In recent years, the U. This white paper will familiarize employers with the structure of the SSN; describe the recent changes to the SSN assignment process; clarify the types of SSN checks available to employers and detail the levels of information those checks provide; and explore recent trends in how SSNs may be used in the employment process.
Each state and territory was assigned unique numbers, with the exception of the area numbers , and —, which were never used. For example, in Kansas, the assigned area numbers were — For Vermont, the assigned area numbers were — While a group number may theoretically be any two-digit number from 01 to 99, only certain combinations were issued in each state.
Familiarity with the patterns established for key states can again help employers recognize possible inaccuracies. Any combination of numbers, except , is potentially valid. In light of the growing sophistication of identity theft, the randomization process helps to protect the integrity of SSNs against fraud, misuse and theft. The previous assignment process also limited how many SSNs were available in each state.
Although the SSA does recognize that all available number combinations eventually will be exhausted, the new process allows for an increased supply of unique nine-digit combinations. SSN randomization affects adults who are new U. Circumstances that may warrant a new SSN include: sequential numbers assigned to members of the same family are causing problems; more than one person is using the same number; an individual has religious or cultural objections to certain numbers or digits in the original number; a victim of identity theft continues to be disadvantaged by using the original number; or an individual is in a situation of harassment, abuse or life endangerment including domestic violence.
Area Numbers — Randomization eliminated the geographical significance of the area number the first three digits of the SSN. However, randomized SSNs still prohibit the use of area numbers , and — Group Numbers — These two-digit number combinations are now entirely randomized, to include all number combinations except for Although the Act was passed during the Great Depression, it was designed to ensure the future economic security of individuals and did not address the immediate economic problems of the Great Depression.
Social Security's primary original purpose was to provide financial benefits to people over age Upon retirement, people who were no longer working would receive monthly retirement benefits or Social Security income. Benefit amounts would be based on a person's earnings in covered employments. The Social Security Act required a payroll tax for both employees and employers based on earnings.
This was later renamed the Social Security Administration. The earnings of each individual had to be tracked beginning in It was obvious that using a person's name wouldn't work. Can you imagine the difficulty in keeping accurate earnings records for those with common names such as John Smith or Jane Jones?
Several tracking plans were considered, such as using a combination of letters and numbers or using fingerprints. The chosen solution was to use a 9-digit number divided into three parts: area number, group number, and serial number. The first three digits, the area number, represented the state in which the SSN was issued.
However, there were exceptions. For example, a worker could apply in person for an SSN in any Social Security office, and the area number would reflect that office's location, regardless of the worker's residence. The last four digits, the serial number, represented the order within each group. But issuing SSNs was a work in progress. While the details of the Social Security Act were being worked out, the U.
Postal Service accepted the responsibility of issuing SSNs. At this time, there were approximately 45, post offices across the nation. From these, 1, post offices were called on to be "typing centers" to issue Social Security cards and SSNs. In November , the first SSNs were issued by these typing centers and thousands of people were given their 9-digit number.
The post office did not keep the records. By mid, Social Security field offices were able to take over. With this change, the area number was assigned based on the ZIP code of the mailing address provided on the application. This "randomization" shares the pool of available SSNs nationwide. Randomization extends the quantity of SSNs available for the future. For example, a state with an increasing population will need more SSNs in the future.
A state with a decreasing population won't need all that it was allotted. By sharing the available SSNs nationwide, the pool of numbers will last longer.
The use of SSNs has increased over the years. The trend began in when federal agencies were required to use SSNs for identifying individuals in any new record system. Today, a SSN is required for opening a checking or savings account, securing a loan, finding employment, filing taxes, renting an apartment, receiving medical services, completing credit and insurance applications, and the list goes on.
Laws have increased the use of SSNs. See boxed insert, "SSN Timeline. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. The government uses this number to keep track of your lifetime earnings and the number of years worked.
When the time comes to retire, or if you ever need to receive Social Security disability income, the government uses the information about your contributions to Social Security to determine your eligibility and calculate your benefit payments. Most people will use the same Social Security number their entire lives, though some people might need to apply for a replacement number at some point because of identity theft.
Keep reading below to find out more about when and why you need a Social Security number as well as when you should avoid using it. Anytime you get hired for a new job, your employer will ask for your Social Security number.
Employers who participate in E-Verify, a program to make sure employees can legally work in the United States, also must obtain your Social Security number before you can begin work. Financial institutions use your SSN to check your credit, to report your interest and investment income or losses to the IRS, to report your tax-deductible mortgage interest to the IRS, and to manage your account.
For example, to qualify for federal student loans, you must not be in default on another federal loan, you must have eligible citizenship or visitor status, and most male applicants must have registered with the Selective Service. Federal law requires you to provide a Social Security number if you have one when you apply for a U. The IRS uses this number to match the income you report on your tax return to the income your employer and financial institutions report having paid to you. You should use your Social Security number as infrequently as possible.
For example, though most medical providers will ask for your SSN, you can leave the line asking for it blank when filling out medical paperwork, and often, no one will question it. That said, while you can refuse to provide your SSN, the other party can also refuse to do business with you.
Instead, keep the card in a secure place at home or in a safe deposit box at the bank. Similarly, you should keep any documents that contain your SSN, such as your tax returns, in a secure place. If someone were to break into your house, it would be better for you if they could only make off with your stuff and not your identity. You also need to carefully safeguard your electronic documents that contain your Social Security number. When the government introduced the Social Security program with its numbers in , it was never meant to be so widely used to identify and track individuals.
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