Introduction to How Social Security Numbers Work

In the United States, the nine digits that make up your Social Security number (SSN) may be the most important numbers in your life. You are required to apply for your SSN when you start your first job, and it stays with you from then on! We use our SSNs daily, although many times we don't even know it.

Important as it is, we may not know much about the origin of our specific number and how SSNs generally came to be. We certainly do know we don't want other people using our SSN as their own, especially not 40,000 other people, as happened to one woman we'll discuss a little later!

In this article, we'll tell you about about how the Social Security program began and answer some common questions regarding SSNs. We'll also tell you what to do if your card is lost or stolen and how you can deal with and prevent Social Security fraud. But first, we'll tell you what your numbers are for, what they mean and how you get the specific number you'll have for the rest of your life.

What is Social Security?

Generally, the term social security describes a program that uses public funds to provide a degree of economic security for the public. The specific social security discussed here is the United States government program established in 1935 that provides old age, disability, and survivors insurance, as well as supplemental security income, an income for elderly or disabled people.

In the United States, employers and employees are required to pay Social Security taxes. The money raised from these taxes primarily goes to providing benefits for those who have reached retirement age or are otherwise currently eligible. In this way, today's workers provide funds for the people drawing benefits today, and when today's workers retire, the workers of that time will (at least theoretically) provide the funds. You receive Social Security benefits based on the amount of Social Security taxes you have paid, which, up to a certain maximum amount, is based on your income. People who have had greater incomes tend to get greater Social Security benefits. But Social Security also pays a disproportionate amount to people earning low incomes. They need the money more, and a dollar they pay in Social Security taxes provides them higher benefits than a dollar paid by a high-roller. In this way, Social Security in principle provides for those in need.

Social Security reform is in the news pretty consistently. This is beyond the scope of our discussion here but you can learn more about Social Security reform at the Social Security Reform Center. See also How does the Social Security system work?.

The original and essential purpose of SSNs is to keep track of the money you put into the Social Security program so that you can get the benefits you're entitled to. The government needs lifelong, unique identity numbers to keep track of people's payments throughout an entire working life, no matter how often we move or change occupations or even change our names.

The numbers on your Social Security card actually mean something!

What do the numbers mean?

SSNs are not assigned consecutively; the first was not the lowest number, and the most recent is not the highest. They are assigned regionally and in batches.

The nine-digit SSN, which has been issued in more than 400 million different sequences, is divided into three parts: area numbers, group numbers and serial numbers.

  • Area numbers - The first three numbers originally represented the state in which a person first applied for a Social Security card. Numbers started in the northeast and moved westward. This meant that people on the east coast had the lowest numbers and those on the west coast had the highest. Since 1972, the SSA has assigned numbers and issued cards based on the ZIP code in the mailing address provided on the original application form. Since the applicant's mailing address doesn't have to be the same as his residence, his area number doesn't necessarily represent the state in which he resides. For many of us who received our SSNs as infants, the area number indicates the state we were born in. You can find out which area numbers go with each state at SSA.gov: Social Security Number Allocations.
  • Group numbers - These two middle digits, which range from 01 through 99, are simply used to break all the SSNs with the same area number into smaller blocks, which makes administration easier. (The SSA says that, for administrative reasons, group numbers issued first consist of the odd numbers from 01 through 09, and then even numbers from 10 through 98, within each area number assigned to a state. After all the numbers in group 98 of a specific area have been issued, the even groups 02 through 08 are used, followed by odd groups 11 through 99.)
  • Serial numbers - Within each group designation, serial numbers -- the last four digits in an SSN -- run consecutively from 0001 through 9999.

Although SSNs are issued in some order, there is no simple way to tell a person's age based on his Social Security number.

New SSN?

If you encounter a company that offers to get you a new SSN to clear up your credit, report them to the Social Security Administration Office of the Inspector General. It's also a good idea to notify your local Better Business Bureau, consumer affairs and state attorney general's offices.

Common SSN Questions

In this section, you'll find basic SSN information and instructions on how to get an SSN or a new SSN card.

Does everyone have to have a Social Security number?

According to the U.S. Internal Revenue Service (IRS), any U.S. citizen (over age 18) who receives income must have an SSN. Employers are required to use that SSN to report the individual's income to the IRS.

