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Wednesday, November 11, 2015

Social Security spouse benefits unclear after Supreme Court ruling on same-sex marriage

 Michael McConnell, 73, and Jack Baker, 73, at their home in Minneapolis, Minnesota on July 1, 2015

PHOTO: Gay marriage pioneers Michael McConnell, 73, and Jack Baker, 73, at their home in Minneapolis, Minnesota on July 1, 2015. (Courtesy Angela Jimenez) (See previous post Baker on gay marriage in 1972 vs. 2015 reaction to Supreme Court ruling (7/17/15))

UPDATE 12/10/15: On Dec. 10, 2015, I received in the U.S. mail the standard, annual letter from Social Security, "Your Benefit Amount," which this year for the first time included a link to more information for same-sex couples:

The above link redirects to:

"Same-Sex Couples: Important Information for Same-Sex Couples," dated June 26, 2015 by the Google search engine

Note: as of Dec. 10, 2015, this page is still unclear.

END OF UPDATE 12/10/15.

The recent Supreme Court decision allowing same-sex marriages, under state marriage laws, has left opened the question of how, in the future, Federal benefits should be paid equally to same-sex married couples.

In addition to the simplest case, of a same-sex couple who is married when neither partner is transgender, there are many other corner cases, such as a transgender FTM (female-to-male) person born with a female birth certificate, but who is currently identified as being male and who was legally married before any gender transition to a person who was born male and still identifies as being male. Legally, do you treat this marriage based on the sexes assigned at birth, or do you treat it legally based on the current gender of the two people?

My curiosity about the above questions, combined with my own retirement planning efforts, has led me to look up what are the spouse benefits for Social Security and Medicare -- Medicare eligibility for both a worker and his spouse is always 65 years old, except for people who are determined as being disabled under the law. For a spouse, either working or non-working, to receive Social Security benefits, the rules are more complicated. Two key ages for a non-working spouse are 60 years old for "widow" benefits and age 62 for "spouse benefits."

In addition to Social Security benefits, there are the retirement benefits and so-called minimum distributions, or withdrawals, which must be taken out of the IRA and 401(k) type of plans. The following business magazine article discussed some of the modern problems if combining Social Security benefits with these tax-deferred plans that were first promoted by Republicans during President Reagan's administration as being a future replacement for Social Security, which is a FDR era program that Republicans consider to be socialistic and should be cut.

". . .The lack of plans is fueling a retirement-savings crisis. Few workers save anything outside of employer-sponsored plans. Only 8 percent of taxpayers eligible to set aside money in an IRA or Roth IRA did so in 2010, according to the IRS. . . Low-income Americans have long relied mostly on Social Security. Now middle-class professionals and managers are increasingly doing the same. But the average Social Security benefit -- $15,700 a year ($1308 per month) -- doesn't come close to replacing the earnings of those with mid-five and six-figure salaries. . . Some 58 percent of the 68 million wage-and-salary workers without a company-sponsored retirement plan in 2013 worked for a business with fewer than 100 employees, according to the Employee Benefit Research Institute. . ." (Quoted from Carol Hymowitz, "No-Retirement-plan Starter Pack: With no program at work, few people save anything at all; There's huge coverage gap that needs to be addressed," Business Week, Oct. 26 - Nov. 1, 2015, p. 33-34 and posted online as "The 401(k) Crisis Is Getting Worse: Half of U.S. workers lack company-sponsored retirement plans; 45% of businesses with fewer than 100 employees offer 401(k)s" Oct. 22, 2015)

A legally married spouse, who has never worked in a paid job, can qualify for Social Security benefits (and Medicare) on the work record of the other spouse who worked enough to qualify for benefits. Traditionally, the sexist assumption by Congress is that the male husband is the worker and breadwinner for his family and his female wife was a stay-at-home mom and housewife who did not work in a paid job subject to Social Security insurance taxes and benefits. Likewise, even if she had worked in a job that paid less than her husband, then she could get the larger Social Security Benefits based on the record of her husband who had made more money and who therefore was qualified to receive a higher benefit.

Listed below are some of my miscellaneous notes and links about Social Security spouse benefits I recently learned about:

  • "Survivors Benefits For Your Widow Or Widower," accessed Oct. 3, 2015 says, "At present, there are about 5 million widows and widowers receiving monthly Social Security benefits based on their deceased spouse's earnings record. And, for many of those survivors, particularly aged women, those benefits are keeping them out of poverty. . . Your widow or widower can receive: reduced benefits as early as age 60 or full benefits at full retirement age or older . . . benefits as early as age 50 if he or she is disabled AND their disability started before or within seven years of your death. . ."
  • "Disability Planner: Benefits For Your Spouse," accessed Oct. 3, 2015 says spouse benefits can be received at, "Age 62 or older, unless he or she collects a higher Social Security benefit based on his or her earnings record. The spouse benefit amount will be permanently reduced by a percentage based on the number of months up to his or her full retirement age."
  • "When can my spouse get Social Security benefits on my record?" accessed Oct. 3, 2015 says, "Your spouse may be able to get benefits if he or she is at least age 62 and you are getting, or are eligible for, retirement or disability benefits. . . "Your spouse may be able to get benefits if he or she is at least age 62 and you are getting, or are eligible for, retirement or disability benefits. . ."
  • "Retirement Planner: Benefits For Your Spouse," accessed Oct. 3, 2015 says, "Even if he or she has never worked under Social Security, your spouse may be able to get benefits if he or she is at least 62 years of age and you are receiving or eligible for retirement or disability benefits. He or she can also qualify for Medicare at age 65."

On a loosely related note: Stephen Ohlemacher, Associated Press, "No rise for Social Security," Gazette-Times, Oct. 16, 2015, p. A9says, "The annual cost-of-living adjustment, or COLA, by law is based on a government measure of inflation that was released Thursday. . . But as far as benefits are concerned, the lack of a COLA will affect more than 70 million people, over one-fifth of the nation's population. Almost 60 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,224."

I will leave the Consumer Price Index and the topic of inflation for another post. (See previous post Cost of OSU outpaced inflation letter to the editor (11/5/14))