully controlled and funded by the federal and state governments.
Governmental action does affect Social Insurance programs, but strictly on an administrative level. For example, the SSA is a federal organization that oversees the management of Social Security as a program. If the SSA were to shut down, benefit payments would be delayed and there would be a negative effect; however, the Social Security program would remain.
These types of programs (Social Security, Medicare, SSI, Workers Comp. etc.) are a mutually beneficial social contract. The more you contribute into these programs, you’ll be able to claim a higher benefit while ensuring longevity for the program and allowing others to use it too. The Council for Retirement Security works to protect the Social Security program, but it also establishes a community for seniors to interact with, because a community that supports itself thrives.
