Social Security History

Report to Congress on Options for Enhancing the Social Security Card

CHAPTER V - ENHANCED SOCIAL SECURITY CARD PROTOTYPE

DESIGN

Background

We were directed by legislation enacted in August 1996 to consider a range of technology and materials in the design of a tamper-resistant Social Security card. The legislation placed no boundaries on the type of tamper-resistant material, security features or other enhancements that could be used to display or store information on the Social Security card. Each of the technologies mentioned in the legislation, and others that bear consideration, offer options for making the Social Security card more secure and tamper-resistant. The legislation also requires the Social Security card to be reliable proof of citizenship or legal resident status. This was interpreted as requiring consideration of techniques or technologies that can link the Social Security card to the card holder, such as including identifying information about the number holder on the card itself, or adding the number holder's picture, fingerprint, biometric identifier or combination of such features in or on the card.

The capability of a particular card technology must be considered in terms of the business process in which it will be used. That is, although we have considered card options with varying degrees of technological sophistication, each of the options considered, and many others that are not discussed in this report, are capable of performing the function of the current Social Security card. However, since future uses of the Social Security card are unknown, the prototype Social Security cards developed for and described in this report reflect the capability of different types of cards to meet our current requirements for the Social Security card as well as potential capability to meet future unspecified requirements.

Approach to Card Design

We focused on card designs that allow the Social Security card to function as it does currently, that is, as a visible record of the SSN assigned to the number holder for the purpose of crediting earnings and paying benefits. Therefore, every prototype option developed is, on its face, similar to the current Social Security card in that it displays the number holder's name and assigned SSN. Since the prototype cards also must serve as reliable proof of citizenship or legal resident status, all of the prototype Social Security cards display a statement indicating the number holder's citizenship or noncitizen status at the time of card issuance.

We produced prototype card options that, after accomplishing the basic SSA function, demonstrate a variety of ways of performing additional functions with varying degrees of technological sophistication. The different technological features are intended to demonstrate ways in which the Social Security card could function visually, as it does currently, and in concert with electronic devices that could read and/or verify data encoded on the card itself. These features could allow those who use the Social Security card (e.g., employers) to access data about the number holder that is not displayed on the card but that could be used to guarantee the card bearer's identity.

All of the prototype options were developed to include physical security features that make counterfeiting difficult. The electronic features provide counterfeit-resistance and enhance the potential usefulness of the Social Security card for assuring the bearer is the number holder. The electronic features also can be adapted to future uses of the Social Security card that might be developed to enhance our customer service.

It also should be noted that rather than developing different colors or appearance features, we used the current Social Security card as the model for the front of all prototype options. This was done to focus attention on card features rather than on colors, logos or artwork. The only change in appearance from the current card (aside from including the citizenship/noncitizen status legends) is removal of the signature line from the front of the card. Space for the number holder's signature has been provided on the reverse of all prototype options, consistent with other plastic card technology standards.

Categories of Plastic Card Technology

The legislation directs us, in part, to develop a prototype Social Security card that is "made of a durable, tamper-resistant material"and "employs technologies that provide security features." The legislation mentions examples of both materials and technologies but does not specify a particular card design or technology. Considering the wide range of materials and technologies currently used in the production and manufacture of all types of plastic (and other material) cards, we developed a strategy to narrow the options.

To facilitate consideration of different kinds of cards, we grouped the various card technologies into three categories. Each category includes card technologies that, while similar in general characteristics, represents a variety of card options that could fulfill the legislative mandate. Rather than developing a card demonstrating each technology within a category, examples of technologies or combinations of technologies within each category were developed. The three categories of card technologies we considered for demonstrating current and future uses of the Social Security card are:

Basic cards employing permanent data storage, regardless of how it is stored, encoded or displayed.

This category includes cards made of plastic, polyester or other durable material. Cards in this category may display information only, or may employ technologies that permit a combination of visible and coded data. The coding technology may involve bar codes, optical storage or other machine readable technologies capable of storing basic text data, pictures, fingerprints, or other biometric data, or a combination of such items. The distinguishing feature of cards in this category is the data is static and there is no potential for loss of data on the card as a result of electrical or magnetic interference, or other degradation, thereby allowing the card and the information on it to be as durable as the current paper Social Security card. We developed four card options representing different technologies within this category.

Enhanced cards employing magnetic stripes or other data storage technologies, either alone, or in combination with other security and technology features.

This category includes technologies employing data stored electronically, on a magnetic stripe, that can be read by a variety of card reading devices. Prototype card options in this category would have an appearance similar to the prototype card options in the category above, but these card options have the added capability of storing basic or enhanced data magnetically. The magnetic stripe optionally could be used in future electronic service delivery applications, or in other non-SSA applications. The distinguishing feature of card prototype options in this category is that the card employs a magnetic stripe in addition to other security and/or tamper-resistance features. We developed two card options within this category.

Cards employing microprocessor technologies, either alone, or in combination with other security and technological features, compatible with future applications of smart-card technology.

This category includes card technologies that employ microprocessors to process and/or store information, and to interact with other electronic devices. Card prototype options in this category have an appearance similar to the cards in the first category and also employ a magnetic stripe as in the category above. The distinguishing feature of cards in this category is the microprocessor that could interact with other electronic devices in future SSA or non-SSA applications. We developed one option in this category.

The use of any of the technologies mentioned above in connection with the Social Security card must take into consideration the future of the technology itself. That is, a decision to use certain technologies in connection with Social Security cards must recognize that SSNs are assigned for a number holder's lifetime. If the Social Security card relies on a particular technology, that technology, and its successors, will have to be maintained into the future to assure the card's features can be used, when needed.

Considering the frequency with which technological change and improvements occur, the lifespan of many of the technologies that fall within the categories mentioned is considerably less than the expected lifespan of most people. Therefore, employing technology to enhance the functionality of the Social Security card could be viewed as a commitment to periodically issuing new, more sophisticated cards to keep up with improvements in technology. The workload and cost implications of issuing new Social Security cards to maintain their technological currency would have to be justified by a demonstrated need for this functionality among the majority of card holders.

Card Security Features

The current banknote paper Social Security card incorporates security features appropriate to a paper format. The legislation directs us to develop a prototype Social Security card that is counterfeit-resistant and tamper-resistant made of durable, tamper-resistant material, for example plastic or polyester. Although there is no single security technique that is foolproof, there are many techniques that can be used in the construction of plastic cards to meet these requirements. Many card security designs rely on physical features embedded in the card material itself or used in the card construction process. Others rely on combinations of printing and embedded features to make counterfeiting difficult and to make tampering evident. Some anti-tampering techniques are incompatible with others and cannot be used on the same card.

We developed prototype card options that demonstrate different applications of card technology, especially for encoding information on the card. These technologies ultimately are better at preventing counterfeiting or tampering than physical security features because information encoded on a card can be encrypted and made unusable to anyone but authorized users. However, since the Social Security card also has to function visually, certain physical security features have been included in each of the prototype options to make card counterfeiting more difficult and to make tampering evident. These features are similar to those used by commercial credit and debit card manufacturers and for secure identity card programs. While most of the card options we developed employ additional features demonstrating various ways to store data on the card itself (and additional security features), every card described in the report uses a basic combination of physical security features to prevent tampering and make the card counterfeit-resistant.

Following is a description of the security features that are included on each of the prototype Social Security card options.

Four color printing

This is a basic card printing process that is used in the preprinting of blank card stock. The four color process refers to printing using the subtractive combination of the three primary colors, yellow, magenta and cyan, together with black as a sustaining color in order to raise the contrast of the print. The four constituent parts of the image are successively printed on top of one another in exact register. Use of four color printing makes counterfeiting more difficult because the card production equipment that is needed to produce cards through this process is expensive and complex.

Transparent hologram

This is a security feature in which a clear holographic image is bonded to the top surface of the plastic card. This feature complicates counterfeiting and makes tampering evident because both the holographic image itself and how it is registered (i.e., where the image(s) appears on the card surface) create a unique appearance that can be distinguished from copies and if altered will show evidence of tampering. If an attempt is made to remove or alter the holographic topcoat, tampering will be evident without the need of special equipment.

(Note: The transparent hologram used on the prototype Social Security card options demonstrates this capability. An SSA-unique holographic image would be created for actual production.)

Miniprinting/Microprinting

This is a printing technology used to produce very small (miniprinting) and microscopic (microprinting) fonts. (Miniprinting can be seen with the naked eye, microprinting can be seen only under magnification.) Miniprinting and microprinting often are combined with other artwork and printing effects on the card surface. Both techniques require sophisticated, expensive printing equipment, making forgery costly and difficult. Accurate reproduction of miniprinting/microprinting cannot be accomplished today by photocopying or by commercially available color photography or color scanners. Microprinting is used on the current Social Security card and on U.S. currency.

Ultraviolet ink

This is a printing technology used to print an image on the card surface that is visible only under ultraviolet light. When properly exposed, the hidden image can be used to verify card authenticity. Forgery is difficult because the special inks used to produce the image in the card surface are difficult to obtain, and in some cases, available only to government agencies or other secure users.

In addition to physical security features used in the construction and printing of plastic cards, special fibers or other material (known as taggants) can be embedded in the card's plastic material to make it unique and even more difficult to counterfeit. Also, material other than plastic can be used for some card applications to make cards more flexible, wear-resistant and to increase durability. Such features, some of which would be invisible, were not used in the prototype Social Security card options. However, additional security features would be selected in addition to the security features described above if specifications are developed for a new Social Security card.

Linking the Number Holder to the Social Security Card

We have interpreted the legislation as requiring us to consider technological enhancements to the Social Security card that could link the card to the assigned number holder so the card could fulfill the legislative requirement that it be reliable proof of citizenship/legal resident status. The only way the Social Security card can, with certainty, assure that the bearer of the card is the assigned number holder is if the number holder's identifying information, picture, fingerprint, or biometric identifier is on the card itself. Then, someone needing assurance the card bearer is the assigned number holder could perform a visual comparison with the number holder's picture or identifying information, or an electronic comparison to a biometric identifier stored on the Social Security card.

To meet this requirement of the legislation, we developed several prototype card options that display the number holder's picture or are capable of storing information such as a biometric identifier. Current Social Security cards do not provide this functionality and the issuance process does not include taking the number holder's picture or capturing identifying data to be included on the card, visually or electronically. To properly assess the total cost and workload implications of prototype Social Security cards that could be used with number holder identification features, it is necessary to understand the process needed to capture pictures or biometric readings in the course of issuing Social Security cards.