Social Security coverage is mandatory -- you can't drop out. To those who claim their private retirement plans are better, the SSA points to its disability coverage and provisions for survivors, coverage it claims provides greater protection for families than what most private pensions provide.

Do I need a number for my child?

Applying for a number for your child is strictly voluntary. However, if you plan to claim the child as a deduction on your income taxes, you'll need to get him or her a number. Hospitals are making it easy to sign your baby up when you complete his or her name papers, but you can also wait until later and apply directly to the SSA.

It's a good idea to go ahead and get SSNs for your children -- you'll need them if you want to open savings accounts in their names, get them medical coverage, or let them take advantage of government services. Most people today receive their SSNs at birth, and, as a parent, you will certainly encounter many forms asking for your child's SSN.

What happens to my social security number after my death?

According to the SSA, SSNs are not recycled. Upon an individual's death, the number is removed from the active files and is not reused. Recycling numbers might become an issue someday, but not any time soon -- statisticians say that the nine-digit SSN allows for approximately one billion possible combinations.

Social Security Fraud Hotline

P.O. Box 17768

Baltimore, MD 21235

(800) 269-0271 (10 a.m.-4 p.m. EST)

Fax: (410) 597-0018

Email: oig.hotline@ssa.gov

Lost or Stolen Social Security Card

What if my name changes or my card is lost or stolen?

In any of these instances, you need to complete a Form SS-5, which you can download from the SSA site. Your new number will be the same as your old number, but to get a replacement card you will need to have proof of identity, such as:

  • Driver's license
  • Employer ID card
  • Marriage license or divorce decree
  • Military records
  • Adoption records
  • Passport
  • School ID card
  • Health insurance card (Medicare card not accepted)

To change your name on your card, you need documentation showing your old name as well as documentation showing your new name. For example, if you were newly married, your old Social Security card and your new marriage license would do. Again, your card number will be the same, but your new name will appear on your new card. You can notify the SSA of a change of address by mail or, if you are receiving regular benefits, by calling (800) 772-1213.

To apply for a new Social Security card, you must provide (in-person) proof of who you are (birth certificate, school record), your age, and your citizenship or legal alien status. If you were born outside the United States, you must also show proof of citizenship.

Only rarely -- in the event of identity fraud or stalking -- does the SSA assign a person a new SSN. Even in extreme cases, you can get a new SSN (no fee involved) only from the SSA. There are more and more companies claiming they can get you a new SSN (for a fee) to help clear your credit record. There is no way they can legally do this, according to fraud examiners.

For more information on getting a new card, call (800) 772-1213 or visit your local Social Security office. (See the SSA Web site for a list of field offices across the country.)

Can someone who steals my SSN and identity be prosecuted?

In October 1998, President Bill Clinton signed the Identity Theft and Assumption Deference Act of 1998. This act makes it a felony to use or transfer the identity (including the SSN) of another person. Last year, the act was used to successfully prosecute a Wisconsin man for stealing the identity of a Chicago man (he used the man's SSN to get a job that enabled him to steal computer equipment and open bank accounts and file income taxes in the victim's name). He pled guilty and faces a maximum penalty of 15 years in jail (followed by three years of probation) and a fine of up to $250,000.

In addition to crimes by U.S. citizens -- crimes that are bilking the government out of millions of dollars each year -- agents in the OIG's Strategic Enforcement Division (SED) say they are also targeting scams run by immigrant groups and foreign nationals.

There is a great deal more to learn about the Social Security program, its benefits and what they mean to you. Check out the Social Security Administration Web site for answers to your questions (sign up for the SSA's e-mail newsletter to keep up with changes in Social Security laws and regulations.

The History of Social Security

According to SSA historians, the social security program began with the Social Security Act of 1935, originally titled the Economic Security Act. The term "Social Security" was coined in the United States by activist Abraham Epstein, who led a group called the American Association for Social Security.

Social Security taxes and benefit payments began in January 1937. Initially the government paid retirement benefits only to a family's primary worker, but in 1939 it added survivor's benefits and benefits for the retiree's spouse and children. Disability benefits began in 1956, and in 1965 Congress signed Medicare into law. The Civil Service Commission adopted the SSN as an official federal employee identifier in 1961, and the Internal Revenue Service adopted it as the official taxpayer ID number in 1962.

