Social Security Benefits for Noncitizens: Current Policy and Legislation

Publication Date: May 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Population and demographics

Type:

Abstract:

Concerns about the number of unauthorized (illegal) aliens residing in the United States and the recently signed totalization agreement with Mexico have fostered considerable interest in the eligibility of noncitizens for U.S. Social Security benefits. The Social Security program provides monthly cash benefits to qualified retired and disabled workers, their dependents, and survivors. Generally, a worker must have 10 years of Social Security-covered employment to be eligible for retirement benefits (less time is required for disability and survivor benefits). Most jobs in the United States are covered under Social Security. Noncitizens (aliens) who work in Social Security-covered employment must pay Social Security payroll taxes, including those who are in the United States working temporarily and those working in the United States without authorization. There are some exceptions. Generally, the work of aliens who are citizens of a country with which the United States has a "totalization agreement," coordinating the payment of Social Security taxes and benefits for workers who divide their careers between two countries, is not covered if they work in the United States for less than five years. In addition, by statute, the work of aliens under certain visa categories is not covered by Social Security.

The Social Security Protection Act of 2004 (P.L. 108-203) requires an alien whose application for benefits is based on a Social Security Number (SSN) issued January 1, 2004, or later to have work authorization at the time an SSN is assigned, or at any later time, to gain insured status under the Social Security program. Aliens whose applications are based on SSNs issued before January 1, 2004, have all Social Security-covered earnings counted toward insured status, regardless of their work authorization status. In addition, the Social Security Act prohibits the payment of benefits to aliens in the United States who are not "lawfully present," but under certain circumstances, alien workers and dependents/survivors may receive benefits while residing outside the United States (including benefits based on unauthorized work). H.R. 98 would create a new system for employers to ascertain if an alien has work authorization.

On June 29, 2004, the United States and Mexico signed a totalization agreement, the effects of which depend on the specific terms and language of the agreement, which has not been transmitted to Congress for review or otherwise made publicly available. Currently, since Mexico meets the "social insurance country" definition, a Mexican worker may receive U.S. Social Security benefits outside the United States. Family members of the Mexican worker must have lived in the United States for at least five years to receive benefits in Mexico, but typically under a totalization agreement, this requirement is waived allowing the payment of benefits to alien dependents and survivors who have never lived in the United States. The Social Security Administration reports that the projected cost of the agreement would average $105 million annually over the first five years. In September 2003, the Government Accountability Office reported that "the cost of a totalization agreement with Mexico is highly uncertain" because of the large number of unauthorized immigrants from Mexico estimated to be living in the United States. This report will be updated as legislative activity occurs or other events warrant.