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Social Security Spousal Benefit Rules

Are Divorced Spouses Entitled To Social Security Spousal Benefits

Rules for Drawing on a Spouse’s Social Security Benefits

Yes, divorced spouses are eligible if certain criteria are met. The other spousethe one with the work history upon which the benefits will be basedmust be entitled to receive either retirement or disability benefits. Ex-spouses, spouses and children are not eligible at all until that first condition is met. The person to collect spousal benefits must be at least 62 years old. The marriage must have lasted for a period of no less than 10 years, and the person claiming the spousal benefit must not currently be married to another person.

How Much Do You Get

There are different types of Social Security benefits that you can claim. You can take Social Security income based on your own work history and earnings, or you can collect a spousal benefit instead.

If you take the benefits based on your spouse’s work history and earnings, you will get 50% of the amount of your spouses Social Security benefit.

This amount is calculated at their full retirement age . FRA depends on when you were born. You can check the Social Security website to find out how old you or your spouse need to be to reach FRA.

Social Security calculates and pays the higher amount.

If you were born on or before January 1, 1954, once you reach your FRA, you can choose to receive only the spousal benefit. You can apply for this by filing what is known as a “restrictedapplication.”

This lets you put off getting your own retirement benefit. Your benefit will keep growing until you file at a later age. If you were born any later than January 1, 1954, you no longer have that option.

Social Security Benefits For Divorced Spouses

While the divorce rate in the United States is declining overall, the one among people nearing and at retirement age is actually on the rise. The country now has more people who are eligible for spousal benefits than at any other point since the Social Security Act was enacted in 1935. The process to claim benefits as a divorced spouse is often much more complex than it is for a spouse that is still married, and many divorce attorneys recommend seeking representation that can help you navigate the system.

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Claiming Spousal Benefits From Social Security: How It Works

When a worker files for benefits from Social Security, the workers spouse may be able to claim a benefit based on the workers contributions. For spouses to receive the benefit, they must be at least age 62 or care for a child under age 16 . In addition, spouses cannot claim the spousal benefit until the worker files for her or his benefit.

There are other important caveats about the spousal benefit as well.

How To Calculate Your Own Social Security Spousal Benefits

Spousal Social Security Benefits: Switch To My Own?

The spousal benefit calculation is straightforward if you dont have a benefit of your own. Remember, in that case, its between 32.5% and 50% of the higher-earning spouses full retirement age benefit, depending on your filing age.

However, it can seem a little more complicated if you have Social Security benefits from your work history.

And to keep things interesting, the Social Security Administration decided that a different calculation method should be used to determine how much each benefit should increase/decrease based on your filing age.

Fun, right?

As complicated as Social Security benefits can seem, there is a way to correctly calculate how much your spousal benefit will be if you qualify to receive it.

Check out this section of my video that goes over this calculation step-by-step. VIDEO: How To Calculate Spousal Benefits The RIGHT Way

If you understand how they break down the individual benefits, its not hard to use the table above to quickly figure out what your approximate benefit will be. Heres an example.

Joe and Julie each have a Social Security benefit from work they individually performed. Julies benefit at her full retirement age is $800 per month. Joes benefit at his full retirement age is $2,000.

Assuming they are both full retirement age when they file, Joe will be entitled to a benefit of $2,000 and Julie will be entitled to the greater of her own benefit or half of Joes benefit.

Sounds simple, right?

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How Do You Claim Spousal Benefits

The initial process for claiming spousal benefits is the same as claiming your own PIA. However, there are many different regulations not covered here that may apply to your individual case and which can make the process quite complex. While you can begin the process with a phone call, many divorce lawyers recommend doing it in person at your local Social Security office as that will likely be required anyway. Appointments are not required but are recommended as well as they will significantly reduce the amount of waiting time. Once your initial appointment is over, you can then consult with a family law attorney if you need assistance navigating and completing the process.

First Change: Timing Of Multiple Benefits

There are incentives to delay filing for retirement benefits. Your benefits increase for each month you delay receiving retirement benefits between full retirement age and age 70.

Before the change:

Previously some spouses received spousal benefits at full retirement age, while letting the retirement benefits based on their earnings record grow by delaying to file for benefits.

What did the law change?

If you turn 62 before January 2, 2016, and:

  • You are eligible for benefits both as a retired worker and as a spouse in the first month you want your benefits to begin and
  • You are not yet full retirement age, you must apply for both benefits . You will receive the higher of the two benefits.

If you turn 62 on or after January 2, 2016, and:

  • You are eligible for benefits both as a retired worker and as a spouse in the first month you want your benefits to begin, then:
  • Deemed filing applies at age 62 and extends to full retirement age and beyond. In addition, deemed filing may occur in any month after becoming entitled to retirement benefits.

