In the United States, 85.6% of those 65 or older receive most of their income from Social Security. Certain groups of individuals, however, are significantly less likely to collect benefits. This poses a significant challenge for policymakers and others concerned with the well-being of the country’s aging population.
A 2011 paper by the Office of Retirement Policy at the Social Security Administration, “Who Never Receives Social Security Benefits?” (PDF), analyzes demographic information for “never-beneficiaries” aged 62 to 84 in 2010. By utilizing the Modeling Income in the Near-Term (MINT) microsimulation model, the researchers could project whether the individuals in the study were likely to never receive Social Security benefits in the future.
Key study findings include:
Nearly 4%, or 1,581,556, of the country’s older residents never collect Social Security benefits in their lifetimes. Of this group, 94.5% are not able to collect because they do not have the requisite 40 quarters of coverage (QC) or 10 years of recorded work history needed to qualify for the program. (The remaining 5.5% of never-beneficiaries pass away before they receive their benefits.)
55.2% of never-beneficiaries were immigrants who arrived in the U.S. at age 50 or older, with nearly 83% of these older arrivals never qualifying for Social Security benefits (including those granted U.S. citizenship.) Infrequent workers — those whose work history was frequent interrupted (often the result of unstable partnerships or dependence on a non-qualifying spouse) — comprise 34.7% of never-beneficiaries. The balance, approximately 5% of workers, were typically municipal employees who did not pay into the Social Security system and are ineligible to receive benefits.
43.2% of late-arriving immigrants and 57.2% of infrequent workers lived at or below the poverty line and relied primarily on income from assets, the federal Supplemental Security Income (SSI) program, or a coresident (a household member other than a spouse.) The median annual income for late-arriving immigrants in 2010 was $34,754; for infrequent workers, it was $11,553.
The researchers note that “despite representing only a modest percentage of the aged population, never-beneficiaries are notable from a social welfare standpoint because of their high poverty rates…. Future research could better delineate the life experiences that lead to never receiving Social Security benefits as well as the resulting economic implications.”