Social Security Benefits and Unauthorized Alien Workers

February 6, 2018

Social Security Benefits and Unauthorized Alien Workers

“Are unauthorized alien workers eligible for Social

Security benefits?” This In Focus addresses the frequently

asked question in a summary format. A more detailed

discussion is provided in CRS Report RL32004, Social

Security Benefits for Noncitizens. An alien is “any person

not a citizen or national of the United States” and is

synonymous with noncitizen and foreign national. The

terms are used interchangeably here. Note that an alien may

be authorized to be in the United States, but not authorized

to work. Therefore, an alien who does not have work

authorization is not necessarily illegally present (i.e., an

unauthorized alien). For example, an alien present in the

United States on a B-2 tourist visa may remain in the U.S.

for six months, but is not legally permitted to work.

Summary

Concerns about the number of unauthorized aliens

(sometimes referred to as “illegal” aliens) residing in the

United States have fostered considerable interest in the

eligibility of noncitizens for U.S. Social Security benefits.

Social Security provides monthly cash benefits to qualified

retired or disabled workers, their dependents, and the

survivors of deceased workers. In general, among other

eligibility requirements, a worker must have 10 years of

Social Security-covered employment to be eligible for

retirement benefits. To qualify for disability and survivor

benefits, less time in covered employment is required.

Most U.S. jobs are covered under Social Security. As a

result, noncitizens authorized to work in the United States

are eligible for a Social Security number (SSN).

Noncitizens who work in Social Security-covered

employment must pay Social Security payroll taxes,

including those in the United States working temporarily or

without authorization. Unauthorized aliens working and

paying Social Security taxes may be fraudulently using

another person’s SSN, for example.

There are some exceptions. In general, the work of aliens

who are citizens of a country with which the United States

has a totalization agreement is not covered if they work in

the United States for fewer than five years. (Totalization

agreements allow for the coordination of Social Security

payroll taxes and benefits for workers who divide their

careers between the United States and a foreign country.) In

addition, by statute, the work of aliens under certain visa

categories is not covered by Social Security (e.g.,

noncitizens who work under the F, J, M, Q, and H-2A visa

categories are exempt from Social Security payroll taxes).

Earnings Suspense File

Earnings in Social Security-covered employment (i.e.,

earnings on which Social Security payroll taxes are paid)

allow workers to qualify for Social Security benefits for

themselves and their eligible family members and

determine the amount of benefits payable. In some cases,

the Social Security Administration (SSA) cannot post

earnings to individual work records because the names and

SSNs on W-2 forms submitted by employers to SSA do not

match SSA’s records. The mismatched information may be

due to clerical errors, as well as the use of invalid or stolen

SSNs by aliens working in the United States without

authorization. In such cases, SSA posts the earnings to its

Earnings Suspense File (ESF). The ESF has accumulated

more than $1.5 trillion in wages and 360 million wage

items for tax years 1938 through 2016. In tax year 2016

alone, SSA posted about 8.9 million wage items,

representing $98 billion in wages. The ESF represents

earnings on which Social Security payroll taxes have been

paid, and, potentially, earnings on which Social Security

benefits may not be payable.

Lawful Presence Requirement for Beneficiaries

In 1996, Congress prohibited the payment of Social

Security benefits to aliens in the United States who are not

lawfully present. The lawful presence requirement was

added by the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (P.L. 104-193) and

the Illegal Immigration Reform and Immigrant

Responsibility Act of 1996 (P.L. 104-208). Depending on

the circumstances, alien workers, their dependents, and

survivors may receive Social Security benefits while

residing outside the United States (including benefits based

on unauthorized work).

Work Authorization Requirement

Before 2004, noncitizens were not required to have work

authorization to qualify for Social Security benefits.

Noncitizens could qualify for benefits based solely on

unauthorized work.

In an effort to limit the crediting of earnings from

unauthorized work for purposes of qualifying for Social

Security benefits, Congress passed a work authorization

requirement for certain noncitizens as part of the Social

Security Protection Act of 2004 (P.L. 108-203). Certain

noncitizens must have authorization to work in the United

States at some point to qualify for Social Security benefits.

Specifically, an alien whose application for benefits is

based on an SSN assigned January 1, 2004, or later must

have work authorization at the time an SSN is assigned, or

at some later time, to qualify for Social Security benefits

(with some exceptions).

The work authorization requirement does not apply to an

alien whose application for benefits is based on an SSN

assigned before January 1, 2004. Such individuals may

qualify for benefits without having had authorization to

work in the United States at any point.

https://crsreports.congress.gov

Social Security Benefits and Unauthorized Alien Workers

Can Noncitizens Qualify for Social

Security Benefits for Themselves and

Their Family Members Based on

Unauthorized Work?

There are certain circumstances under which noncitizens

who work in the United States without authorization can

qualify for Social Security benefits for themselves and their

eligible family members (see text box). Current law with

respect to crediting earnings from unauthorized work for

Social Security eligibility and benefit computation purposes

becomes of interest when Congress considers legislation to

legalize all or part of the unauthorized population residing

in the United States.

