Wednesday, November 27, 2013

Divorce and Social Security: What Every Spouse Should Know

By: Carole L. Chiamp

There are enough rules about social security to drive one crazy trying to figure them out.  But there is some simple information below that can be very helpful.  Unfortunately one of the biggest assets, the stream of income from social security is often ignored in divorce.

Ten Year Marriage Rule

If you and your former spouse were married for ten years or more and your former spouse paid into the social security trust fund, you may be entitled to a portion of retirement benefits and/or survivor benefits on your former spouse’s account if you have not remarried.  Eligibility is not dependent on recognition of these rights in the judgment dissolving your marriage.  The federal government provides these benefits; the state divorce judgment need not specifically address them.  At ten years of marriage certain rights enure to the benefit of the non-working spouse.  However, if you decide to get divorced at nine and a half years of marriage, it would be helpful to not enter the judgment of divorce until one day after your tenth anniversary.  It costs neither spouse anything to wait as the wage earning spouse is not penalized by any reduction in benefits, even if the spouse is married for ten years more than one time.

Survivor Benefits

Former spouses may be eligible for survivor benefits.  If your former spouse dies, and you meet the ten year marriage requirement, you will be eligible for reduced survivor benefits at the age of sixty and full survivor benefits at the age of sixty-five.  As with spouse’s benefits, your receipt of social security survivor benefits does not affect the amount of benefits paid to anyone else on your former spouse’s social security account.

If you remarry before turning sixty years old, you will lose your rights to retirement and survivor benefits on your former spouse’s account.  You are still eligible for both spouse’s and survivor benefits on your former spouse’s account if you remarry after age sixty.  You also may become “re-eligible” for benefits on your former spouse’s account if you remarry before sixty but that marriage also ends.

You cannot receive both spouse’s benefits and survivor benefits from your current spouse.  If you are receiving spousal benefits at the time your former spouse dies, your benefits automatically convert to survivor benefits by the social security system.

Divorces and Spousal Support Benefits in Marriages of Long Duration

When spouses have been married a long time and a divorce settlement is being negotiated consider how social security will affect each spouse. Think of the situation where the working spouse receives, or will receive, say $1,000 monthly benefit from social security retirement while the other spouse receives or will receive $500.  (The benefits are such that the non-working spouse receives one-half of the amount which the retired worker receives).  The court has the authority to make a fair division.  In doing so, the non-working spouse may successfully argue that one spouse should not receive one-half the amount  since both contributed equally to the marriage, one by being out of the work force to raise the children while the other earns social security credits.  That argument is most often the argument needed for the wife who has been out of the work force and will never be able to earn as much during her shorter outside the home work life as the husband.  Other arguments may be made to offset some of the harm by awarding her more of the other assets of the couple.

Contact Information

Social security laws are constantly changing and may affect your future benefits.  To be sure of your exact benefits and earlier eligibility to receive them, contact the social security administration directly.  The Department of Health and Human Services issues numerous free pamphlets explaining exactly what your benefits are and how recent legislation affects them.  Two booklets that may be helpful to you are Understanding Social Security (January 1991) and Survivors (January 1991).  For free copies of either or both pamphlets, contact the Department of Health and Human Services directly at 800-722-1213.

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