The world media is busy are discussing a statement by Elon Musk, the head of the US Department of Public Administration, known for his loud statements and outrageous actions, about possible large-scale fraud in the United States’ social security system. He claimed that the database contained more than 20 million people who were allegedly over 100 years old, and even joked that they might include «vampires» who were receiving benefits for no reason.
However, experts and representatives of the authorities doubt the veracity of these statements. Audits by the Social Security Administration (SSA) show that such records are mostly due to technical errors or out-of-date enrollment data, rather than actual abuse. Yes, most of these people are long dead and do not receive any payments, because their data has been preserved since the time when there was no electronic record of deaths.
This situation is surprisingly reminiscent of the plot of «Dead Souls» by Mykola Gogol, where bureaucratic inaccuracies allowed fraudsters to manipulate the registers of serfs who had died long ago. A century and a half has passed, citizen identification technologies have changed radically, but ironically, similar cases still occur, although not because of human cunning and adventurism, but because of the peculiarities of old administrative systems.
Phantoms in the social security system: why «150-year-old recipients of social security payments» is a technical error, not fraud
A detailed analysis shows that the DOGE head’s accusations against the Social Security Administration are exaggerated and do not take into account the real reasons for the existence of such records. It is worth noting that SSA uses outdated computer systems developed half a century ago in the COBOL programming language. This programming language uses the default date of birth is May 20, 1875.
If the system does not have information about a person’s actual birthday, it is automatically assigned this date. As a result, in the current year, all such records reflect the age of 150 years, although in fact this is only a technical feature of the system, and not evidence of the real age of individuals. That is, it is a technical error, and not evidence of fraud.
The thing is that in the USA there is no single database for registration of deaths. Each state and local government lead your records, which can cause delays or omissions in reporting information to federal agencies such as the SSA. Because of this, records of the deceased may not be updated, giving the impression that these people are still alive and receiving social benefits.
- at. Commissioner of the US Social Security Administration soothes public: the mere fact that there is no date of death in the database does not mean that the person is getting paid. Many such records remain inactive and do not affect payouts in any way.
In addition, last year’s audit proved that the social security system, despite its scale, works quite accurately. Of the total $8.6 trillion paid out between 2015 and 2022, less than 1% of the funds were mistakenly disbursed. This demonstrates that the margin of error in this gigantic system remains low, and that claims of massive fraud are more like wild speculation than a real problem.
How the US Social Security System Works
Social Security, started in 1935 during the presidency of Franklin D. Roosevelt, is the cornerstone of financial support for millions of Americans. Financing is carried out through the payroll tax known as FICA, where employees and employers each pay 6.2% of earnings, and the self-employed pay the full amount — 12.4% — on their own. These funds go to special trust funds, from which payments are made to socially vulnerable persons.
Social security in the United States covers various categories of citizens, financing those who cannot earn independently due to age, disability or loss of a breadwinner. First of all, these are pensioners — people who have worked for at least 10 years and contributed to the system. They can start receiving benefits at age 62, but if they don’t wait until full retirement age (67 for those born after 1960), the benefits will be much lower. On the contrary, postponing the pension until age 70 increases the monthly amount.
People with disabilities who cannot work due to a serious illness or injury also receive assistance. They have to prove that the disability lasts for at least a year or is fatal in order to receive payments through the SSDI program.
Another category is the families of deceased workers. Widows, widowers, children, and sometimes even elderly dependent parents can count on financial support from the state. There is a separate assistance program for children and low-income disabled persons. Unlike the main Social Security system, which is funded by payroll taxes, this program receives funds directly from the federal budget. Thus, Social Security in the US covers a variety of life situations, helping those who need it most.
System is working yes: taxes currently paid by workers are immediately used to pay current retirees and people with disabilities. This means that funds are not kept separately for each person, but are used immediately to support those who need them now.
Currently, the social security system is facing serious problems common to most Western countries. An aging population and an increase in the number of pensioners create an additional burden on the program. In the absence of reform of the system, the trust funds could be exhausted by 2033, which would reduce the benefits by a quarter. Uncertainty about the future of Social Security is causing concern among average Americans and experts alike.
And Musk’s recent statements about possible fraud in the social security system attracted attention to the problem of data accuracy and efficiency of program administration.
