Social Security is a program designed to help people save for a time in their future when they might not be able to work. Both workers and employers pay into the fund, and the federal government sends monthly checks to qualified people who have retired or who cannot work because of disability. Residents of Puerto Rico receive Social Security benefits just as people in the states do. Unlike nutrition assistance and healthcare funding, Social Security in Puerto Rico is not automatically less generous than in the states.
Yet there are real differences in the amount of Social Security that reaches people in Puerto Rico and people living in the states. Stateside, the average monthly Social Security benefit is about $1,917, while in Puerto Rico the average monthly Social Security benefit is about $1,232. That is about 35% less in Puerto Rico than in the states. If Puerto Rican recipients received the same average amount as people in the states, the Island would see $300 million per month more in benefits — about $4.4 billion less annually for recipients to spend locally. That creates a massive economic impact on the Island.
What’s going on?
Facts about Social Security in Puerto Rico
Here are the basic numbers on Social Security in Puerto Rico:
- Total Beneficiaries: 851,795
- Total Monthly Benefits: $1.05 Billion
- Annualized Impact: ~$12.5 Billion
Who are the beneficiaries?
- Retired Workers: 537,482
- Disabled Workers: 124,379
- Widows/Widowers and Parents: 73,053
- Spouses: 73,277
- Children: 43,604
- Age 65+: 647,611 beneficiaries
This is a major federal revenue stream into Puerto Rico’s economy, supporting nearly 25% of residents. Puerto Rico has an aging population, and relies heavily on Social Security. Yet in spite of its importance to the Island’s economy, the amount of benefits in Puerto Rico is far lower than what can be seen in states with comparable populations.
What’s different?
There are two big differences. First, Social Security payments are based on the income of the recipient over their working life. Incomes in Puerto Rico are lower on average than incomes in the states. If a worker in Puerto Rico retires to a state, he or she will still often receive less than the other retirees in that state because the lifetime pay-in totals a smaller amount.
The other big difference comes from a very different cause. Puerto Rico participates fully in Social Security but is excluded from full Supplemental Security Income (SSI) benefits, relying instead on capped programs. People who would be eligible for SSI if they lived in a state lose those benefits if they live in Puerto Rico. This is clearly unfair, but it is legal under the U.S. Constitution. Congress must treat states equally, but is allowed to treat territories differently.
What’s the solution?
As a territory, Puerto Rico can try to persuade Congress to grant SSI coverage to Puerto Rico or work to increase wages on the Island. However, even if the current Congress were to make changes in the laws for Puerto Rico, a future Congress can change those laws again.
This why piecemeal approaches to gaining equality for Puerto Rico are doomed to failure. As a state, Puerto Rico would have the full protection of the Constitution and would be on an equal footing with all other states. When Puerto Rico becomes a state, eligible residents will automatically receive SSI. What’s more, when Puerto Rico becomes a state, it’s a good bet that it will — like all the other territories that have been admitted as states — become more prosperous. Territory status is the main reason for the higher poverty level in Puerto Rico compared with the states.
With a level playing field, workers in Puerto Rico can expect to earn as much as people in states. Their Social Security checks will then be higher.
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