Deemed filing means that when you file for either your retirement or your spouses benefit, you are required or deemed to file for the other benefit as well. The Bipartisan Budget Act extends deemed filing rules to apply at full retirement age and beyond.

Recommended Reading: Medicare Benefit Policy Manual 2021

What Is Social Security

Social Security is the main social insurance program in the United States. When workers experience disabilities, retire or die, this national pension plan substitutes a portion of their lost earnings.

Its also enormous. According to its latest report to Congress, the federal Social Security Administration plans to transfer more than $1.2 trillion worth of pension and disability benefits to as many as 74 million beneficiaries during fiscal year 2022 alone.

The federal government finances the program through taxes that both workers and employers pay in the form of payroll deductions, which are in both cases mandatory.

What Is Social Security?

What Is Social Security?

Social Security is a social insurance program intended to prevent poverty in old age, survivorship and disability.

The federal government finances those benefits through a 12.4% payroll tax divided equally between each employee and employer. If youre self-employed, however, you pay the full 12.4% tax. The annual maximum taxable earnings is $147,000, which means if you make more than that, youre not taxed on the amount.

What Happens If One Spouse Dies

Social Security Spousal Benefits – MADE EASY to Understand

If your spouse passes away, you can collect a survivors benefit as early as age 60. You will be able to get the maximum benefit, or the full amount of your spouse’s monthly Social Security payment if youve reached FRA.

Before that, its reduced by 71.5%-99%. The amount it’s reduced by depends on how many years over 60 you are.

If you are the surviving spouse, you can restrict your application to file for either your own benefit or the survivor benefit. Later, you can switch to the other amount.

You might do this if your own monthly payment at age 70 would be larger than your spouse’s payment. You could claim the spousal benefit for several years, and then at age 70 switch to your own benefit.

If you are divorced and your ex-spouse dies, you might be able to get the same benefits as any current spouse. This is true if your marriage lasted at least 10 years or you are caring for a qualifying child.

Once you and your spouse have started getting Social Security benefits, the surviving spouse will have to choose one benefit. You can take either your spouse’s monthly payment or your own. You cannot get both.

If you live in the same household when your spouse passes away, you will also be able to get a one-time lump-sum payment of $255.

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What If Youre Receiving Other Benefits

Suppose that youre also a member of another government pension plan, but no organization ever withheld any payroll taxes to pay for that coverage. In this case, Social Security would impose a reduction in your spousal benefit equivalent to a 66% decrease in the pension amount.

To simplify, for example lets assume that youre collecting $600 each month from another federal or state government pension plan that never withheld any Social Security taxes. Your Social Security payment would in this case be lowered by $400.

The Voluntary Suspension Loophole

Prior to April 30th, 2016, this Social Security loophole allowed a married worker to voluntarily suspend his/her own benefits after full retirement age, allowing the spouse to receive spousal benefits while the worker was not collecting benefits. Effective April 30, 2016, spousal benefits can only be received if the worker spouse is collecting retirement benefits.

If you are receiving a divorced spouse benefit, the change in the law does not apply to you. You may continue to receive a spousal benefit if your ex-spouse decides to voluntarily suspend his/her benefit.

You may wonder if there is any reason to use the file-and-suspend strategy today, and the answer is yes, maybe! If you started receiving benefits but would now like to voluntarily suspend and earn higher benefits for delaying, you can do so. This may be the case if you started receiving benefits, but then gained some type of employment, received an inheritance, or suddenly discovered you do not need the benefits youve been receiving. If thats the case, you can suspend your benefit so that you earn delayed credits. But please note, if your spouse was receiving a spousal benefit, that benefit will be suspended as well. And, to voluntarily suspend, you must have at least reached your full retirement age.

Both loopholes are discussed more in-depth at .1

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If You’re Receiving Other Retirement Benefits

The calculation gets a bit more complicated if you are eligible to receive benefits from a government pension or foreign employer that is not covered by Social Security. In that case, you may still be eligible, but the amount will be reduced.

For example, if you have a government pension for which Social Security taxes are not withheld, the amount of your spousal benefit is reduced by two-thirds of the amount of your pension. This is known as a government pension offset.

For example, suppose you are eligible to receive $800 in Social Security spousal benefits and you also get $300 from a government pension each month. Your Social Security payment is reduced by two-thirds of $300, or $200, making your total benefit amount from all sources $900 per month + $300).

Strategy For Late Claimers

Social Security Survivor Benefits For Divorced Spouse

If one partner has little or no earnings history, the best strategy is for the wage earner to postpone applying for Social Security retirement benefits until age 70 to get the highest amount possible. Full retirement age is 66 for most baby boomers and 67 for everyone born in 1960 or later, but by delaying claiming benefits until age 70, the wage-earner will accrue delayed retirement credits that will increase the monthly payments by 8% for each year of delay.

