Report to Congress on Options for Enhancing the Social Security Card
CHAPTER VII – FEASIBILITY OF A USER FEE FOR ENHANCED SOCIAL SECURITY CARDS
BACKGROUND
The theme of charging fees for substitute Social Security cards is not raw to SSA. It has been considered colloquially on many occasions and formally in 1982 and 1989 based on suggestions by battlefield employees, SSA budget staff and the HHS Inspector General.
Proponents of fee charging broadly cited three reasons to adopt such a policy : ( 1 ) to deter unnecessary repetitive refilling of lost, mutilated, or damaged cards ; ( 2 ) to deter deceitful use of surrogate cards ; and ( 3 ) possibly most importantly, to reduce ( offset ) SSA ‘s menu refilling costs. In the latter context, fees were viewed as within the horizon of the Federal politics ‘s “ user fee ” policy as expressed in OMB Circular No. A-25. ( 23 ) It was besides likened to fees charged for drivers licenses, passports, and other “ privilege ” services or documents. however, proponents either acknowledged or suggested exemptions from refilling batting order fees for sealed meritorious reasons ; e.g., name change ascribable to marriage or divorce, inability to pay, and passing due to natural disasters.
Historically, SSA rejected such fee proposals — not because it was impossible to do — but primarily for overriding policy reasons. From a policy perspective, SSA disagreed that Social Security card successor represented a service or benefit within the mean of OMB Circular A-25 and is clearly distinct from prerogative documents such as drivers licenses, passports, navigate ‘s licenses, credit cards, etc.
Public participation in the Social Security program is not a matter of individual choice — it is compulsory. furthermore, at least since IRCA, the government has determined that a Social Security menu is substantive proof of engagement in the Social Security broadcast. Thus the combination of mandate engagement and compulsory adhesiveness to the methodology devised by the government to show that participation ( the monomania of a valid Social Security card ) angstrom well as the taxes already imposed on the public for engagement in the program create a special relationship between the politics ( SSA ) and the public that is identical different from the relationships that exist between motor vehicle agencies, licensing agency and credit poster companies. This relationship casts serious doubt on the policy wisdom of charging fees for Social Security cards.
furthermore, SSA did not believe charging fees for substitute cards would have any measurable impression on deceitful use of twin cards. Any fee that would be acceptable to law-abiding citizens would not be high enough to deter those purpose on committing imposter.
For these reasons, stream social security administration policy requires replacement of Social Security cards without charging any fees.
CURRENT ANALYSIS
In mandating this report, the Congress asked SSA to “ evaluate the feasibility and cost implications of imposing a user fee for replacement cards and cards issued to individuals who apply for such a poster anterior to the scheduled 3-, 5-, and 10-year phase-in options. ” We interpret this to mean all individuals who would receive an enhanced Social Security card would be charged a fee regardless of when they apply. therefore this analysis differs from the previous ones which considered a much smaller universe of people to be charged ; i.e., only those who ask for substitute cards for certain reasons. While nothing in the current analysis changes our view of the fundamental policy business about charging fees for the ask token of engagement in a compulsory special tax-supported broadcast, charging fees for the issue of Social Security cards in an enhanced version is however feasible. The play along information describes the fundamental assumptions we used to estimate the cost and workyear implications of charging drug user fees, and provides the estimated drug user fees themselves, on a unit and entire cost basis.
We presently handle approximately 200,000 remittances, chiefly repayments of overpay benefits, in our FOs each year. In orderliness to handle a substantially higher volume, a modern remittance process would be necessary and this estimate presumes a fresh streamlined process would be developed. In the new process, the fee would be collected as a separate of the poster issue march and the new tease would be issued only after the tip is collected. The estimate presumes a tip will be charged for all 277 million cards, however, Congress will likely provide some exceptions to the tip. For case, the very old, the very young or the very inadequate ( for example, entitled to Supplemental Security Income ) could be exempted from paying a tip. If such categories of exceptions were identified, an automatize method would be used where possible to determine who is nontaxable from the fee.
The estimated price for collecting fees in conjunction with issuing enhanced Social Security cards to all 277 million numberholders is $ 1.3 billion. The whole cost would be about $ 4.60 for each batting order issued. This estimate excludes any initial start-up costs ( for example, equipment ) and is conservative, since it does not include some items for which we can not project costs until the summons is more fully developed. The sum individual tip would range from $ 19- $ 38 ; i, $ 14 to $ 33 monetary value of reissuing the card plus $ 4.60 for collecting the fee. note that these costs are expressed in changeless dollars ( i, FY 1996 costs ) and consequently do not include future increases in wage costs, equipment costs, inflation, etc. This calculate assumes that any staff documentation efforts related to drug user fees would have to be absorbed within current SSA staff digest streamlining plans. The keep up table provides the entire price by card option, including the cost to administer a user fee process and the average fee per poster.