While the Social Security Act did not specify the use of numbered cards, it did call for the formation of a record-keeping plan. The first group of SSNs were assigned and distributed through 45,000 local post offices across the United States, since the SSA had not yet developed its current network of 1,300 field offices. The cards themselves were made in more than 1,000 post offices designated as "typing centers."

Between November 1936 and June 1937, more than 30 million SSN applications were processed. First, the SSA distributed SS-4 applications to employers, asking them to report the number of employees in their businesses. Then, the SSA sent the appropriate number of SS-5 forms to employees for them to complete. When the employees returned these forms to the post offices and typing centers, the SSA assigned SSNs and typed them up on the first Social Security cards. Fred Happel, the New York artist who had created the Flying Tigers logo used during World War II, provided the design for the cards (SSA.gov: History has a picture of the original design). The post offices sent these number assignments (on form OA-702) to the master files at Social Security headquarters in Baltimore, Maryland.

The First Social Security Numbers

So who got that first number? According to government historians, no one knows for sure. The first card was issued sometime in mid-November 1936 at one of the 1,074 typing centers. Officially, no cards should have been issued before November 16, SSA historians say, provided that the 45,000 local post offices followed procedure, which is unlikely. Even if the first issuance date could be determined, it's likely that hundreds of thousands of citizens across the country received their cards on that day.

The First "Official" Record

Once received in Baltimore, SSN records were grouped in sections of 1,000, and master records (on the earnings and Social Security taxes of each individual) were formulated.

When the first block of records was complete, the head of the SSA's Division of Accounting Operations pulled off the top record -- SSN 055-09-0001 -- and designated it as the first official card.

That first Social Security record was assigned to a 23-year-old New York man, John David Sweeney, Jr.. Ironically, Sweeney died in 1974 at the age of 61 without ever receiving any Social Security benefits (full retirement age was initially set at 65; today, benefits are reduced by five-ninths of 1 percent for each month you are retired before 65, up to a maximum of 20 percent for people who retire the month they reach 62). Sweeney's widow, however, did receive benefits until she died eight years later.

The Low-Number Holder

Concord, New Hampshire, resident Grace D. Owen was issued the first card typed in Concord, which because of the numbering scheme happened to be the card with the lowest possible number -- 001-01-0001. Owen received the number after it had been offered (as an honor) and declined by both John G. Winant, Social Security board chairman, and John Campbell, Federal Bureau of Old Age Benefits' regional representative for the Boston region.

Who was the first to receive Social Security benefits?

During the Social Security program's start-up period between January 1937 and December 1939, the SSA only made one-time, lump-sum payments. According to SSA historians, Ernest Ackerman was the first recipient of Social Security benefits -- 17 cents, paid to him in January 1937. The first person to receive monthly benefits was Ida May Fuller from Vermont, who retired in November 1939 and started collecting benefits in January 1940 at age 65. In the three years that Fuller worked under the program, she contributed a total of $24.75. Her first benefit check was for $22.54 and she went on collecting benefits for 35 years, until 1975, when she died at age 100. In this time she collected a total of $22,888.92.

How 40,000 people used Mrs. Whitcher's SSN for 40 years

If someone has misused your SSN, take heart -- it could be worse. According to SSA historians, over the course of 40 years more than 40,000 people used secretary Hilda Schrader Whitcher's SSN as their own.

In 1937, Whitcher's boss, Douglas Patterson, vice president and treasurer of the wallet-manufacturing company E. H. Ferree, decided to include a demonstration Social Security card in the new line of wallets. To make the false card a better representation of a real Social Security card, he included a real SSN -- his secretary's. The display cards were smaller than actual cards and had the word "specimen" written on them, but many people took the number to be their own SSN anyway. The SSA gave Whitcher a new number and announced that the wallet sample number was not to be used as anybody's SSN. But some people were still using the number as late as 1977!

Problems With Your SSN

Because SSNs are unique, lifelong identification numbers, they serve many beneficial functions. However, those same qualities can also make SSNs problematic.

