CHAPTER
11

Special Circumstances

In This Chapter

• Social Security protection if you’re divorced or widowed
• How to maximize your spousal benefits
• What happens to your benefits if you live outside the United States
• The impact on Social Security benefits if you’re incarcerated

There are several special situations that can impact your Social Security benefits. In this chapter, we review two of the most common ones, widowhood and divorce, as well as two unique situations that impact hundreds of thousands of Americans every year: living outside of the United States or under incarceration.

For each of these situations, there are specific conditions and requirements that must be considered in terms of qualifying for Social Security benefits. Whether you qualify or not will depend on such things as how long you were married, your age, and most important of all, if you or your spouse met the minimum work credit requirements to be eligible for Social Security benefits.

Social Security and Divorce

Among the most overlooked benefits are the ones offered to ex-spouses, provided they meet certain criteria. For example, you need to have been married at least 10 years at the time of the divorce, be divorced for at least 2 years, and be at least 62 years old when you file for spousal (or, in this case, ex-spousal) benefits. Also, your ex-spouse needs to be at full retirement age (FRA) and eligible for Social Security benefits. Your ex-spouse, however, does not have to file for Social Security for you to be able to file for ex-spousal benefits. You can do an independent filing. Nor will your ex-spouse have to be told that you are filing for ex-spouse benefits based on his work record.

TIP

If you’re at your FRA, which will be 66 or 67 depending upon the year you were born, it might be possible the Social Security Administration (SSA) will make an exception to the rule of having a 2-year delay between the divorce and filing for ex-spousal benefits as long as you were married for 10 years before the divorce, you have not remarried, and your ex-spouse qualifies to receive benefits.

How Benefits Are Affected by Divorce

Just because you’re divorced doesn’t mean you can’t collect spousal benefits based on the work record of your ex. As stated, it depends on a number of factors, including your age, your ex-spouse’s age, and whether you have remarried.

If your ex-spouse has remarried, it will not impact whether you can also claim ex-spousal benefits. It’s you who must not have remarried, because that would disqualify you from claiming ex-spousal benefits.

Criteria for Collecting Ex-Spousal Benefits

Here’s a summary of the conditions you have to meet in order to be able to receive benefits based on your ex-spouse’s earnings record even if he or she has remarried:

• Your marriage lasted at least 10 years.
• You’re still unmarried.
• You’re age 62 or older.
• Your ex-spouse qualifies for Social Security benefits (either retirement or disability).
• It’s been at least 2 years since your divorce (although SSA might make an exception to this if you’ve reached your FRA).
• The benefits you would receive based on your own earnings record is less than one half the benefits you would get based on your ex-spouse’s earnings record.

WORTH NOTING

If you remarried after your divorce, you can still be eligible for benefits based on your first ex-spouse’s earnings record if your second marriage ended in death, divorce, or annulment, and you meet all of the other criteria. You currently must be single to apply for ex-spousal benefits, and if you had multiple ex-spouses, you can only claim ex-spousal benefits on one of them. However, you can choose the one with the higher benefits when applying for your ex-spousal benefits.

How Much Will an Unmarried Divorced Spouse Receive?

The amount you can receive as a divorced spouse depends upon a variety of factors. For example, if you’re entitled to retirement benefits based on your own earnings record, the SSA will pay you that amount first. However, if one half of your ex-spouse’s benefit is higher than yours, you’ll receive a combination of both your and your ex’s benefits equal to the higher amount.

WORTH NOTING

The benefits you could receive don’t include any delayed retirement credits your ex-spouse may receive by postponing his or her benefits beyond full retirement age. However, if you have reached your own FRA, you can choose to receive only your divorced spouse’s benefits now and delay receiving your own until the maximum age of 70. Doing so will enable you to receive higher benefits at a later date, based on accruing delayed retirement credits on your own earnings.

Some other things to consider are that if you apply for benefits as a divorced spouse before you reach your FRA, your benefit will be at a reduced rate just as it would be if you applied for your own benefit as a single person. You would see about an 8 percent per year reduction. The reduced rate, as noted previously, is based on the fact that the rates are reduced unless you postpone receiving your Social Security benefits until your FRA.

If you continue to work while receiving ex-spousal benefits, there will be a cap placed on how much you can earn if you are receiving those benefits before reaching your FRA. These are the same earnings caps for anyone who is still working before their FRA and receiving Social Security benefits. If you receive a work pension not covered by Social Security, such as pensions for working for the government or in a foreign country, your benefits can also be impacted.

