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Congressional Research Service

Overview of the Social Security Program


The Social Security program provides monthly cash benefits to retired and disabled workers and their
dependents, and to the survivors of deceased workers. 4 To qualify for benefits, workers (whether citizens
or noncitizens) must work in Social Security-covered jobs for a specified period of time, among other
requirements. Generally, workers need 40 credits (sometimes referred to as quarters of coverage, or
QCs) to become insured for benefits (fewer credits are needed for disability and survivor benefits,
depending on the workers age). The Social Security program is financed primarily by mandatory payroll
taxes levied on wages and self-employment income. Most jobs in the United States are covered under
Social Security (about 94% of the work force is required to pay Social Security payroll taxes).5
With some exceptions,6 foreign nationals 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
who may be working in the United States without authorization.7

Eligibility for and Calculation of Social Security


Benefits
This section briefly reviews the requirements for receiving Social Security benefits and explains how
benefits are calculated.8 A person who has a sufficient history of earnings in employment subject to Social
Security payroll taxes becomes insured for Social Security, which makes the worker and qualified
dependents eligible for benefits. Insured status is based on the number of QCs earned. In 2015, a worker
earns one QC for each $1,220 of earnings, and a worker may earn up to four QCs per calendar year. The
amount needed for a QC generally increases annually.
To be eligible for most benefits, workers must be fully insured, which requires one QC for each year
elapsed after the worker turns 21 years old, with a minimum of 6 QCs and a maximum of 40 QCs. A
worker is first eligible for Social Security retirement benefits at 62, so to be eligible for retirement
benefits, a worker must generally have worked for 10 years.

This section is adapted from CRS Report RL32004, Social Security Benefits for Noncitizens, by Dawn Nuschler and Alison
Siskin.
5
Social Security Administration, Office of the Chief Actuary, Social Security Program Fact Sheet, Washington, DC, July 17,
2014, http://www.ssa.gov/OACT/FACTS/.
6
Generally, the work of aliens who are citizens of a country with which the United States has a totalization agreement is not
covered by Social Security if they work in the United States for less than five years. In addition, by statute, the work of aliens
under certain visa categories (such as H-2A agricultural workers, foriegn students) is not covered by Social Security. See CRS
Report RL32004, Social Security Benefits for Noncitizens, by Dawn Nuschler and Alison Siskin.
7
For Social Security payroll taxes to be withheld from wages, a worker must provide a Social Security number (SSN) to his or
her employer. An alien who is working in the United States without authorization (1) may have an SSN because he or she worked
in the United States legally and then fell out of status; or (2) may have obtained an SSN fraudulently.
8
For more information, please refer to CRS Report R43542, How Social Security Benefits Are Computed: In Brief, by Noah P.
Meyerson; CRS Report R42035, Social Security Primer, by Dawn Nuschler.

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Benefits may be paid to eligible survivors of workers who were fully insured at the time of death. Some
dependents are also eligible if the deceased worker was "currently insured," which requires earning 6 QCs
in the 13 quarters ending with the quarter of death.
To be eligible for disability benefits, in addition to being fully insured, workers also must satisfy a
recency of work requirement and meet the programs definition of disability. To satisfy the recency of
work requirement, workers aged 31 and older must have earned 20 QCs in the 10 years before becoming
disabled (which generally means having worked in five of the last 10 years). Fewer QCs are required for
younger workers. To be considered disabled, an individual must be found to be unable to engage in
substantial gainful activity (SGA) by reason of a medically determinable physical or mental impairment
expected to result in death or last at least a year.9
An individuals Social Security disability benefits are calculated in two steps:

First, a summarized measure of lifetime earnings is computed. That measure is called the
average indexed monthly earnings (AIME). Rather than using the amounts earned in past
years directly, the AIME computation process first updates past earnings to account for
growth in overall economy-wide earnings.

Second, a benefit formula is applied to the AIME to compute the primary insurance
amount (PIA). The benefit formula is progressive. As a result, workers with higher
AIMEs receive higher Social Security benefits, but the benefits received by people with
lower earnings replace a larger share of past earnings.

When the AIME is computed, only a fixed number of years (computation years) of earnings are
averaged. If the person worked fewer than 35 years in employment subject to Social Security payroll
taxes, the computation includes some years of zero earnings. For example, benefits for workers who
immigrated to the United States may be based only on their earnings in the United States and could
include zero earnings for years before they immigrated, even if they had earnings in another country.
In the case of workers who die before turning 62 years old, the number of computation years is generally
reduced below 35 by the number of years until he or she would have reached 62. For example, the AIME
for a worker who died at 61 is based on 34 computation years. For disabled workers, the number of
computation years depends primarily on the age at which they become disabled, increasing from two
years for those aged 24 or younger to 35 years for those aged 62 or older.10
The monthly benefit amount is based on the PIA. For retired workers who claim benefits at their full
retirement age (which is currently 66) and for disabled workers, the monthly benefit equals the PIA.
Retired workers may claim benefits when they turn 62 years old, but the longer that they wait (up to age
70), the higher their monthly benefit. For retired workers who claim at earlier ages, the monthly benefit is
smaller than the PIA, and for those who claim at later ages, the monthly benefit is greater than the PIA.
The AIME is computed using only taxable earnings, which are limited by law; this year, the limit on
taxable earnings is $118,500. Workers do not pay Social Security payroll taxes on earnings above that
level.
9

