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Social Security isn’t just for old folks anymore

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(Bloomberg) – Social Security was meant to protect elderly Americans from the financial vicissitudes of growing old. Eighty years later, the safety net championed by President Franklin D. Roosevelt is protecting some younger people, too.

About 6.4 million kids, or almost 1 in 10 Americans under the age of 18, rely on checks from Social Security. The fastest growth is among indirect beneficiaries, especially kids who live with grandparents collecting the federal benefit. According to a new report by the Center for Global Policy Solutions, more than 3.2 million children were indirect recipients in 2014, up 48 percent from 2001. Another 3.2 million children receive Social Security directly because their parents or guardians have died, are disabled, or are old enough to retire. The number of minors in this category was up 6 percent since 2001, according to the report by the Center, a liberal-leaning Washington think tank.

More children are being supported by Social Security as the American family heads back to a living arrangement more akin to the early 20th century, with multiple generations living under the same roof. According to the Census Bureau (PDF), 5.1 million U.S. households consisted of three or more generations in 2010, up from 3.9 million in the 2000 census. Much of this is being driven by economics, as U.S. families make thousands of dollars less now than they did in 2001.“Social Security is a tremendous economic benefit for children living in some of America’s most vulnerable households,” the report stated, estimating that benefit checks make up 39 percent of household income for underage beneficiaries. The Center proposes expanding Social Security benefits by, for example, extending direct benefits for 18- to 22-year-olds so they can more easily attend college.

Policymakers have been underestimating the number of children who get help from Social Security, according to the report’s authors, who include researchers at the University of Massachusetts-Amherst. To measure the number of beneficiaries under 18, the report analyzed both Social Security data and the U.S. Current Population Survey.

Extended families are being forced to pool resources. After adjusting for inflation, the median income for families with children was $60,410 in 2014, down from $64,613 in 2007 and $65,678 in 2001. The poverty rate among children receiving Social Security is 26 percent, the report estimates, but it would be 43 percent without the program’s benefits.

The Center’s report is also a reminder of how difficult it’s gotten to save and plan for retirement. Many Americans aren’t just using Social Security—and any paltry savings they’ve accumulated—to support themselves. Now, some also bear the burden of caring for grandchildren.


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