Addressing immigration fraud is crucial in fixing Social Security funding issues, according to Vance. Experts concur.

• The large baby boomer population is putting pressure on Social Security and Medicare to provide support during retirement.
• During a recent CNBC interview, JD Vance, the Republican vice presidential candidate, emphasized the importance of addressing "massive" benefit fraud committed by undocumented immigrants.
• One expert says that addressing the looming trust fund depletion dates is a bigger problem than the programs.

This November, several older voters have stated that their decision on which candidate to vote for will depend on two key concerns: Social Security and Medicare.

If either former President Donald Trump or Vice President Kamala Harris wins the presidency on Nov. 5, they may have to address the impending depletion of trust funds for certain programs.

In a Sept. 12 interview on CNBC's "Squawk Box," JD Vance, the Republican vice presidential candidate, suggested that addressing the issue of immigration first could help alleviate the programs' funding problems.

Vance stated that Social Security and Medicare are facing a "massive fraud problem" due to undocumented immigrants collecting benefits, as some of his constituents and friends have shared incidents of fraud with him.

"Let's address the illegal alien fraud in our Social Security and Medicare system before discussing any changes to benefits for American earners, Vance stated, emphasizing the financial impact."

The Trump-Vance campaign has previously stated that immigration negatively impacts the programs that millions of retirees depend on for their monthly benefit payments and healthcare coverage.

In March, Trump claimed on Truth Social that Democrats are "destroying Social Security and Medicare through the migration of undocumented individuals."

The Harris campaign has discussed the possibility of an "earned pathway to citizenship," which may motivate immigrants to work and contribute to society. However, the campaign did not provide CNBC with further details on these plans.

Who is eligible to benefit from Social Security?

According to the Social Security Administration, a unique Social Security number is assigned to individuals who are either U.S. citizens, lawfully admitted permanent residents, lawfully admitted temporary residents with DHS authorization, or have a valid non-work reason for needing a Social Security number.

In the U.S., most jobs necessitate a Social Security number, and employers are obligated to withhold payroll taxes from employees to finance programs such as Social Security and Medicare.

After working for many years, the employee typically earns enough to qualify for monthly Social Security payments and Medicare benefits upon retirement or disability.

According to Tara Watson, a senior fellow at The Brookings Institution and author of the book "The Border Within: The Economics of Immigration in an Age of Fear," documented immigrants, including those with permanent status and dual intent temporary visas, contribute to Social Security and Medicare through payroll taxes.

Undocumented immigrants are not eligible for Social Security or Medicare benefits, but they may contribute to the programs regardless of their immigration status, according to Watson.

Some undocumented immigrants may use false Social Security numbers to work in jobs that require payroll tax contributions to Social Security and Medicare, thus unofficially contributing to those programs, she said. On the other hand, seasonal workers may not pay payroll taxes.

Immigrants who contribute to programs and earn eligibility may receive benefits, including Social Security, according to Watson and the American Academy of Actuaries.

In 2022, immigrants without legal status paid a total of $33.9 billion in federal taxes for Social Security, Medicare, and unemployment insurance, as reported by the Institute on Taxation and Economic Policy.

Due to their immigration status, those workers are unable to receive those benefits.

How widespread is Social Security fraud?

Two common forms of Social Security fraud related to immigration occur when individuals who are not eligible for a Social Security number either steal one or create a false one in an attempt to obtain employment in the U.S., and when individuals who are not eligible for Social Security or Medicare benefits use a fraudulent name or Social Security number to claim benefit payments.

Committing these kinds of fraud isn't easy.

Some people, including undocumented immigrants, may be able to accomplish it.

Accessing someone's Social Security account and bank information to steal their benefits is challenging, as stated by Andrew Biggs, a senior fellow at the American Enterprise Institute and former principal deputy commissioner at the Social Security Administration.

In 2023, the Social Security Administration and the Office of Inspector General received complaints of unauthorized changes to bank deposit information after individuals were allowed to make changes through their online accounts.

What is the answer to the question "Was my Social Security number stolen?" regarding the massive breach. Additionally, why do eligible families miss out on Social Security survivor benefits for children? Lastly, what is the predicted cost-of-living adjustment for Social Security in 2025?

According to Brown, $33.5 million in benefits for 20,878 beneficiaries was redirected through unauthorized direct deposit changes between January 2013 and May 2018. However, another $23.9 million for 19,662 beneficiaries was prevented from misdirection by the agency before payments were made.

The 2019 report found no evidence linking undocumented immigrants to the activity in question.

Brown stated in his testimony that our audits discovered that fraudsters could use stolen identities for employment or to obtain earnings-related benefits, but he did not provide any demographic information about those involved in the fraud.

Undocumented immigrants have been found to misuse Social Security numbers to fraudulently access benefits.

