CHAPTER
12

Family Benefits

In This Chapter

• Who qualifies for family benefits
• The SSA’s definition of family
• Benefits available for qualified children
• How to get the maximum family benefits

When you start receiving Social Security benefits either for retirement or disability, some members of your family could also be entitled to benefits based on your work history. These family benefits are also called auxiliary benefits and will not impact what you receive each month, but could add a significant amount to your family’s funds overall.

Provided they qualify, your child or spouse could receive monthly benefits that total up to 50 percent of your benefit. These benefits are available to eligible family members when you retire, become disabled, or die. The fact that these benefits are available to eligible family members could help you decide when to start taking your benefits.

Dependents and Spouse Benefits

Over time, the amount your family members will receive could total hundreds of thousands of dollars. Some financial advisors have compared family Social Security benefits to having a six-figure life insurance policy.

Who’s in the Family

When the Social Security Administration (SSA) uses the term family, it’s a little different than the common definition. In Social Security parlance, “family” means anyone who receives benefits that are tied to an insured worker’s primary insurance amount (PIA). What does that mean? Well, if you and your spouse are retired and are both receiving benefits based on each of your own work credits, you will be counted by the SSA as two families. But if one spouse is taking spousal benefits because he or she didn’t accumulate the necessary work credits, the couple are counted as one family.

Relationship to the Retired or Disabled

To further complicate things, the SSA has three categories of families and a total of 24 distinct family relationship types. Here’s how they break out.

A family with a retired worker could include:

• A single retired worker who’s at least 62 years old.
• A married retired worker and spouse, both of whom are at least 62 years old.
• A married retired worker and spouse of at least 62, who have one or more children.
• A married retired worker, young spouse with either a child under the age of 16 or a disabled child in his or her care, and one or more nondisabled children.
• A married retired worker, young spouse, and two or more nondisabled children.
• A retired worker with one or more nondisabled children.
• Any family with a retired worker.

A family with a disabled worker could include:

• A disabled worker only.
• A disabled worker and a spouse who’s at least 62 years old.
• A disabled worker, spouse 62 or older, and one or more nondisabled children.
• A disabled worker, young spouse with either a child under the age of 16 or a disabled child in his or her care, and one or more nondisabled children over 17.
• A disabled worker, young spouse, and two or more nondisabled children.
• A disabled worker and one or more nondisabled children.
• Any family with a disabled worker.

A survivor family could include:

• One or more children of a deceased worker with the children under the age of 18, a high school student under the age of 19, or a child who has become disabled before the age of 22, in addition to a surviving spouse who is not receiving a benefit.
• A 60+-year-old widow or widower, where the marriage lasted at least nine months. There are exceptions, however: for example, if the insured worker was expected to live nine months but accidentally died before that time was up, and his death was caused by an accident not more than three months after the bodily injuries occurred, with the exception of suicide, or death in the line of active military duty.
• An aged widow or widower with one or more dependent children.
• A disabled widow or widower who is at least 50 years old.
• A young widow or widower with a child under the age of 16 or a disabled child in his or her care and one or more nondisabled children.
• A young widow or widower with two or more nondisabled children.
• Any surviving family.

WORTH NOTING

Since the SSA has no fewer than 24 family relationship types that could qualify you, your spouse, or children as a family, check to see if you fit into any of the definitions of a family. For same-sex relationships, what SSA defines as a family for the purpose of retirement or disability benefits is more complicated. Check with your state and then with SSA for your particular circumstances.

Age Qualifications

By now it’s become apparent that the SSA has established age qualifications for nearly every benefit. Here’s a brief rundown of some of the more common age qualifications or requirements anyone seeking any kind of Social Security benefit is likely to encounter:

• The earliest age you can receive retirement benefits is 62.
• Retirement benefits for widows and widowers begin at 60.
• If widows or widowers are disabled, they can begin receiving retirement benefits at age 50.
• You can begin receiving your personal Social Security statement online if you are a worker 18 years of age or older. This statement is an important tool to help you plan for your financial future by providing estimates of what your benefits will be at different retirement ages, as well as what disability benefits you can receive if you become disabled and are unable to work. Go to ssa.gov to create an account. Your full retirement age (FRA) depends on when you were born. If you were born before 1944, your FRA is 65. For those born between 1943 and1954, it’s 66, and for those born after 1960, it’s 67.
• Retirement benefits will increase 8 percent annually after your FRA until you reach age 70. This annual increase is known as the delayed retirement credit.
• If you are receiving retirement benefits, your spouse age 62 or older can also receive spousal benefits.
• Spouses who are younger than 62 and are taking care of a child who is younger than 16 or is disabled may also qualify for spousal benefits.
• Former spouses who remain unmarried and are age 62 could qualify for spousal benefits if they were married for 10 years or more and it has been at least 2 years since their divorce before they filed for benefits.
• Children up to the age of 18, or 19 if still in high school, are eligible for family benefits.
• Children who became disabled before the age of 22 are eligible at any age.

Maximum Family Benefits

There is a maximum amount your family can receive above your Social Security benefit no matter how many dependent children you have. This maximum ranges between 150 and 180 percent of your total monthly benefit payment.

Of course, there’s a special complicated formula for determining what your particular family maximum benefit is, but we’ll try to keep this as simple as possible. It’s similar to the formula the SSA uses to determine the benefits amount you receive at your FRA (or what they call your Primary Insurance Amount [PIA]).

If you remember from earlier in the book, the formula used to compute your PIA takes percentages of four different sections of your PIA. These sections are called “bend points.”

For 2014, the bend points are:

• 150 percent of the first $1,042 of your PIA.
• 272 percent of your PIA between $1,042 and $1,505.
• 134 percent of your PIA between $1,505 and $1,962.
• 175 percent of your PIA over $1,962.

For the family of a disabled worker, it’s a little different. In that situation, the family maximum is either 85 percent of the worker’s average indexed monthly earnings or 150 percent of the worker’s PIA if one is available.

How a Spouse Can File for Auxiliary Benefits

Auxiliary benefits are those benefits that are paid to eligible family members. You can apply for auxiliary benefits by calling SSA’s toll-free number at 1-800-772-1213, or by visiting a local field office and applying in person. When you do, here is a list of some of the documents you should have handy:

• If you’re filing for yourself or your child, you’ll need all your birth certificates or other proof of birth.
• Your proof of marriage to the worker.
• Proof of U.S. citizenship or your lawful alien status.
• U.S. military discharge papers, if relevant.
• W-2 forms and/or self-employment tax returns for the last year.

If you’re applying for disability benefits for an adult child disabled before the age of 22, there are two special forms you’ll need to complete:

• The Adult Disability Report (SSA-3368).
• Authorization to disclose information to the Social Security Administration (Form SSA-827).

Chances are the SSA representative will ask you to provide the following information:

• Your name and your Social Security number.
• The worker’s name and his or her Social Security number.
• Date of birth, Social Security number, and relationship to the worker (such as each biological or adopted child, stepchild, or dependent grandchild) for each child listed on the application.
• The child’s citizenship status.
• If any child 17 years or older is a student or is disabled.
• If any child is the worker’s stepchild in addition to when and where the worker and the child’s parent were married.
• Whether you are the child’s natural or adoptive parent.
• Whether the child has a legal guardian.
• If the child has been adopted by someone other than the worker.
• Does the child live with you and did he or she live with the worker during each of the last 13 months?
• If the child has ever been married, and if so, the dates and locations of the marriages and how and when those unions ended.
• Whether you or anyone else has ever filed for Social Security benefits, Medicare, or Supplemental Security Income (SSI) on behalf of the children. If so, the SSA will ask for information about whose Social Security record was used for the previous application.
• If the child worked, the amount of each child’s earnings for this year, last year, and projections for next year.
• Dates of any adoption of any children by the worker.
• Whether you have been convicted of a felony.
• Whether any child age 13 or older has any unsatisfied felony warrants for arrest or unsatisfied federal or state warrants for arrest for any violation of the conditions of their parole or probation.
• Whether you have ever served as a representative payee for someone’s Social Security benefits.

If the worker is deceased and you are filing as a survivor, you will be asked for:

• The worker’s date of birth and his or her name at birth if different from the name at death.
• The worker’s date and place of death.
• State or foreign country of the worker’s fixed permanent residence address at the time of death.
• Whether the worker was unable to work due to illness, injuries, or conditions at any time in the 14 months prior to death. If the answer is yes, you will also be asked for the date he or she became unable to work.
• Whether the worker was in active military service before 1968 or ever worked for the railroad. If the answer is yes, you will also be asked to provide dates of service and whether he or she received a pension from the military or a federal civilian agency.
• Whether the worker earned Social Security credits under another country’s Social Security system.
• Whether the worker was employed or was self-employed between 1978 and last year.
• How much the worker earned in the year of his or her death and the previous year.
• Whether the worker ever filed for Social Security benefits, Medicare, or Supplemental Security Income. If yes, you will be asked for information about whose Social Security record he or she applied on.
• Whether each child was living with the worker at the time of death.

Filing for Disability Benefits for Dependents

When you become eligible for disability benefits, some of your family members (such as your spouse and dependent children) may also qualify for auxiliary benefits.

Filing for auxiliary benefits for your spouse and dependent children is similar to the process of filing for yourself, with a few additional steps.

To receive auxiliary disability benefits, your spouse must be under the age of 62 and be the joint caregiver of your children age 16 and under. If your spouse divorces you, he or she may still qualify for auxiliary disability benefits as long as you were married for at least 10 years.

For children to qualify, they must be dependents, under the age of 18 unless enrolled in school full time, and unmarried.

Dependent children who are legally adopted are also eligible, along with dependents who do not live with you, such as a child for whom you provide child support. A disabled child is considered a dependent if he or she became disabled before the age of 22.

How Can a Spouse Receive Disability Benefits?

Your spouse or ex-spouse may be eligible for disability benefits once you qualify for disability benefits. He or she must meet certain criteria, such as:

• The spouse must be caring for your child who is under the age of 16 or disabled and receiving Social Security benefits.
• Your spouse is old enough to receive retirement benefits at age 62 or older or survivors benefits as a widow or widower starting at age 60.

WORTH NOTING

Your spouse also can get disability benefits, which is usually around 50 percent of the benefits you are receiving based on your work record, if he or she is over 62, you are receiving disability benefits, and/or he or she is caring for a dependent child under 16 or a disabled child. One or more of your children may also receive benefits. However, there is a maximum family benefit, which is approximately 150 to 180 percent of your monthly benefit.

Reasons for Denying Spousal Benefits

There are only a few reasons why a spouse is denied benefits. Here are some of those reasons:

• He or she is not over the age of 62.
• He or she is not the joint caregiver of any dependent children you have with either your current spouse or ex-spouse.
• An ex-spouse wasn’t married to the worker for at least 10 years.
• Two years have not yet passed between the divorce and the filing for ex-spousal benefits by the ex-spouse.
• For retirement benefits, the spouse or ex-spouse does not have enough work credits to qualify for Social Security retirement benefits or has not yet reached their FRA.
• For survivor benefits, the spouse or ex-spouse did not have enough work credits to qualify for Social Security retirement benefits. Although there is the special ruling that benefits can be paid to the worker’s children and the spouse caring for the children if the worker worked for only one and one-half years in the three years prior to their death.
• For survivor benefits, the widow or widower wasn’t married to the eligible worker for at least nine months prior to the worker’s death.
• If a surviving spouse remarries before the age of 60 or before the age of 50 if disabled, they cannot receive survivors benefits as long as they are remarried. (However, if they remarry after the age of 60 or after the age of 50 if disabled, they can qualify to receive benefits on the Social Security work record of the deceased spouse.)

As previously mentioned, if your spouse is 62 years old or older, she doesn’t need a child to care for in order to qualify for Social Security benefits based on your earnings. From the age of 62 and older, spousal benefits are available to your spouse on the basis of age alone. But you must have reached your FRA for your spouse to apply for spousal benefits, which will usually be computed at 50 percent of your retirement benefit at your own FRA. If your spouse is still working, he or she needs to consider the income caps on their earnings, or their Social Security benefits will be reduced according to the formula the SSA created. In 2014, the income cap was raised to $15,480, which was a $360 increase over 2013.

Here’s how it works. From the age of 62 until the year you reach your FRA, if you earn more than that income cap, Social Security will withhold $1 in benefits for every $2 you earn over that limit.

However, in the year you reach your FRA, the income cap rises to $41,400. If you go over the income cap during that year, Social Security will withhold $1 in benefits for every $3 you earn over that cap. As you know, there is no income cap once you reach your FRA.

