Ask The Advisor: Illegal Workers and Social Security Benefits

Ask The Advisor: Illegal Workers and Social Security Benefits

Q: I understand there is a large problem with illegal workers obtaining Social Security Disability (SSDI) or Suplemental Security Income (SSI) benefits using fraudulent Social Security numbers. Do we have some data verification?

A:  There’s a heated debate over the extent to which illegal immigrant workers obtain Social Security or Supplemental Security Income (SSI) benefits. Recently the Social Security Office of Inspector General reported that improper Social Security Disability (SSDI) payments (due to errors, fraud and abuse) totaled $2.5 billion in fiscal year 2009 while improper SSI payments totaled $4 billion. But just how much of that money is going to illegal immigrants seems to be anybody’s guess.

Federal law generally prohibits or restricts the payment of both Social Security and SSI to unauthorized noncitizens, but a number of exceptions exist. Although the perplexing web of rules differ for each program, immigration or disability attorneys are frequently involved in applicants’ efforts to apply and qualify for SSDI or SSI benefits. In addition, illegal immigrants may be using forged or invalid Social Security numbers (SSNs) and papers when claiming benefits.

The vast majority of illegal immigrants come to this country for jobs. To obtain one, they need documentation to show an employer. There’s a huge underground business in the manufacture and distribution of phony or even stolen Social Security numbers (SSNs). According to media reports, counterfeit SSNs and papers can be purchased on the streets for under $1,000.

Employers are only required to check SSNs and report wages, but aren’t required to verify whether individual workers have legal authorization to work in this country. When employers submit wage reports with SSNs that don’t match those of Social Security, the reports wind up in the Earnings Suspense File until they can be reconciled.

The Earnings Suspense File represents a huge growing potential liability to the Social Security program. Currently the file holds more than 295.5 million wage reports worth more than $835 billion. Wages are used to determine entitlement to Social Security benefits. Under current law when a worker is found eligible for Social Security, all earnings that can be proven are used to determine entitlement, even for jobs worked without legal authorization.

TSCL believes much more stringent measures are needed to protect Social Security and SSI programs from document fraud. TSCL supports legislation that would ban the use of unauthorized earnings for determining entitlement to Social Security benefits. In addition, TSCL supports stronger penalties for the use of fraudulent documents for obtaining federal benefits, including SSI.

Source:  Fiscal Year 2010 Inspector General Statement, Social Security Administration Office of the Inspector General, November 2010.