Ask the Advisor: How Would Earnings Under A Stolen SSN Affect My Benefits?

Ask the Advisor: How Would Earnings Under A Stolen SSN Affect My Benefits?

Q: Recently, I learned that my mother, who has Alzheimer's, was the victim of identity theft.  In addition to the risks it places on her credit and bank accounts, what happens if an illegal immigrant uses her Social Security number to work; what effect could that have on her benefits?  She was born in 1942, took early retirement at age 62 and will turn 65 in June.

A:  Use of your mother's stolen Social Security number could potentially cause serious and costly problems, especially if you don't move quickly to report problems, correct her record and continue ongoing vigilance for new problems.  Correcting her record could take repeated work since some problems may not surface until years from now.  Here's just a partial listing of what to watch out for:

  • Benefit reductions due to excess earnings.  Earnings showing up on your mother's Social Security number could subject her Social Security benefits to reductions.  Because your mother is still under her full retirement age, Social Security would withhold $1 in benefits for every $2 over $12,960 in annual earnings, ($1,080 per month).
  • IRS audits and taxation of her Social Security benefits.  Added earnings that appear under her number could subject 50% to as much as 85% of your mother's Social Security to tax if those earnings make her income appear to be over $25,000 or more (single) or if over $32,000 (joint).  Since neither you nor your mother would be aware of those earnings by someone using her number, your first indication that there's any problem could be a notice from the IRS that she may owe taxes.
  • Letters saying she is no longer, or is not, eligible for "Extra Help" to cover prescription drug costs.  "Extra Help" pays all or most of the monthly drug plan premiums and deductibles, much of the co-insurance, and provides coverage during the "doughnut hole" coverage gap for low-income seniors.  If your mother is single and added earnings make her monthly income appear to be over $1,276 (or $1,711 if she is married) then she could be mistakenly dropped from the program, or told she is not eligible.
  • Notifications that she is no longer, or is not eligible for "Medicare Savings Programs".  These programs cover the Medicare Part B premium deductible and co-insurance for certain low-income seniors.  If added earnings make her monthly income appear higher than $871 (single) or $1,l61 (joint) she could be mistakenly dropped from one of these programs, or told she is not eligible.
  • Notifications that she must pay higher "income related" Medicare Part B premiums.  It's not uncommon for more than one illegal immigrant to work under the same Social Security number.  In one particularly egregious case cited by the Government Accountability Office, a single employer used one Social Security number for 2,580 W2's filed in a single tax year.  Should the earnings make your mother's income appear to be over $80,000 (single) or $160,000 (couple) she could be mistakenly notified that she would have to pay substantially higher Medicare Part B premiums.
  • Notifications that your mother is no longer eligible, or is not eligible, for other low-income programs.  Earnings could also make your mother's income appear too high to qualify for Medicaid, food stamps, low-income housing subsidies, assistance to pay cooling and heating bills, in addition to state, local and private programs from which she may receive benefits.

If you think someone is using your mother's numbers for work purposes, contact Social Security.  You or your mother can ask to check her Social Security Statement that lists earnings posted to her Social Security record.  If an error is found on her statement, contact Social Security right away.

Social Security's website, however, is not very encouraging about fixing problems.  The publication, Identity Theft And Your Social Security Number (Publication No. 05-10064) states, "If you have done all you can to fix the problem and someone still is using your number, we may assign you a new number.  We cannot guarantee that a new number will solve your problem."  Call Social Security toll free at 1-800-772-1213 or visit online at

In addition, should your mother continue to have problems, we strongly recommend that you contact your Congressional Representative or one of your Senators and ask for help.  Each office has aides who handle constituent problems such as you describe.