We developed hypothetical business processes involving capturing either the number holder's picture or a biometric identifier and then developed estimates of the cost of the typical kinds of equipment needed to perform the various functions associated with each option (e.g., digital image cameras, biometric reading devices, card readers, etc.). Assumptions were made about the changes in our current card issuance business process that would be needed to implement either of these options in connection with Social Security card issuance.

This was not intended to be an exhaustive cost-benefit analysis of all of the picture or biometric technologies currently available for this purpose. Rather, its main purpose was to demonstrate that while the cost of adding pictures or data strips (capable of storing the biometric information) to the Social Security card may result in only minor increases in the cost of the card itself, the total cost of issuing Social Security cards is much greater when personal information such as a picture or biometric reading must be obtained from the number holder and included on the card.

Following are the business process assumptions we used to determine the added cost and workload impact of including the number holder's picture or a biometric identifier on the Social Security card.

Including the number holder's picture on the Social Security card

Including the number holder's picture on the Social Security card would require a business process that is similar to other applications in which a picture is displayed on a plastic card, such as a drivers license or an identification card. Generally, we are assuming a process in which applicants for original SSNs, or those needing replacement Social Security cards and a new picture, will be photographed in an SSA office using state-of-the-art digital photography equipment. The picture data would be processed electronically with other information needed to issue a card. The data would be routed to our central processing facilities and ultimately to a Social Security card production facility, either owned by or under contract to SSA. Social Security cards with the number holder's picture would be mailed from the production facility to the card holder as they are today.

In addition to the time it would add to the issuance process in FOs, implementing a process to capture the number holder's picture would require us to:

Install in our facilities throughout the country the equipment needed to take the picture, or to contract with a vendor(s) that could service SSA's 1,300 geographically dispersed sites,
Train personnel to operate the equipment and obtain or modify facilities to house the equipment,
Modify computer systems to store and process picture data and associate it with other information used to prepare the Social Security card,
Modify SSA systems, depending on the final implementation strategy, to allow employees to access the number holder's picture from the central data base, and;
Periodically issue a new Social Security card throughout the number holder's lifetime to capture up-to-date pictures (perhaps as frequently as every 5 years, based on current business practices where a picture is used).

For the purposes of this report, we estimated the nominal cost of a prototype Social Security card bearing the number holder's picture, the cost of buying equipment for SSA facilities, and the additional cost in terms of the time added to the current issuance process to capture the picture in an SSA environment. Training, facilities, systems changes, and other related costs would, in a complete assessment of this option, need to be added to these cost estimates to estimate the total cost of implementing a Social Security card bearing the number holder's picture.

Including a biometric identifier on the Social Security card

Biometric identification systems rely on the examination of permanent physiological traits or physical human characteristics such as fingerprints, voice patterns, retinal patterns, etc. Biometric systems use sensors that "read" the physical characteristic, convert it to a digital pattern, and compare it to stored patterns for identification. Whether someone places a finger or hand on a reading device, or a device that captures another physical characteristic, a positive identification can be made of the physical trait. Biometric characteristics are unique to each person, making biometric identity systems virtually foolproof when used properly.

Biometric identification is in use in a wide variety of settings, including many State governments that currently use or are planning to use it for positive identification of public assistance clients or in connection with licensing.

While the use of biometric identification is increasing, it is not universally accepted in our society; any decision to employ this technology in connection with the Social Security card would likely generate public debate of this option. However, it is a realistic method of assuring the card bearer is the assigned number holder and offers the possibility of allowing third parties (e.g., employers) to use electronic devices to identify a Social Security card bearer (by comparing a "live" reading to the data on the card) without needing to contact us. In order to assess the implications of using biometrics in an SSA environment, we chose fingerprint geometry as an example of a biometric technology that could be used to associate the Social Security card to the card bearer. Other biometric identification techniques also could be used.

Including a biometric identifier on the Social Security card would result in a business process similar to what many States are implementing for identifying public assistance clients using their fingerprints. Generally, we are assuming a process in which the fingerprint of applicants for new Social Security cards, or those seeking a replacement card, would be "read" by a state-of-the-art fingerprint imaging device located in SSA offices. The fingerprint data would be routed in the same manner as described for picture data. Social Security cards with the number holder's biometric identifier stored on the card would be mailed from the production facility to the card holder, as they are today.

In addition to the time this would add to the SSN interview, implementing biometric identification of number holders would require us to

Install equipment needed to capture biometric readings and read biometric data from Social Security cards in its facilities throughout the country, or contract with a vendor(s) who could serve SSA's 1,300 geographically dispersed sites,
Train personnel to operate the equipment and modify facilities to house the equipment,
Modify our computer systems to store, process and retrieve biometric data and associate it with other information used to prepare the Social Security card,
Modify SSA systems, depending on the final implementation strategy, to allow employers to access the number holder's biometric information from a central, SSA-maintained database.

A central SSA file of fingerprint data (or pictures) for the entire number holder population also would require a high level of physical security to ensure electronic information was not tampered with or misused in any way. Like adding the number holder's picture to the Social Security card, these activities would add considerable cost to issuing cards when compared to the current process. For this report, we estimated the nominal cost of prototype Social Security cards that could store a biometric identifier, the cost of equipment needed for SSA facilities, and the additional cost in terms of time added to the current card issuance process to capture the biometric identifier in an SSA environment. As stated in connection with adding a picture to the Social Security card, training, facilities, related costs, and systems modification costs would need to be added to these cost estimates to understand the total cost of implementing a card containing a biometric identifier.

Issuance Process For Enhanced Social Security Cards

The Social Security card issuance process, as well as many related processes and systems, would be changed by adding citizenship or noncitizen status information, the number holder's picture, or personal biometric information to the Social Security card. The collection, storage and display of this information on the card would make issuing cards more costly for us and more complicated for the public. Among the changes that would be needed in the Social Security card issuance process are:

Each application for a card would require the number holder to visit an SSA facility to have a picture or biometric reading taken to be included on the card or to verify the picture or biometric reading against SSA records.
The time needed to issue a card would increase by the time needed to capture the number holder's picture or biometric reading; the process would involve more SSA employees, equipment and systems; and necessitate periodic reissuance of all cards (if the number holder's picture is used) to update the picture at established intervals throughout the number holder's lifetime.
Including the number holder's picture, biometric or other identifying information on the card would increase its usage for non-SSA purposes (e.g., proof of identity), thereby generating more lost or damaged cards needing replacement and, perhaps, creating incentives for counterfeiting.
Including information about the number holder's citizenship or legal resident status on the card would increase SSA replacement card workloads for noncitizens who need a replacement card to reflect status changes.
EAB would need to be modified to provide special cards or SSN issuance procedures for infants. Regardless of how SSNs were issued to infants, subsequent contact with us would be needed in the early years of life (e.g., school age) to obtain the number holder's picture or biometric reading.
We may need to discontinue taking applications for replacement cards by mail.

The cost analysis section of this chapter, beginning on page 43 provides a discussion of the cost of the current card issuance process and the added costs to issue an enhanced Social Security card as part of the evaluation of the cost and workload implications of issuing a new card to all living number holders. The additional cost of including the number holder's picture or biometric identifier on the card is also discussed in this section.

PROTOTYPE SOCIAL SECURITY CARD DESCRIPTIONS

General

This section describes the seven card options we developed in response to the legislative mandate to develop a prototype Social Security card that is tamper-resistant and counterfeit-resistant. The description of each card option contains the following information

Description of the card,
Summary of the card's specifications (i.e., material, security features, etc.),
Potential card usage, and
Impact on the Social Security card issuance process. (For options that include a picture or a biometric identifier, a discussion of an issuance process that links the number holder to the card by these methods begins on page 22.)

We did not redesign the appearance of the Social Security card. The artwork and colors of the current card have been reproduced on the front of each of the prototype cards. A facsimile of each prototype card option can be found after page 42.

Card Descriptions

Following are descriptions of the prototype Social Security cards:

Option 1--Flexible Plastic Social Security Card

Description
Option 1 is a flexible plastic Social Security card with the number holder's name and assigned SSN flat printed on the front of the card. This option employs all of the physical security features mentioned in the section on card security features in this chapter beginning on page 20. Two versions of option 1 (options 1 and 1A) were developed, one with and one without a statement concerning the number holder's citizenship/noncitizen status. They are identical in all other respects.
Specifications
Technical Features:
24 millimeter PVC plastic base
Flat printing
Complies with ISO/IEC⁽⁶⁾ 7810, Identification Cards--Physical Characteristics
Complies with ISO/IEC 10 373, Identification Cards--Test Methods

Security Features:
Four color printing
Miniprinting and microprinting
Transparent hologram
Tamper-resistant signature panel
Activation label (for verifying the card is received by the number holder.)
(Demonstrated on option 1A only.)
Card Usage
Option 1 is the most basic Social Security card option and, aside from the addition of the statement regarding citizenship/noncitizen status, would function the same as the current paper card, as a visible record of the SSN assigned to the number holder. Option 1, which displays the number holder's citizenship or noncitizen status, could be used in combination with evidence of the bearer's identity to be reliable proof of the number holder's citizenship/noncitizen status at the time evidence of such status was presented to us.

(Option 1A, which does not actually display the number holder's citizenship or noncitizen status, also could be used in combination with evidence of the bearer's identity to be reliable proof of the number holder's citizenship/noncitizen status if issued under current procedures.) Since this card option has no encoded or electronically stored data, and no processing capability, it cannot be used to interact with other devices or for conducting transactions that may be part of future SSA or non-SSA business processes.
Issuance Process
The issuance process for card option 1 (and 1A) would be the same as our current card issuance process except that current number holders who have not proven their citizenship, and all noncitizens, would need to prove their citizenship or noncitizen status so the new Social Security card could be considered reliable proof of their status. Although option 1 displays the number holder's citizenship/noncitizen status (or other applicable legends, when appropriate), issuing either option 1 or 1A to applicants for the new card would not require us to capture any additional information. This card also could be issued following the EAB process without any change in that procedure.

Option 2--Plastic Card With Number Holder's Picture On Back
Description
Option 2 is a rigid plastic Social Security card with the number holder's name and assigned SSN flat printed on the front of the card. This card employs the same physical security features as option 1 to make it tamper-resistant and counterfeit-resistant. In addition, this option demonstrates the capability of displaying the number holder's electronically captured

picture, gender, and date of birth on the back of the card.
Specifications
Technical Features:
30 millimeter PVC plastic base
Flat printing
Complies with ISO/IEC 7810, Identification Cards--Physical Characteristics
Complies with ISO/IEC 10 373, Identification Cards--Test Methods

Security Features:
Four color printing
Miniprinting and microprinting
Transparent hologram
Digitized color photo with embedded SSN (miniprinting)
Tamper-resistant signature panel
Card Usage
Card option 2 would improve the functionality of the Social Security card. It would be a record of the SSN assigned to the individual whose name and picture appear on the card. The addition of the number holder's picture and other personal data to the back of the card would make the card reliable proof of the bearer's citizenship/noncitizen status at the time evidence of such status was presented to us. The number holder's picture, personal information and other security features would make the Social Security card nontransferable, more difficult to counterfeit, and more reliable for employers and others who use the card. Card option 2 has no potential for storing encoded data or interacting in electronic transactions.
Issuance Process
The issuance process for a Social Security card bearing the number holder's picture, as demonstrated by option 2, would be significantly different from the current card issuance process. Applicants for new or replacement cards would need to visit FOs to have their picture taken.

Option 3--Plastic Card With Secure Barcode Storage
Description
Option 3 is a rigid plastic Social Security card with the number holder's name and assigned SSN flat printed on the front of the card. This card employs the same physical security features as option 1 to make it tamper-resistant and counterfeit-resistant. In addition, this card demonstrates the capability of including a secure barcode data storage stripe on its reverse. The secure barcode is a data storage technique that is applied to the back of the card during the card printing operation. It has sufficient capacity to store the number holder's name, SSN, and other identifying information, the number holder's biometric identifier, or other encoded data. The secure barcode can only be read using special devices and cannot be overwritten. Tampering with the barcode stripe makes the information unusable.

(Note: Barcode security is created by using encrypted data in the barcode.)
Specifications
Technical Features:
30 millimeter PVC plastic base
Flat printing
1,024 byte secure barcode storage strip
Complies with ISO/IEC 7810, Identification Cards--Physical Characteristics
Complies with ISO/IEC 10 373, Identification Cards--Test Methods

Security Features:
Four color printing
Miniprinting and microprinting
Transparent hologram
Tamper-resistant signature panel
Card Usage
Card option 3 introduces the capability of verifying SSN-related information using the Social Security card itself. The secure barcode storage, if used to store identifying information or a biometric identifier linking the card to the number holder, would allow the card to be used with devices that could read the text or biometric information and compare it to information provided by the card bearer or to a live biometric reading taken from the card bearer.

Any authorized entity willing to purchase an appropriate card reader and a fingerprint scanner could use the Social Security card as reliable proof of the bearer's citizenship/noncitizen status at the time evidence of such status was presented to us.

The addition of a biometric identifier to the secure barcode storage stripe would make this Social Security card nontransferable, difficult to counterfeit, and very reliable for employers or others who use the Social Security card.

Although less of a guarantee of the card bearer's identity (because the card would not contain a biometric identifier that could be used to identify the card bearer), the barcode storage could be used simply to store identifying information about the number holder.

Due to the technological limitations of secure barcode data storage, card option 3 has no further potential for storing encoded data or interacting in electronic transactions. However, since the secure barcode cannot be overwritten and does not degrade with time, the information stored on the secure barcode stripe would be as durable as the current paper Social Security card, although the technology needed to read and compare the data stored on the secure barcode could become obsolete.
Issuance Process
The issuance process for a Social Security card with secure barcode storage, as demonstrated by option 3, would depend upon how the barcode storage stripe is to be used. If it is used to house only identifying information, the card issuance process would be the same as for option 1. Information about the number holder to be stored on the secure barcode would be added during the card production process and would not require us to capture any additional information from individuals during the issuance process. Under those circumstances, a Social Security card with secure barcode also could be issued following EAB.

If the barcode storage is used to house the number holder's biometric identifier, the card issuance process would be similar to option 2, except applicants for Social Security cards

would need to visit SSA offices to have the biometric identifier captured or verified. The biometric information would be added to the card during the card production process. Under those circumstances, special procedures or a temporary card would need to be issued following EAB.

Option 4--Plastic Card With Optical Memory Storage
Description
Option 4 is a rigid plastic Social Security card with the number holder's name and assigned SSN flat printed on the front of the card. This card employs the same physical security features as option 1 to make it tamper-resistant and counterfeit-resistant. In addition, this card option demonstrates the capability of including an optical memory storage stripe on the back of the card. Optical memory cards utilize CD-ROM technology in card form. They are capable of storing large amounts of data in a secure manner that is highly durable and cannot be overwritten. Data may be added to the card until storage limitations are reached, but it cannot be erased. The optical memory storage stripe on this card option has the capacity to store large amounts of identifying information about the number holder, (e.g., a digitized picture, multiple biometric identifiers) and, potentially, vast amounts of other information. The stored information can be encrypted to ensure access only by authorized entities.
Specifications
Technical Features:
30 millimeter PVC/polycarbonate base
Flat printing
4 megabyte optical storage stripe (capacity of 6.6 megabytes available)

Security Features:
Four color printing
Miniprinting and microprinting
Transparent hologram
Tamper-resistant signature panel
Card Usage
Card option 4 is similar to card option 3 in that it provides the capability to verify SSN information using the Social Security card itself, or in combination with a device that obtains a live biometric reading from the card bearer. The optical storage could perform all of the functions that can be performed by secure barcode storage (card option 3) and its data storage capacity makes it useful or adaptable for storing other information. Although data stored on the optical storage stripe becomes permanent, and cannot be overwritten, additional data from future non-SSN applications could be added until capacity limits are reached.

Optical storage technology is not currently used in financial or other transactions involving online access of data, so future additional uses of this card technology are unknown. However, because the data stored on the card is permanent, with proper care, card option 4 potentially could be as durable as the current paper Social Security card, although the technology needed to read and compare the optically stored data could become obsolete.
Issuance Process
The issuance process for a Social Security card with optical storage, as demonstrated by option 4, would depend upon how the optical storage capability is to be used. Similar to card option 3, if used to house only identifying information, the issuance process would be the same as for option 1. If the optical storage is used to house the number holder's picture or biometric identifier, the issuance process would be similar to options 2 and 3 in that applicants for new or replacement cards would need to visit SSA offices to have their picture taken or to have the biometric identifier captured or verified.

Option 5--Financial Industry Standard Magnetic Stripe Card
Description
Option 5 is a rigid plastic Social Security card with the number holder's name and assigned SSN embossed on the front of the card. This card employs the same physical security features (except the clear holographic topcoat, which is incompatible with embossed printing) as option 1 to make it tamper-resistant and counterfeit-resistant. This option includes additional security features (embossed silver topped lettering and metallized reflective hologram located under the last four digits of the SSN) and demonstrates the capability of including a magnetic stripe that meets financial/credit card industry standards for capacity, durability, and security. Including a magnetic stripe would allow the Social Security card to be adapted to a wide variety of current and future applications that rely on information on the magnetic stripes to provide access to the application. (Note: The reflective hologram used on this prototype card option demonstrates this feature. An SSA-unique hologram would be created for actual production.)
Specifications
Technical Features:
30 millimeter PVC base
High coercivity, 3 track magnetic stripe
Complies with ISO/IEC 7810, Identification Cards--Physical Characteristics
Complies with ISO/IEC 10 373, Identification Cards--Test Methods

Security Features:
Embossed printing through metallized reflective hologram
Ultraviolet image
Mini/microprinting
Tamper-resistant signature panel
Card Usage
Card option 5 provides the capability to use a magnetic stripe to perform some of the same capabilities as options 3 and 4, the capability to verify SSN information using the Social Security card itself, or in combination with other devices. The magnetic stripe could be used to store a biometric identifier or personal data about the number holder, or it could perform entirely different functions.
Issuance Process
Information stored on the magnetic stripe would be added during the card production operation. Because it can be overwritten and will degrade over time, it is not as secure as the storage technologies described in options 3 and 4. Also, though the card itself could continue to function as a visible record of the assigned SSN even after the information on the magnetic stripe became unusable, the Social Security card would need to be reissued periodically to all number holders to assure that data stored on the magnetic stripe could be used as intended.

The issuance process for a Social Security card with a magnetic stripe, as demonstrated by option 5, would depend upon how the magnetic stripe is to be used. Similar to other card options, if it is used to store the number holder's biometric identifier, applicants for new or

replacement cards would need to visit SSA offices to have the biometric identifier captured or verified. If the magnetic stripe was used for other purposes, the card issuance process would be similar to option 1 and could be used with EAB.

Option 6--ID-Style Magnetic Stripe Card With Picture On Front
Description
Option 6 is a rigid plastic Social Security card with the number holder's name and assigned SSN flat printed on the front of the card. This card employs the same physical security features as option 1 to make it tamper-resistant and counterfeit-resistant. In addition, it demonstrates the capability of including the number holder's picture on the front of the card, similar to an identification card, and a magnetic stripe on the back that is capable of storing the number holder's name, SSN, citizenship status, date of birth, gender and/or a biometric identifier (similar to option 5). The number holder's date of birth and gender also are printed on the back of the card.
Specifications
Technical Features:
30 millimeter PVC base
High coercivity, 3 track magnetic stripe
Complies with ISO/IEC 7810, Identification Cards--Physical Characteristics
Complies with ISO/IEC 10 373, Identification Cards--Test Methods

Security Features:
Transparent hologram
Ultraviolet image
Mini/microprinting
Tamper-resistant signature panel
Tonal color picture on front
Card Usage
Card option 6 combines the potential capabilities of options 2 and 5 in that it provides the capability to verify the identity of the number holder visibly using the picture on the front of the card, or electronically using the magnetic stripe and external devices. The number holder's picture would allow this option to function as visible proof of the bearer's identity and, because of the magnetic stripe, to be adapted to future electronic applications. The magnetic stripe also could be used to store a biometric identifier or personal data about the number holder.
Issuance Process
As explained under card option 5, information stored on a magnetic stripe can be overwritten and will degrade over time. Even though the card could continue to function as a visible record of the number holder and assigned SSN, it would need to be reissued periodically to update the number holder's picture and to assure that data stored on the magnetic stripe could be used as intended. Because the number holder's picture is included on the card, the issuance process would be the same as the issuance process for card option 2.

