Minimum Social Security Benefit: A Windfall That Should Be Eliminated

The minimum benefit provision of the Social Security Act, intended to help the poor, has in recent years mainly benefited retired government workers with pensions and homemakers supported by their spouses' incomes. The provision grants a much higher benefit than individuals have earned and would otherwise receive. The need for the minimum benefit was greatly reduced in 1974 with the implementation of the Supplemental Security Income program, which established a Federal minimum income level for needy people who are at least age 65, blind, or disabled. Before the program, the minimum social security benefit may have been the only source of income for such people. In the fiscal year 1980 budget, the President proposed eliminating the minimum benefit for new beneficiaries to prevent the windfall effect and to reduce the welfare aspect of social security. The Social Security Administration estimated that implementing the proposal in October of 1980 would save the Government $455 million for fiscal years 1981 through 1985.