Applying for Benefits Based on an Ex-Spouse’s Work Record

You can apply for Social Security benefits based on your ex-spouse’s work record either by going in person to a Social Security field office or by going online to socialsecurity.gov and following the prompts for your particular situation. You can also apply over the phone by calling 1-800-772-1213.

The key is to make sure you first have gathered the necessary information to complete your application. This includes the following:

• Your ex-spouse’s Social Security number
• Your own birth certificate or proof of birth
• Proof of U.S. citizenship or lawful alien status if you weren’t born in the United States
• Your marriage certificate to that ex-spouse
• Your final divorce decree

In addition to those items, the SSA will ask you for the following:

• Your own Social Security number
• Your name at birth (if it has changed)
• Whether you or anyone else has ever filed for Social Security benefits on your behalf
• Whether you have ever used any other Social Security number
• Whether you receive any benefits from military service or a federal civilian agency
• Whether you or your spouse have ever worked for the railroad
• Whether you have earned Social Security credits under another country’s Social Security system
• Whether you receive or expect to receive a pension or annuity from the federal, state, or local government
• Whether you are currently married
• The names, ages, and Social Security numbers of any other former spouses
• Dates and places of each marriage, and how and when each marriage ended
• The names of any unmarried children under age 18, ages 18 to 19 and in secondary school, or disabled before the age of 22
• The names of employers, or if self-employed, your earnings for this year, last year, and projected earnings for next year.

Furthermore, the SSA may need to ask you even more questions, depending on the information you provide.

You may also want to have your checkbook handy or at least your bank’s routing number and your account number so you can sign up for direct deposit to expedite the payment process once your benefits start.

Social Security and the Death of a Spouse

There are few periods in an adult’s life as traumatic as the death of a spouse. Emotionally it is devastating, but if that spouse was also the primary wage earner, his death can throw the surviving family members into financial turmoil. Fortunately, there’s some relief available from the SSA in the form of survivors benefits.

Survivors Benefits

Survivors benefits are benefits the SSA pays to certain eligible family members of a deceased worker. This can include widows and widowers, as well as divorced widows and widowers, children, and in some cases, dependent parents.

CAUTION

In general, you need to have been married at least nine months to be eligible to collect Social Security survivors benefits based on your deceased spouse’s work record. Exceptions may include if the deceased’s death was a job-related accident, if you had a child or adopted his/her child, or if the death occurred in the line of duty in active uniformed service.

Here’s a breakdown of eligibility requirements for the different types of survivors:

• If you’re a widow or widower, you may be eligible for full benefits at your FRA, which at this time is 65 to 67, depending on when you were born. (If you need help computing your FRA, refer back to the age table in Chapter 7.) Reduced widow (or widower) benefits are available for you beginning at age 60. If you’re disabled, you can begin receiving benefits at age 50. In addition, if you’re caring for a child who is also receiving Social Security benefits and is younger than 16 or disabled, you can receive survivors benefits at any age.
• Unmarried children who are younger than 18, or between 18 and 19 and still attending secondary school, can also receive survivors benefits.
• Children who are disabled before turning 22 can receive benefits at any age. There are also circumstances in which stepchildren, grandchildren, step-grandchildren, and adopted children can also receive benefits.
• If your dependent parents are 62 or older, they may also be eligible to receive survivors benefits. However, in order for them to qualify as dependents, the deceased would have to have been providing at least one half of their support.
• If you are a surviving divorced ex-spouse, you can begin receiving benefits at age 60, or 50 if you are disabled, as long as your marriage had lasted at least 10 years. If you are caring for your ex-spouse’s child under the age of 16 or a disabled child, you can collect at any age.

WORTH NOTING

If you remarry before reaching age 60, or age 50 if you are disabled, you are ineligible to receive survivors benefits during your new marriage.

However, if you remarry after reaching age 60, or after age 50 if you are disabled, you are still eligible for survivors benefits on your deceased spouse’s work record.

How to Apply for Survivors Benefits

As with most things related to Social Security, timing is key in applying for survivors benefits—the sooner, the better. Keep in mind, however, benefits are usually paid from the time you apply and not from the time your spouse or ex-spouse died.

To apply for survivors benefits (if you are not already receiving Social Security benefits), call or visit your local Social Security field office. Bring the following information or documentation with you:

• Proof of death. Usually the funeral home will provide you with the official death certificate. (If possible, get multiple originals so you always have at least one or two originals in your files. Note, you likely will have to pay for each one.)
• Your Social Security number as well as the Social Security number of the deceased.
• Your birth certificate.
• Your marriage certificate.
• Your divorce papers if applying as a divorced widow or widower.
• The deceased worker’s W-2 forms or federal self-employment tax return for the most recent year.
• Your bank’s routing number and your account number so that your benefits can be deposited directly into your account.

