December 2006                A-14-05-14042



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Date:     December 21, 2006                                                                                     Refer To:

To:       The Commissioner

From:     Inspector General

Subject:  Impact of Unauthorized Employment on Social Security Benefits (A-14-05-14042)


The objectives of our review were to assess:  (1) the accuracy of unauthorized employment information recorded on the Social Security Administration’s (SSA) Numident Master File (NUMIDENT), and (2) the impact of unauthorized employment on Social Security benefits. 


Each year, SSA uses NUMIDENT and earnings information to inform the Department of Homeland Security (DHS) about noncitizens who may be working illegally.  SSA sends DHS information about individuals who have earnings recorded under Social Security numbers (SSN) that SSA assigned for nonwork purposes.   The information is sent to DHS in the form of an electronic data file called the NonWork Alien (NWALIEN) file as required by law.   The file is sent approximately 6 to 18 months after earnings are first reported to SSA. 
According to DHS, resource priorities, data compatibility and possible data accuracy problems have prevented it from making effective use of the unauthorized earnings information.  While SSA notifies DHS of possible unauthorized employment, DHS is not required to tell SSA when it changes a person’s work authorization status from unauthorized to authorized.  Unless the person informs SSA directly of such a change, NUMIDENT records continue to show the person as not authorized for employment and SSA includes his or her earnings on the NWALIEN file.

The Social Security Protection Act of 2004 (SSPA) Section 211, prevents SSA from giving noncitizens credit toward future SSA benefits under Title II of the Social Security Act if they were never authorized to work in the United States (after this referred to as nonwork SSNs).  The law only applies to individuals who were assigned original nonwork SSNs January 1, 2004 or later.   These individuals have to later obtain work authorization to be insured for Title II benefits.   Individuals assigned an original nonwork SSN before January 1, 2004 are not subject to SSPA’s restrictions.

From a representative 5 percent segment of the NUMIDENT, we identified 57,720 individuals who had prior earnings and, according to their most recent SSN application, were not work authorized.  From this universe, we randomly selected 250 individuals for review.  Our sample represented all individuals recorded on the NUMIDENT file over the past 3 decades who had earnings but, according to SSA’s records, were never assigned an SSN for employment purposes.  We obtained comprehensive earnings and benefit information for each sample case and, when available, current immigration and work authorization status from DHS’ Immigration and Customs Enforcement (ICE).   Further information concerning the scope and methodology of this audit can be found at Appendix B. 


Based on our review of information obtained from DHS, we estimate that more than a third of work authorization information contained in SSA’s NUMIDENT file for nonwork SSNs was no longer accurate.  DHS found that work authorization status had changed from unauthorized to authorized for over a third of our 250 sample cases.  The remaining cases were either still unauthorized or DHS could not locate immigration information for the individuals.  Although data that no longer reflects current work authorization status reduces the usefulness of the NWALIEN file for DHS, we found that SSA could use data mining techniques and the information it now records on SSN applications to increase the usefulness of the NWALIEN file records. 

We found that SSPA may have minimal impact on future SSA benefits to noncitizens since most noncitizens provided nonwork SSNs were enumerated prior to implementation of SSPA.  Based on our sample results, we estimate that 378,640 individuals in the NUMIDENT (1) were assigned nonwork SSNs before January 2004, (2) have never been work authorized, (3) had $25.4 billion in Social Security earnings, and (4) because they were assigned original nonwork SSNs before January 1, 2004, will not be affected by SSPA’s restrictions (see Appendix B for details). 


The information we received from DHS in January 2006 showed that, over time, work authorization status changed from unauthorized to authorized for more than one-third of our 250 sample cases.  Those changes were not shown as reported to SSA and/or recorded on SSA’s records.  Work authorization status for the remaining cases was either still unauthorized as shown on SSA’s records or could not be confirmed.  DHS indicated that: