Social Security faces a customer service backlog

Although Social Security benefits continued uninterrupted throughout the pandemic, customer service declined precipitously when the more than 1,200 field offices closed to the public in March 2020.

Currently, appointments are available on a limited basis for dire emergencies and for “express service” interviews that allow individuals to submit the proof of identity that's needed to apply for an original Social Security card or update information such as a name change or citizenship. Everyone else is encouraged to access services online or on the phone. Please hold.

After reaching an agreement with its three labor unions in January, the Social Security Administration announced that it plans to bring employees back to the office at the end of March, two years after local offices were shuttered. The agreement requires its employees and members of the public to wear masks, regardless of their vaccination status.

“This will be a significant step toward improving access to our services as we implement this plan,” Kilolo Kijakazi, the agency’s acting commissioner, said in an email sent to Social Security’s employees Jan. 21. Kijakazi said the agency hopes that offices can resume providing in-person service, without appointments, in early April.

Nancy Altman, president of the nonprofit Social Security Works advocacy group, welcomed the news of the planned reopening, but said Social Security needs to do more to improve service to the public.

“Even before the pandemic, Social Security was facing a customer service crisis due to underfunding,” she said in a statement issued Jan. 21.

Between 2010 and 2021, SSA’s operating budget shrank by 13% even as the numbers of beneficiaries grew by 22%. In 1985, SSA employed 81,000 workers; today, there are fewer than 60,000 employees. Prior to the pandemic, SSA offices averaged 175,000 visitors each day, for a total of more than 40 million in-person visits each year.

“As Social Security field offices reopen, they will face a backlog of disability claims, which decreased significantly during the pandemic, likely due to the difficulty of applying without in-person assistance,” Altman said in the statement. “Long Covid, the continued retirement of the baby boomers, and the provision of survivor benefits to the families of pandemic victims mean the SSA can expect an even larger amount of work in the years to come.”

Altman noted that the Social Security Administration’s operating budget is funded out of Social Security’s $2.9 trillion accumulated surplus, known as the Social Security trust funds. Social Security is funded exclusively by payroll tax contributions from both employers and employees, but Congress limits how much SSA can spend on administrative costs. Currently, SSA spends less of one penny of every dollar on administrative expenses. The balance of every dollar is returned to workers in the form of retirement, disability or survivor benefits.

“Congress must allow SSA to spend enough of Social Security’s $2.9 trillion accumulated surplus to not just safely reopen offices, but expand both the workforce and number of offices,” Altman said. “The American people have earned, paid for, and deserve first class service.”

However, those trust funds are in danger of being exhausted in the foreseeable future unless Congress acts before then to shore up the crucial retirement system.

The trust funds had been growing since 1984 as excess tax revenues were stockpiled for pay for future benefits. In 2010, in the wake of the Great Recession and as the first wave of baby boomers began to retire, SSA started tapping interest earnings on the trust funds to supplement FICA tax revenues to pay current benefits. Last year, FICA tax revenues and the trust fund interest were no longer sufficient to pay all promised benefits, and SSA started drawing down the trust fund principal for the first time.

The Social Security trust funds are now expected to be exhausted in 2034. At that point, FICA tax revenues are expected to be able to fund about 75% of promised benefits in the event that Congress fails to enact program reforms before then. Potential solutions includes raising payroll tax rates, boosting taxable wage limits, increasing future full retirement ages or enacting a variety of benefit changes, such as altering how cost-of-living benefits are calculated.

One of the silver linings of the pandemic is the Social Security Administration significantly expanded the services that can be accessed online. Today, you can apply for retirement, disability and Medicare benefits online, check the status of an application or appeal, request a replacement Social Security card in most states (except Alaska, New Hampshire, Oklahoma and West Virginia), print a benefit verification letter and request a 1099 documenting benefits for income tax purposes.

However, survivors can't apply for benefits online and must contact SSA via its toll-free phone number (800-772-1213) or use the field office locator to find the phone number of their local office by zip code.

[Questions about Social Security rules? Find the answers in Mary Beth Franklin’s ebook at Maximizing Social Security Retirement Benefits]