If you’re already receiving Social Security benefits based on your spouse’s work credits when you report his or her death, the SSA will change your payments to survivors benefits. If they still need more information to process your application, they’ll get in touch with you.

If you’re receiving benefits based on your own work history, contact the SSA and ask them to check to see if you could receive more as a widow or widower. If you can, then you’ll receive a combination of benefits that equal the higher amount. In this case, you’ll have to complete an application form to switch to survivors benefits and the SSA will want to see your spouse’s death certificate.

Calculating What Survivors Benefits You’re Due

Your amount of survivors benefits is determined by how long the deceased worked as well as their age at the time of death. The younger that person was, the fewer years he would have had to work to become eligible for any Social Security benefits.

Basically, survivors receive a payment calculated upon the average lifetime earnings of the deceased, just like retirement benefits. That means the more the deceased earned, the more their survivors will receive. To determine this figure, check the Social Security statement of the deceased, which should give you an estimate of what your survivors benefits will be.

Please note: you will not be able to use the retirement calculators at the Social Security website to estimate what you might receive as a survivor. These calculators only estimate your benefits. Contact your local Social Security office or call their toll-free number (1-800-772-1213 or 1-800-325-0778 for the hard of hearing) to find out how much you might receive on your deceased spouse’s work record.

There are a number of variables to consider when calculating your survivors benefits. For example, if you are a:

• Widow or widower at full retirement age or older, you will receive 100 percent of your deceased spouse’s benefit.
• Widow or widower between age 60 and your FRA, you will receive between 71 to 99 percent of your deceased spouse’s benefit.
• Disabled widow or widower age 50 through 59, you should receive 71.5 percent.
• Widow or widower of any age and caring for a child under the age of 16, you will receive 75 percent.
• Child under the age of 18, 19 and still in high school, or disabled, you will receive 75 percent of your deceased parent’s benefit.
• A surviving dependent parent of a deceased worker, age 62 or older, you will receive 82.5 percent.
• Two surviving dependent parents of a deceased worker age 62 or older, you should each receive 75 percent.
• Surviving divorced widow or widower, you should receive the same amount as a widow or widower.

You might also be eligible for a lump-sum death benefit, which we will talk about in a bit.

Maximum Family Amount

You should keep in mind that there’s a limit to what a family can receive each month. Although the limit varies, the maximum amount any one family can receive is between 150 to 180 percent of the worker’s basic benefit rate.

For more information on the maximum family amount, you can call Social Security’s toll-free number at 1-800-772-1213, visit your local field office, or go to socialsecurity.gov.

TIP

Even if a worker has worked for only one and one-half years in the three years prior to his/her death, under a special rule survivors benefits can be paid to the deceased worker’s children and the spouse who is caring for the children.

Government Pension Offset

If you receive a government pension from working for the federal, state, or local municipal government where you did not pay Social Security taxes, your survivors or ex-spouse’s benefits may be reduced by something called the Government Pension Offset.

Typically, this reduction will amount to two thirds of your government pension. For example, if you receive a monthly civil service pension of $1,000, then two thirds or $666 of that pension would be offset or deducted from your Social Security benefits. If you are also eligible for a spouse’s, widow’s, or widower’s benefits, those benefits would be reduced by $666 or be offset by your government pension.

Applying for the One-Time $255 Death Benefit

Survivors can apply for a one-time Lump Sum Death Benefit (LSDB) payment of $255 when their spouse dies, provided the deceased spouse worked long enough to be eligible for Social Security benefits.

The LSDB was actually included in the original 1935 Social Security legislation, although the average amount paid back in 1939 was $96.93, according to a document prepared in 1996 and updated in 2006 by Larry DeWitt of the SSA Historian’s Office.

The LSDB was originally included in the legislation, according to DeWitt, because there was initially no survivors benefit option. The LSDB was supposed to amount to 3.5 percent of the worker’s earnings that were covered by Social Security; at that time, it was a maximum of $3,000 per year.

There were amendments over the years to LSDB, but the $255 amount has been the same since a 1954 Amendment. It might not sound like a lot of money to some, but when you consider that in 2012 there were 770,000 LSDB payments made, the total added up to $220 million.

