The Social Security Administration (SSA) benefits from an unexpected source of funding: undocumented immigrants. In 2022, this group contributed an estimated $25.7 billion in Social Security taxes, according to the Institute on Taxation and Economic Policy. Despite being ineligible for Social Security benefits due to their immigration status, these workers are still paying into the program, effectively subsidizing benefits for American citizens.
As President-elect Donald J. Trump’s administration has discussed mass deportation plans, experts predict potential economic consequences, including a loss of about $20 billion in Social Security cash flow annually. The SSA distributes $1.5 trillion to 68 million Americans monthly, but the program has been facing a financial shortfall due to demographic changes—such as lower birthrates and an aging population. Immigrants have helped mitigate this gap by bolstering the workforce.
In the coming years, the Social Security trust fund that supports retiree benefits is expected to run out by 2033, which would result in a 21% reduction in benefits unless Congress acts. Immigration is increasingly viewed as a key factor that helps ease these financial pressures. If immigration levels decrease, experts warn, the program’s financial shortfall could worsen.
The Social Security Administration’s projections indicate that a reduction in net immigration would exacerbate the program’s funding gap. On the other hand, a rise in immigration could significantly improve the program’s financial outlook, potentially reducing the shortfall.
Undocumented workers contribute to Social Security through payroll taxes, even though they cannot access benefits. Many undocumented workers file federal tax returns using Individual Taxpayer Identification Numbers (ITINs), allowing them to comply with tax laws. Though their contributions don’t lead to direct benefits, these workers are vital in maintaining the system’s solvency.
The Institute on Taxation and Economic Policy estimates that undocumented immigrants contributed $96.7 billion in federal, state, and local taxes in 2022. Of this, one-third went toward funding social insurance programs, including Social Security and Medicare, which underscores their significant role in sustaining these programs.
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