In the summer of 1935, the Social Security Act was signed into law. It provided workers (and later, their families) with monetary benefits based on payroll tax contributions made throughout their working years. In November 1936, the United States Postal Service first distributed Social Security forms (SS-5 forms). Beginning in January 1937, Federal Insurance Contributions Act (FICA) taxes were collected. By January 1940, monthly benefits were paid to retired workers or to surviving widows and under-aged children.
On the 1940 census, the U.S. government asked 15 supplementary questions to 5 percent of the general population. Anyone listed on lines 14 or 29 of a census page answered three questions about Social Security.
Question 42 asked people ages 14 and above if they had a Social Security number (SSN). At no point were people asked to give their Social Security number to the census taker. If they didn’t know their SSN or if they had lost the Social Security card, it didn’t matter; the yes/no answer was based on having registered for the Social Security program.
Question 43 asked if, in 1939, wage or salary deductions were made for “Federal Old-Age Insurance” or Railroad Retirement. Up to $3,000 could be deducted from wages or salaries for private, non-government employment “except agriculture, railroads, charitable, and nonprofit organizations, employment as sailors, and in domestic service in the home of the employer.” The Railroad Retirement contributions were different, in that deductions were made for the first $300 earned each month in the railroad industry.
If the answer to question 43 was “yes,” then question 44 asked what percentage of their wages or salaries went to these retirement programs, with answers being:
1. deductions were taken from all of the person’s wages or salary (up to $3,000 for Federal Old-Age Insurance or $300 per month for Railroad Retirement)
2. deductions were taken from one-half or more of the person’s wages or salary, but not all of the amount
3. deductions were taken from some but less than half of the person’s wages or salary
The Social Security Administration (SSA) web site offers a brief history and timeline of the program.