The LSDB payment is made only to a surviving spouse of a deceased worker eligible for Social Security benefits, or to a dependent child if there is no surviving spouse at the time of the eligible worker’s death, if they meet certain criteria and apply within two years of the deceased’s death. The following criteria must be met to receive the $255 LSDB:

• The surviving spouse was living with the deceased worker when he or she died.
• If the surviving spouse was living apart from the deceased worker, he or she had already begun receiving retirement benefits at the time of death or became eligible for benefits at the time of death.
• If there is no surviving spouse, the LSDB can be paid to a surviving dependent child or children if, during the month the worker died, the child or children had already begun receiving retirement benefits on the worker’s record or became eligible for benefits at the time of the worker’s death.

If You Are Living Outside the United States

You are considered to be living outside the United States if where you reside is not one of the 50 states or in any of these additional districts: the District of Columbia, Puerto Rico, Guam, American Samoa, or the Northern Mariana Islands.

CAUTION

The SSA considers you living outside the United States if you have been in another country for at least 30 days in a row. Until you return and live in the United States for 30 consecutive days, you are technically still considered living outside the United States.

Many people on Social Security choose to live abroad because their money goes farther, and they can live a more luxurious lifestyle where the cost of living is lower. For example, there is a large contingency of retired Americans living in Baja, Mexico, because the cost of living is lower there.

There are, however, some countries where the SSA will not send benefit payments, such as Cuba, North Korea, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, and Vietnam.

The SSA has a booklet that contains detailed information on how living outside the United States will impact your payments, as well as what information you need to report to the SSA to ensure your payments are kept up to date and protected. This booklet is titled “Your Payments While You Are Outside the United States” and you can access it for free online at ssa.gov/pubs/EN-05-10137.pdf.

In most situations, if you’re living in countries such as Austria, Belgium, Canada, Chile, Czech Republic, Finland, France, Germany, Greece, Ireland, Israel, Italy, Japan, South Korea, Luxembourg, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the United Kingdom, you will receive payments without any restrictions.

On the other hand, if you’re living in South America or other European and Asian nations not on the no-restrictions list, there are additional requirements you will have to meet. Again, read the previously mentioned booklet to get information about your specific country.

The same rules apply to survivors or ex-spouses as to primary Social Security beneficiaries.

There are other rules that apply to anyone who is not a U.S. citizen. These rules in such specialized circumstances are noted in the SSA booklet.

If you do work or own a business outside the United States, you should notify the U.S. Embassy in the country in which you are living if you have not already done so. If you don’t, you could be penalized and possibly lose some of your benefits.

Incarceration

Currently 2.4 million Americans are incarcerated in state and federal prisons. Almost 700,000 Americans are released from prison, including local jails, each year. How does incarceration impact your Social Security benefits?

If you’re in prison, you’re not eligible to receive Social Security benefits during your incarceration. If you’re receiving Social Security benefits when you are sentenced, those benefits will be suspended if you are incarcerated for longer than 30 days due to conviction for a crime. Your benefits will be reinstated one month following your release. Your spouse or children, however, will be able to continue receiving benefits as long as they are eligible.

As soon as you are released and you have reached age 62, or your FRA, or age 70, you may apply for Social Security retirement benefits as long as you worked enough years to acquire the necessary 40 work credits and you paid into Social Security before you were incarcerated. Even if you aren’t eligible for Social Security retirement benefits, you may still qualify for Supplemental Security Income (SSI) if you are 65 or older, blind, have a disability, or have limited or no income and resources. None of this is automatic, however, which means you’re going to have to apply for it if you think you deserve it.

To help you in this matter, the SSA has produced a booklet titled “What Prisoners Need to Know.” It contains everything you should know about applying for Social Security, disability, or SSI once you leave prison. You can access this free publication at socialsecurity.gov/pubs/EN-05-10133.pdf.

Remember, you will not be paid for your time in prison, nor will this time count toward your required work credits.

In order to receive benefits once you’re released, you’ll need to contact Social Security and give them a copy of your release documents.

The Least You Need to Know

• You can apply for spousal benefits even if you’re divorced as long as you meet certain criteria.
• You can receive survivors benefits beginning at age 60, or at 50, if you’re disabled. If you’re caring for a dependent child, you can begin immediately receiving survivors benefits.
• Survivors benefits start when your application is approved, not upon the death of the eligible worker.
• A surviving spouse can apply for a Lump Sum Death Benefit (LSDB) of $255, but it must be applied for within two years of the eligible worker’s death.
• With some exceptions, such as Cuba and North Korea, you should still be able to collect your Social Security benefits even if you reside outside the United States.
• Social Security benefits stop when you’re incarcerated for 30 days or more, but begin again upon your release. You must apply for a reinstatement of your benefits and you’ll need release papers for the application.