Social Security consolation prizes for divorced spouses

(An earlier version of this article incorrectly stated that an ex-wife is entitled to 50% of her ex-husband’s Social Security as long as she is caring for their child who is under age 16.)

Divorce can certainly complicate Social Security claiming rules. As long as a marriage lasted at least 10 years, a divorced spouse who is currently unmarried can claim Social Security benefits on an ex’s earnings records as if they were still married.

But in some cases, divorce spouses have more benefit options after they split up than they ever did when they were married.

(More: 10 top Social Security questions for divorced spouses)

For example, if a nonworking wife who is at least 62 years old and currently married wants to claim spousal benefits on her husband’s earnings record, she must wait for her husband to take some action. The husband has to either claim benefits or file and suspend his benefits at his full retirement age in order to enable his wife to collect spousal benefit. This requirement can be a real challenge to married couples when the nonworking or lower-earning spouse is older than the main breadwinner.

But unlike a married couple, a divorced spouse is independently entitled to claim spousal benefits on an ex’s earnings record even if the ex has not yet claimed Social Security benefits. The key to this independent claiming option, which is only available to divorced spouses, is that both spouses must be at least 62 years old and the couple must have been divorced at least two years (in addition to being married for at least 10).

Another fact of life for married couples is that although families with minor children and parents of any age who are caring for them may be entitled to dependent benefits, there is a limit to the amount of benefits a family can receive.

For example, each child is eligible to receive benefits worth up to half of the retired parent’s amount until they are 18, or up to age 19 if they are still in high school. And a spouse of any age who is caring for a child under age 16 may be entitled to benefits of up to 50% of the worker’s benefit, too.

(More: Social Security rules for divorced public employees)

But the Social Security Administration (SSA) limits the amount of monthly benefits that a family can receive to 150% to 180% of worker’s full retirement benefit.

Here’s how it works. First, SSA subtracts the worker’s benefit amount from the family’s total benefits. The retired worker’s benefit is not reduced. But if the family’s total benefits exceed the family maximum limit, the adjustment is made by proportionately reducing all the dependent family members’ monthly benefits.
Patrick Noonan, a certified financial planner with Commonwealth Financial Network in Waltham, Mass., wondered if the family maximum limit applied to his client, a 60-year-old divorced spouse who is caring for the minor dependent child of her ex-husband. The ex is 70 years old and collecting his Social Security benefit.

Mr. Noonan asked if she and her child would have their benefits proportionately reduced because of the family maximum limit restrictions.

No. The amount of Social Security benefits that a divorced spouse receives on her ex’s earning record has no effect on the family maximum limit. So her child will receive half of the amount of his father’s Social Security benefit until he turns 18 (or 19 if still in high school).

Although a spouse who is caring for a child under age 16 is normally entitled to collect benefits when her husband claims Social Security, this provision does not apply to divorced spouses.

“Benefits are not payable to a divorced spouse under age 62 based on having an entitled child of the number holder (NH) in his or her care,” Social Security spokesperson Dorothy Clark confirmed in an e-mail.
A divorced spouse must be at least 62 to claim benefits on his or her ex-spouse’s earnings record. But other basic Social Security rules apply. Anyone who claims Social Security before full retirement age will have their benefits permanently reduced and will be subject to earnings cap restrictions if they continue to work. If they want to collect spousal benefits only in order to allow their own benefits to continue to grow, they must wait until their full retirement age to file a restricted claim for spousal benefits only.

(More: Understanding Social Security rules for divorced spouses)

And if her ex-husband dies first, she is entitled to 100% of her former spouse’s survivor benefits — even if he had remarried. Both the widow and the surviving ex-spouse are entitled to full survivor benefits. That rounds out the trifecta of Social Security benefits for divorced spouses and proves that an ex-spouse is worth twice as much dead than alive.

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