The invisible contribution: How illegal immigrants fund the state without getting anything in return
Imagine a person who worked in construction, in a restaurant, or on a farm, paying taxes on every dollar they earned, but not being eligible for the welfare benefits that those taxes fund. This is the reality for millions of illegal immigrants in the US who did a significant contribution to the country’s economy.
According to the Institute on Taxation and Economic Policy, in 2022 illegal immigrants paid nearly $100 billion in taxes, about a quarter of their income. These funds are used to finance various government programs, in particular, social security and health insurance, which immigrants themselves do not have access to due to their status. At the same time, mass deportation policies initiated by the Trump administration could lead to lower FICA contributions, potentially affecting the sustainability of these programs.
It is worth noting that many illegal immigrants use fake or fake social security numbers to work. This too can cause inaccuracies in databases and risks for them and employers. However, they are still are paid taxes without receiving social benefits.
In some states, illegal immigrants contribute significant amounts to taxes. In California, for example, illegal immigrant households paid $2.7 billion in taxes in 2010. In Texas, that amount was $1.6 billion, and in Florida it was $806.8 million.
This situation creates a paradox: people who make significant financial contributions to society remain deprived of basic social guarantees. This raises the question of the need to reform immigration policy and the welfare system to ensure fair treatment of all those who contribute to the country’s development.
Musk, fraud and politics: how the billionaire affects social reforms in the United States
It is worth noting that fraud using the social security numbers of the deceased is real happens. For example, during the COVID-19 pandemic in the US, more than $45 billion in fraud was uncovered when fraudsters filed unemployment claims on behalf of deceased or incarcerated individuals. But these cases relate to specific assistance programs and are not common across the entire social security system.
Therefore, Elon Musk’s statements about alleged large-scale fraud in the US social security system raise reasonable doubts about their objectivity and possible political basis. It is known that Musk actively supports the political initiatives of Donald Trump and the Republican Party. In particular, during the 2024 election campaign, he donated more than $290 million in support of Trump and other Republican candidates.
In addition, after Trump’s election victory, Musk led the newly created Department of Government Efficiency (DOGE), whose goal is to reduce budget expenditures and restructure federal agencies.
In his new role, Musk introduced controversial measures, among others, requirement to all federal employees to submit weekly reports on their work. This naturally caused criticism, because it can distract employees from their main duties and threatens confidentiality.
Musk’s claims about fraud in the welfare system may be part of a political strategy to support Trump’s initiatives to reduce public spending and reform social programs. Using his influence, Musk can try to influence public opinion to support policy decisions that are in his interests and those of his allies.
Phantom records and «dead souls» or possible technical failures in the Ukrainian system of social payments
In Ukraine, there is also a risk of similar technical cases, although the system of accounting for social security payments is significantly different from the American one. Maintenance of social registers and databases is carried out through the Unified Information System of the Ministry of Social Policy of Ukraine, which is integrated with other state registers, in particular, the State Register of Individuals — Taxpayers (DRFO), the Unified Register of Insured Persons of the Pension Fund, the State Register of Civil Status Acts and the Register of Territorial Communities.
As for software, Ukrainian databases mostly use modern database management systems — Oracle, Microsoft SQL Server, PostgreSQL, and work with more modern programming languages, in particular Java, C#, Python. However, some state registers, in particular, Pension Fund databases, may still contain outdated components running on FoxPro, Clipper or COBOL.
Similar technical problems with «phantom» records in Ukraine may arise due to untimely updating of information on the death of payees. Data on the deceased are transmitted from the civil registry, but there may be delays or discrepancies between different databases. For example, if information about a person’s death is not entered promptly, social benefits may continue to accrue.
Another potential risk is the use of powers of attorney, where relatives or guardians can receive payments on behalf of a deceased person if the state system has not updated their status. Such cases were recorded during audits of social funds.
However, in contrast to the USA, in Ukraine there is a system of verification of payments through the verification of the Ministry of Finance. It tracks inconsistencies between government registries, making it difficult for large-scale fraud to occur. Although there were cases when «dead souls» remained in the registers for a certain time, verification mechanisms and checks by the PF and the Ministry of Social Policy allow to minimize such risks to a large extent.
So, similar technical errors are also possible in Ukraine, but thanks to the data verification system, integration state registers and permanent audits, their scale is much smaller than it might seem with loud statements about fraud in the social sphere.
Tetyana Viktorova
