Evening star., 1939-08-28

| OIQ 1OlhS WIFI lIIlpOSSlOlc OF QllSlCaQs
ing promises as an open sesame to
election.
The first drive to offset Townsend
ism was to increase direct charity
payments in the form of old-age
pensions (Which must be differen-
tia.ed from annuities).
When the new act finally was
signed by President Roosevelt, it
contained provision boosting the
maximum the Government will give
as a straight old-age pension from
SIS to $40 month. Since this
money is paid only if State matches
dollar for dollar, the amendment
boosted the total maximum from $50
to $40.
But this was scarcely satisfactory
because only one State, California,
now puts up even as much as SIS.
Many upt up nowhere near that
much. So it was a pretty fair guess
that it would be a long time before
the $40 maximum" ever made much
OF a dent on the Nations old-folks
problem.
Congress decided, basically, that
extension of direct grants was not
the way to do the job-that it would
merely mean perpetual pressure for
higher and higher grants, for more
and higher Federal participation.
What had to be done, obviously,
was make the real old-age insurance
system, supported by contributions
from both employees and employers,
really mean something it
really work.
To do that, the entire basis of
hgurlng monthly annuities at 65 had
to be changed.
Acts to Appease Young Worker.
Something had to be figured out
to make the young worker regard
the system, not rs doubtful prom
Use which might net him something
In 80 or 40 years, but a program
which offered him something for his
money-and now. That was the
genesis of the vast new structure Of
family Insurance. to protect de-
pendents in case of death.
And things had to be so arranged
that those who reach IS in the next
lew years could retire on a ivable
monthly income. Of they couldn t
live on it, why have a system at all?)
That meant junking the old for
mula which figure monthly retire
ment income on the basis of total
wages earned while in the system.
1t meant substitution of new for
mula based chiefly on the average
wage-as contrasted with the total
wage-and gave comparatively minor
consideration to length of service
The net effect Of the new formula
is greatly to incrase in the next few
years annuities which can be COL
lected beginning January next. 1t
decreases the eventual annuity of
the ''youngster," who cannot collect
retirement pay" for 20 or 80 years
anyway, but provides increases even
for him if he has family, plus the
constant added security of standard
insurance protection" annuity
style
1t leaves the net cost of the whole
program, according to Arthur j. Alt
meyer, chairman of the Social Sc
curity Board. about the same. But
1t spreads that cost, Mr. Altmeyer
declares, in a more intelligent and
discriminating manner.
Eligibility Standard Changed.
To be eligible to collect benefits
under the new act, a worker must
have been paying taxes on his wages
at least half the time from January
l, 1887, until the date he retires.
After 10 years of pay roll-tax paying
this so per cent provision is waived
and the worker becomes fully in
sured-that is, he can collect an an
nuity against his average wage at
IS, even though he retires before
that age.
The amount of each workers "re-
tirement income" is calculated by
the following formula:
Forty per cent of the first $50 a
month-or 500.
Plus 10 per cent of average
monthly wages over $50, up to $3.50
Plus per cent of the total of
tAiSoS WV P1CN1OOS llS lcS, W Uc
added for each year the worker paws
pay roll taxes.
1.-THE worker has a wife over IS,
or one or more children under 18
each draws an added annuity of SO
per cent of the breadwlnner's an
nuity.
1t works out this way:
A man earning $l0O a month gets
$40 on his first $50 earned, IS on
his other $50. If he has been in the
system for 10 years he gets an addi-
tional $250-1 per cent of $25, null
tiplied by 10.
The basic retirement income of
the S100-a-month, 10-year man,
therefore, is $27.50 a month. ct
goes up Is cents for every additional
year he may have paid taxes.)
II he is unmarried, that's all he
gets. Or if his wife is less than 65
years old, or if they have married
within five years, that's all he gets
But If he has a wife over IS she
draws an additional $13.75, making
their total family annuity s41.25 a
month. If they also have a IT.
year-old child in school that figure
is upped to SIS until the child
reaches 18.
Apply this formula to the s25O-a-