By Mary Johnson
A new Obama Administration immigration policy that was announced without a single vote of approval from Congress provides a path to Social Security benefits based on illegal work. Although the policy does not grant legal status, the young illegal immigrants affected may apply for and receive work permits, giving them access to Social Security numbers.
Under current law, that would allow them to later file a claim for Social Security benefits if they have enough years of earnings. Currently citizenship is not a requirement to claim Social Security benefits, but legal work authorization is.
The new policy, called "deferred action" because it defers deportation, would allow an estimated 800,000 illegal immigrants who are under the age of 30, and who came to the United States before the age of 16, to remain in the country without risk of deportation. Those affected may get work permits if they have been law abiding and meet certain requirements.
The oldest of those illegal immigrants eligible for "deferred action" could feasibly have worked here long enough to already be "vested" for Social Security benefits. Workers become qualified for Social Security benefits with 40 coverage quarters, or about ten years of work. Although the public commonly believes that illegal workers don’t pay taxes and thus don’t pay into Social Security, that's a misconception.
Illegal immigrants get jobs using fraudulently obtained or invalid Social Security numbers that employers use to withhold payroll taxes and report earnings to the Social Security Administration. Immigration advocates point to this, saying that unauthorized workers are supporting the system with their taxes but have little chance of benefiting because of this.
That changes once those workers gain work authorization and a valid Social Security number. Current Social Security Administration policy allows noncitizens, who have evidence of earnings under invalid Social Security numbers, to claim and reinstate their earnings history once they obtain their own valid Social Security number. The earnings are then used to determine both entitlement to benefits and the initial retirement benefit amount.
Here's how. When the Social Security Administration receives wage reports from employers with Social Security numbers and names that don't match those on file, the reports go into an Earnings Suspense File until they can be reconciled with the rightful owner — which can occur years later when an application for benefits is received. From 2000 through 2009 the Social Security Administration on average received 9.5 million suspicious wage reports annually, representing more than $69 billion per year in wages.
Wages, not the taxes paid in, are what the Social Security Administration uses to determine benefits. Under current law the Social Security Administration uses all earnings, even for jobs worked while illegal, to determine benefits. TSCL supports legislation that would ban earnings from unauthorized work from being used to determine entitlement to benefits — the "No Social Security for Illegal Immigrants Act" (H.R. 787) introduced by Representative Dana Rohrabacher (CA-46).
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Sources: “Obama to Permit Young Migrants to Remain in U.S.,” Preston and Cushman, Jr., The New York Times, June 15, 2012. “Deferred Action Process For Young People Who Are Low Enforcement Priorities,” U.S. Citizenship and Immigration Services, June 19, 2012.