In addition, you can also continue putting your own earnings into the pool for your benefits. Then when you reach age 70 you can switch from spousal benefits (50 percent of your spouse’s benefit) to 100 percent of your own benefits, which would have increased by 8 percent each year you delayed taking your benefits after reaching your FRA.

However, you cannot switch from spousal benefits to your own benefits if you had already begun receiving your own benefits at an earlier age. The rate at which you began taking retirement benefits is the same rate that will remain for the rest of your life. So if you started receiving your benefits at age 62, the rate (or amount) you receive will remain at that reduced rate forever.

You can, however, pay back Social Security all the benefits income you received before switching to spousal benefits, and then restart your own at a later date for higher benefits.

Check with your local Social Security office to see if this option is available to you. If it is, find out what amount you would be required to repay if you want to pursue this higher benefits option beginning at age 70, based on your own work credits and earnings record.

The break-even point for taking Social Security at 70, which could be as high as $3,500 a month, is between ages 83 and 84. So you will have to live at least until that age to make it financially beneficial to wait until 70 to take your benefits. If you die before then, you’ve lost the advantage of starting your benefits at a later date.

Do You Have Parental Responsibility?

According to the SSA, you must have parental control and responsibility for a dependent or disabled child in order to be eligible for parental benefits. That means you must …

• Show a strong interest in properly raising the child.
• Oversee the child’s activities.
• Be actively involved in making important decisions about the child’s needs and welfare.
• Have control in the child’s upbringing and development.
• Be responsible for cleaning, feeding, and dressing a disabled child.
• Manage the activities of a physically disabled child.
• Be physically present with the child because of the disability.

You will lose your parental benefits if you no longer meet these “in care” requirements. This can happen when a child grows up or overcomes his or her disability. For example, if you and the child no longer live together, you will not be able to receive parental benefits.

Here are some other reasons you’ll lose benefits if you and the child no longer live together:

• You become mentally disabled.
• You and your spouse separate or get divorced, and you lose custody or give up your right to either directly or indirectly control the child.
• You lose care and custody of the child due to a court order.
• You give up care and custody of the child to another person or agency.
• The child is physically disabled and 16 years or older and you have been separated from him or her for more than six months.
• The child is under the care of a court-appointed guardian besides you.

Other Issues Involving Family Benefits

Because there are so many issues involving family benefits, you should contact the SSA by phone or by visiting a local office in person with any questions you may have that are not addressed in this book. Everyone’s situation is different, and the laws regarding qualifications for receiving benefits are changing all the time.

Same-Sex Couples

Speaking of important changes in the law, on June 26, 2013, the Supreme Court ruled Section 3 of the Defense of Marriage Act unconstitutional, which meant the SSA was no longer prevented from recognizing same-sex marriages to determine Social Security benefits.

In fact, it has published new rules that allow the agency to process claims involving same-sex relationships. They have published an extensive Q&A of 13 frequently asked questions about same-sex relationships and how it impacts Social Security benefits at faq.ssa.gov/link/portal/34011/34019/ArticleFolder/452/Same-Sex-Couples.

If you’re in a same-sex marriage, the surviving spouse of a same-sex marriage, or even a non-marital legal same-sex relationship, you can still apply for benefits including Social Security retirement benefits, survivors or ex-spouse benefits, and even the $255 Lump Sum Death Benefit (LSDB).

However, you should also be aware that the SSA follows state guidelines when it makes its determinations about same-sex marriages or nonmarital same-sex relationships and their impact on eligibility for Social Security benefits.

Social Security recommends you contact your local Social Security office or call their toll-free number at 1-800-772-1213 if you have questions about how your same-sex marriage or non-marital same-sex relationship may impact your benefits.

QUOTATION

“Two same-sex individuals are married for SSI purposes if they are legally married under the laws of the state where they make their permanent home.

NOTE: We will not recognize that a claimant and a same-sex individual with whom he or she lives are married for SSI purposes because they are …

• entitled to Title II benefits, based on a marriage or other nonmarital legal relationship; or
• holding themselves out to the community as a married couple.”

Source: Social Security website (https://secure.ssa.gov/poms.nsf/lnx/0500501150)

How a Child’s Benefits Change with Age

Benefits to children typically end when a child reaches 18 years old or leaves high school. But if the child is disabled, that’s another story. Payments can continue into adulthood if the child’s disability occurred before the age of 22 and continues to be a major impairment to the ability to support him- or herself financially.

