Legalization Of Illegal Immigrants Could Affect Your Benefits

Legalization Of Illegal Immigrants Could Affect Your Benefits

TSCL Testifies On Policy Allowing Social Security Entitlement Based On Illegal Work

TSCL recently testified at a House Subcommittee hearing on immigration reform. "Paying benefits based on illegal work rewards persons who have broken our laws and weakens Social Security," said Executive Director, Shannon Benton.  TSCL urged lawmakers to ban a current policy that allows immigrants to receive benefits based on illegal work.

Congress is moving on immigration legislation that would legalize some 12 million illegal immigrants.  At stake are hundreds of billions in new costs to Social Security, Medicare, Medicaid - programs already facing looming solvency problems.  The pending legislation would provide work authorization to millions of illegal immigrants who apply for "legalized" status, and with it, access to valid work-authorized Social Security numbers (SSN).

Although the Social Security Protection Act of 2004 imposed new restrictions on the payment of Social Security benefits to illegals, aliens who are working illegally now, or who have in the past, could become entitled to Social Security benefits should they gain legal work authorization and a valid Social Security number.  Under the 2004 law, immigrants who apply for benefits with a SSN assigned after 2003, and who at some point gain work authorization, can file for Social Security benefits once they have worked under the system long enough (10 years).  In addition, under current policy, when determining entitlement for insured status, and in calculating the initial retirement benefit amount, the Social Security Administration uses all reported earnings from covered employment in the United States, even if the earnings are from illegal or "unauthorized" work.  Although proposals have been made to modify this law, the outcome of the legislation and any provisions to protect Social Security remain very unclear.

In order to lawfully work in the United States, immigrants must have both a valid Social Security number (SSN) and legal work authorization from the Department of Homeland Security (DHS).  Government data indicates that millions of non-citizens are working with neither a legitimate SSN nor work authorization.  There are also millions who have worked at least for some part of the time under a legitimate SSN, but without legal work authorization.  In addition to widespread document fraud (use of counterfeit or stolen SSNs), immigrants work illegally by using Social Security numbers that are prominently marked, NOT AUTHORIZED FOR WORK PURPOSES, known as "non-work" SSNs.  Aliens also work illegally under SSNs issued for temporary work visas that have expired.

Social Security trustees recently warned that the program would begin paying out more in benefits than it receives in cash revenues by 2017.  That could happen even sooner with millions of former illegals swelling the rolls - and dependents of the newly-eligible Social Security recipients could increase the bill by as much as 50%.   When Social Security runs out of cash, Congress will be faced with having to find the money by raising taxes, borrowing, or by cutting back spending - including on Social Security benefits.

Sources:  "Immigration Bill Clears Its First Hurdle in Senate," Robert Pear and Michael Luo, The New York Times, May 21, 2007.  "Social Security Benefits For Non-citizens," Congressional Research Service, July 20, 2006, RL 32004.  "Better Coordination Among Federal Agencies Could Reduce Unidentified Earnings Reports" GAO February 2005, GAO 05-154.

August 2007