Supreme Court same-sex ruling opens the door for Social Security’s valuable spousal benefits

Today’s U.S. Supreme Court ruling on same-sex marriage will give a huge boost to the retirement security of LGBT Americans. That will be especially true in the realm of Social Security – where it pays to be married.

The ruling will affect everything from access to spousal pension and retirement accounts, health benefits and more. But Social Security really is the headliner here. Recognition of same sex marriage in all 50 states will guarantee access to Social Security’s spousal and survivor benefits, which are the most valuable features of the program. And the near-universal nature of Social Security means it is the retirement benefit that will impact the largest number of same-sex couples.

Just how valuable? Financial Engines, a large financial advisory firm, ran numbers recently for a hypothetical same-sex couple and found that marriage could be worth $343,000 in additional lifetime benefits.

Married couples usually don’t have the same lifetime earning history, and hence their Social Security benefits differ. But married couples can take advantage of rules that permit a spouse to receive up to half of a living spouse’s benefit, if it’s larger than his or her own. And the survivor rules permit widows or widowers to receive up to 100 percent of a deceased spouse’s benefit or his/her own benefit, whichever is greater.

The big payoff comes when couples coordinate the timing of their Social Security benefit claims.

The Social Security Administration (SSA) began processing spousal and survivor claims for benefits in states recognizing same-sex marriage soon after the Defense of Marriage Act (DOMA) was struck down in 2013. The SSA said today that it is working with the U.S. Department of Justice to analyze the Supreme Court ruling and “provide instructions specific to the decision for Americans who rely on our programs and services.” But the SSA should be able to issue new rules quickly to its field offices, according to Webster Phillips, a senior policy analyst for the National Committee to Preserve Social Security and Medicare (NCPSSM).

One remaining question revolves around potential retroactive benefits for married couples living in states that did not recognize same-sex marriage. With a few exceptions, Social Security’s rules generally allow up to 6 months of retroactive benefits assuming an applicant meets the eligibility requirements through that period.

Read more about this in my column this afternoon at Reuters Money; NCPSSM has been holding Social Security education meetings for same sex couples around the country; here’s a calendar listing upcoming events.

 

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