An adult who was disabled before age 22 may also continue to be eligible for child’s benefits if a parent is deceased or starts receiving retirement or disability benefits. The SSA considers it a “child’s” benefit because it’s paid on the earnings record of a parent.

The adult child, even an adopted child, stepchild, or grandchild, must be unmarried and have been disabled since before the age of 22.

If the child is 18 or older, the SSA will evaluate his or her disability the same way it evaluates the disability for an adult. An application is filed and the SSA sends it to the Disability Determination Services (DDS) in your state.

Caring for Sick Children or Relatives

If you are the parent or caregiver for disabled children under the age of 18, you could be eligible for Supplemental Security Income (SSI) payments or Social Security Disability Insurance (SSDI) benefits payments. The child must first have to meet the SSA’s definition of disability for children.

When applying for benefits for your child, you will be asked for detailed information about your child’s medical condition and how it affects his or her ability to function on a daily basis.

You will also be asked to give permission to doctors, teachers, therapists, or any other professional who might have information about your child’s condition to provide that information to SSA.

It usually takes the Disability Determination Services (DDS) about five months to decide if your child is disabled enough to qualify for benefits. However, there are some conditions that will get a faster response, such as if your child …

• Has an HIV infection.
• Is totally blind.
• Is totally deaf.
• Has cerebral palsy.
• Has Down syndrome (DS).
• Has muscular dystrophy.
• Has a severe mental or intellectual disorder.

Chances are, if your child has one of these conditions, he or she will receive payments much faster. Once your child begins receiving benefits, the SSA will review the child’s condition about every three years to verify that he or she is still disabled.

The Family and Medical Leave Act (FMLA)

The U.S. Department of Labor, which is responsible for the nation’s labor laws, has a provision to help families burdened with medical problems. It’s called the Family and Medical Leave Act (FMLA), and it gives you the ability to take unpaid leave without worrying about losing your job when you need to deal with family and medical issues.

Eligible employees can take off up to 12 weeks during a 12-month period to …

• Give birth and care for a new baby.
• Care for a newly adopted infant or child.
• Care for a spouse, child, or parent with a serious medical condition.
• Care for yourself if you have a serious medical condition that prevents you from performing your job.
• Deal with any qualifying situation related to a spouse, child, or parent in the military and on active duty.

You’re also eligible for 26 weeks of leave during a 12-month period if your spouse, child, or parent is a service member and suffers a serious injury or illness while on active duty and you are their caregiver.

There is currently a bill in Congress that would establish the Office of Paid Family and Medical Leave within the SSA. It would provide family and medical leave insurance benefit payments for each month you are on unpaid leave. As of this writing, the bill, sponsored by Representative Rosa DeLauro, a Connecticut Democrat, was still in the House Ways and Means Committee.

Benefits for Severe Medical Conditions

There are some medical conditions the SSA deems so severe it is willing to provide benefits as quickly as possible to anyone suffering from one of them. These benefits are called Compassionate Allowances (CAL). Basically, CAL is the SSA’s way of identifying specific diseases and other medical conditions that immediately qualify you as being disabled.

To see a full list of CAL conditions, go to ssa.gov/compassionateallowances/conditions.htm. Here are a few of the more common conditions:

• Acute Leukemia
• Adrenal Cancer
• Breast Cancer
• Bladder Cancer
• Child Non-Hodgkin Lymphoma
• Heart Transplant Graft Failure
• Liver Cancer
• Lung Cancer
• Pancreatic Cancer
• Prostate Cancer
• Stomach Cancer
• Thyroid Cancer

TIP

CAL is not a separate program; it’s part of the SSA’s disability benefits considerations. It enables a quicker response to those who apply so they can be considered for disability benefits. For more information on disability, see the free publication titled “Disability Benefits” at ssa.gov/pubs/EN-05-10029.pdf.

The Least You Need to Know

• Family members who qualify may be eligible for Social Security benefits.
• The maximum benefit any family member can receive varies between 150 and 180 percent of your monthly benefit payment.
• The Social Security Administration recognizes same-sex marriages in those states where it is legal.
• Your survivors may be entitled to 100 percent of your Social Security benefits after you die.