Surviving spouse question

[tmgarveySJ]

I'm helping my stepmom with her finances (power of attorney, etc.), and she just received what is (to me, anyway) a puzzling communication from social security.  I'm just trying to understand it.

Background: She and my dad were married for about 30 years (same age) when he recently passed away at age 88.  Her social security benefit was higher than my dad's benefit (he got 500-some a month, she 700-some a month).   She applied for and received her $225 one-time death benefit.

The letter she just received from SSA states she will begin receiving $171/month as a widow, and that is to be in addition to the full benefit she receives on her own record.  

I've been researching this everywhere (including, of course, the SSA website), and EVERYTHING I've read indicates that the surviving spouse receives either a survivor benefit based on the deceased spouse's record OR their own benefit, whichever is greater, but that you cannot receive both.  

Hence my confusion: why is she receiving an additional survivor's benefit over and above her own benefit?  Obviously, more money is more money, so we aren't complaining, but I would like to understand the basis for this decision.  

The exact quote from the letter is: "You are entitled to monthly widow's benefits beginning March 2018.  Your benefit is $171.40 as a widow.  This is in addition to the benefit of $840.50 on your own earnings record."  It then goes on to tell her she will receive one payment for the two months that have passed since my dad's death, and thereafter a monthly payment.

Can someone explain this?  I could call SSA (with her on the line), but it's probably not worth the trouble.  I'd just like to understand it.

[tmgarveySJ]

Thanks, Gail,

No doubt that's the explanation.  So I guess the "widow's benefit" they referred to is the additional amount (added to the amount she receives on her own account) to be equal to what she would receive as his surviving spouse?

The funny part is that I'm a lawyer, but stuff like this, the tax code, etc., are so mind-bogglingly complex that I happily pay my accountant so I don't have to understand any of it.  🙂

[GailL1]

More details definitely helps to figure out this mystery.  There are many nooks and crannies.

Your father's SS benefit was affected by the Social Security Windfall Elimination Provision

Your late father's benefit was reduced due to the Social Security Windfall Elimination Provision (WEP) which took affect back in the mid-80's and still continues as an adjustment to the benefit for those who had the majority of their career in civil service where they did not pay into the SS system but also had other covered earnings.  

WEP does not affect survivor benefits.  The deceased spouses' PIA (primary insurance amount) will be recomputed using the regular computation formula, and the potential widow's benefit would be derived from a starting point of 100% of his PIA.

[PamM972466]

My husband received SS benefits and a pension. When I went to SS my pension was larger than his pension. My SS benefits were affected by the windfall so I only received 325.00 a month for SS. They told me that since my husbands pension was smaller than mine I would not received anything because my pension was larger. I was flabbergasted. It had nothing to do with his SS only his pension amount.

[GailL1]

@PamM972466 

Sounds like you may be affected by the Social Security Government Pension Offset (GPO)

You can read about it here:

Social Security.gov - Government Pension Offset (GPO)

[PamM972466]

Yes it is ..... I just don't understand that my husband paid into SS since he was a teenager and he passed away at age 68.  He was receiving 1400.00 a month for SS.  I had the windfall so I only recieved 385.00 a month.  What does his pension have to do with his SS?  I was told at the office that his pension was smaller than mine so I wouldn't receive anything.  HIs pension was 1400.00 a month .  I just don't understand.  Where did all his SS money go to????

[GailL1]

@PamM972466 

Simply put -

Your SS benefits,

• whether your own, (SS -Windfall Elimination Provision)
• or that of a spousal benefit (SS - Government Pension Offset)
• or a widow (SS - Government Pension Offset),

are reduced because you are receiving a pension from an employer that DID NOT participate in the Social Security system during your working years.

While working for this public employer, you did not pay into the Social Security system, rather your public employer had their own pension plan.

It sounds like your husband's employer DID participate in the SS system and he also had a pension which could have been funded entirely by the company or perhaps he also made contributions to his pension fund.  Because his employer DID participated in SS, your husband's own SS benefits were not affected by any reduction.

It is YOUR situation that is causing the SS reduction amount -

CRS.gov 06/21/2019 #RL32453 - Social Security: The Government Pension Offset (GPO) Explained

In general, Social Security spousal and survivor benefits are paid to the spouses of retired, disabled, or deceased workers covered by Social Security. The spousal benefit equals 50% of a retired or disabled worker’s benefit and the survivor benefit equals100% of a deceased worker’s benefit.