Option 7--Microprocessor Card With Picture and Magnetic Stripe
Description
Option 7 is a rigid plastic card with a magnetic stripe and microprocessor. This card incorporates the physical security features of the other card options and displays the number holder's picture and identifying information on its reverse. In addition to the visible information on the card, the combination of microprocessor and magnetic stripe give this card the capability of performing all of the potential functions of the other card options while being adaptable to a wide range of future card-based applications. The microprocessor makes possible a high level of active security for the card that can protect it from being read, changed or added to by unauthorized persons.
Specifications
Technical Features:
30 millimeter PVC base
ISO standard microprocessor location
Flat printing
High coercivity, 3 track magnetic stripe
Complies with ISO/IEC 7816-1, Identification Cards--Integrated Circuit Cards with Contacts
2 KB storage capacity microprocessor (up to 8 KB available)

Security Features:
Transparent hologram
Ultraviolet image
Mini/microprinting
Tamper-resistant signature panel
Digital color photograph
Card Usage
Card option 7 is the most sophisticated and secure of the Social Security card options we developed. The card could perform the following functions:

The printed information would allow it to function the same way the current card functions, as a visual record of the number holder's name and SSN.

The citizenship/noncitizen status information, coupled with the number holder's photograph and identifying information on the card's reverse, would allow the card to serve as reliable proof of the bearer's citizenship or noncitizen status at the time evidence of such status was presented.

The magnetic stripe is capable of storing information such as an encoded version of the SSN, a personal identification number, or a biometric identifier.

The microprocessor could be used to store large amounts of data, or it could be used to provide processing capability when the card was used with other devices.
Issuance Process
The issuance process for a Social Security card with a microprocessor, the number holder's picture and a magnetic stripe, as demonstrated by option 7, would be the same as the issuance process for card options that include the number holder's picture. Following capture of the number holder's picture, information would be encoded on the magnetic stripe, or stored using the microprocessor, during card production.

Table 2: Summary of Social Security Card Prototype Options/Capabilities
Option	Card Description/ Significant Feature	Physical Security Features	Permanent Data Storage	Rewriteable Data Storage	Verifies Assigned Number Holder {7}	New Issuance Process {8}	Adaptable to Other Uses
1 (1A)	Plastic card	X	No	No	No	No	No
2	Card with picture	X	No	No	Yes	Yes	No
3	Secure barcode stripe	X	Yes	No	Yes/No	Yes/No	No
4	Optical memory stripe	X	Yes	No	Yes/No	Yes/No	Yes
5	Magnetic stripe	X	No	Yes	Yes/No	Yes/No	Yes
6	Magnetic stripe/ picture	X	No	Yes	Yes	Yes	Yes
7	Microprocessor/ picture	X	No	Yes	Yes	Yes	Yes

{6} ISO/IEC is the International Standards Organization/International Electrotechnical Organization.

{7} A "Yes/No" entry indicates the card could be used to verify the identity of the card bearer, depending on how the card's features are used.

{8} A "Yes/No" entry indicates the card's impact on the SSN process will depend on how the card's features are used.

(SEE EXHIBITS)

SOCIAL SECURITY CARD REPLACEMENT COST ANALYSIS

Background

Section 111(b)(2) of Public Law 104-193 requires us to study and evaluate the cost and workload implications of issuing a counterfeit-resistant Social Security card to all number holders over a 3-, 5-, and 10-year period. Since there are an estimated 277 million living number holders, issuing new cards to all current number holders would create a workload for SSA of unprecedented dimensions. We have never attempted to issue a new Social Security card to all number holders. In the past, when a new card was introduced, the card was phased into the ongoing issuance and replacement process. Similarly, when new card issuance policies or evidentiary requirements were introduced, they were applied prospectively. We made no attempt to revisit past determinations regarding evidence required to assign an SSN.

The legislation also requires the Social Security card to be reliable proof of citizenship or legal resident status. Issuing Social Security cards for this purpose to current number holders will require millions of number holders who received SSNs prior to 1979 (the vast majority of whom are U.S. born) to visit field offices to present evidence of citizenship or legal resident status because citizenship information was not required for citizens prior to May 1978. If new card features are adopted to make the card capable of proving the identity of the card holder by including a picture or fingerprint on the card itself, all current number holders would need to visit SSA offices during the 3-, 5-, or 10-year timeframes specified in the legislation. SSA's recent experience under welfare reform, requiring the presentation of evidence of citizenship for a small fraction of this population, required significant additional resources, the establishment of additional temporary interviewing centers, and placed a significant burden on that segment of the public.

We used cost and workload data from the current issuance process to estimate the cost of reissuing cards to all current number holders. The estimates take into consideration the additional cost and workload related to verifying the citizenship or legal resident status of a significant portion of current number holders, and to implementing potential new Social Security card features such as capturing the number holder's picture or biometric identifier. The analysis focused on the following issues:

How many cards would need to be issued, based on the estimated number of living number holders?
What policies and procedures would be followed when issuing new cards?
What strategy or process will be used to obtain addresses for all or some number holders, to contact them, and to schedule them to apply for a new card?
What does it cost us to issue or replace a card today, and how would the cost increase if the card had to serve as proof of the number holder's citizenship or legal resident status?
What additional costs would there be to issue enhanced cards that include new features such as the number holder's picture or biometric identifier, or that could store data on the card itself?
What is the total of these costs when spread over a 3-, 5-, or 10-year period?

Using this approach, we developed cost and workload estimates for issuing a new Social Security card to all living number holders. Our analysis of these issues is summarized in the following sections.

Estimating the Number of Living Number Holders

SSNs are assigned for the life of the number holder and remain valid indefinitely, even after we receive notice of the number holder's death. For many years, and especially before automation, we were not notified routinely of a number holder's death. As a result, there are millions of SSNs in our enumeration data base that are dormant. SSNs assigned to noncitizens (including those assigned for nonwork purposes) also are valid indefinitely, even though the conditions under which the noncitizen was present in the U.S. may change or expire.

Unless they are receiving benefits, noncitizen number holders are not required to report to us when their status changes or when they leave the country. If they die outside the U.S., we usually are not informed of the death. Therefore, our enumeration data base also contains millions of SSNs which, while potentially still considered active, are likely to belong to many noncitizens who left the U.S. and who would not qualify to receive a new Social Security card based on their current circumstances.

Our cost and workload estimates for issuing a new card to all living number holders are based on estimates of the number of SSNs in use⁽⁷⁾ today. We estimated the number of SSNs in use today, and the number of new cards that would need to be issued, by analyzing our enumeration data base. We used a combination of system generated summary data and projections from analyses of individual SSN records. To validate the estimate, we compared the results to estimates based on census data that are used to determine how many people in the U.S. are likely to be alive and have SSNs.

Analysis of Enumeration Data Base

SSN records were kept manually from the 1930's until our computerized enumeration data base was created in the 1970's. With automation, paper SSN records were converted to electronic data. The following information is known or can be concluded from our enumeration data base:

Through March 1997, we assigned 387 million SSNs to U.S. citizens and noncitizens who needed an SSN for work and nonwork purposes.
Approximately 50 million number holders are known to be deceased because we were notified of their death, either through the Social Security benefit claims process or through exchanges of death information from outside sources. These SSNs show the number holder as deceased in the enumeration data base.
Approximately 50 million additional number holders who are not receiving benefits are thought to be deceased based on our analysis of the number holder's projected age (based on the date of birth given on the application for an SSN) and the knowledge that, for many years, we were not notified of a number holder's death unless a claim for Social Security benefits was filed by survivors. These SSNs do not show the number holder as deceased but are considered inactive.
There are approximately 10 million multiple SSNs (involving approximately 20 million total SSNs) which are the result of errors by SSN applicants (e.g., applying for a new SSN when they already had one, primarily before records were automated), administrative errors by SSA (before computerization of the enumeration data base), and SSNs obtained fraudulently (which, following detection, are linked to the person's correct SSN.) We also assign intentional multiple SSN's under certain circumstances. Multiple SSNs generally are cross-referred to each other in the enumeration data base, thereby reducing the potential number of active SSNs by the number of known multiple SSNs.
Approximately 8 million SSNs have been assigned to people for nonwork purposes when they were present in the U.S. or outside the U.S., many of whom are now most likely outside the U.S. Most of these number holders are noncitizens and would not meet our current requirements to receive a new Social Security card. (Some of the number holders within this group also would be included among those known or thought to be deceased.) These SSNs have special annotations in the data base and can be counted. The following table summarizes information about our enumeration data base:

Table 3. Summary of SSA's Enumeration Data Base
Description	Number (Million)
Number of SSNs Assigned since 1936	387
Deceased (Proven)	(50)
Deceased (Estimated)	(50)
Multiple SSNs	(10)
Nonwork SSNs/Inside or Outside the U.S.	(8)
Estimated Minimum Number of SSNs in Use Today (Net)	269

The exact number of SSNs in use today cannot be determined without investigating every individual SSN in the enumeration data base that does not show the number holder as deceased or is otherwise known to be inactive. If all 50 million number holders who are thought to be deceased actually are deceased, and all 8 million number holders who received nonwork SSNs are now outside the U.S., the low range estimate of the number of potentially active SSNs that would require new Social Security cards is 269 million. If none actually are deceased and all those who received nonwork SSNs are still alive and eligible for an SSN, the number of new Social Security cards to be issued could be as high as 327 million.

Comparison to Census data

Using census data, the number of new Social Security cards that would need to be issued can be inferred from the number of people who are likely to be in the Social Security "area."⁽⁸⁾ The Social Security area is used to estimate the potential number of people who may be insured for benefit purposes and for other actuarial purposes related to the Social Security programs. We assume all those who are included in the Social Security area have been assigned an SSN. For 1996, approximately 277 million people⁽⁹⁾ are estimated to be within the Social Security area and would be eligible to receive a new Social Security card.

Based on a combination of known and imputed information about the enumeration data base, we estimate the number of active SSNs to be between 269 and 327 million. An alternative estimate, based on census data, assumes there are approximately 277 million living number holders (approximately 70 percent of the SSNs assigned since 1936.) The census-based estimate is within the range we projected, based on our analysis of the enumeration data base. For purposes of further estimates of the cost and workload implications of issuing a new Social Security card to all living number holders, we will assume there are 277 million number holders who would need to apply for a new Social Security card.