For additional information, see CRS Report RL32279, Primer on Disability Benefits: Social Security Disability Insurance
(SSDI) and Supplemental Security Income (SSI), by William R. Morton.
10
For details on computation of disability benefits, see CRS Report R43370, Social Security Disability Insurance (SSDI):
Becoming Insured, Calculating Benefit Payments, and the Effect of Dropout Year Provisions, by Umar Moulta-Ali.

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Maximum Social Security Benefits


To be eligible for the maximum possible benefit, a worker would have to have earned the limit on taxable
earnings or more in every computation year. Very few people, however, have such consistently high
earnings. (Each year, roughly 6% of workers earn more than that limit, and close to 20% earn more than
the limit for at least one year in their career.11)
For people who become entitled to benefits in 2015 at age 65, the maximum retired worker annual benefit
will be $29,424, or $2,452 per month (see Table 1); it would be higher for people who claim at older ages
and lower for those who claim at younger ages.12
For people who become entitled to disabled worker benefits in 2015, the maximum annual benefit will be
about $32,800, or about $2,730 per month.13
In certain cases, family members of retired and disabled workers are also entitled to Social Security
benefits. For example, a child under 18 would generally be entitled to a benefit equal to 50% of the retired
or disabled workers benefit. For details on dependents benefits, see Table 3 in CRS Report R42035,
Social Security Primer.
However, the total benefit that all members of a family can receive is limited by a family maximum.14
For a 65-year old retired worker with maximum lifetime earnings claiming benefits in 2015, the annual
family maximum would be roughly $51,500, or about $4,300 a month. For a disabled worker with the
maximum annual benefit, the family maximum would be limited to 150% of the monthly workers
benefit, which would be about $49,200 annually, or about $4,100 per month.
Table 1. Estimated Maximum Monthly Social Security Benefit, 2015
Retired Worker

Disabled Worker

Worker benefit

$2,452

$2,730

Family benefit

$4,300

$4,100

Source: Congressional Research Service, based on Social Security Administration data.


Notes: Values for retired worker assumes claim at age 65. Values for disabled worker vary slightly with age.

Average Social Security benefits are substantially lower than the maximum. For example, in December
2014, the average monthly benefit for a retired worker was $1,329, and the average benefit for a disabled
11

Social Security Administration, Population Profile: Taxable Maximum Earners, April 2012, at
http://www.ssa.gov/retirementpolicy/fact-sheets/tax-max-earners html.
12
Social Security Administration, Workers with Maximum-Taxable Earnings, at
http://www.ssa.gov/oact/cola/examplemax.html/.
13
Social Security Administration, Office of the Chief Actuary, Actuarial Note 2014.4, Illustrative Benefits for Retired Workers,
Disabled Workers, and Survivors Scheduled Under Current Law, October 2014, at
http://www.socialsecurity.gov/OACT/NOTES/ran4/an2014-4.pdf. The exact amount depends on the workers age; see Table 2.
The estimates published in that document are for 2014. The amounts presented in this memo are about 1.3% higher than the
amounts in the actuarial note, reflecting the 1.3% increase in Social Securitys Average Wage Index from 2012 to 2013; see
Social Security Administration, Average Wage Index (AWI), at http://www.ssa.gov/oact/cola/awidevelop html.
14
See Social Security Administration, Office of the Chief Actuary, Formula for Family Maximum Benefit, at
http://www.ssa.gov/oact/cola/familymax html, and Maximum Benefit for a Disabled-Worker Family, at
http://www.ssa.gov/oact/cola/dibfamilymax html.

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worker was $1,165; see Table 2.15 When a worker has eligible dependents, the benefits paid on the basis
of the workers past earnings increase. Table 2 includes average benefits for several types of beneficiary
families.
Table 2. Average Social Security Benefits for Various Types of Beneficiaries and Beneficiary
Families
Monthly Benefit
Retired worker beneficiary (December 2014)

$1,329

Disabled worker beneficiary (December 2014)

$1,165

Retired worker and wife

$2,078

(December 2012)
Disabled worker, wife, and children, for families with two or more children
(December 2012)

$1,881

Sources: For 2014 data, Social Security Administration, Monthly Statistical Snapshot, December 2014, January 2015, Table
2. Social Security benefits, December 2014, at http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/. For 2012 data,
Social Security Administration, Annual Statistical Supplement, 2013, February 2014, Table 5.H2 Number, average primary
insurance amount, and average monthly family benefit for selected family groups, December 2012, at
http://www.ssa.gov/policy/docs/statcomps/supplement/2013/5h.html#table5.h2.

