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Thursday, October 20, 2016

Social Security’s Misunderstood Suspense File

Q: I recently heard a news report that said Social Security has several billion dollars in something called a suspense file. It has something to do with the taxes collected on fraudulent Social Security numbers. The report said this money is just sitting there, not earning interest and not being used for any constructive purpose. If this is true, it’s no wonder our government has such financial problems when there are large pools of unaccounted-for cash like this just lying around. Can you shed any light on this?

A: Ah, yes, the infamous “suspense file.” When I was the deputy press officer for the Social Security Administration, I don’t think a day went by when I didn’t field a call from a reporter somewhere in the country asking me about this alleged pile of cash supposedly lying around in some Social Security safe or other government vault.

But there is no pile of cash. There are no unaccounted-for and mismanaged funds that, once found, would miraculously solve all of Social Security financial woes. Here’s the real story.

Every single day, thousands of wage reports from employers representing millions of workers around the country trickle in to the Social Security Administration. (I guess since we’re talking numbers like thousands and millions, “trickle” is the wrong word. How about “flood?”) The reports contain the names, Social Security numbers, and earnings of anyone working at a job covered by Social Security. And it’s important to note that these files are just the wage reports needed to maintain Social Security’s earnings records for all Social Security number holders. The actual money withheld in Social Security taxes takes a completely separate path and goes directly to the Treasury Department.

In almost all cases, the name and Social Security number on the employer’s earnings report sent to SSA match a name and Social Security number in the agency’s records. So the Social Security records for all those folks get updated immediately. But in a relatively small percentage of the cases (the last I heard, it’s about 5 percent), the information supplied by the employer doesn’t match the information in Social Security’s files.

Many times, this is merely a problem of a transposed digit in a Social Security number on the employer’s report. Other times, it’s a simple name issue. For example, the employer’s report might show an employee named T. Robert Margenau, but SSA’s records show the name as Thomas R. Margenau. SSA’s computer software programs have “tolerances” built into them that recognize these easily explained discrepancies and post the earnings to the proper record.

But if the problem cannot be simply identified and readily fixed, then we have what SSA calls an “earnings discrepancy” case. The actions necessary to assign the earnings in question to the proper Social Security number account are temporarily suspended. Thus the term “suspense file” for all the earnings reports that have not yet been assigned to the proper Social Security number.

Many of the cases that go into the suspense file don’t remain there for very long. SSA works with the employer who submitted the report and/or with the employee in question to resolve the problem.

But in some cases, the problem can never be resolved. Many times, this is because there was some fraudulent activity involving a fake Social Security number or maybe someone using a deceased person’s Social Security number. Lots of these earnings reports remain in that suspense file for years and years.

And even though the percentage of such unresolved cases is very small, over decades, the numbers just keep adding up. And that is why today, there are about $300 billion in unrecorded earnings reports in the suspense file.

But please bear in mind that does not mean that $300 billion in cash is just lying around because no one knows what to do with it. Once again, the money collected in taxes, including the taxes collected in these earnings discrepancy cases, went directly from the employer to the Treasury Department and was used to finance Social Security checks sent out to all of the program’s beneficiaries. The only records sitting in the infamous suspense file are paper reports of earnings still waiting to be assigned to a proper Social Security number.

If you ask me, one way to help resolve this problem is to issue everyone a Social Security card that’s a full-fledged identity card — something with a picture and maybe some form of biometric identification. But that’ll never happen because folks on both sides of the political spectrum dislike the idea. Conservatives hate it because it would be one more example of big-brother government intruding into their lives. And liberals dislike the idea because it would take away from our civil liberties.

And so the suspense file will just keep growing and growing.

If you have a Social Security question, Tom Margenau has the answer. Contact him at [email protected] To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at


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