What is Social Security Number (SSN) | Meaning & Definition

What is a Social Security Number (SSN)?

The Social Security Administration (SSA) creates and distributes a nine-digit number called Social Security Number (SSN) as a means of identification. A Social Security number (SSN) is required to work in the United States and is used to verify identity when applying for government benefits.

An SSN is required for usage by companies and government agencies; therefore, it is available to anybody living in the United States, regardless of whether or not they are working.

In 1936 the SSN was established to fund social security-related retirement and disability payments. The initial purpose of the SSN was to keep tabs on wages and provide benefits. The IRS now uses it to verify taxpayers' identities and keep tabs on consumers' credit histories, among other things. Credit, bank accounts, government benefits, large purchases, etc., all need a Social Security number in the United States.

What are the Components of the Social Security Number (SSN)?

A Social Security Number (SSN) consists of nine digits. The digits indicate that although two persons may have been given the same Social Security number, no numbers have been reused.

1. Area Number

The first three numbers of a person's Social Security number indicate their geographic region of origin. It signified the issuing state. States could have multiple numbers depending on the number of people requiring SSNs.

2. Group Amount

The group number is the next pair of digits. 01 to 99 are used as group numbers. They were not necessarily allotted in order. They originally represented groups of 10,000 numbers issued to a state's post offices in order to assign SSNs. They were there to represent the issuing agency.

3. Serial Number

The actual serial number comprises the last four digits of the third group. Within each group, the individuals ascended from 0001 to 9999.

What are the Types of Social Security Numbers (SSN)?

SSNs can be broken down into three distinct categories. They are:

First Category: The first card typically includes a photo, name, and Social Security number and is valid for gainful employment. Only U.S. citizens and those with permanent legal admission to the U.S. are eligible to receive one.
Second Category: Valid for employment with DHS authorization is printed on the second sort of card along with your name and number. These cards are issued to temporary visa holders who the Department of Homeland Security has granted employment authorization.
Third Category: To foreign nationals who meet the following criteria, we will issue a Social Security number in the third category.

The criteria:

are legitimately admitted to the U. S. without work authorization from DHS but have a legitimate nonwork reason for requiring a Social Security number; or
need a number because federal law requires an SSN to obtain a benefit or service.

What are the Necessities of Having a Social Security Number (SSN)?

All citizens, permanent residents, and temporary or working residents of the United States are issued a Social Security number.

An SSN is crucial since it is directly related to any potential future benefits from the U.S. government to which you may be eligible. The Necessities of having a Social Security Number (SSN) are:

To track annual income and the number of years worked
To calculate future financial benefits based on whether they are related to retirement income, disability income, or health insurance
To establish a bank account or other type of financial account
To file for unemployment
To extract information about the salary payments connected to each SSN and the deductions made for workers' Social Security and Medicare contributions to the Internal Revenue Service (IRS)
To calculate income taxes
In the process of applying for a federal loan
To acquire a passport
In the process of registering for Medicare
As a means of identification on tax returns
To acquire a driver's license