Social Security Administration Eyes Cutting Off Payments For Thousands
Social Security Administration officials are considering a policy that could effectively strip benefits from thousands of people. “A proposal to ban payments to people without Social Security numbers is circulating at the Social Security Administration,” reports Government Executive, noting it “could affect thousands of beneficiaries receiving retirement, disability, and low-income benefits.”
At issue is a little-known practice: SSA sometimes allows an individual without an SSN to serve as a representative payee to manage benefit checks on behalf of someone eligible. The agency can make someone a representative payee even if they don’t have an SSN. Such payees are often family members – for example, a parent caring for a disabled child – who handle Social Security funds for a beneficiary unable to do so themselves.
According to the leaked internal memo obtained by Government Executive, the draft policy would “bar any payments to payees without SSNs, of which there are currently more than 170,000” individuals. In practical terms, SSA could stop sending checks whenever the designated payee lacks a Social Security number. The agency did not publicly announce this plan; it came to light through whistleblowers. SSA leadership declined to comment on the proposal when asked.
Social Security Payment Crackdown: Musk’s DOGE And The War On Waste, Fraud, And Abuse
This drastic measure may be part of President Donald Trump and Elon Musk’s campaign to eliminate what the current administration deems fraud, waste, and abuse in federal programs. Earlier this year, President Trump empowered tech billionaire Musk to spearhead a government efficiency drive. Musk was installed as head of the new Department of Government Efficiency, and SSA quickly felt the effects.
Internal and external observers say DOGE is effectively calling the shots at the agency. In one instance, SSA officials were “weighing a proposal to eliminate telephone support for claims processing and direct-deposit account transactions” under “pressure from DOGE,” a move that “could have jeopardized public access to benefits for millions of Americans who rely on the SSA’s phone service,” according to The Washington Post. After media exposure of that plan, SSA abruptly backtracked, restoring phone services in the face of public outcry.
Musk has made no secret of his mission to slash what he sees as bloat in entitlement programs. “Most of the federal spending is entitlements. So that’s like the big one to eliminate. That’s… half a trillion, maybe $600, $700 billion a year,” Musk declared according to Politifact, lumping Social Security and related benefits into a target for cuts (The White House later insisted Musk was referring to eliminating wasteful spending, not the benefits themselves.)
He has repeatedly raised the alarm about fraud in the system, claiming “there’s a massive amount of fraud” involving people “submitting fake Social Security numbers to receive a range of government benefits,” including Social Security. By Musk’s logic, cracking down on questionable payments – such as those handled by payees without valid SSNs – is crucial to saving taxpayer money. “We are going to be very careful with any benefits,” Musk said at a recent event. “In fact, only by tackling waste or fraud can we actually preserve those programs for the future.”
Even the acting SSA Commissioner, Leland Dudek, privately voiced alarm. “I don’t want the system to collapse,” Dudek confessed in a closed-door meeting reported by ProPublica, warning it “would be catastrophic for the people in our country” if DOGE imposed the kind of sweeping changes at SSA that it was pushing at other agencies. By all accounts, the campaign to ferret out fraud is causing upheaval within Social Security’s ranks – and the potential cut-off of 170,000 beneficiaries is the latest, and perhaps most controversial, move in this campaign.
Social Security Impact: 170,000 Vulnerable Beneficiaries In The Crosshairs
Who exactly would be hurt if the Social Security Administration axes payments to payees without SSNs? By design, representative payees tend to be used in cases involving the most vulnerable beneficiaries – minors, people with disabilities, and others who cannot manage their finances. Many such beneficiaries rely on caretakers or relatives who, for various reasons, lack an SSN (often because they are noncitizens). According to the SSA memo, “One large group that could be affected by the proposed change would be children receiving Supplemental Security Income or disability benefits whose parents don’t have an SSN. Others impacted could include widows and other survivors of dead Americans living overseas.” In other words, low-income kids with undocumented immigrant parents and elderly survivors living abroad with foreign family members as payees are squarely in the firing line.
Several SSA employees admitted to Government Executive that “the proposal may be wrapped up in the administration’s immigration policies” – a sign that this could be as much about cracking down on undocumented immigrants as it is about program integrity. “The only time we pay someone who is here illegally is when they are a payee,” one explained. “So by barring people without SSNs from applying to be payee, they would be able to say they stopped paying illegal immigrants Social Security. But it will create a crisis. We usually are paying them because their kid is severely disabled and still a minor. If they aren’t the right person to manage funds, who is?”
If adopted, the policy’s implementation would be daunting. SSA would have to scramble to obtain Social Security numbers for those 170,000+ payees or find alternate payees for each of the corresponding beneficiaries. The leaked memo acknowledges the uncertainty: “The agency needs to confirm that it has the authority to make this change.” If it does press forward, SSA would need to “work the thousands of cases, contacting the payees to submit an SSN or change the payee altogether to someone that has a number.”
That is no small undertaking. “That task could be arduous,” warned Kathleen Romig, director of disability policy at the Center on Budget and Policy Priorities, noting to Government Executive that finding suitable payees is often so tricky “at times the agency turns to institutional payees like child welfare agencies.” SSA staff also must vet each payee for suitability, Romig added, underscoring the heavy workload involved.
In short, tens of thousands of vulnerable Americans could see their lifeline payments disrupted unless and until substitute arrangements are made – and making those arrangements would strain an already gutted agency.
Social Security Reform At A Crossroads
The coming weeks will test just how far the SSA can go under Musk’s sway to reform Social Security in the name of efficiency. The agency is already under heavy scrutiny as it awaits a new Commissioner (President Trump has nominated former business executive Frank Bisignano, who faces Senate confirmation. Capitol Hill hearings and media investigations will likely intensify as the public learns about plans to cancel payments for 170,000 beneficiaries. Musk maintains that aggressive steps are needed, arguing that only by cutting waste or fraud can we preserve programs like Social Security for the future. Many lawmakers believe Social Security can be reformed without throwing its most vulnerable under the bus.
For now, the Social Security proposal to ban payees without SSNs remains just that – a proposal. SSA officials are reportedly still evaluating whether they have the authority to make this change, and no implementation has begun. But the trial balloon is already drawing fire. In the court of public opinion, the question boils down to trust: Is this really about stopping fraud or simply cutting costs at any cost? The 170,000 beneficiaries and families facing uncertainty are about to become the human face of that debate.
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