Divorce and Social Security Benefits
A common question among divorcing couple of a certain age is about what effect, if any, divorce will have on their own social security retirement benefits, as well as what effect it will have on an entitlement to social security benefits derived from their divorced spouse. To begin by looking at an individual’s social security retirement benefits based on his/her own work record and payment of social security taxes over the years, note that a divorce will have no effect on those benefits. Looking then at a claim to benefits derived from a divorced spouse’s record of employment and payment of social security taxes, there are certain eligibility criteria to be met, but if they are met, a divorced spouse will still be able to claim social security retirement benefits based on the other party’s employment and tax-paying record. The criteria are outlined below, and the notes following the outline may help to inform the expectations of divorcing spouses on the subject of social security retirement benefits.
The criteria for one to receive social security benefits based on an ex-spouse’s employment record can be summed up as these:
a.)The parties must have been married for ten (10) years or longer;
b.) The divorcing spouse claiming retirement benefits based on the other party’s record (ex-spouse #1) must be:
2. 62 years old or older
c.) The other divorced spouse (ex-spouse #2, the one whose record is being used as the basis of benefits) must be currently-entitled to social security retirement or disability benefits; and
d.) The benefit ex-spouse #1 would be entitled to on his/her own record of employment and payment of social security taxes must be less than what s/he would receive based on ex-spouse #2s record.
Looking more closely at the meaning and effect of that letter (d), the benefit to ex-spouse #1 based on ex-spouse #2’s record would be half of ex-spouse #2’s full retirement benefit, if s/he (ex#2) began receiving benefits at his/her “full retirement” age. Ex#1 will not gain any advantage or increased benefit based on ex#2’s delaying his/her retirement and thereby increasing his/her own benefit. To further define terms here, “full retirement age” is 66 for those born between 1943 and 1954, and it increases by two (2) months for each birth year between 1955 and 1960, until it is capped (currently, anyway) at age 67 for those born in 1960 or later.
To take the analysis three steps further, note first that if ex-spouse #1 is eligible for retirement benefits on his/her own record of employment, but at a lesser amount than half of ex-spouse #2’s benefit, then ex#1 will receive an amount equal to his/her own benefit, plus an amount sufficient enough to make up the difference to equal half of ex-#2’s benefit.
The second note is about an opportunity limited to those in the position of ex-spouse #1 who were born before January 2, 1954. Those individuals who meet all of the eligibility criteria outlined above and who were also born before January 2, 1954, may apply for only the benefits derived from ex-spouse #2, while delaying application for their own benefits. While that option is not available to anyone born after January 2, 1954, for those who were born before that date, there will likely be an advantage to filing first for only the derivative benefits under the ex-spouse’s record and delaying the application for benefits based on their own record.
Then too, regarding the amount of benefits to be received, note that those who continue to work and to earn income while receiving social security retirement benefits, whether those benefits derive from their own employment record or from their ex-spouse’s record, may find a reduction in the amount they receive based on their earned income. Any such income-based reduction in social security benefits, however, will be applied only to those receiving benefits before reaching their full retirement age.
Turning then to the meaning of the criteria identified by letter (c) above, note that, as long as ex-spouse #2 is eligible for retirement benefits, even if s/he has not yet applied for retirement income, ex-spouse #1 may still collect benefits based on ex#2’s record, but in this case, only if the parties have been divorced for at least two years.
One brief note about the criteria identified as b.1. above is that, for an ex-spouse #1 to claim benefits based on an ex-spouse #2’s record, ex-spouse #1 must be unmarried when filing the claim. That does not mean that ex#1 must have remained unmarried since divorcing ex#2. If ex#1 remarried after divorcing ex#2, but ex#1’s subsequent marriage has also ended, by death or divorce, ex #1 may still be eligible to receive social security benefits based on ex#2’s record, if all other criteria are also met.
Lastly, and as set forth at the outset, for those in the position of ex-spouse #2, note that no matter what social security benefits ex-spouse #1 may claim or receive, ex-spouse #2’s benefits will never be affected in any way. In other words, ex-spouse #2 will receive no more and no less in his or her own benefits, notwithstanding whatever benefits ex-spouse #1 may obtain based on ex#2’s record.
These and many other considerations, details, laws and rules that are outside the purview of the divorce court are important to those engaged in or considering divorce at any age. Please call 610-892-3877 and make an appointment with an experienced family-law attorney for a further discussion of any and all such concerns.