Social Security Auxiliary Benefits

1. Social Security Auxiliary Benefits John Benbow ERI

2. Social Security Title II Benefits Social Security Title II benefits are the partial replacement of earning lost due to retirement, death, and disability: • Retirement benefits • Disability benefits • Auxiliary benefits • Survivor benefits

3. Auxiliary Benefits • For certain family members of person who receives social security retirement (RIB) or disability benefits (DIB) on own record. • Title II of Social Security Act, not Title XVI (SSI.) • Not part of original Social Security Act of 1935 – added in 1939 amendments with changes since then. • Similar to but different from Survivor benefits. • POMS RS 002

4. Types of Auxiliary Benefits • Spouse • Divorced Spouse • Independently-Entitled Divorced Spouse • Child (under age 18) • Disabled Adult Child (age 18 and over)

5. Spouse Entitlement • Legal spouse of person who is receiving RIB or DIB. • Married 1 year, or natural mother or father of worker's biological child, or entitled to certain auxiliary or survivor's benefits month before marriage. • 62 years old, or have in care child entitled to benefit on spouse's record (under 16 or disabled if 16 or over.) • Not entitled to own RIB or DIB with PIA equaling or exceeding one-half ex-spouse’s PIA.

6. Divorced Spouse • Legally divorced spouse of person who is receiving RIB or DIB. • Married ten years. • 62 years old. • Not married. • Not entitled to own RIB or DIB with PIA equaling or exceeding one-half ex-spouse’s PIA.

7. Independently-Entitled DivorcedSpouse • Legally divorced spouse of person who is insured for RIB entitlement, is at least age 62, but not receiving benefits. • Married 10 years and divorced for 2 years. • 62 years old. • Not married. • Not entitled to own RIB or DIB with PIA equaling or exceeding one-half ex-spouse’s PIA.

8. Spouse Benefit Amount • Basic amount: 50% of RIB or DIB beneficiary’s Primary Insurance Amount (PIA.) Reduced for: • Age: if spouse under FRA and no entitled child in care; 30% reduction at age 62. • Earnings: limit on amount spouse can earn and still receive full amount; $1 reduction for every $2 over $14,860 (2012.) • Family Maximum: limit on total amount of benefits a family can receive on one record

9. Divorced Spouse Benefit Amount • Basic amount: same as spouse. • Reduced for: same as spouse except not subject to Family Maximum. Independently Divorced Spouse Benefit Amount • Basic amount: 50% of ex-spouse’s PIA, computed as if ex-spouse became entitled to RIB in first month of divorced spouse’s entitlement. • Reduced for: same as divorced spouse.

10. Spouse Benefit Example • DIB beneficiary’s 63 year-old, non-working spouse applies in 2012 • DIB beneficiary’s PIA: $1000 • Spouse benefit: 50% PIA, reduced for age • $1000 PIA x 50% = $500 base spouse amount • 36 month reduction, 25/36th of 1% per month up to 36 months before FRA= 25% • $500 x 25% = $125 reduction • $500 - $125 = $375 spouse benefit amount

11. Auxiliary Child Entitlement Factors • Child of Retirement (RIB) or Disability (DIB) beneficiary • Dependent upon the RIB or DIB parent (usually presumed) • Unmarried • Under age 18, or age 18 but not yet finished 2ndary school, or over age 18 and disabled before age 22 (Disabled Child Benefits)

12. Auxiliary Child Benefit Amount • 50% of Retirement (RIB) or Disability (DIB) beneficiary’s PIA Benefit is reduced for: • Earnings: limit on amount child under 18 (or if over and still in 2ndary school) can earn and still receive full amount – $1 reduction for every $2 over $14,860 (2012.) • Family Maximum: limit on total amount of benefits a family can receive on one record.

13. Child Benefit Example • Child of DIB beneficiary files for benefits; age 15 and not working • DIB parent’s PIA: $1000 • Auxiliary child benefit: 50% of PIA • $1000 x 50% = $500 • No reduction for age for child • If child starts working, subject to earnings test - if other auxiliaries, subject to family maximum • At age 18, must still be in 2ndary school or disabled

14. Survivor Benefit Types • Widow(er) • Disabled widow(er) • Disabled surviving divorced spouse • Child (under 18) • Disabled adult child (18 and over) • Mother/father • Surviving divorced mother/father • Parent

15. Survivor Benefits Number of credits (QC’s) that deceased worker must have earned depends on type of benefit. Widow(er)/parent –fully insured worker: earned 40 credits, or earned 1 credit for each year after age 21 up to year of death (can exclude years of disability.) Child/mother/father – fully insured (above) or currently insured: earned at least 6 credits during 13-quarter period ending with quarter of death or with quarter of entitlement to RIB or DIB.

16. Survivor Benefit Amount • Widow(er) – depends on widow(er)’s age, and benefit status and age at death of deceased worker - 71.5% to 100% of PIA • Child/mother/father – 75% of PIA • Parent – 82.5% (one parent) or 75% (two parents) of PIA. May be reduced for earnings (non-disabled beneficiaries) and family maximum.

17. Auxiliary to Survivor Benefits • Some types of benefits automatically convert: spouse with child in care to mother/father, auxiliary child to survivor child. • Application or certification of election needed in some conversion situations, e.g. application needed if new type of benefit sought. • Computations of benefits change with conversion.

18. Family Maximum • Limit on total amount a family can receive on one record. • Normally around 150% to 180% of PIA but can be higher or lower. • May cause benefits to go below 50% for auxiliaries or 75% for survivors. • Can be exceeded in situations with entitlement of divorced spouse.

19. Family Maximum Example • DIB beneficiary: benefit of $1000 and FMax of $1500; spouse age 40 and child age 10. • Normally auxiliary benefit is 50% of PIA: $500. • Total family benefits on record cannot exceed $1500, so auxiliary benefits reduced. • 1500 - $1000 (DIB) = $500 divided by 2 = $250 for each auxiliary. (Reduction for age and earnings after this)

20. Dual/Simultaneous Entitlement • Amount paid will not exceed highest single benefit to which person entitled. • Four methods to calculate multiple entitlement - depends on types of benefits involved. • Technical entitlement: entitled but not paid on a record because higher benefit due on another - person technically entitled on a record will not affect other beneficiaries on that record. • In some cases entitlement terminated on a record when entitlement gained on another (no technical entitlement.) For example, spouse becomes entitled to RIB or DIB on own record higher than spouse benefit.

21. More Information Presented by Wisconsin’s Disability Benefits Network (WDBN) • John Benbow, Employment Resources, Inc. • More about about the WDBN online at www.eri-wi.org/WDBN.htm