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How to Increase Usage of SSA’s Online Tools

Retiring baby boomers are increasing the demand for Social Security Administration (SSA) services at a time when budget constraints and retiring staff are limiting its capacity to deliver these services. In theory, investing in web-based tools that people can use to serve themselves could help SSA meet the projected increases in demand, even with fewer staff. But, despite investments in tools with significant labor-saving potential, such as online benefit application, the share of retirees applying for benefits online has hovered around 50 percent since 2013. This study of online claiming is based on a survey of older individuals who either claimed their Old Age and Survivor (OASI) benefit in the past five years or intend to claim within the next five years. The survey covered: 1) how they submitted (or intend to submit) their benefit application; and 2) how they communicated (or intend to communicate) with SSA during the process. The survey found that: • About 60 percent of respondents submit (or intend to submit) their benefit application online, but only 43 percent claim (or intend to claim) benefits completely online – that is, claim benefits without interacting with an SSA representative by phone or in-person during the process. • Reasons for contacting SSA rep during the claiming process included 1) distrust of online tools and a preference for in-person interactions, 2) obstacles to using SSA’s online services – such as data errors or a general lack of awareness of SSA’s online tools, 3) straightforward inquiries about benefits – most of which could probably be handled online, and 4) more complex inquiries regarding things like spousal benefits or the tax implications of receiving SS income. • In general, younger respondents were more likely to exhibit a high comfortability with online financial services. The policy implications of the findings are: • Only 70 percent of the roughly 50 percent currently submitting online benefit applications – about 35 percent of retirees – claim completely online. • The share of retirees who claim completely online could be increased significantly through policies that 1) help more retirees find answers to their basic inquiries online and 2) reduce the impediments retirees encounter when they do try to use SSA’s online tools. • These policies, combined with the incremental impact from greater comfort with online services among younger cohorts, could increase the share of retirees claiming completely online by about 20 percentage points in ten years. Introduction Americans rely on services from the Social Security Administration (SSA) throughout their lives, from the time they are issued a Social Security number (SSN) as infants, through their work lives as earnings records are updated monthly, until they receive old-age benefits as retirees. Providing these services can pose a significant administrative challenge, particularly when budget constraints and retiring staff are limiting SSA’s capacity. In 2022, SSA expects to process 9.6 million claims, handle 36 million 1-800 calls, update 267 million earnings records, and issue 19 million SSN cards. And demand for SSA’s services will continue to grow as baby boomers continue to retire. Effectively meeting the growing demand for its services is currently one of SSA’s highest priorities. One way that SSA plans to meet this challenge is by increasing the use of online services. Online services are well-suited to meet increasing demand because, relative to call centers or field offices, they have a low “marginal cost” – processing 1,000 claims online costs almost the same as processing 100 claims online. Importantly, some online services complement those provided by staff (e.g., a tool to check the status of a claim made in-person), while others serve as a substitute (e.g., a tool to obtain a replacement SSN card). In both cases, investing in webbased tools that people can use to serve themselves could help SSA meet increased demand with fewer staff. To increase its overall capacity despite staff reductions, the SSA will increasingly need to substitute online tools for time-consuming human interactions – such as processing applications. The first online claims application for retirement benefits was launched in November 2000. Although the monthly online application rate has grown significantly since the program’s inception, it has slowed considerably in the last decade – hovering at around 50 percent since 2013 (see Figure 1). 1 Curda (2018). 2 U.S. Social Security Administration (2021b). 3 U.S. Social Security Administration (2021c). 4 Osterweil, Millett, and Winston (2007).