| Table 33. Total Cost of Issuing Social Security Cards to all Number Holders, Including the Cost of a User Fee Process | ||||
| Social Security Card Options | Card Reissue Cost ($ million) |
User Fee Process Costs ($ million) |
Total ($ million) |
User Fee Per Card |
| 1/1A. Plastic card with security features | $ 3,898 | $ 1,271
Reading: Social Security History |
$ 5,169 | $ 18.70 |
| 2. Plastic card with picture | 4,254 | 1,271 | 5,525 | 20.00 |
| 3. Plastic card with secure barcode storage | 4,250 | 1,271 | 5,521 | 20.00 |
| 4. Plastic card with optical storage | 9,231 | 1,271 | 10,502 | 37.90 |
| 5. Magnetic stripe card (banking style) | 3,985 | 1,271 | 5,256 | 19.00 |
| 6. Magnetic stripe (ID style with picture) | 4,333 | 1,271 | 5,604 | 20.20 |
| 7. Microchip card with magnetic stripe and picture | 7,288 | 1,271 | 8,559 | 30.90
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Collecting user fees for all 277 million Social Security cards would require as many as 22,000 workyears that are currently unbudgeted. These workyears would also be in addition to the workyears needed to produce the enhanced cards.
OTHER CONSIDERATIONS
The mandate for this study is not clear on whether fees would be charged only for the initial reissuance of all SSN cards or would be continued for future replacements. Some card options in this report would not require mandatory periodic reissuance while others would; e.g., to update photographs. The choice of features on a new card will determine the need for an ongoing high volume periodic replacement process. With any choice, there would be replacements for ordinary reasons related to marriage, divorce, lost card, etc. Fees for future replacements under any scenario would be calculated in the same manner as for the initial reissuance process; i.e., the sum of card issuance costs and fee collection costs.
If Congress authorized exemptions from the fee, collection costs would increase due to the time necessary to: (1) explain the exemption requirements, and (2) evaluate and document individual eligibility for the exemption. The extent of the added costs would depend on the complexity of the exemption. Further, Congress would need to consider how these increased costs would be funded; i.e., as part of the fee charged to the non-exempt or from other appropriated funds.
Currently, about half of the 10 million replacement cards issued annually are for name changes related to marriage, divorce, adoption, etc. A fee, especially a very high one, is a potential disincentive to voluntary reporting of such changes to SSA. This is especially true for people for whom SSA historically has had greater difficulty maintaining accurate and up-to-date records; e.g., transient and migrant workers, low-wage workers, and domestics. These groups are expected to be least able or willing to report changes if a fee is required. However, some degree of non-reporting is expected among the general population as well.
Failure to report name changes timely to SSA increases SSA costs to reconcile discrepancies in wage reporting and other processes. It also means more discrepancies between SSA records and those of other Federal agencies that use the SSN. For example, SSA and IRS records are matched for name and SSN in processing tax returns. Mismatches delay processing including payment of tax refunds. The extent of these problems and their associated costs to the government could not be projected for purposes of this report since, to a large degree, non-reporting is likely to be directly related to the amount of the fee and to the absence or presence of any perceived disadvantage, loss or harm to the number holder for failure to report.
The Social Security Act neither authorizes nor prohibits imposing a fee for a Social Security card. Legislation would need to be enacted and a regulation promulgated to announce and govern imposing and collecting the fee.
FEE CHARGING IN CANADA
Recently, OIG studied the fee charged in connection with Canada’s Social Insurance Number (SIN) card. A user fee of CAN$10 is charged for each replacement card. The SIN card is made of plastic without any technological enhancements.
No fee is charged for a name change or when the card is lost in a natural disaster and the welfare system provides funds to pay the fee for its clients who are unable to pay. If a person needs proof of a SIN, he or she may request a certification from the Canadian government; it is not necessary for him/her to pay for a replacement card.
Canada issues about 1 million replacement cards annually (compared to over 10 million replacement Social Security cards annually). The fee charged in Canada is designed to generate revenue and has remained unchanged since 1985, due to enhancements in automation of their systems and political pressure to avoid increases.
Every year Canada audits the user fee costs to set the fee for the following year. The costs of processing the fee are included. The Canadian government does not bear additional costs as a result of charging a user fee.
OIG found that the workload impact of the user fee activity on local offices is minimal. This is because the work force is already in place and the fee collection is a relatively small and integrated portion of the SIN card application process. Canada’s replacement cards comprise about 20% of the volume of cards it issues annually; SSA’s replacement cards constitute about 65% of the cards issued. One explanation for the significant difference in replacement rates is Canada’s more limited uses for the card. The government strongly discourages private organizations from using the SIN and Canadian government employees have identification numbers that are different from their SINs.