Treatment of Earnings Based on Unauthorized Work

The treatment of earnings differs, depending on when a

noncitizen is assigned a Social Security number (SSN).

Noncitizens Assigned an SSN Before 2004 *

With respect to benefit applications based on an SSN assigned

before 2004, the individual is not required to have work

authorization at any point. All Social Security-covered earnings

are credited for purposes of qualifying for benefits, regardless of

the individual’s work authorization status.

Noncitizens Assigned an SSN in 2004 or Later *

With respect to benefit applications based on an SSN assigned

on or after January 1, 2004, the individual must have work

authorization when an SSN is assigned, or at any later time, to

qualify for Social Security benefits. [Social Security Act, §214 and

§223; 42 U.S.C. §414 and §423]



If the individual has work authorization at some point, all of

his or her Social Security-covered earnings (from

authorized and unauthorized work) count toward qualifying

for benefits.



If the individual never obtains work authorization, none of

his or her covered earnings count toward qualifying for

benefits.

* Policy Regarding SSN Assignment for Noncitizens

Noncitizens authorized by the Department of Homeland

Security to work in the United States can be assigned an SSN.

Noncitizens not authorized to work can be assigned an SSN for

a valid nonwork reason. Under regulations in effect since late

2003, the only valid nonwork reason for assignment of an SSN

would be if a noncitizen needs an SSN to receive federal, state,

or local government benefits to which he or she has otherwise

established entitlement (20 C.F.R. §422.104). Previously, the

policy for assignment of nonwork SSNs was less restrictive;

noncitizens could be assigned an SSN for a variety of nonwork

purposes, such as to obtain a driver’s license.

Can Noncitizens in the U.S. Receive

Social Security Benefit Payments If They

Are Not Lawfully Present?

No. The Social Security Act requires noncitizens to be

lawfully present to receive benefit payments while in the

United States [Social Security Act, §202(y); 42 U.S.C.

§402(y)]. The term lawfully present alien for purposes of

the Social Security program is defined in 8 C.F.R. §1.3.

If a noncitizen is entitled to benefits, but does not meet the

lawful presence requirement, his or her benefits are

suspended. In such cases, a noncitizen may receive benefits

while residing outside the United States indefinitely

(including benefits based on work performed in the United

States without authorization) if he or she meets one of the

exceptions to the alien nonpayment provision [Social

Security Act, §202(t); 42 U.S.C. §402(t)].

Noncitizens Residing Outside the U.S.

When the Social Security program began paying benefits in

1940, there were no restrictions on benefit payments to

noncitizens. Congress placed restrictions on benefit

payments to alien workers living abroad as part of the

Social Security Amendments of 1956 (P.L. 84-880) and to

alien dependents and survivors living abroad as part of the

Social Security Amendments of 1983 (P.L. 98-21).

Alien Nonpayment Provision

Under the alien nonpayment provision, a noncitizen’s

benefits are suspended if he or she remains outside the

United States for more than six consecutive months.

However, there are a number of exceptions that allow

noncitizens to receive benefits while residing outside the

United States indefinitely. For example, an alien may

receive benefits outside the United States if he or she is a

citizen of a country that has a social insurance or pension

system that pays benefits to eligible U.S. citizens residing

outside that country (such as Mexico). If an alien does not

meet one of the exceptions, his or her benefit payments are

suspended beginning with the seventh month of absence

and are not resumed until he or she returns to the United

States lawfully for a full calendar month. In addition, to

receive payments outside the United States, alien

dependents and survivors must have lived in the United

States for at least five years previously (lawfully or

unlawfully), and the relationship to the worker must have

existed during that time. There are a number of exceptions.

For example, the U.S. residency requirement does not apply

if the alien is a citizen or resident of a country with which

the United States has a totalization agreement (such as

Canada).

Related Statistics from SSA

In 2013, SSA’s Office of the Chief Actuary (OCACT)

estimated that about 3.1 million unauthorized aliens were

working and paying Social Security payroll taxes in 2010.

Of those, SSA estimated that 0.6 million had temporary

work authorized at some point in the past and overstayed

their terms of admittance (e.g., visas); 0.7 million obtained

fraudulent birth certificates at some point and used these

birth certificates to obtain an SSN; and 1.8 million used an

SSN that did not match their name (i.e., fraudulently used

another person’s SSN). OCACT estimated that $13 billion

in payroll taxes were from unauthorized immigrant workers

and their employers in 2010. In addition, OCACT estimated

that 3.9 million unauthorized workers worked in the

“underground economy,” for an estimated total 7.0 million

unauthorized workers in 2010. (Source: SSA, OCACT,

Actuarial Note, Number 151, Effects of Unauthorized

Immigration on the Actuarial Status of the Social Security

Trust Funds, April 2013.)

Audrey Singer, Coordinator, Specialist in Immigration

Policy

William R. Morton, Analyst in Income Security

https://crsreports.congress.gov

IF10820

Social Security Benefits and Unauthorized Alien Workers

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