Spousal benefits, which Congress created in 1939,are intended for individuals who are financially dependent on a working spouse. For this reason, but also because of the costs, Social Security does not provide both full worker and full spousal benefits to the same individual. For persons who qualify for both a Social Security worker benefit (retirement or disability) based on their own work history and a Social Security spousal benefit based on a spouse’s work history, the dual entitlement rule effectively caps total benefits at the higher of the worker’s own benefit or the spousal benefit. The Government Pension Offset (GPO) is analogous in purpose to the dual entitlement provision and applies to individuals who qualify for both a pension based on their own non-Social Security-covered government work and a Social Security spousal benefit based on a spouse’s work in Social Security-covered employment. The dual entitlement rule and the GPO share the same intent—to reduce the Social Security spousal benefits of individuals who are not financially dependent on their spouses because they receive their own retired-worker or disabled-worker Social Security benefits, or their own non-Social Security pension benefits.

read more at the link provided -

Since your government pension is large and therefore the GPO reduction amount of 2/3rds of this pension amount is large, it reduces or eliminates in total any SS widows benefit.

[GailL1]

Based on the details you have given here, it does not compute.

I would suggest that you make an appointment with a local Social Security office and go over your late father's benefit amount.

You should try to find out the details of his benefit - perhaps his last Social Security Statement of earnings that is issue at the end of the year for those who need it for taxes and other type of documentation.

Here are some possibilities which I am just guessing about -

From your details, your late father's benefit amount was VERY low.  Extremely low.  This could occur IF your late father only worked a few years, 11 years is the minimum OR he earned a VERY low amount during the (up to)30 years which he worked.  Since 1973, SS has used a different formula for people in this type of situation - it is rarely used anymore - but that only could explain his LOW benefit but not why your Mom is getting this extra amount as a Widow benefit.

What might make more sense is that your late father was not drawing his own SS old age benefit - possibly he never filed for his own benefit.  The amount he was getting was something else - like perhaps it was an SSI benefit rather than his SS old age benefit.  Or perhaps he was drawing a spousal benefit based on your mother's earned benefits and never filed for his own.

Or something else could have been deducted from his SS old age benefit and you are referencing just the monthly total.  

• Perhaps for some reason he didn't have enough time and contributions to Medicare Part A and he was having to pay for it. It is premium free for most people who have worked and made contributions during their work life but if not, the cost of it can be upwards of $400 a month, prorated based on what you did contribute during those working years.
• He could have owed the IRS or some other government entity some money and they were collecting out of his SS old age benefit.

Based on your details, I am just guessing about why his benefit could have been so low but you are right, the maximum widow/widower benefit for those who are full retirement age is what the deceased person would do have received.  The amount can be made up of the living spouses old age benefit + an additional amount from the deceased person to equal this maximum amount, which seems to be what SSA is saying.

BTW, the death benefit amount for SS is $255, not $225, and it has been this amount for a good while.

Seems to me that you have to figure out why your late father was only getting a benefit of $500-something a month and what type of benefit it was.  Remember Medicare Part B premiums and sometimes Medicare Part D premiums are deducted monthly for most everybody if they are not on some Low Income Subsidy.  This should also show on that yearly statement.

Good Luck in figuring out this mystery - I have worked on several that you wouldn't believe.

[tmgarveySJ]

Right--I mistyped the amount of the death benefit, it was $255.

I'm guessing it was so low because virtually his entire working life was in the military or federal civil service. I don't know the details on that, but I know there are a number of jobs that don't qualify for social security benefits.

I can't go to the local Social Security office; my stepmom is in Oregon and I'm in NJ, and they don't recognize the PoA, so I would have to do a conference call with her. I'm just not sure it would be worth the trouble (hold times, etc.).

Unfortunately, I was never able to set up an online account for them. They didn't recall the details of the kind of info requested to verify identity (e.g., where they got a mortgage loan 30 years ago).

If it's important to check on this, we can do the conference call.

[tmgarveySJ]

OK, a bit more detail.

I looked over some records and did a bit more reading.  My dad retired from the Air Force in 1969--he was enlisted, so I don't imagine his salary was that high at that time.  After that, he served 20 years in federal civil service covered under the CSRS, which apparently does not provide social security credit.  So that probably explains the relatively small benefit he was receiving.  

I'm still puzzled by the letter referencing a widow's benefit in addition to my stepmom's own benefit (she was employed, probably up until she married my dad in 1987, which probably explains why her benefit was larger than his).  The one thing I don't want to have to deal with is an overpayment situation, so I'll probably try to set up the conference call.  

It's a shame that the system that is set up for the benefit of older people is so incredibly confusing.  Guess I'm getting good practice for when it's my turn!