A crash course on Social Security benefits for gay couples

Talk about a moving target! Since the U.S. Supreme Court struck down the Defense of Marriage Act in its Windsor v. United States decision on June 2013, there have been more than 50 judicial rulings at the federal, state and appellate court levels in favor of same-sex marriage.
That has opened the door for legally married gay couples to apply for Social Security spousal and survivor benefits in 33 states and the District of Columbia — up from 19 states at the time the Supreme Court handed down its decision last year.
(More: Drastic changes to tax and estate planning for same-sex couples)
Last week, Nicholas Fish, a financial adviser with Fish and Associates in Voorhees, N.J., asked me about the availability of Social Security benefits for his clients, a same-sex couple legally married in Pennsylvania.
“If John, who has the higher Social Security benefit, dies, will Bob, who is 70 and has a smaller benefit, be able to collect survivor benefits on John?” Mr. Fish asked me in an e-mail.
I did a quick search of states that allow same-sex couples to marry and found that Pennsylvania is one of the 33 states that does.
(More: State tax labyrinth awaits same-sex couples)
“As long as the couple has been married for one year, the lower-earning spouse may be entitled to spousal benefits if they are larger than his own,” I told Mr. Fish in an e-mail. “He would be entitled to survivor benefits upon the death of the other spouse as long as they had been married at least nine months and married at the time of death.”
A spousal benefit is worth up to 50% of the worker’s Primary Insurance Amount. A survivor benefit is worth up to 100% of the deceased’s worker’s benefit.
Freedom to Marry, a grassroots organization promoting the legalization of same-sex marriage, keeps an up-to-date list of states that have approved same-sex marriage as well as states where legal decisions are pending.
As of mid-November 2014, the following states permit same-sex marriage: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Iowa, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Minnesota, North Carolina, New Hampshire, New Jersey, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Virginia, Vermont, Washington, West Virginia, Wisconsin and Wyoming. Gay couples also have the freedom to marry in the cities of Washington, D.C., and St. Louis.
That leaves 17 states that have laws or constitutional amendments that deny the freedom to marry to same-sex couples. These include Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Michigan, Missouri, Mississippi, Montana, Nebraska, North Dakota, Ohio, South Carolina, South Dakota, Tennessee and Texas.
But in two of those states — Montana and South Carolina — federal appellate rulings have set a binding precedent in favor of the freedom to marry, opening the door for legalizing same-sex marriage there.
On the flip side, the 6th Circuit Court of Appeals has reversed pro-marriage rulings in Kentucky, Michigan, Ohio and Tennessee. But legal teams in each of those four states have vowed to take the fight to the U.S. Supreme Court, which could pave the way for a national ruling on same-sex marriage.
The Social Security Administration began processing and paying spousal and survivor benefits to some married same-sex couples in August 2013.
Currently, legally married same-sex couples who live in states where their marriage is recognized are entitled to Social Security spousal benefits during marriage and survivor benefits after the death of one spouse. If they have minor dependent children under age 18 at the time one spouse claims benefits, the children may also be entitled to Social Security dependent benefits.
And if one or both spouses wait until at least their full retirement age to claim benefits, they can engage in creative claiming strategies such as filing a restricted claim for spousal benefits or filing and suspending benefits. These strategies can be used to allow one spouse to collect benefits while the other continues to accrue delayed retirement credits in order to maximize lifetime income.
However, Social Security benefits based on state of residence could change in the future. Legislation has been introduced in Congress to award benefits to legally married same-sex couples regardless of zip code. The Justice Department is also reviewing the situation.
Consequently, the Social Security Administration is encouraging retirement age same-sex married couples who live in states that do not recognize their marriage to apply for benefits any way.
“Applying now will protect against the loss of any potential benefits,” National Press Office spokesman William Jarrett told me in an e-mail.
If you have questions about how a same-sex marriage may affect a claim for benefits, contact your local Social Security office or call the toll-free hotline at 800-772-1213.

(Questions about Social Security? Find the answers in my e-book.)