OIG recommended that SSA charge a $13 fee for replacement cards based on the Canadian experience. The FY 1996 cost of issuing a Social Security card was $12.51. However, OIG’s suggested $13 fee does not take into account the enhancements to the current Social Security card, or the cost of establishing a system for collecting and processing user fees. Any exemption from the fee is likewise not accounted for in the OIG-recommended fee. Finally, OIG did not discuss potential, negative consequences for individuals and for SSA if people chose not to replace their cards rather than pay the fee.
Collecting user fees for all 277 million Social Security cards would require deoxyadenosine monophosphate many as 22,000 workyears that are presently unbudgeted. These workyears would besides be in summation to the workyears needed to produce the enhanced cards.OTHER CONSIDERATIONSThe mandate for this study is not clear on whether fees would be charged alone for the initial reissuance of all SSN cards or would be continued for future replacements. Some card options in this report would not require compulsory periodic reissuance while others would ; e.g., to update photograph. The choice of features on a fresh batting order will determine the necessitate for an ongoing high volume periodic substitute action. With any option, there would be replacements for ordinary reasons related to marriage, divorce, lost card, etc. Fees for future replacements under any scenario would be calculated in the lapp manner as for the initial reissuance process ; i.e., the sum of circuit board issue costs and tip collection costs.If Congress authorized exemptions from the fee, collection costs would increase due to the time necessary to : ( 1 ) explain the exemption requirements, and ( 2 ) evaluate and document person eligibility for the exemption. The extent of the add costs would depend on the complexity of the exemption. Further, Congress would need to consider how these increased costs would be funded ; i, as separate of the tip charged to the non-exempt or from other appropriated funds.Currently, about half of the 10 million surrogate cards issued per annum are for name changes related to marriage, divorce, borrowing, etc. A fee, specially a very high one, is a potential disincentive to voluntary report of such changes to SSA. This is specially true for people for whom SSA historically has had greater difficulty maintaining accurate and up-to-date records ; e.g., transeunt and migrant workers, low-wage workers, and domestics. These groups are expected to be least able or will to report changes if a fee is required. however, some degree of non-reporting is expected among the general population as well.Failure to report name changes timely to SSA increases SSA costs to reconcile discrepancies in wage report and early processes. It besides means more discrepancies between SSA records and those of other Federal agencies that use the SSN. For example, SSA and IRS records are matched for name and SSN in processing tax returns. Mismatches delay processing including payment of tax refunds. The extent of these problems and their consociate costs to the politics could not be projected for purposes of this composition since, to a big degree, non-reporting is probable to be directly related to the sum of the tip and to the absence or presence of any perceive disadvantage, passing or harm to the number holder for failure to report.The Social Security Act neither authorize nor prohibits imposing a tip for a Social Security card. Legislation would need to be enacted and a regulation promulgated to announce and govern inflict and collecting the fee.FEE CHARGING IN CANADARecently, OIG studied the tip charged in connection with Canada ‘s Social Insurance Number ( SIN ) card. A drug user fee of CAN $ 10 is charged for each refilling card. The SIN tease is made of plastic without any technological enhancements.No tip is charged for a name change or when the card is lost in a natural calamity and the wellbeing system provides funds to pay the fee for its clients who are unable to pay. If a person needs proof of a SIN, he or she may request a certification from the canadian politics ; it is not necessary for him/her to pay for a substitution card.Canada issues about 1 million successor cards annually ( compared to over 10 million substitution Social Security cards per annum ). The fee charged in Canada is designed to generate tax income and has remained unaltered since 1985, ascribable to enhancements in automation of their systems and political pressure to avoid increases.Every year Canada audits the exploiter fee costs to set the fee for the follow year. The costs of processing the tip are included. The canadian government does not bear extra costs as a solution of charging a user fee.OIG found that the workload impact of the exploiter fee activeness on local offices is minimal. This is because the make violence is already in place and the fee collection is a relatively small and desegregate assign of the SIN menu application process. Canada ‘s refilling cards comprise about 20 % of the volume of cards it issues per annum ; SSA ‘s substitution cards constitute about 65 % of the cards issued. One explanation for the meaning difference in refilling rates is Canada ‘s more limited uses for the card. The politics strongly discourages individual organizations from using the SIN and canadian government employees have recognition numbers that are unlike from their SINs.OIG recommended that SSA charge a $ 13 fee for successor cards based on the canadian experience. The FY 1996 cost of issuing a Social Security wag was $ 12.51. however, OIG ‘s suggested $ 13 tip does not take into account the enhancements to the current Social Security wag, or the cost of establishing a system for collecting and processing user fees. Any exemption from the fee is besides not accounted for in the OIG-recommended fee. finally, OIG did not discuss potential, negative consequences for individuals and for SSA if people chose not to replace their cards preferably than pay the tip. 23. “ Where a service ( or privilege ) provides special benefits to an identifiable recipient role a charge should be imposed to recover the wide price to the politics of rendering the service … .. [ if the serve ] is performed at the request of the recipient role and is above and beyond the services regularly received by other members … of the general public. ”
