Illegal Work Under Fake Social Security Number? Government Still Pays Benefits!
What happens when illegal immigrants work under phony Social Security numbers? What does the Social Security Administration (SSA) do when it receives W-2s that don't match the names and numbers on the agency's records?
According to a recent report from the Social Security Administration Office of Inspector General – not much. The report went on to say that "employers hired unauthorized workers because nothing prevented them from doing so."
The lack of enforcement has enormous long-term implications for Social Security's financing, because the SSA calculates future benefit payments based on the wages that individuals accumulate over a lifetime. When SSA receives wage reports from employers that don't match the name and number on the agency's files, the reports are set aside in a special "Earnings Suspense" file until they can be reconciled, even years later, when the actual worker files a claim.
Under current law, if the individual claiming the earnings has a work-authorized Social Security number at the time of making the claim (as would happen under immigration reform), Social Security will use all verifiable earnings to calculate benefit payments – even if the wages are for jobs illegally worked under fraudulent Social Security numbers.
Social Security numbers are widely misused. The Inspector General's Office identified 100 employers who contributed the most erroneous wage items and found that 18% of the W2s did not match SSA records. The Inspector General identified a number of irregularities such as numbers that belonged to young children, the dead, and even numbers having all zeros (000-000-000). Fifty - five percent, however, were valid Social Security numbers with names that did not match the SSA’s records, indicating the numbers may have been stolen.
The Senate has passed, and the House is considering, immigration reform legislation that would provide work-authorized Social Security numbers to millions of illegal immigrants currently in the country. TSCL believes that because the Social Security Administration pays benefits that are based at least in part on illegal work, this poses a very significant and undisclosed long-term liability to the program.
In the immigration reform legislation that passed in the Senate, however, Senators Orrin Hatch (UT) and Marco Rubio (FL) introduced an amendment that would prevent payment of benefits based on prior illegal work. The provision would ban earnings from jobs worked without legal authorization from being used to determine entitlement to Social Security benefits and for calculating the amount of initial benefits, legislation that TSCL and its grassroots members have long supported. The Congressional Budget Office estimates that the new TSCL-supported amendment would save the programs about $6 billion over the first 20 years, with the savings growing greater in the future.
The fate of the provision remains uncertain as Congress continues consideration of immigration reform. TSCL encourages all readers concerned about the future of their Social Security and Medicare benefits to contact your member of Congress. Let's tell Congress to stop paying Social Security based on unauthorized work!
Source: Employers Who Report Wages With Significant Errors In the Employee Name And Social Security Number, Social Security Administration Office of the Inspector General, August, 2013.