1. Social Security: Revisiting Benefits for Spouses and Survivors.
- Author
-
Zhe Li
- Subjects
SOCIAL Security (United States) ,SOCIAL security beneficiaries ,SPOUSAL benefits ,RETIREMENT benefits ,DIVORCED women ,SINGLE women ,OLDER women - Abstract
Social Security auxiliary benefits are paid to the spouse, former spouse, survivor, child, or parent of a Social Security-covered worker and are equal to a specified percentage of the worker's basic monthly benefit amount (subject to a maximum family benefit amount). For example, the spouse of a retired worker may receive up to 50% of the retired worker's basic benefit and the widow(er) of a retired worker may receive up to 100% of the retired worker's basic benefit. When auxiliary benefits were first established, most households consisted of a single earnerâ€" usually the husbandâ€"and a wife who cared for children and remained out of the paid workforce. As a result, benefits for nonworking spouses were structured to be relatively generous. A woman who was never employed but is married to a man with high Social Security-covered wages may receive a Social Security spousal benefit that is higher than the retirement benefit received by a single woman, or a divorced woman who was married less than 10 years, who worked a full career in a low-wage job. In recent decades, this household structure has changed in part because women have entered the workforce in increasing numbers. The labor force participation rate of women with children under the age of 18 increased from 47.4% in 1975 to 72.4% in 2019. As a result, many women now qualify for Social Security benefits based on their own work records. Women are, however, more likely than men to take breaks in employment to care for family members, which can result in fewer years of contributions to Social Security and employer-sponsored pension plans. Beneficiaries who qualify for multiple benefits do not receive both benefits in full. For example, for a beneficiary eligible for his or her own retired-worker benefits as well as spousal benefits, the spousal benefit is reduced by the amount of the retired-worker benefit. The beneficiary receives a reduced spousal benefit (if not reduced to zero) in addition to his or her retired-worker benefit. This effectively means the beneficiary receives the higher of the two benefit amounts. Because of this, a two-earner household may receive lower total Social Security benefits than a single-earner household with identical total Social Security-covered earnings. Another change since 1939 has been an increase in the number of men and women who remain single or who have divorced. Persons who have never been married, or divorced before 10 years of marriage, generally do not qualify for Social Security spousal or survivors benefits under current law. Proposals to modify the Social Security auxiliary benefit structure are often motivated by a desire to improve adequacy for certain beneficiaries, or equity between a two-earner household and a one-earner household with similar earning profiles. For example, some proposals address the adequacy of benefits for certain groups of beneficiaries, such as elderly and widowed women. Although Social Security plays an important role in the retirement security of aged women, about 14.4% of widowed women aged 65 or older, 15.8% of divorced elderly women, and 16.9% of never-married elderly women had family incomes below the official poverty line in 2019. [ABSTRACT FROM AUTHOR]
- Published
- 2021