New Social Security Card Issuance Policy

Policy assumptions for issuing new Social Security cards to all living number holders

Since the legislation does not specify otherwise, we assume our current policies would apply when reissuing a new Social Security card to all current number holders. Considering the legislative requirement that the card be reliable proof of citizenship or legal resident status, and our inability to determine this status from our records for most current number holders, we based our cost and workload estimates on the assumption the following policies would be in force:

Every number holder would be required to complete an application for a Social Security card (Form SS-5-FS).
Every number holder would be required to provide proof of identity, using documents currently acceptable for that purpose.
U.S. or foreign born number holders who have not already established U.S. citizenship in our records must prove they are citizens using documents acceptable for that purpose. This would apply to virtually every SSN assigned to U.S. born or naturalized citizens before 1978.
Noncitizen number holders must provide proof of lawful noncitizen resident status, or otherwise prove they are eligible for an SSN, using documents acceptable for that purpose, regardless of when their SSN was assigned.
Social Security card issuance to all living number holders will be performed by SSA employees in SSA facilities.
Unless required to visit an office to have a picture and/or biometric reading taken, number holders may apply for their new cards by mail, assuming the number holder is willing to submit required evidence through the mail.

The following table summarizes the conditions under which current policy requires verification of citizenship or legal resident status when issuing a replacement Social Security card, and an estimate of the number and percentage of the 277 million current number holders who would be impacted:

Table 4. Number Holders Who Must Prove Identity and Citizenship/Noncitizen Status
Condition When SSN Assigned	Proof Required		Number Holders Impacted⁽¹⁰⁾
Condition When SSN Assigned	Identity	U.S. Citizenship/ Noncitizen Status or Nonwork Purpose	Number (Million)	Percent Living Number Holders
Anyone who received SSN prior to 1979	Yes	Yes	177	64%
U.S. born or naturalized citizens who received SSN 1979 or later	Yes	No	87	31%
All noncitizens who received SSN 1979 or later	Yes	Yes	13	5%

New policy requirements

The Social Security Act has no provision requiring number holders to comply with an effort to issue a new Social Security card, much less with a specific request that number holders who already have a card prove their citizenship or noncitizen status. Before undertaking such an effort, legislation would be needed to ensure compliance by current number holders. Through the regulatory process, we would allow public comment on new policies that would be needed to implement the legislation. However, without a legislative mandate and appropriate sanctions for noncompliance, we could rely only on voluntary cooperation and it is unlikely we could accomplish the goal of issuing new Social Security cards to all living number holders. For this analysis, we assume there would be a legislative mandate upon which reissuance policies will be based, and upon which we could reasonably anticipate number holder compliance.

Acquiring Addresses and Contacting Number Holders

Although most number holders reside in the U.S., they do not have regular contact with SSA during their working lifetime. Once an SSN is assigned, we only use it for recording earnings. Generally, aside from applying for an SSN⁽¹¹⁾ or requesting a duplicate or corrected Social Security card, most people's subsequent contact with us occurs when applying for a Social Security or SSI program benefit. Until that time, we do not maintain number holder addresses.

The only contact we initiate with number holders during their working lifetime occurs if there is a wage reporting discrepancy, or if they request information or a benefit estimate. Even then, we have access to the employer's address (an IRS record) rather than the number holder's address. We maintain the addresses of the 50 million number holders who are receiving Social Security and/or SSI program benefits. To notify all living number holders about the issuance of new Social Security cards, we would need to obtain addresses for approximately 227 million number holders who are not in benefit status and for whom we have no readily available address. After obtaining addresses, we would need to contact all number holders, explain their responsibilities, and identify the timeframe during which they should contact us to apply for their new card.

Experience obtaining number holder addresses

1990 legislation requires us to send workers age 25 and older an annual statement (known as the Personal Earnings and Benefit Estimate Statement (PEBES)) about their Social Security covered earnings and future benefits. Under special legislation authorizing its release, we are purchasing address information from IRS to send PEBES statements to current number holders. Although the legislation limits the use of this information to PEBES purposes, it illustrates the difficulty we would have in obtaining addresses for all current number holders.

There are an estimated 123 million workers over age 25 who will receive PEBES statements. Of these, we expect the IRS to provide addresses for approximately 85 percent. Addresses for the remainder will have to be obtained, at much greater cost, from third parties such as State motor vehicle offices, other government sources, and private entities. We are not allowed, under the legislation to use the number holder's address for any other purpose. To issue new Social Security cards, we would need legal authority to obtain address information from the IRS and other sources where address information is protected by law. Even with that authority, the available sources of address information would be the same as available for PEBES. After obtaining number holder addresses from our beneficiary rolls (approximately 50 million addresses), and from IRS (approximately 105 million addresses), we would need to obtain addresses for approximately 122 million additional number holders from outside sources (and presumably at greater expense).

Age of current number holders

In addition to obtaining their addresses, issuing new Social Security cards would have to take into consideration the age of many number holders. The estimated 277 million number holders who would receive new cards represent all age groups. The following table illustrates their range in age:

Table 5. Estimated Age of Number Holders
Number Holder's Age	Total (Millions)⁽¹²⁾	Percent
Under age 20	77.6	28 %
20 - 34	58.2	21 %
35 - 54	64.0	23 %
55 - 74	61.0	22 %
75 and over	16.6	6 %

Issuing new Social Security cards to young number holders would require us to identify the number holder's parent or guardian's address, to ensure the number holder complies with the new card issuance process. Although SSN applications contain the number holder's parents names, and may have been submitted by a parent or guardian, special procedures would be needed to identify and contact the appropriate guardian for many number holders who are too young to be contacted directly.

Older number holders, especially the very old, will require more effort to establish their citizenship or legal resident status. As explained previously, most of these number holders received their SSNs before evidence requirements were imposed on the SSN application process. Many who are in Social Security benefit status never had to prove they are U.S. citizens to receive benefits. For the very old, we often proved age for benefit entitlement purposes using documents which only established presence in the U.S. at a certain time, rather than citizenship by birth or naturalization. While exceptions regarding proof of citizenship could be made for certain elderly number holders, it also would be difficult for them to comply with other reissuance requirements such as visiting an SSA office to be fingerprinted or to have a picture taken.

We did not estimate the added costs of issuing a new Social Security card to the very young or the very old. Because of their special circumstances, the unit cost of special processing for these people is likely to be much greater than the unit cost of issuing a new card to adults in the general population.

Contacting number holders

Once addresses were obtained, and other necessary support activities were complete (staffing, facilities, new equipment, systems changes, etc.), we would schedule the Social Security card issuance workload within the legislatively mandated timeframe of 3-, 5- or 10-years. Through direct correspondence, number holders would be told when (i.e., a time frame, not appointment) to contact us. Depending on the number of years allowed, a portion of the number holder population would be contacted throughout each year of the allotted time frame. Correspondence would likely be released in monthly segments designed to maximize even workload distribution throughout the year. Based on our estimate of 277 million living number holders, and the current geographic distribution of SSA offices, the potential card issuance workload in each office could be as follows:

Table 6. Potential Social Security Card Issuance Workload Per SSA Field Office⁽¹³⁾
Issuance Time Frame	Annual	Monthly
3 Years	67,570	5,631
5 Years	40,556	3,380
10 Years	19,766	1,647

Letters to number holders would, to the extent possible, be customized to their circumstances. If U.S. citizenship already has been annotated on our records (e.g., SSN assigned after 1981 and U.S. born), the letter will explain the number holder will only be required to submit proof of identity when obtaining the new Social Security card. Number holders who need to prove their citizenship or noncitizen status will be told what documents are acceptable for that purpose. A workload of this proportion will generate many equally large related activities, such as:

Address acquisition and remailing undeliverable correspondence.
Follow up with number holders who do not comply with the request that they obtain a new card.
Special processing for aged, very young, disabled or outlying number holders (rural U.S. and outside the country) who cannot contact us directly to receive their new card.
Resolution of SSN discrepancy cases identified through the card replacement process.

The correspondence operation and related activities have costs that would be in addition to the actual Social Security card issuance processing costs. To carry out the issuance process, we assume there would need to be at least two pieces of correspondence mailed to every number holder. One letter would consist of a general announcement concerning new cardsand the other would be a letter addressing the number holder's specific requirements (i.e., when to contact us, what documentation is needed, etc.). The following table contains estimates of the annual cost of sending two pieces of correspondence to number holders notifying them in general and providing instructions for applying for a new Social Security card.

Table 7. Estimated Correspondence Costs for Issuing New Social Security Cards
Issuance Timeframe	Number of Letters (Million)	Annual Cost⁽¹⁴⁾($ Million)
3 years	184.7	$ 59.1
5 years	110.8	$ 35.5
10 years	55.4	$ 17.7

The additional costs related to the correspondence operation, such as handling the volume of telephone calls and walk-in traffic we would receive in response to the letters, has not been included in the cost and workload estimates for issuing new cards to all number holders.

Cost of Social Security Card Issuance

Current Social Security card unit time

In FY 1996, SSA employees spent an average of 27 minutes processing requests for Social Security cards, performing the following functions:

Interviewing the SSN applicant, in person or by phone; reviewing evidence of age, identity and citizenship or noncitizen status, and work authorization; and completing and reviewing the application form used to request a Social Security card.
Investigating the portion of SSN requests that are complex or raise questions, or which may not result in issuance of a Social Security card.
Inputting SSN application data to our computer systems, performing file maintenance activities, correcting and resolving systems-generated exceptions, and mailing completed SSN application forms to central storage facilities.
Performing related functions, such as management review, providing receipts to Social Security card requestors, responding to requests to verify SSNs, and processing requests for blank SSN applications.

The above list is not all-inclusive; it represents the basic activities involved in the Social Security card workload. Many of these functions are performed for both original and replacement cards and by a variety of SSA employees in many different locations, making it virtually impossible to isolate activities that are strictly related to replacing certain types of Social Security cards.

However, the 27-minute average does not include a share of SSA headquarters staff time which our Cost Analysis System (CAS) allocates across all SSA workloads.

Current Social Security card unit costs

Based on actual costs of $199.5 million for 15.9 million Social Security cards, the average cost to process a Social Security card in FY 1996 was $12.51 (as reported in the SSA FY 1996 Accountability Report). To develop a base unit cost for the purpose of projecting costs associated with issuing new cards to all living number holders, several adjustments were necessary, resulting in a base unit cost of $11.70 per card. Excluded from the base unit costs are Social Security cards issued through EAB because that process could not be used for issuing replacement cards. Also excluded are headquarters staff support and automation investment costs allocated to the SSN workload by the CAS, as well as costs of card stock and delivery (e.g., postage). The last two items are addressed later in this report as add-ons to base costs that would be dependent upon the specific card option and, ultimately, its implementation strategy.

Workyear costs of issuing new Social Security cards to all living number holders

To estimate the workyear costs needed to issue new cards to all living number holders, we took into consideration the current base unit cost of Social Security card issuance ($11.70) plus the cost of new procedures, such as photographing each applicant. To estimate the cost of these additional procedures, we estimated a unit time for each procedure and converted this to dollars using $0.40 per minute, the FY 1996 actual average cost of time for SSN- related work in FOs and teleservice centers.

The following table presents estimated workyear costs for issuing new Social Security cards to all living number holders when the additional time associated with verifying citizenship or noncitizen status, and obtaining the number holder's picture or biometric identifier is included in the issuance process.

Table 8. Estimated Workyear Costs for Issuing New Social Security Cards to All Number Holders
New Social Security Card Issuance	Minutes	Unit Cost	Number (Million)	Cost ($ Million)	Total Workyears
Base Level of Social Security Card Processing	27	$ 11.70	277	$ 3,241	59,928
Verify Citizenship/Noncitizen Status	5	$ 2.00⁽¹⁵⁾	190	$ 380	7,612
Total--Issue New Social Security Cards (All card options)				$ 3,621	67,540
Obtain Number Holder's Picture or Biometric Identifier	2.5	$ 1.00⁽¹⁶⁾	277	$ 277	5,549
Total--Issue New Social Security Card With Picture or Biometric Identifier (Social Security Card Options 2-7)				$ 3,898	73,089

Additional Costs Related to New Cards

Social Security card stock cost

If the cost of the Social Security card stock itself increases substantially (as it would for two of the prototype card options presented in this report), the total cost of issuing new Social Security cards increases by an amount equal to the additional cost of the Social Security card itself. For example, the average cost of five of the SSN prototype card options (Options 1, 2, 3, 5, and 6) that utilize the least expensive plastic card technologies, even including the number holder's picture, is $.17 compared to approximately $.05 for the current paper Social Security card. This additional cost would not significantly change the total cost of ongoing Social Security card issuance or the cost of replacing Social Security cards for all living number holders.

However, two card options use card technologies that add considerable cost to the Social Security card itself. Option 4, which uses optical storage technology, costs approximately $5.90 more per card than the other plastic cards presented in this report, and option 7, which uses a microprocessor chip, costs approximately $3.60 more. If Social Security cards with these features were issued to all living number holders, the cost of the card itself significantly increases the total cost of issuing new cards as well as the cost of ongoing card issuance. The following table describes the unit cost, ongoing issuance cost and cost of replacing the Social Security cards of all living number holders for the current paper Social Security card stock and each of the prototype card options described in this report.

Table 9. Estimated Costs of Social Security Card Stock
Social Security Card Option	Unit Cost⁽¹⁷⁾ ($)	Ongoing Annual Issuance (15.9M Social Security Cards) ($ Million)	Replacement (277M Social Security Cards) ($ Million)
Current paper Social Security card	$ 0.05	$ 0.8	$ 13.9
1. Plastic card with security features (Includes 1A)	0.12	1.9	33.2
2. Plastic card with picture	0.14	2.2	38.8
3. Plastic card with secure barcode storage	0.12	1.9	33.2
4. Plastic card with optical storage	6.10	97.0	1,.0
5. Magnetic stripe card (banking style)	0.22	3.5	61.0
6. Magnetic stripe (ID-style with picture)	0.23	3.7	63.7
7. Microprocessor card with mag stripe and picture	$ 3.78	$ 60.1	$ 1,047.0

Social Security card personalization and final production

The current paper Social Security card is printed by a security printing company under contract with us. The paper is delivered to us for overprinting of the number holder's name and SSN, using our facilities and equipment that are connected to our data processing operations. Social Security cards are mailed to the number holder from SSA headquarters.

Converting to a plastic card will require us to obtain preprinted card stock from a commercial plastic card manufacturer, and to either purchase our own card personalization equipment or contract with a card service bureau for the personalization of Social Security cards.

Plastic card personalization includes the overprinting of the card holder's name, account number and other legends on the preprinted plastic card stock. It also includes the addition of pictures, coding of data stripes (including magnetic stripes, microprocessors, etc.) and bonding of protection and/or security layers to the card surfaces. Many commercial organizations, especially banks and credit card companies, obtain card personalization services from outside contractors to avoid the cost of purchasing and maintaining their own card production equipment. Such arrangements can be cost-effective when the card can be mailed from a remote location to the card holder. Other organizations, especially those involving secure applications such as drivers licenses, public assistance cards, etc., personalize their cards on their own equipment. Generally, this process is used where the card has to be turned over to the owner on-the-spot, rather than through the mail, or where a picture or biometric identifier has to be added to the card.

The cost of card personalization varies depending on the level of personalization needed for the finished card, the sophistication of the card's features, and the level of security associated with the card. Generally, the cost of card personalization at least triples⁽¹⁸⁾ the final cost of a plastic card and in many cases increases the cost by four or five times the cost of individual card stock. Since each of the prototype cards presented in this report would require card personalization, the final cost of each card would be at least three times the unit cost of each card presented in Table 9. However, it must be noted that our card volume is so large⁽¹⁹⁾ that it would exceed the card production capacity of most card service bureaus or require multiple installations of card production equipment, if we were to purchase our own equipment.

Therefore, our card volume most likely would impact the market dynamics and pricing strategy of both contracted card personalization services and card personalization equipment manufacturers.

We could not determine the final cost of the prototype cards presented in this report without knowing the specific Social Security card to be implemented, including the card's features, and without soliciting price proposals from card equipment manufacturers and/or card service bureaus. Whether the card is produced under contract or by us using our own card production equipment, the cost of the equipment or the contracted service needed to complete Social Security card personalization activities would increase the cost of each card produced. The following table provides estimates of the minimum final cost of producing each prototype card if the card personalization was performed by a contracted card service bureau.

The table also includes estimates of the cost of ongoing card issuance using the prototype cards and the cost of replacing the Social Security cards of all living number holders.

Table 10. Estimated Total Cost of Prototype Social Security Cards Including Card Personalization⁽²⁰⁾
Social Security Card Option	Card Stock Unit Cost ($)	Total Cost ($)	Ongoing Annual Issuance (15.9M Cards) ($ Million)	Replacement (277M Cards) ($ Million)
1. Plastic card with security features (Includes 1A)	$ 0.12	$ 0.36	$ 5.7	$ 99.7
2. Plastic card with picture	0.14	0.42	6.7	116.3
3. Plastic card with secure barcode storage	0.12	0.36	5.7	99.7
4. Plastic card with optical storage	6.10	18.30⁽²¹⁾	291.0	5,069.1
5. Magnetic stripe card (banking style)	0.22	0.66	10.5	182.8
6. Magnetic stripe (ID style with picture)	0.23	0.69	11.0	191.1
7. Microchip card with magnetic stripe and picture	$ 3.78	$ 11.34	$ 180.3	$ 3,141.2

Equipment costs for SSA facilities

Producing a card that carries the number holder's picture or biometric identifier, or uses electronic or coded data storage for other purposes, would require us to install specialized hardware and software equipment in 1,300 FOs. The type of hardware and software needed would depend on the specific card features selected for the enhanced Social Security card and how they are to be used. Generally, hardware and software to capture and process the number holder's digitized picture would be needed for the three card options that display a picture. Card options that could be used to store the number holder's biometric identifier will require devices to capture the biometric reading and other devices to read data stored on the card itself. Card options that utilize magnetic stripes, secure barcodes, optical storage and/or a microprocessor also require card reading devices or devices that interact with the microprocessor. All of this hardware and the software needed to operate it would need to be integrated into our data processing and telecommunications infrastructure.

Considering the ongoing volume of SSN-related activity performed by FOs, and the additional volume that will result from issuing a new card to all living number holders, many offices would need multiple installations of the specialized equipment to work with an enhanced Social Security card. Also, regardless of the timeframe during which all cards were to be replaced, the related hardware and software would need to be installed in SSA facilities before any enhanced cards could be issued. To estimate the cost of this equipment, we are assuming, at a minimum, that every FO would need at least four complete installations of the equipment needed to perform the functions of capturing information (pictures or biometrics) and reading information from the Social Security cards. In practice, it is more likely that we would have to install more than four units of this equipment in many offices, especially in large cities, where client traffic is greatest.

Based on the capabilities and/or requirements of the prototype card options presented in this report, the following specialized equipment would be needed in SSA FOs to work with the features of each card:

Table 11. Equipment Needed for SSA FOs to Work With Enhanced Social Security Cards
SSN Card Option	Card Features
SSN Card Option	Barcode Reader	Mag Stripe Reader	Optical Stripe Reader	Photo Capture System	Fingerprint Capture System	Smart Card Reader
1. Plastic Social Security card (Includes 1A)	No	No	No	No	No	No
2. Plastic card with picture	No	No	No	Yes	No	No
3. Plastic card with secure barcode	Yes	No	No	No	Yes	No
4. Plastic card with optical storage	No	No	Yes	No	Yes	No
5. Magnetic stripe card (banking)	No	Yes	No	No	Yes	No
6. Magnetic stripe (ID style w/ picture)	No	Yes	No	Yes	No	No
7. Smart card w/mag stripe, picture	No	Yes	No	Yes	No	Yes

The cost of this equipment varies by manufacturer, quantities purchased, and specific installation requirements. To estimate the cost, we surveyed⁽²²⁾ organizations that have implemented card based applications that use pictures and/or biometrics, such as State and local governments, and also obtained price information directly from industry suppliers. The following table provides the estimated cost of the equipment identified in the previous table and the cost to purchase the minimum four installations of this equipment for each of SSA's 1,300 FOs:

Table 12. Estimated Cost of Social Security Card-Related Equipment
Type of Equipment	Unit Cost ($)	SSA Installation Cost ($ Million)
Barcode reader	$ 1,500	$ 7.8
Magnetic stripe reader	750	3.9
Optical storage stripe reader/writer	3,600	18.7
Photo capture system	12,000	62.4
Finger print capture system	13,000	7.6
Smart card reader	$ 1,000	$ 5.2

We did not include in these estimates the cost of maintaining or replacing the picture taking, fingerprint recording, or card reading equipment during the 3-, 5-, or 10-year timeframes. It also should be noted that we would incur significant additional costs to modify data processing and telecommunications systems to accommodate both field office hardware and software integration and centralized processing of new SSN-related data. For example, if we are required to display the number holder's picture, or store a biometric identifier, on the Social Security card, the picture or biometric data would have to be transmitted from SSA FOs to SSA's central processing facilities to be stored and merged with other data during production of the Social Security card. Our enumeration data bases and supporting systems would have to be modified to archive picture or biometric data for each number holder, and to make the data retrievable from SSA FOs and other operations facilities. We did not estimate the cost of these infrastructure modifications for any of the prototype card options.

Additional Social Security card-related activities

Apart from the identifiable costs associated with issuing enhanced Social Security cards to new SSN applicants and/or to all living number holders, we would encounter several new workloads related to enhanced cards that are not part of current SSN processing, such as:

If the new card contains the number holder's picture, the picture must be updated periodically throughout the number holder's lifetime. Depending on the specific application, pictures are updated every 5 years (e.g., drivers licenses) to 10 years (e.g., passports). Assuming we will be responsible for taking the number holder's picture, the entire base of living number holders would need to be cycled through our offices on a recurring basis to update their pictures.
We currently replace approximately 10 million Social Security cards annually. If the enhanced card can be used by both the Federal and private sector to prove the card bearer's identity, it will be used more frequently than the current card. The additional usage will result in more lost or damaged cards, thereby increasing replacement card workloads.
Plastic cards that include magnetic or electronic data storage technology, such as magnetic stripes, microprocessors, etc., have to be replaced periodically to guarantee the reliability of the stored data, and to keep up with improvements in card reading and storage technology. We would need to issue new Social Security cards to all living number holders whenever the expected lifespan of magnetically stored data was reached, or whenever the card became incompatible with card reading and storage technologies.

We did not estimate the cost of these future workloads. However, each would involve a portion or all of the same costs and workloads that have been estimated in connection with issuing an enhanced Social Security card to all living number holders.

Cost Estimates For Issuing Prototype Social Security Cards

The legislation requires us to estimate the cost and workload implications of issuing an enhanced Social Security card to all number holders over a 3-, 5-, or 10-year period. Since we developed 7 different prototype card options, the cost and workload estimates vary depending on the Social Security card and its related features. The following sections present the cost and workload estimates, and additional related costs, for each of the 7 prototype card options. For every option, SSA issuance processing cost and workyear estimates are included. All estimates include the base cost of card issuance and the added cost to verify citizenship or legal resident status for all living number holders whose status has not been proven already in our records. For every card option except Option 1, there are separate tables for each issuance timeframe because certain costs (card-related equipment costs) must be incurred in the first year of any issuance timeframe before new cards could be issued. Since the card-production process could be handled either by SSA or a contractor, the costs of production equipment were averaged over the period of time the cards would be issued.

Unless noted otherwise, the yearly totals reflect cost and workload. Costs are expressed in terms of constant dollars (i.e., FY 1996 costs) and therefore do not include future increases in salary costs, equipment costs, inflation, etc.

Card Option 1--Flexible Plastic Social Security Card

Card Option 1 (and 1A) is a plastic Social Security card with security features. (Card Option 1A is the same card as Option 1, but without the citizenship/legal resident status statement.) Since this card does not store data or display the number holder's picture, and has no processing capability, the total cost of issuing this type of card would be approximately the same over each year of a 3-, 5- or 10-year period. There are no first year implementation costs associated with new hardware or software needed to work with card features.

Table 13. Card Option 1 (and 1A)--Flexible Plastic Social Security Card--3-, 5-, and 10-Year Estimates
Cost Components	Issuance Time Frame
	3 Years		5 Years		10 Years
	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 59.1		$ 35.5		$ 17.7
Social Security Card Replacement Processing	1,207.0	22,513	724.2	13,508	362.1	6,754
Card Costs	33.2		19.9		10
Total Per Year	$ 1,299.3	22,513	$ 779.6	13,508	$ 389.8	6,754

Card Option 2--Plastic Card With Number Holder's Picture On Back

Card Option 2 is a plastic Social Security card with security features and the number holder's picture on the reverse of the card. Since this card does not store data and has no processing capability, the total cost of issuing this type of Social Security card would be approximately the same over each year of a 3-, 5- or 10-year period. There are first year implementation costs related to new hardware that would be needed in offices to capture the number holder's picture and the additional processing costs.

Table 14. Card Option 2--Plastic Card With Number Holder's Picture On Back--3-Year Estimate
Cost Components	Year 1		Years 2 and 3
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 59.1		$ 59.1
Social Security Card Replacement Processing	1,299.3	24,363	1,299.3	24,363
Card Costs	38.8		38.8
Photo Capture System	$ 62.4
Total (per year)	$ 1,459.6	24,363	$ 1,397.2	24,363

Table 15. Card Option 2--Plastic Card With Number Holder's Picture On Back--5-Year Estimate
Cost Components	Year 1		Years 2 thru 5
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 35.5		$ 35.5
Social Security Card Replacement Processing	779.6	14,618	779.6	14,618
Card Costs	23.3		23.3
Photo Capture System	62.4
Total (per year)	$ 900.8	14,618	$ 838.4	14,618

Table 16. Card Option 2--Plastic Card With Number Holder's Picture On Back--10-Year Estimate
Cost Components	Year 1		Years 2 thru 10
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 17.7		$ 17.7
Social Security Card Replacement Processing	389.8	7,309	389.8	7,309
Card Costs	11.6		11.6
Photo Capture System	62.4
Total (per year)	$ 481.5	7,309	$ 419.1	7,309

Card Option 3--Plastic Card With Secure Barcode Storage

Card Option 3 is a plastic Social Security card with security features and secure barcode data storage, which could be used to store the number holder's biometric identifier or for other purposes. The total cost of issuing this type of card must take into consideration the cost of the card itself and the cost of the equipment needed to work with the card's features, such as if the secure barcode storage were used to store the number holder's fingerprint biometric identifier. First year implementation costs include new hardware that would be needed in SSA offices to capture the number holder's fingerprint biometric and to read data from the secure barcode. If used to store other data about the number holder, the workyears (5,549) and costs ($277 million) for capturing the number holder's biometric identifier could be eliminated.

Table 17. Card Option 3--Plastic Card With Secure Barcode Storage--3-Year Estimate
Cost Components	Year 1		Years 2 and 3
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 59.1		$ 59.1
Social Security Card Replacement Processing	1,299.3	24,363	1,299.3	24,363
Card Costs	33.2		33.2
Fingerprint Capture System	67.6
Barcode Readers	$ 7.8
Total (per year)	$ 1,467	24,363	$ 1,391.6	24,363

Table 18. Card Option 3--Plastic Card With Secure Barcode Storage--5-Year Estimate
Cost Components	Year 1		Years 2 thru 5
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 35.5		$ 35.5
Social Security Card Replacement Processing	779.6	14,618	779.6	14,618
Card Costs	19.9		19.9
Fingerprint Capture System	67.6
Barcode Readers	7.8
Total (per year)	$ 910.4	14,618	$ 835	14,618

Table 19. Card Option 3--Plastic Card With Secure Barcode Storage--10-Year Estimate
Cost Components	Year 1		Years 2 thru 10
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 17.7		$ 17.7
Social Security Card Replacement Processing	389.8	7,309	389.8	7,309
Card Costs	10.0		10.0
Fingerprint Capture System	67.6
Barcode Readers	7.8
Total (per year)	$ 492.9	7,309	$ 417.5	7,309

Card Option 4--Plastic Card With Optical Memory Storage

Card Option 4 is a plastic Social Security card with security features and an optical data storage stripe. The total cost of issuing this type of card must take into consideration the cost of the card stock itself and the cost of the equipment needed to work with the card's features, such as if the optical storage stripe was used to store the number holder's fingerprint biometric identifier. First year implementation costs include new hardware that would be needed in SSA offices to capture the number holder's fingerprint biometric and to read data from the optical storage stripe on the Social Security cards. If used to store other data about the number holder (e.g., identifying information), the workyears (5,549) and costs ($277 million) for capturing the number holder's biometric identifier could be eliminated.

Table 20. Card Option 4--Plastic Card With Optical Memory Storage--3-Year Estimate
Cost Components	Year 1		Years 2 and 3
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 59.1		$ 59.1
Social Security Card Replacement Processing	1,299.3	24,363	1,299.3	24,363
Card Costs	1,689.7		1,689.7
Fingerprint Capture System	67.6
Optical Storage Stripe Reader/Writer	18.7
Total (per year)	$ 3,134.4	24,363	$ 3,048.1	24,363

Table 21. Card Option 4--Plastic Card With Optical Memory Storage--5-Year Estimate
Cost Components	Year 1		Years 2 thru 5
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 35.5		$ 35.5
Social Security Card Replacement Processing	779.6	14,618	779.6	14,618
Card Costs	1,013.8		1,013.8
Fingerprint Capture System	67.6
Optical Storage Stripe Reader/Writer	18.7
Total (per year)	$ 1,915.2	14,618	$ 1,828.9	14,618

Table 22. Card Option 4--Plastic Card With Optical Memory Storage--10-Year Estimate
Cost Components	Year 1		Years 2 thru 10
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 17.7		$ 17.7
Social Security Card Replacement Processing	389.8	7,309	389.8	7,309
Card Costs	506.9		506.9
Fingerprint Capture System	67.6
Optical Storage Stripe Reader/Writer	18.7
Total (per year)	$ 1,000.7	7,309	$ 914.4	7,309

Card Option 5--Financial Industry Standard Magnetic Stripe Card

Card Option 5 is a plastic Social Security card with security features and embossed printing, similar to a banking style card. It has a magnetic stripe that could be used to store the number holder's biometric identifier or for other purposes, such as magnetically encoding the number holder's name and SSN. The total cost of issuing this type of card must take into consideration the cost of the card stock itself and the cost of the equipment needed to work with the card's features, such as if the magnetic stripe was used simply to store data. First year implementation costs include new hardware that would be needed in SSA offices to read data from the magnetic stripe. If used to store other data about the number holder, such as a biometric identifier, the workyears and costs for capturing the number holder's biometric identifier would have to be added to these estimates.

Table 23. Card Option 5--Financial Industry Standard Magnetic Stripe Card--3-Year Estimate
Cost Components	Year 1		Years 2 and 3
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 59.1		$ 59.1
Social Security Card Replacement Processing	1,207	22,513	1,207	22,513
Card Costs	60.9		60.9
Magnetic Stripe Reader	3.9
Total (per year)	$ 1,330.9	22,513	$ 1,327	22,513

Table 24. Card Option 5--Financial Industry Standard Magnetic Stripe Card--5-Year Estimate
Cost Components	Year 1		Years 2 thru 5
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 35.5		$ 35.5
Social Security Card Replacement Processing	724.2	13,508	724.2	13,508
Card Costs	36.6		36.6
Magnetic Stripe Reader	3.9
Total (per year)	$ 800.2	13,508	$ 796.3	13,508

Table 25. Card Option 5--Financial Industry Standard Magnetic Stripe Card--10-Year Estimate
Cost Components	Year 1		Years 2 thru 10
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 17.7		$ 17.7
Social Security Card Replacement Processing	362.1	6,754	362.1	6,754
Card Costs	18.3		18.3
Magnetic Stripe Reader	3.9
Total (per year)	$ 402	6,754	$ 398.1	6,754

Card Option 6--ID-Style Magnetic Stripe Card With Picture On Back

Card Option 6 is a plastic Social Security card with security features and the number holder's picture printed on the front of the card, similar to an identification card. It has a magnetic stripe that could be used to magnetically encode the number holder's name and SSN, or for other purposes. The total cost of issuing this type of card must take into consideration the cost of the card stock itself and the cost of the equipment needed to work with the card's features, such as capturing the number holder's picture and to store data on the magnetic stripe. First year implementation costs include new hardware that would be needed in SSA offices to capture pictures and read data from the magnetic stripe. If used to store other data about the number holder, such as a biometric identifier, the workyear and cost estimate for capturing the number holder's biometric identifier would have to be added to these estimates.

Table 26. Card Option 6--ID-Style Magnetic Stripe Card With Picture On Back--3-Year Estimate
Cost Components	Year 1		Years 2 and 3
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 59.1		$ 59.1
Social Security Card Replacement Processing	1,299.3	24,363	1,299.3	24,363
Card Costs	63.7		63.7
Magnetic Stripe Reader	3.9
Photo Capture System	62.4
Total (per year)	$ 1,488.4	24,363	$ 1,422.1	24,363

Table 27. Card Option 6--ID-Style Magnetic Stripe Card With Picture On Back--5-Year Estimate
Cost Components	Year 1		Years 2 thru 5
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 35.5		$ 35.5
Social Security Card Replacement Processing	779.6	14,618	779.6	14,618
Card Costs	38.2		38.2
Magnetic Stripe Reader	3.9
Photo Capture System	62.4
Total (per year)	$ 919.6	14,618	$ 853.3	14,618

Table 28. Card Option 6--ID-Style Magnetic Stripe Card With Picture On Back--10-Year Estimate
Cost Components	Year 1		Years 2 thru 10
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 17.7		$ 17.7
Social Security Card Replacement Processing	389.8	7,309	389.8	7,309
Card Costs	19.1		19.1
Magnetic Stripe Reader	3.9
Photo Capture System	62.4
Total (per year)	$ 492.9	7,309	$ 426.6	7,309

Card Option 7--Microprocessor Card With Picture and Magnetic Stripe

Card Option 7 is a plastic Social Security card with security features and the number holder's picture printed on the back of the card. It has a microprocessor and magnetic stripe that could be used to magnetically encode the number holder's name and SSN, and for other purposes. The total cost of issuing this type of card must take into consideration the cost of the card itself and the cost of the equipment needed to work with the card's features, such as capturing the number holder's picture and storing data on the magnetic stripe or microprocessor. First year implementation costs include new hardware that would be needed in SSA offices to capture pictures and read data from the magnetic stripe and microprocessor.

Table 29. Card Option 7--Microprocessor Card With Picture and Magnetic Stripe--3-Year Estimate
Cost Components	Year 1		Years 2 and 3
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 59.1		$ 59.1
Social Security Card Replacement Processing	1,299.3	24,363	1,299.3	24,363
Card Costs	1,047.1		1,047.1
Magnetic Stripe Reader	3.9
Photo Capture System	62.4
Smart Card Reader	5.2
Total (per year)	$ 2,477	24,363	$ 2,405.5	24,363

Table 30. Card Option 7--Microprocessor Card With Picture and Magnetic Stripe--5-Year Estimate
Cost Components	Year 1		Years 2 thru 5
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 35.5		$ 35.5
Social Security Card Replacement Processing	779.6	14,618	779.6	14,618
Card Costs	628.2		628.2
Magnetic Stripe Reader	3.9
Photo Capture System	62.4
Smart Card Reader	5.2
Total (per year)	$ 1,514.8	14,618	$ 1,443.3	14,618

Table 31. Card Option 7--Microprocessor Card With Picture and Magnetic Stripe--10-Year Estimate
Cost Components	Year 1		Years 2 thru 10
Cost Components	Cost ($ Million)	Workyears	Cost ($ Million)	Workyears
Number Holder Correspondence	$ 17.7		$ 17.7
Social Security Card Replacement Processing	389.8	7,309	389.8	7,309
Card Costs	314.1		314.1
Magnetic Stripe Reader	3.9
Photo Capture System	62.4
Smart Card Reader	5.2
Total (per year)	$ 793.1	7,309	$ 721.6	7,309

COST SUMMARY

Summary Table

The following table summarizes the total cost and workyear estimates for each of the prototype Social Security card options discussed in the previous sections. These estimates include only the anticipated costs of contacting all number holders, processing costs (excluding staff overhead) to issue the new cards, the cost of the new card itself, and the cost of special equipment needed to work with each card option and/or to capture information to be included on the card.

Table 32. Total Cost and Workyears--All Prototype Social Security Card Options
Social Security Card Option	Total Cost ($ Millions)	Total Workyears
1. Plastic card with security features (Includes 1A)	$ 3,898	67,540
2. Plastic card with picture	4,254	73,089
3. Plastic card with secure barcode storage	4,250	73,089
4. Plastic card with optical storage	9,231	73,089
5. Magnetic stripe card (banking style)	3,985	67,540
6. Magnetic stripe (ID style with picture)	4,333	73,089
7. Microprocessor card with magnetic stripe and picture	$ 7,288	73,089

There would be many additional activities associated with issuing new Social Security cards to all number holders that have not been included in these estimates because they cannot be meaningfully estimated without knowing the specific requirements of issuing new cards to all number holders. However, throughout the cost analysis discussion, we identified many of the potential additional costs and workloads that would result from issuing new cards to all number holders. These items, for which we have not developed cost estimates, would result in additional costs and are recapped below:

Other Costs

The cost of periodically updating the number holder's picture on the Social Security card, and issuing a new card.
The cost of periodically replacing all cards that use magnetic stripes, microprocessors, or other electronic data storage technique when the reliability of the data storage medium is exceeded or the technology becomes obsolete.
The cost of maintaining and replacing the equipment needed to read cards, take pictures and/or capture fingerprints.
The cost of modifying our data processing systems.
The cost of new, additional card replacement workloads resulting from increased use of the Social Security card for non-SSA purposes.
The cost of postage to mail new cards to all number holders (e.g., mailing a new card to all 277 million number holders at $0.26 per card would be about $70 million).
The cost of public information campaigns that would be needed to inform all number holders of the requirement to obtain a new card.
The cost of obtaining addresses for all number holders not currently receiving Social Security or SSI program benefits.
The cost of special processing for very young and very old number holders, and those in rural locations or outside the U.S.
The cost of following up with number holders who do not comply with a requirement to obtain a new card.
The cost of resolving SSN discrepancy cases resulting from the card replacement process.
The cost to other ongoing workloads (e.g., processing claims for benefits, posteligibility activity, and maintenance of the beneficiary rolls) resulting from the workyears assigned to issuing new cards.

Estimates of these additional costs would have to be developed if legislation were enacted requiring SSA to issue new Social Security cards to all number holders. 7. "In use" means the number holder is alive and entitled to have an SSN, whether or not earnings are posted or there is benefit activity.

8. The Social Security "area" includes all residents (U.S. citizens and legal residents ) of the 50 States and the District of Columbia; civilian residents of Puerto Rico, Guam, the Virgin Islands, and American Samoa; Federal civilian employees and Armed forces abroad and their dependents; crew members of merchant vessels, and all other U.S. citizens abroad. See Table 4.C5., Social Security Bulletin--Annual Statistical Supplement--1996.

9. See Table 4.C5., Social Security Bulletin--Annual Statistical Supplement--1996.

10. See Table 4.B1., Social Security Bulletin--Annual Statistical Supplement--1996. Estimates based on projections of the number of living number holders and approximate annual immigration of 1 million persons per year from all countries.

11. Most new SSNs are assigned at birth through the EAB process.

12. Source: Table 4.C5., Social Security Bulletin--Annual Statistical Supplement--1996.

13. Based on 1,300 SSA FO service areas. Actual numbers and potential workload per SSA FO would have to be determined by census data for an SSA FO service area.

14. Based on a cost of $.32 per letter.

15. Unit cost based on $.40 per minute of additional time.

16. Based on a cost of $.32 per letter.

^{17. Unit cost information for plastic card options provided by Datacard Corporation. Includes only the cost of preprinted card stock. Finished card costs would be higher. See Table 10.}^{18. Inforrmation provided by Datacard Corporation.}^{19. Ongoing Social Security card issuance of more than 15 million new and replacement cards annually and the potential additional volume of 27 to 92 million cards per year, depending on the timeframe determined for issuing new Social Security cards to all living number holders.}^{20. Based on estimated card personalization costs equal to 3 times the unit cost of the card stock.}^{21. Estimates of card personalization costs for optical storage cards are based solely on comparable costs for other card types.}^{22. We obtained information on the cost of equipment needed to work with various plastic card technologies from State and municipal governments that issue plastic cards (welfare identification cards, drivers licenses, etc.), from their contractors, and from Datacard Corporation.}

Reports & Studies

Report to Congress on Options for Enhancing the Social Security Card

CHAPTER V - ENHANCED SOCIAL SECURITY CARD PROTOTYPE

Historical Links