What is a Social Security Plan?

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  • Written By: Jessica Saras
  • Edited By: Michelle Arevalo
  • Last Modified Date: 09 December 2019
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A social security plan is a type of social insurance program that protects individuals from a particular social condition, such as old age, disability, poverty, or unemployment. Often sponsored by the government, these plans are usually defined by statute and funded through taxes. Therefore, the program cannot be changed unless the law is changed and the government must treat all recipients equally.

A social security plan is generally designed to benefit society as a whole and promote social well-being, rather than self-interest. By providing a minimum service level, the program protects all citizens and helps ensure a better quality of life. Although citizens are eligible to participate in the social security plan, many countries also provide additional help to its more vulnerable recipients.

Most countries require mandatory participation in any social security plans they offer. If participation is voluntary, however, the cost of the program is usually low, to ensure universal involvement. Regardless of age, income, or any other social factor, if a country offers a social security plan, all of its citizens are automatically entitled to the protections provided by it.


Designed to reduce poverty and other social disabilities, a social security plan is generally based on the belief that all people should be protected from certain risks. There are typically five common programs included in most social security plans. Created to protect the rights of workers and promote employment, labor market programs are the most common. Social insurance programs help reduce the risk of unemployment, disability, old age, and other social conditions.

Social welfare programs provide assistance to those who have little or no support — such as single mothers and homeless individuals. Child-protection services may also be outlined in a social security plan, as a way to help ensure healthy and productive children. Finally, many countries’ social security plans use area-based programs to address issues in the community.

Although less common, some social security plans include an income maintenance program, which provides cash for citizens who become unemployed or retire. Depending on the country, other items that are considered basic necessities may also be provided to citizens. These basic securities can include shelter, food, clothing, and education.

Approximately 170 countries use some sort of social security plan. The United States, for example, provides health insurance benefits to its elderly and disabled citizens. Likewise, in the United Kingdom, citizens are automatically enrolled in national insurance programs to protect against illness and unemployment. Meanwhile, both Canada and Australia offer national pension plans to help support retired workers.



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