Noncitizen Eligibility for Social Security


There are two main provisions that affect the ability of noncitizens to become eligible for or entitled to
receive Social Security benefits in the United States. The first, 214 of the Social Security Act,16 restricts
the payment of Social Security benefits (retirement, survivors, and disability benefits) to certain
noncitizens who file an application for benefits based on a Social Security number (SSN) assigned on or
after January 1, 2004. Specifically, a noncitizen who files an application for benefits based on an SSN
assigned on or after January 1, 2004, is required to have work authorization at the time an SSN is
assigned, or at some later time, to gain insured status under the Social Security program.17 If the
individual had work authorization at some point, all of his or her Social Security-covered earnings would
count toward insured status. If the individual never had authorization to work in the United States, none
of his or her earnings would count toward insured status, and Social Security benefits would not be
payable on his or her work record (i.e., benefits would not be payable to the worker or to the workers
family).18 A noncitizen who files an application for benefits based on an SSN assigned before January 1,
2004, is not subject to the work authorization requirement. All of the individuals Social Security-covered
earnings would count toward insured status, regardless of his or her work authorization status.

15

Social Security Administration, Monthly Statistical Snapshot, December 2014, January 2015, at
http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/.
16
42 U.S.C. 414.
17
The law provides exceptions to the work authorization requirement for certain noncitizens (i.e., noncitizens who are admitted
to the United States under a B visa (for business purposes) or D visa (for service as a crew member) at the time quarters of
coverage are earned).
18
Before enactment of P.L. 108-203, all Social Security-covered earnings would count toward insured status regardless of an
aliens work authorization status.

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Under the November 20, 2014, policy memorandum, foreign nationals who receive deferred action status
may be eligible for work authorization.19 As a result, a foreign national who receives deferred action
status may be able to have all of his or her Social Security-covered earnings count toward qualifying for a
Social Security benefit (all earnings from authorized and unauthorized work). Nonetheless, it is unclear
how easy it will be for a foreign national to prove that earnings credited to a Social Security number that
was not issued to the foreign national (i.e., credits earned while the person was working without
authorization) belong on his or her earnings record.
The second provision, 202(y) of the Social Security Act,20 requires noncitizens to be lawfully present
to receive benefits in the United States. For the purposes of Social Security, as defined in regulations,
foreign nationals in deferred action status are considered lawfully present. Thus, currently, those who will
receive deferred action status as a result of the November 20, 2014 memorandum, and are eligible for
Social Security benefits, will be able to receive those benefits in the United States. Notably, the concept of
lawfully present is only a factor when an alien is trying to receive a benefit payment in the United States.
In many situations, foreign nationals who qualify for a Social Security benefit are able to receive benefits
outside the country.
Table 3. Social Security Eligibility for Select Hypothetical Cases

Initial Immigration
Status

Immigration Status at
Time of Benefit
Application

Eligible to Receive
Benefits in the U.S.

Eligible to Receive
Benefits Abroada

Foreign national entered the


county legally in a status that
allows the person to be
employed (e.g., Lawful
Permanent Resident (LPR)
status).

Foreign national remained in


a lawful immigration status.

Yes

Yes

Foreign national entered the


country illegally.

Foreign national never had a


lawful immigration status or
work authorization.

No

No

Foreign national entered the


country on a visa that
authorizes employment (e.g.,
H-1B, H-2B, P).

Foreign national overstayed


the authorized period of
admittance, becoming
unlawfully present.

No

Yes

Foreign national entered the


country illegally.

Foreign national was able to


adjust to a legal immigration
status or was granted work
authorization and is
considered lawfully present
under 8 C.F.R. 103.12 (e.g.,
granted deferred action and
work authorization).

Yes

Yes

Source: CRS analysis of the Social Security Act.


19

Foreign nationals who are eligible to work in the United States are eligible to receive a Social Security number. Social Security
cards issued to noncitizens who are in the United States temporarily (such as those with deferred action) bear the inscription,
VALID FOR WORK ONLY WITH DHS AUTHORIZATION. See, Social Security Cards and Noncitizens, in CRS Report
RL32004, Social Security Benefits for Noncitizens, by Dawn Nuschler and Alison Siskin.
20
42 U.S.C. 402(y).

Congressional Research Service

Note: Assumes the foreign national meets the nonimmigration-related eligibility requirements to receive a Social Security
benefit (e.g., quarters of coverage, age, disability). Also assumes the individuals Social Security number was issued on or
after January 1, 2004.
a.

Assumes foreign national is from a country where the United States will send Social Security benefits.

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