Challenges in Processing Disability Benefits with the US Social Security Administration (SSA) and Global Implications for Social Security Systems: How Interact SSAS Can Offer Solutions The Social Security Administration (SSA) of the United States serves as a vital lifeline for millions of Americans who rely on disability benefits. However, this essential function can face significant operational challenges, leading to delays, inefficiencies, and inaccuracies in processing claims. According to a recent report from the SSA (“The Social Security Administration’s Major Management and Performance Challenges During Fiscal Year 2023”, Nov 2023, Office of the Inspector General), the backlog of disability claims has soared, with nearly 1.13 million pending initial claims at the end of FY 2023—a 90% increase since FY 2019. Reconsideration claims have jumped 117% in the same period, resulting in a dramatic rise in the average processing time, from 120 days in 2019 to an alarming 218 days for initial...

In the United States, the challenges of accurately collecting social security taxes are not much different than in the rest of the world.  Inconsistent wage reporting, changes in employment types, and errors in employees’ earnings filing are common problems that lead to discrepancies.  Misclassification of workers, especially in the gig economy, and the application of varying contribution rates based on employment or industry further complicate this task. Complexities in Contribution Collection Employment Classification: Different employment types, such as full-time, part-time, freelance, and gig economy workers, can come with unique contribution rules, which can lead to errors in filing. Full-Time vs. Gig Workers: Traditional full-time employees are subject to payroll taxes (FICA), where both the employer and the employee contribute to Social Security. However, gig economy workers (e.g., Uber drivers, freelance designers) are classified as self-employed and must pay self-employment taxes, covering both the employer and employee portions of Social Security...

A recent report by the US Social Security Administration’s Inspector General, named “The Social Security Administration’s Major Management and Performance Challenges During Fiscal Year 2023”, notes that the U.S. Social Security Administration (SSA) faces a daunting task: distributing over $1 trillion in benefits to millions of Americans every year, while ensuring that payments are accurate and compliant with regulations. However, like many social security systems worldwide, the U.S. SSA has struggled with improper payments—both overpayments and underpayments—which were estimated to have totaled $13.6 billion in fiscal year 2022 alone. Improper payments are a major challenge for which the Inspector General advises the US SSA to “Improve the Prevention, Detection, and Recovery of Improper Payments”. These issues are not unique to the U.S. SSA; they are shared by social security systems around the world.  In many regions, outdated systems, manual processes, and a lack of integration and automation exacerbate the challenge....

Image: Government employees at the new Social Security Administration filing citizens applications for social security account numbers. Ca. 1937 History of the Social Security Number (SSN) The Social Security Number (SSN) was introduced in 1936 as part of the U.S. Social Security Act of 1935. Its primary purpose was to track the earnings of U.S. workers and to determine eligibility for Social Security benefits. The creation of the SSN represented a significant step in building a new social safety net for Americans, providing them with financial security upon retirement or in cases of disability. Situation Prior to the Existence of the SSN Before the SSN’s implementation, tracking individual earnings and contributions for social benefits was a complex and often inaccurate process. Identifiers like names and addresses were used, but they proved insufficient for distinguishing between individuals, especially in cases of common names. This lack of a standardized system made it...

Origins of Data Exchange in Social Security The exchange of data within social security systems has its roots in the need to manage and administer benefits efficiently. Initially, these exchanges were manual or limited to localized databases, often relying on paper forms and physical records. For example, in the United States, the Social Security Act of 1935 introduced a system where contributions and benefits were tracked manually, requiring employers to submit wage information on paper, which was then recorded and processed by the Social Security Administration (SSA). This system faced challenges such as delays, errors, and inefficiencies due to the sheer volume of records to be managed. Similarly, in Europe, before the advent of the European Union (EU) frameworks, individual countries managed their social security data separately, using bilateral agreements to handle cross-border cases, which involved extensive paperwork and coordination between national agencies. As social security programs evolved, so did...

Introduction: Understanding KYC’s Role in Social Security “Know Your Customer” (KYC) processes have become a cornerstone of modern social security administration, extending far beyond the simple verification of individual identities. Today, KYC policies encompass the identification and maintaining of up-to-date records of employers, healthcare providers, and other key stakeholders, ensuring that social security systems operate with integrity, transparency, and efficiency. This blog post delves into the origins of KYC, its role in maintaining data integrity and compliance within social security, and how solutions like Interact SSAS KYC Management enhance these efforts. The Origin of KYC Policies KYC practices originated in the financial sector, primarily as a means to combat money laundering and fraudulent activities. Over time, their importance expanded to other industries, including social security. Governments worldwide recognized the need for thorough identity verification processes to protect sensitive data and prevent misuse of benefits. By integrating KYC procedures, social security...

In today’s rapidly evolving digital landscape, organizations dealing with large volumes of sensitive data, such as social security administrations, need to have the best tools for managing complex business processes. Many organizations have had to make do, until now, with multiple different solutions to handle different aspects of their business processes.  Quite a few social security administrations to this day operate one software to manage registrations, another one to manage benefit claims, another ERP system to manage the payment of such benefit claims and Solutions like Interact SSAS, an integrated system designed to address all social security administration needs in one singly system, highlight the benefits of having a unified approach to such critical functions. The key advantage is clear: having all modules—ranging from registration to compliance management—within a single system promotes efficiency, data integrity, and customer satisfaction while ensuring regulatory compliance. Data Integrity In an integrated system like Interact...