Fewer Americans seeing crucial Social Security document
due to budget cuts
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[April 24, 2019]
By Mark Miller
CHICAGO (Reuters) - (The opinions expressed
here are those of the author, a columnist for Reuters.)
It is one of the most important retirement documents you will ever
receive - but fewer Americans are reviewing their Social Security
benefit statement nowadays due to cost-cutting and a government push to
online services that is falling short.
Until about a decade ago, all workers eligible for Social Security
received a paper statement in the mail that provided useful projections
of their benefits at various ages, along with reminders on the
availability of disability benefits and Medicare enrollment information.
But the Social Security Administration (SSA) decided in 2010 to save
money by eliminating most mailings of benefit statements. Instead, we
would all be encouraged to obtain this information online.
It is now abundantly clear that this is not working out.
The number of workers accessing their statements online has been just a
fraction of those who once were reached by paper statements. And the
cost-benefit tradeoff is poor.
Forty-two million Americans have created online accounts with the SSA
since they were first offered seven years ago, the agency says, compared
with the 155 million paper statements that were mailed in 2010, before
the cost-cutting began. Meanwhile, the number of online account-holders
who accessed their statements fell dramatically in fiscal 2018, from 96
percent to 43 percent, according to a report issued in February by the
SSA’s Office of the Inspector General (OIG).
The report does not speculate on reasons for the fall-off, and the SSA
declined to offer its own analysis. “We’ll leave the hypothesizing to
others,” said Mark Hinkle, acting press officer.
If you have an online account with the SSA, you will receive an email
message three months before your birthday reminding you to review your
statement. But the process of logging on can be challenging, partly due
to security protections aimed at preventing identity theft and fraud.
The security is necessary, but the setup process requires users to go
through multiple layers of authentication to prove identity.
Meanwhile, the level of comfort with online technology among older
people lags the general population, according to a 2017 study by the Pew
Research Center. For example, 51 percent of adults aged 65 or older have
home broadband, compared with 73 percent of all adults. “We’ve seen the
gaps close somewhat, but for the most part the differences haven’t
changed much over the past five or six years,” said Monica Anderson, a
senior researcher with Pew.
BROADER SHIFT TO ONLINE CUSTOMER SERVICE
The SSA’s shift to online accounts is part of a broader agency strategy
to handle most of its business with the public online by 2025. Yet the
statement adoption rates underscore the problem with that strategy.
Social Security is a near-universal program, and that means the agency
serves many people who are less tech-savvy.
Differences in tech adoption also vary quite a bit by income, education
levels and race. Eighty-seven percent of seniors living in households
earning more than $75,000 annually told Pew they have home broadband,
compared with just 27 percent of seniors whose annual household income
is below $30,000.
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A sign is seen on the entrance to a Social Security office in New
York City, U.S., July 16, 2018. REUTERS/Brendan McDermid/File Photo
But the relatively low engagement with statements also might be due to human
behavior. “I logged on and set it up the first year it was offered,” said
Kathleen Romig, senior policy analyst at the Center on Budget and Policy
Priorities, a leading research and policy expert on Social Security.
“But do I log on regularly to check my account? Absolutely not - and I’m much
more interested in Social Security than most people," she said. "But that seems
deeply normal to me - people are busy and once they’ve logged on once, they
don’t bother to do it again. It goes on the back burner.”
Currently, the only people receiving paper statements by mail are those who are
over age 60, have not claimed benefits and do not have an online account. That
was roughly 13 million people in fiscal 2017, according to the OIG report.
People who review their statements tend to make more optimal decisions claiming
benefits. The statement projects your benefit at various ages - and people who
review the numbers are far less likely to claim at earlier ages, and more likely
to stay in the workforce longer, one recent research paper found. (https://bit.ly/2IzFZPH)
The statement also provides an opportunity to safeguard against the threat of
identity theft and fraud by checking your earning history to make sure it looks
accurate. “The best way to prevent fraud is for everyone to look every year at
the earnings statement to see if everything looks right,” Romig said. (You can
sign up for an account here: http://bit.ly/socialsecurityaccount)
How much does the agency save by shifting to online accounts? About $46 million
last year, according to the OIG report. That sounds like big money, but it is
not significant in the context of the SSA’s overall budget, which is $12.9
billion in fiscal 2019.
The SSA budget has been cut repeatedly over the past decade. That has led to
large staff reductions and closing of field offices. Wait times for the public
have soared at field offices and on the agency’s toll-free line; there also have
been big backups in disability appeals hearings and back-office paperwork
For fiscal 2020, the agency has requested a budget of $13.3 billion - a 3.3
percent increase. Notably, the separate budget request from the White House for
the agency was to keep the budget nearly flat.
Indeed, Romig argues that the diminished number of people receiving and
reviewing Social Security statements is just part of a bigger set of problems
besetting the agency. “It’s a good example of why the Social Security
Administration needs more money.”
(Reporting and writing by Mark Miller in Chicago; Editing by Matthew Lewis)
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