Watson stated that while there are some immigrants receiving benefits they shouldn't, he believes it's a minor number of them.

Vance's comments about social services fraud by undocumented immigrants are not a problem that I've heard specifically, as Biggs says.

What happens to unclaimed earnings?

Experts suggest that the type of fraud involving the misuse of Social Security numbers for work purposes may be more prevalent.

If someone uses a Social Security number that does not belong to them, their earnings may be mistakenly attributed to the individual whose name matches that number in the agency's records.

The Social Security Administration's earnings suspense file holds wage items where the names and Social Security numbers on Form W-2s do not match their records, an agency spokesperson stated via email.

The wage records remain in the file until they can be verified and linked to a worker's record. Although the wage records are unidentified, the program's trust funds have received revenues for the wage items placed in the suspense file, the spokesperson stated.

The earnings suspense file, as per a 2023 report from the Social Security Administration Office of the Inspector General, had amassed a total of $2.15 trillion in wages for tax years 1937 through 2022.

Watson stated that the earnings suspense file contains undocumented immigrants and others, indicating that people are putting money into the system but not claiming it back.

Immigrants in the labor market 'very much a positive'

Experts claim that immigration has a positive impact on Social Security and Medicare overall.

Both programs receive funding from payroll taxes contributed by immigrants, according to experts.

The American Academy of Actuaries' Social Security committee chairperson, Sam Gutterman, stated that immigration generally has a positive impact.

Neither the Social Security Administration nor the Department of Health and Human Services, which is responsible for Medicare, has released recent information on how undocumented immigrants impact their programs.

Renata Miller, HHS spokesperson, refuted Vance's claim that undocumented workers are draining Medicare and Social Security, stating that these assertions are false and divert attention from the health care issues that matter to everyday Americans. HHS will continue to work towards reducing health care costs, allowing patients to obtain prescriptions without having to ration pills or accrue medical debt.

The Social Security Administration outlined stringent guidelines for eligibility and the use of Social Security numbers in an email.

"According to a Social Security spokesperson, the Social Security Act prohibits the payment of benefits to noncitizens residing in the U.S. unless they are lawfully present. To obtain a Social Security number for work, individuals must be U.S. citizens or have authorization from the Department of Homeland Security. The Social Security Administration has strict evidentiary requirements to verify the authenticity of documents and prevent the issuance of numbers to ineligible individuals."

The Social Security Administration stated in a 2013 report that accurately determining the total taxes paid and benefits received by unauthorized workers is challenging.

In 2010, the chief actuary of the program's office stated that undocumented immigrants contributed $13 billion in payroll taxes to the program's trust funds, while about $1 billion in benefit payments were attributed to unauthorized work. This resulted in a net contribution of approximately $12 billion to the program's cash flow, according to the agency.

The SSA's chief actuary office estimates that unauthorized immigrants' earnings contribute to a net positive impact on Social Security's financial status overall.

It is predicted that the positive impact on trust funds will persist in future years.

The Social Security Administration has stated that immigration has a positive impact on the program because the newcomers to the country are typically of working age.

Stephen Goss, the chief actuary of the Social Security Administration, stated in testimony before the House Budget Committee in June that when individuals arrive in the country, they typically seek economic opportunities and join the workforce, which is a positive outcome.

Goss stated that it aids in generating more revenue for us.

Goss stated that those workers may eventually work long enough to become eligible for benefits.

Some immigrants contribute to the program but never receive benefits, he stated.

Having children can help increase the country's birth rate, which in turn benefits the program, as stated by Goss.

Looming depletion dates are the more pressing issue

The American Academy of Actuaries has released a report stating that immigration can positively impact the future financial stability of Social Security, particularly in the long run. The report suggests that immigration can improve the worker-to-beneficiary ratio and slightly postpone the depletion of the program's trust funds.

According to research, the Social Security Administration's latest annual trustees report shows that immigration is not a "silver bullet" to completely solve 100% of Social Security's financial problems.

The retirement of the baby boomer generation is putting pressure on both Social Security and Medicare as they are being utilized for benefits.

The trust fund that funds retirement benefits through Social Security is projected to be depleted by 2033, with 79% of benefits still payable, according to projections from the program's trustees.

The Medicare hospital insurance trust fund, commonly referred to as Part A, is projected to be depleted by 2036, with only 89% of benefits still payable.

Instead of focusing on fraud by undocumented immigrants, Biggs suggested that presidential campaigns should prioritize policies to address the looming depletion dates that will result in across-the-board benefit cuts.

When it comes to larger Social Security and Medicare funding issues, focusing on the undocumented immigrant angle is a "total sideshow," according to Biggs.

Biggs stated that he believes Vance is employing it as a diversion to avoid discussing the need for Social Security repairs.