Social Security Reform Outcomes in the USA: Essay

Sample Essay

Words 1,559

The 1986 Social Security Act’s changes to means-tested benefits came into force in April 1990. Their aims were to meet a genuine need, to control spending, to provide a simpler harmonized structure, to improve administration, to target benefits more towards families with children and to improve incentives to work and save. The Act also changed provisions of the State Earnings Related Pension Scheme and of Widows Benefits but this research deals only with changes to means-tested benefits. The main changes were:

  • Income Support (IS) replaced Supplementary Benefits (SB).
  • The Social Fund replaced single payments of supplementary benefit for one-off needs.
  • Family Credit replaced Family Income Supplement for low waged working families with children and was more generous.
  • Housing Benefits were simplified and harmonized with Income Support. Rebates from rates and community charge were limited to a maximum of 80%. The remainder to be paid from weekly benefit or other income. The maximum rebate has been restored to 100% for council tax since April 1993.
  • Some claimants such as students and 16-18-year-olds lost entitlement to benefit altogether.

Spending on means-tested benefits fell by 6% but remained at 29% of all social security in 1990-97. The main changes in cost were:

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