How Social Security Numbers Work

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 [source: SSA].

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 [source: Kagan].

Social Security created SSNs in 1936. Back then, computers didn't yet exist, and Social Security personnel needed a way to quickly sort the vast numbers of applications that arrived at the agency's office in Baltimore, where the files were organized by region as well as alphabetically. "It was really just a bookkeeping device for our own internal use and was never intended to be anything more than that," a historical article on the Social Security website explains .

To accomplish that, Social Security officials came up with a complex system of nine-digit SSNs, with three different parts that conveyed different pieces of identifying information. The first set of three digits was the Area Number, and originally represented the state in which a person first applied for a Social Security card. The numbers started in the northeast and moved westward, so that northeasterners had the lowest numbers, and people in the West Coast had the highest ones [source: SSA].

The middle two digits, the Group Number, helped break the applicants in a region into smaller blocks. Instead of being assigned consecutively, all the odd numbers from 01 to 99 were assigned, and then all the even numbers from 10 to 98 were used. Once those had been assigned, even groups 02 through 08 were used, and then odd groups 11 through 99 [source: SSA].

Finally, SSNs were given a four-digit ending sequence called the Serial Number, whose numbers were assigned consecutively from 0001 to 9999 [source: SSA].

In 1972, Social Security altered its system slightly. Instead of assigning Area Numbers according to the state where the office to which a person applied was located, Social Security began using the ZIP code of the person's address on the application [source: SSA].

In 2011, Social Security dropped the old system completely, because it limited the number of SSNs available to each state, which eventually might have resulted in Social Security running out of available numbers. Instead, Social Security adopted a new policy called SSN randomization. It eliminated the geographical significance of the initial three digits (that is, the ones that used to be the Area Number). For the first time, it also began using the sequences 000, 666 and 900-999. The significance of the middle two digits, which used to be the Group number, was done away with as well [source: SSA]. The Serial Number was left unchanged.

Social Security says that the change helps give Americans additional protection against identity theft, because it makes it harder for crooks who obtain the last four digits of a person's SSN to use public information to reconstruct the rest of the number [source: Randomization FAQ].

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?

Essentially, yes. You need a Social Security number to apply for a job or a credit card, and you can't collect Social Security benefits in retirement or obtain some other government services without having one. Some states also require you to provide proof of your Social Security number in order to obtain a driver's license [source: SSA].

Is There a Fee for Receiving a Social Security Card?

No. Social Security won't charge you anything to apply, and if you lose your card, the agency will replace it for free [source: SSA FAQ].

Do I Need a Number For My Child?

Applying for a number for your child is strictly voluntary. 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.

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 [source: SSA].

Is a Person's SSN Reused After He or She Dies?

No. Social Security doesn't reassign SSNs after a number holder's death. Even though the agency issues 5.5 million new SSNs per year, it still has plenty of number combinations to use and isn't expected to run out for many years [source: SSA FAQ].

Is It Possible to Change My Name Without Causing Confusion About My SSN?

Yes, people do this all the time, whether it's because of marriage, you've transitioned to a different gender, or because you simply want a new name. To do this, you need to contact Social Security and provide proof of your identity, as well as documents showing that you've legally changed your name, such as a court order for a name change, a marriage certificate or divorce decree, or a Certificate of Naturalization showing your new name [source: SSA].

Can I Change My SSN?

It is possible to get Social Security to change your SSN, but the agency says it will do so only in a few specific situations:

To get a new number, you can either apply in person at a Social Security office, or complete an online application. Either way, you must provide extensive documentation of your problem, and also original identification documents [sources: Borland, National Center for Transgender Equality].

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 [source: SSA].

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 [source: SSA].

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 [source: SSA].

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 Nov. 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 [source: SSA].

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 [source: SSA].

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 [source: SSA].

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 [source: SSA].

Who Was the First to Receive Social Security Benefits?

During the Social Security program's startup 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 [source: SSA].

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.

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

When Social Security numbers were created by the U.S. government, they really were intended for just one use — tracking a worker's earnings over the years, for the purpose of calculating retirement benefits. But over time, because we don't have a national ID card in the U.S., SSNs became a de facto form of national ID as well. Over time, the government, banks and other businesses began to ask for Americans' SSNs on forms and use them to tell people apart [source: Jeffries].

Unfortunately, that's made SSNs a valuable commodity for crooks, because they can use the number to impersonate someone and steal his or her identity and unlock everything from financial accounts to government benefits, and even personal medical information. [source: Bushwick]. Theft of SSNs is a major factor in identity fraud losses that reached $56 billion in 2020 [source: Javelin].

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

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:

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 won't 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:

Social Security Fraud Hotline

If you suspect someone of committing fraud or abuse against Social Security, contact the fraud hotline at 800-269-0271 or submit a report online here [source: SSA].