Addressing Another Social Security Myth: “Ineligible” Benefit Recipients - AMAC Foundation
Addressing Another Social Security Myth: “Ineligible” Benefit Recipients
As Social Security continues its descent toward insolvency, growing public attention tends to bring stubborn rumors to the surface about the causes of this financial dilemma. Take, for example, the myth that politicians are stealing from the program’s reserves—a legendary claim driven by a lack of understanding of how government financing works. We set the record straight on this one recently, only to see commentary point to yet another misconception about who’s drawing benefits from Social Security.
Our AMAC Foundation Social Security Advisory Service has dealt repeatedly with the rumor that illegal immigrants are a major cause of Social Security’s financial dilemma. We’ve also dealt with the complaint that benefits are available to several categories of recipients who haven’t contributed payroll tax revenue. To clarify and clear the decks for more relevant discussions of Social Security’s larger insolvency problem, let’s examine both notions.
Do Illegal (Undocumented) Immigrants Receive Social Security Benefits?
The American Immigration Lawyers Association (AILA) answers this question simply: “No. The process to apply for Social Security benefits is exhaustive and can be time-consuming. Nothing is issued automatically.” So, with the term “undocumented” defined as someone born in another country (not a tourist) who is living in the U.S. without federal authorization, it becomes clearer that anyone who has complied with the benefit application process cannot receive payments from Social Security’s Old-Age and Survivors Insurance (OASI) accounts.
In its research paper titled “Social Security Benefits for Noncitizens,” the Congressional Research Service further notes generally that “The Social Security Act also prohibits the payment of benefits to aliens in the United States who are not “lawfully present." (emphasis added)
In other words, no authorized work record, no benefits. In addition, the requirements to draw benefits on an authorized work record are also restrictive: the applicant must be at least age 62, and must have earned 40 work credits, which equals about 10 years of work paying Social Security taxes. Further, to claim benefits from Social Security, applicants must have legal permanent residence or citizenship.
The obvious question then is what about illegal immigrants using fake or stolen Social Security numbers to obtain employment? In these cases, payroll taxes will be assessed on their earnings, but without meeting the claiming requirements described earlier, they will be unable to draw benefit payments. And that’s a big number…a 2022 study by the Institute on Taxation and Economic Policy reported that undocumented immigrants paid almost $26 billion in Social Security taxes, with no opportunity to draw benefits as a result.
What About Benefits for Nonworking Spouses and Other Family Members?
Another frequent criticism concerns a class of benefits introduced by the Social Security Amendments of 1939. These payments go to a qualifying worker’s spouse, former spouse, survivor, child, or parent. A qualifying worker has a work record that makes these dependents eligible for Social Security benefits.
The specific criticism concerns Social Security funds paid to beneficiaries drawing benefits from another family member's work record, usually when a spouse has not worked outside the home in a job requiring payroll tax payments. Officially labeled “auxiliary benefits,” this type of payment was authorized shortly before retirement benefits commenced, when Congress recognized that the cultural norm at that time saw the typical household consisting of a primary earner and a spouse who did not work outside the home and thus did not create a qualified work record on which benefits could be based.
Congress determined that a social need existed to ensure that the financial support provided to a retiree’s household would adequately support all household members, and it subsequently enacted Public Law 76-379 (the Social Security Amendments of 1939). These Amendments expanded benefits to include spouses and dependent children of retired workers, setting a limit at 50% of the primary earner’s benefit. Later, aged parents of the primary earner, on whose qualified work record the retirement benefit was based, were also made eligible, again to ensure household adequacy.
Recognizing that these amendments addressed societal norms at the time, it’s important to note that modern times are quite different. Now, and particularly in the 21st Century, one-earner households are somewhat of a rarity. “We used to be in this golden age where you could own a home, a car, and get by on a single income — that is a bygone era,” Bankrate’s economic analyst Sarah Foster suggested in a BankRate.com post. Consequently, the issue of a non-working spouse receiving 50% of a primary earner’s Social Security benefit has diminished quite a bit, with most households now having two incomes and therefore two Social Security earnings records.
Subsequent Social Security Act amendments (in 1950 and 1965) expanded auxiliary benefits further, first to divorced widows with children and dependent widowers, and later to divorced wives and surviving divorced spouses without children. These changes were implemented in recognition of the shifts in the financial security and retirement-planning landscape that the end of a marriage causes, and to address the consequences faced by individuals who may have sacrificed career opportunities or earnings during a long marriage.
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.