People who are receiving Social Security retirement or disability benefits, unemployment insurance, or workers’ compensation are correct in not viewing these payments as a handout from the government. Rather they are receiving the proceeds of income insurance for which they, or their employer, paid premiums over their lifetime.
The case of Social Security retirement benefits is the clearest. Workers and their employers each contribute 5.3% of wages annually for Old-Age and Survivors Insurance. This insurance pays benefits to the worker’s family if he should die prematurely and retirement benefits if he survives to age 62. On average, for people retiring today, the payroll tax contributions roughly equal the benefits they can expect to receive. (High earners get a slightly worse deal and low earners a better deal.) Similarly, workers and their employers each contribute 0.9% of earnings for Social Security Disability Insurance, which pays benefits when workers become permanently and totally disabled.
The story is essentially the same for unemployment and workers’ compensation. Even though premiums are usually paid entirely by the employer, economists believe the employer’s contributions are part of the worker’s compensation. Essentially, employers decide how much they are willing to pay in total compensation and then divvy up that commitment between wages and fringe benefits. Contributions for unemployment insurance and workers’ compensation are a component of fringe benefits. See article From Smart Money here: