Social Security Numbers
Toshiaki Kouno
Senior Associate, Economic Research Center
July 17, 2009 (Friday)
Social security numbers are a “framework where insurers and administrative agencies assign a number, consistent among the various systems and insurers, to each covered person to use for managing qualifications, benefits, and so on.” The introduction of a unified number system is being advocated beyond political parties as a way to resolve the so-called pension record problem and issues of people not joining or paying premiums, as well as to reduce administrative expenses.
To reduce the number of uncovered and non-paying people as well as cut administrative costs, it is necessary to overcome the system barriers and exchange information concerning income and benefits. Providing a unified number to the “insured” is an important foundation for this. It is overly optimistic, however, to think that the social security system’s current problems will disappear simply by introducing a unified number system.
Historical developments have left the social security system with differing coverage among pension, health, worker’s compensation, and unemployment insurance. Collaboration among the various systems would therefore require rethinking the meaning of coverage distinctions among different industries. Moreover, the processing of premiums and taxes is currently divided among tax offices, local governments, and social insurance offices, and data is scattered. As a result, the problem of people not joining or paying premiums is more likely to occur.
As seen in the US and elsewhere, the introduction of social security numbers has the merits of reducing the money taxpayers spend on tax declarations, and facilitating the creation of more accurate statistics by using the numbers to streamline and connect different processes. On the other hand, introducing social security numbers is not enough to address the various problems that saddle the social security system. Information should be concentrated in tax offices or local governments, or, as with the US Internal Revenue Service, a department should be set up where information is centralized.