Keep in mind that this won’t affect the spousal benefit amount. Spousal benefits differ from personal benefits when it comes to delaying payments. If you delay claiming for personal retirement benefits past full retirement age, the benefit increases over time, as explained above. However, that will have no impact on your spouse’s benefits, since they max out at full retirement age . In other words, there is no benefit for your spouse in delaying the spousal benefit claim past your full retirement age.

On the other hand, if both partners work, and their earnings are more or less equal, their individual Social Security benefits will each be greater than the spousal benefit, so the best strategy for both is to postpone applying for benefits until age 70.

Also Check: How To Sign Up For Social Security Retirement Benefits

Mistake #1 With Spousal Benefits

For example, we have heard multiple times, and there is a lot of information on the internet that describes spousal benefits as you will always receive a minimum of your spouses benefit.

And thats not the case, or at least thats not the case since 2015.

The most common variation of this we hear is that the lower earning spouse might as well begin benefits as early as possible since the spousal benefit will bring them up to 50% of the larger benefit later.

But this is not the case.

Remember, Social Security calculates a maximum spousal benefit based on your full retirement age. Anne is never going to get more than $100 per month in spousal benefits.

So, lets say Anne begins her benefits at age 62. She will receive a sharply reduced Social Security amount because she claims early. In this case her benefit would drop to $563 per month from the $800 full retirement age amount.

Then, remember the spouse has to be claiming benefits for Anne to receive spousal benefits. But even once the spouse begins benefits and Anne is eligible for spousal benefits she will not be bumped up to $800 per month. She will only get the $100 per month added to her reduced benefit for a total of $663.

That means Anne loses out on $237 per month for the rest of her life. Perhaps she receives some added months of a $563 benefit. But the breakeven on this is not very good, in fact it is just that if Anne lives past 71 she would get more total benefits by not claiming at age 62.

How Social Security Spousal Benefits Are Calculated

The calculation for spousal benefits is fairly straightforward. If you wait until full retirement age, then your benefit will be 50% of the spouses benefit amount. However, starting your benefits early will reduce your monthly payment. Your benefit will be reduced by 0.7% for each month that you begin your benefits early, up to a 36-month reduction. So, if you start your benefits at age 62, then you will only receive 32.5% of your spouses primary insurance amount.

To calculate Social Security benefits for the primary beneficiary, you will need to perform a few different calculations. You could sign up for a My Social Security account at SSA.gov and use the estimator tools there. That is the easiest way. However, if you wish to calculate the amount on your own, here is what you need to do. First, you need to determine your average indexed monthly earnings over the highest 35 years of your work history. This means that you will need to take your 35 highest years of income, index them to current values using the Social Security index tables, and divide the sum by 420 to obtain the average monthly amount.

Also Check: Social Security Administration Medicare Benefits

How Do You Apply

You can apply online by using our Social Security Retirement/Medicare Benefit Application to apply for retirement, spouse’s, divorced spouse’s or Medicare benefits.

If you and your spouse apply online for retirement benefits at the same time, or if your spouse applies online after you start receiving benefits, we will check their eligibility for benefits as a spouse. If they are qualified, the online application will automatically include a request for spousal benefits on your record.

If your spouse applies for benefits, they need to be ready to supply the information we need to approve their application for these benefits:

This Social Security Spousal Benefits Loophole Still Works

Social Security Spousal Benefits: The Complete Guide

Certain Social Security benefits used to have ambiguous language that allowed individuals to take advantage of loopholes to receive additional retirement benefits on top of what they normally qualified for. The most aggressive of these loopholes were definitively closed by 2020, but the good news is that this social security spousal benefit loophole still works.

Prior to 2015, there were some pretty nifty loopholes to maximize your and your spouses Social Security benefits. Thanks to some ambiguous language regarding these benefits, you could take advantage of these loopholes to receive more retirement benefits than you were strictly eligible for.

One method, known as the claim then suspend method, allowed a worker to claim their benefits before full retirement age, then immediately suspend their benefits, therefore racking up retirement credits while still collecting the spousal benefit. Another strategy, the spouse then worker method, was to live off the lower-earning spouses benefit until the age of 70, at which point the primary wage earners much higher Social Security benefits could be collected.

These were considered aggressive claiming strategies by the Social Security Administration , which estimated that these tactics were mostly employed by more affluent individuals following the advice of financial planners. In response, Congress introduced the Bipartisan Budget Act of 2015 , effectively shutting down the exploitation of these loopholes.

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