Why does it matter if someone knows my SSN?

You are not necessarily required to give your SSN to government agencies asking for it. These agencies must provide you with a Privacy Act of 1974 Disclosure Notice, which explains which law allows them to ask, whether you are required to answer and what penalties you face if you refuse to provide the number.

If a business or private company insists on knowing your SSN (they are not bound by the restrictions mentioned above), you can choose either to provide it or to take your business elsewhere.

Sharing your SSN is a potential problem because of the many secondary ways we now use SSNs. During the first few decades that Social Security cards were issued, they contained the phrase "Not to be used for identification." No reinforcing law was passed, however, and since SSNs never change, many institutions -- including hospitals and some banks and brokerage firms -- have found SSNs to be the perfect form of identification.

Some organizations, primarily banks, then began to use SSNs as secret codes or passwords, assuming only the owner would know them. Unfortunately, this is often not the case. The SSA says that if someone knows your name and your SSN and is a good enough actor to convince a clerk or teller that he has forgotten the account number, he might be allowed to transfer funds or conduct other fraudulent business with your money.

Such inconsistencies in the use of SSNs are at the root of the problem, experts say. Our SSNs might appear on our driver's licenses, on mailing labels and on university reports made available to the public in order to maintain federal funding. As such, they can't safely be used as secret passwords or codes; they're too accessible to too many people.

According to the Privacy Rights Clearinghouse, identity theft now occurs at a rate of about 400,000 cases a year -- and that number is growing 40 percent annually. Although Internet identity theft is raising a lot of new fears, experts say that low-tech identity theft, often stemming from criminals finding bits of information in stolen mail or garbage, is still the greater threat. (Before you toss that next credit card offer in the trash, shred it so that no one else can apply for credit in your name!)

We'll look at ways to protect your social security number from theft in the next section.

Social Security Number Protection

Experts suggest you take the following steps to lessen your chances of becoming a victim:

  • Don't carry your Social Security card, passport or birth certificate in your purse or wallet.
  • Cancel any credit cards you don't use.
  • Don't share your SSN when it isn't necessary. (For purchases and business transactions other than banking, trading stock or buying property, it isn't necessary.)
  • Remove your name from mailing lists. By calling (888) 5OPT-OUT, you can get your name off the marketing lists of the three primary credit bureaus. (This will, in turn, decrease the number of pre-approved credit offers you receive.)
  • Request a copy of your Social Security Personal Earnings and Benefit Estimate Statement at least every three years to make sure the information in your file is correct. (You can do this online through the SSA Web site.)
  • Be aware of what's on your credit report -- pull your report once or twice a year to be sure it's correct.
  • If your bank uses your SSN as a personal identification number (PIN) or as the identifier for banking by phone, write or call to request a different number. If you use the last four digits of your SSN as your ATM PIN, change it to something less predicable (not your birth date!).
  • If your state Department of Motor Vehicles uses SSNs as driver's license numbers, ask for an alternate number. Most will cooperate.
What if I find out someone else is using my SSN?

First, you should call the police and contact the Social Security Administration Fraud Hotline, which is operated by the Office of the Inspector General (OIG), an independent law enforcement agency that investigates violations connected with SSA programs. These violations include the following:

  • Misuse of an SSN
  • False statements on claims
  • Misrepresentation or concealment of facts affecting eligibility
  • False statements made to obtain an SSN
  • Crimes involving SSA employees
  • Conflict-of-interest and standards-of-conduct violations
  • Mismanagement and/or waste of funds

You will need to provide detailed information about the crime or fraud being committed against you. Investigators at the Fraud Hotline will review this information and determine the best course of action. If you would rather remain anonymous, you can do so, but this can make solving your problem more difficult. After your initial report, you will be contacted by an investigator for additional information.

The SSA and the OIG do not help with credit problems caused by someone misusing your Social Security number. Instead, you will need to work with credit card companies and credit reporting agencies to correct the problem and alert them that someone has been making fraudulent use of your SSN. The three major credit reporting bureaus are:

  • Equifax - (800) 525-6285
  • TransUnion - (800) 680-7289
  • Experian - (888) 524-3666

For more information on Social Security numbers and related topics, check out the links on the next page.