For a decade, between 1940 and 1950, few changes were made to Social Security after being established in the 1930s. Payment amounts were fixed and no legislation was offered to change aspects of the program, but the 1950s brought new amendments to Social Security and significant changes.
During this time Social Security was underfunded and this led to low retirement benefits. The benefit rate was even lower than welfare assistance which influenced legislators to make changes to the program. In 1950 amendments were introduced that increased benefits for the first time. Today there is an annual cost-of-living adjustment (COLA), but 1950 was the first time beneficiaries experienced an increase in benefits. President Harry Truman signed the amendments into law in August of 1950 and by February 1951 there were more Social Security retirees than people collecting welfare, according to Social Security. Prior to these amendments, more seniors were opting to collect welfare rather than retirement benefits. Benefits increased by 77 percent in 1950 and periodically increased even more throughout the 1950s. In 1952 benefits increased by 12.5 percent, in 1954 benefits increased by 13 percent and in 1959 benefits increased by 7 percent.
A few years later, in 1954, new amendments were offered to Social Security and it was the first time a disability program was established for workers. Although the first measure regarding disability only protected a disabled worker’s retirement benefits and did not provide cash benefits, it did lead to a paid disability program for workers in 1956. The amendment offered in 1956 provided disability benefits to workers age 50-64 and disabled adult children. The disability program would continue to change in the 1960s and the age requirement was dropped so that disabled workers of all ages became eligible for the program, which is consistent with what the program looks like today.
