V I E W P O I N T

WOMEN'S SOCIAL SECURITY BENEFITS

A woman who works a sufficient length of time in Social Security-covered employment becomes eligible for her own Social Security benefit. If she is married, she also may be eligible for a spouse benefit or widow benefit on her husband's earnings record.

A married woman ineligible for her own benefit receives her spouse or widow benefit in full. A married woman eligible for her own Social Security benefit receives part of her spouse or widow benefit if her own check is a lesser amount. Similarly, a woman who works in non-Social Security-covered public employment receives a Social Security spouse or widow benefit only if it exceeds two-thirds of her public annuity.

There is no gender discrimination in how Social Security benefits are determined. Nevertheless, an average female worker receives a substantially smaller Social Security check than does a male worker. In 2003, the average Social Security benefit of a retired man is $1,008, while the average benefit of a retired woman is $775. Caregiver years spent out of the paid work force and generally lower earnings when working usually help account for this disparity.

Married women who have earned their own benefits often receive little or no more than they would have received had they never entered the work force. Two earner couples find their combined earnings provide smaller retirement and survivor benefits than do those paid to a single-earner couple with identical lifetime earnings.

If divorce occurs before 10 years of marriage, a woman is eligible only for her own Social Security benefit. If divorce occurs after 10 or more years of marriage, an unmarried divorced woman remains eligible for the same spouse or surviving spouse benefit she would have received had there been no divorce.

Remarriage after age 60 (50 if disabled) does not prohibit payment of a surviving spouse benefit. Early retirement severely reduces benefits. A young disabled widow or an older widow with no work force experience may have no choice but to apply for a reduced benefit at the earliest age of eligibility. But Social Security offers little incentive for widows to continue working, especially if the deceased spouse retired early as benefits are capped based on the husband's early retirement.

Severely disabled widows not yet at retirement age are eligible for early widow benefits, but benefits are reduced as if retirement were a voluntary choice. Disabled widow benefits are not payable before age 50 and disability must occur within seven years of widowhood or seven years of eligibility for mother benefits (that is caring for a dependent child under age 16 or disabled).

NATIONAL COMMITTEE POSITION

Women deserve an adequate retirement income whether a work life is spent in the home, in the paid work force, or a combination of the two. The National Committee supports the following changes that would safeguard benefits for women, especially for those with the greatest need, and improve benefit equity between one-earner and two-earner couples:

NATIONAL COMMITTEE ARGUMENTS

Privatization: “The largest group of losers from privatizing Social Security would be women.” This is true for women in all birth years, all kinds of marital status, and all income levels. This is the first important finding of a recent, comprehensive analysis of privatization proposals. Women lose because privatization eliminates the three ways Social Security was designed to protect women.

1. Social Security's progressive benefit formula provides proportionally higher benefits to lower earners. Women at every education level earn less than men. Social Security annual cost-of-living adjustments help ensure that benefits are not eroded by inflation.
2. Women live longer than men and, therefore, collect benefits for more years. Annuitized private accounts would reduce monthly benefits based on women's longer life expectancy.
3. Social Security benefits are far more advantageous to women than the private market could provide.

Survivor Benefits: In a one-earner family, when one spouse dies, the survivor receives two-thirds of the couple's combined benefits. However, if each spouse has earned a worker benefit, the survivor receives only the larger of the two benefits. This can be as little as half of the couple's combined checks. Providing a widow or widower two-thirds of the couple's combined checks treats one-earner and two-earner couples more fairly and reduces the likelihood of leaving the survivor in poverty.

Special Minimum Benefits: If a higher benefit is provided than under the regular method, Social Security determines monthly benefits under a Special Minimum method. Monthly Special Minimum benefits are a multiple of a dollar amount times the number of earning years over ten and up to thirty. In 2002, the Special Minimum method provided a worker with 30 years of substantial earnings at least $617 per month. If up to ten years spent caring for children or dependent adults is counted towards the Special Minimum benefit, many women with work careers divided between home and the paid work force would be eligible for higher worker benefits. Counting five additional years of earnings toward the Special Minimum would make this benefit method available to more workers and assure at least a poverty level income to anyone with 35 or more years of earnings.

Disabled Widows: A disabled widow is the only disabled person whose benefit is reduced for early retirement. The early retirement reduction should be removed as should the age 50 and seven-year limitations. These provisions were placed in law in 1967 to safeguard against excessive payments since no reliable estimate could be made regarding how many widows might qualify. It is now known that these limitations affect relatively few widows and could be removed without excessive cost.

Working Widows: Under current law, a widow benefit is capped at the amount the deceased spouse would receive if still alive. If a husband retires before normal retirement age, his widow inherits his early retirement reduction. The only protection is that the widow can receive no less than 82.5 percent of the wage earner's full benefit if she is at least 62 before beginning her widow benefit.

Apart from that limited protection, a widow can neither cancel her husband's early retirement reduction nor enhance her widow benefit by delaying her own retirement. More widows might choose to enter or remain in the work force if doing so would increase the widow benefit they ultimately would be eligible to receive.