Is there fraud, waste, and abuse in the Social Security system? Yes.
Are mistakes being made? Yes.
The purpose of DOGE is to increase government operational efficiency, cut federal spending, and reduce the size of government – who’s not for that?
This article has no political leaning, just facts.
Let’s look at the 3 biggest Social Security myths and what we can expect in the future because of DOGE.
Myth #1: Social Security will go bankrupt.
Fact: Social Security will not go bankrupt.
Social Security only pays out what it takes in. Social Security is self-funded and not part of the general government fund. Social Security is funded through the 6.2% payroll and self-employment tax, income tax revenue from people who pay income tax on their Social Security benefits, and interest income from loans to the government in the form of US Treasury securities. These income streams are deposited into the Social Security trust fund. As it stands now, if no changes are made to the existing structure, benefits will be reduced across the board anywhere from 20% to 33% as early as 2031. There are many solutions to fix the system, but that’s a topic for another day. Some people say Social Security is a Ponzi Scheme. Ponzi Schemes always run out of money, Social Security will not. There will always be money being contributed to the Social Security trust fund, what is distributed is what is put in. It’s a “money in, money out” system. In 2024, the Social Security trust fund had revenue of $1,417 trillion dollars and expenses of $1,485 trillion dollars. See Social Security Trust Fund Data. As long as there are people working, there will be contributions to the trust fund. The real question is, in the future, what benefit amounts will be out based on the income stream.
Myth #2: Really old people (100-year-old plus) or dead people are receiving benefits.
Fact: There may be some instances where this happens but it’s the exception rather than the rule.
When someone files for a Social Security number, Social Security issues what’s called a “Numident.” This record contains your Social Security number, date of birth, where you were born, names of your father and mother and a date of death field. This is the list of people by ages that’s being presented to the public, you know, the people that are about 150 years old, and still receiving benefits, that list. Also on this list are all the children not eligible to receive benefits. What’s important here is this is not the record that determines whether or not you get paid a Social Security benefit. The internal Social Security record that determines when and if you get paid is called the “Master Beneficiary Record” (MBR). On this record is the date of entitlement, the monthly payment amount, Medicare data and information relating to disability payments. This is the record that initiates a monthly payment of benefits, not the “Numident.” Without getting into details the problem with the “Numident,” and therefore the list presented to the public, is the ability to accurately enter the date of death into the system. The Commissioner of the Social Security Administration issued an update on 3/17/2025 stating that 1/3 of 1% of death benefits are wrong. See this website for more information: Social Security Provides Update about its Death Record | SSA. So, there is definitely some work to be done in this area to clean up the list.
Myth #3: Illegals, immigrants or undocumented workers are receiving benefits.
Fact: People who are in the United States illegally, for whatever reason, are not eligible to receive Social Security benefits. An immigrant who is authorized to work in the United State may apply for and receive a Social Security number.
Immigrants who are undocumented may use a Social Security number that is false or stolen. If that’s the case, they actually pay into the system but are unable to claim or receive benefits from their contributions. As unconventional as this sounds, they are actually contributing to the trust fund without being able to draw benefits from the fund.
Most fraud dealing with Social Security comes from inside the United States, not with undocumented workers.
The three principal areas of fraud are:
- Stealing people’s identities and benefits. This happens inside the United States and also by criminals outside of the United States.
- Not reporting the death of a relative.
- People who fake disability – this is the major area of fraud in the Social Security system. Disability benefits are where most of the fraud exists while retirement benefit fraud is nowhere near as significant.
What You Can Expect Now & In the Future
The Social Security Administration has been asking Congress for years for the funds to update their very outdated computer system. Hopefully, with the DOGE initiative, this will now begin to happen. What that means is, in short term, there will be pain, but in the long term, it should be a benefit.
Going Forward
When you contribute to Social Security through withholding, you are paying for the administrative costs of running the Social Security program, staffing, processing applications, and customer service. This part has definitely suffered. Having said that, here is what the immediate future brings:
- It’s going to get worse before it gets better.
- It will be more frustrating and confusing.
- Document everything on your end.
- It’s not business as usual.
- If you are in the system, you should not notice any major changes.
- It will be more difficult to get help from Social Security.
- Customer Services are diminishing by reducing an already low staff by another 7,000.
- Phone calls may be placed on hold and take up to 3+ hours to be answered.
- It’s now an appointment only system.
- Some of the 1,200 offices will be closed with small offices hurt the most.
- Some offices only take phone appointments, so in effect it’s semi-closed.
- Your claim may not be resolved for 2 or 3 months.
In order to strengthen identity proofing procedures, Social Security will be initiating stronger identity proofing policies for direct deposits and new benefit claims. Starting on 3/31/2025, new benefit claims (which have not been defined) or changing direct deposit information needs to done over the internet at ssa.gov, or at a Social Security office. You can no longer do this over the telephone. See this for more: Social Security Strengthens Identity Proofing Requirements and Expedites Direct Deposit Changes to One Day | SSA
New overpayment policy- Beginning on March 27,2025, Social Security will now withhold 100% of your monthly payment until any overpayment you have received is recovered. This is a reversal of their existing policy to withhold 10% in order not to create financial hardships. If you have an overpayment agreement before March 27, 2025, that will not be affected. See this for more: Social Security to Reinstate Overpayment Recovery Rate | SSA
One last thought about the future of Social Security. Nobody likes taxes and President Trump has said he will eliminate the income tax on Social Security benefits. Removing the income tax on Social Security will reduce the income stream to Social Security by 50 billion dollars a year. Only about 50% of people pay tax on their Social Security benefits. It is usually the higher earners. This basically equates to a back door means testing as the higher earners are giving back a portion of their benefits in the form of taxes. In addition, President Biden eliminated the Windfall Elimination Provision (WEP), and the Government Pension Offset (GPO), when he signed the Social Security Fairness Act in 2024. This will mean higher benefits to people who worked in jobs where Social Security was not withheld. Both of these will put a strain on Social Security in the future by reducing the trust fund income, meaning benefits will be reduced sooner than expected unless Congress acts to prevent this.
Remember, take the wrong benefit at the wrong time, it’s always smaller and forever.
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