The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-05-22
STATE DIRECTOR
SHEDS LIGHT ON
SECURITY LAWS
Clarence Jackson Explains
Differences in Various
Units of Program.

Clarence A. Jackson, state IN
employment Compensation Division
director, who today is attending a
Social Security Board meeting in
Washington, d. c., has issued a
statement clarifying various OBJ
jectives of state and nationa! social
security programs.
The three units of the program
which affect the most persons he
said ARE unemployment compen5a-
ton, old age pensions and old age
benefits.
Unemployment compensation is
intended to assist workers by pro-
viding an income during periods of
unemployment and to aid the ma
ton as a whole by providing for
stabilized employment and purchas-
ing power.
Unemployment compensation is
also an insurance plan, whereby
both employers and employees con-
tribute TO fund from which bene-
hts will be paid to eligible unem-
ployed persons after April l, 1898.
This plan directly affects only en-
ployers of eight or more persons
and their employees. Employers con-
tribute IL per cent of pay rolls
from April l to Dec. 81, 1886. Next
year, employees also will contribute
to the unemployment compensation
fund, at rate of 8 of l per cent.
while the employers rate will be 1.8
per cent.
Pensions Payable to Needy
Unemployment compensation is
administered by the State Unem-
ployment Compensation Division,
with local auto license branches as
distribution points for report forms
and information.
old age assistance Sllpersedes the
pension plan which has been oper-
ated by the State since 1888. Old
age assistance is given only TO needy
persons over 70 years old who have
no ether means of support.
The state Department of Public
Welfare, a department under the
direction of Wayne Coy, and en-
tirely separate from the Unemploy-
ment Compensation Division, adj
ministers this branch of the social
security program. Local agencies to
contract for information on old age
assistance are the County Depart
ments of Public Welfare, which are
expected to be certified ana func-
tloning within the next few weeks.
Paid From General Funds
Allowances for old age assistance
or pensions are paid from general
tax funds, one-half being supplied
by the Federal government, 80 per
cent by the state and 20 per cent
by the county in which the aged
person resides. Allowances, none of
which may exceed $4,000 a month.
are determined by local county well
fare boards They are based on the
circumstances of the individual and
are paid only to needy persons. In
this respect they differ sharply
from old age benefits.
odd age benefits, the third major
unit in the security program, are
provided by Federal law and will
be entirely under Federal Supervi-
sion. Old age benefits are similar to
insurance annuities and will be pay
able for the first time in 1912 They
will vary according to the amount
of wages received by each individual
prior to reaching the age of IS, re-
gardless of whether the individual
is then rich or poor.
Payments will be financed by a
pay roll e. tax collected by the Fed
eral government. Both employers
and employees will pay per cent
tax on wages for employment in
1887. 1888 and 1899. The rate for
1910 will be lia per cent, ana there
after the rate increases by z per
cent every three years until 1858,
when the rate will be 3 per cent.
Benefits Payable at 65
only wages up TO $4,000 a year
will be taxable, although persons
earning more than $4,000 will pay
tax and receive benefits based on
the first $4,000 of their income.
odd age benefits will be paid to
qualified persons monthly after they
reach the age of IS, and provision
is also made for payment to an
estate in case OF death. In no case
can benefits exceed $S5 a month.