Urban InstituteRetirement Policy Center

Spouse and Survivor Benefits

Analysts and past Social Security reform commissions have advocated changing the way Social Security provides benefits to workers’ spouses and survivors because the current system creates work disincentives, fails to target those beneficiaries with the greatest needs, and is out of step with the modern American family.

Background

Nearly a fifth of all adult Social Security benefits go to the spouses and survivors of retired, disabled, and deceased workers (figure 1).

Percentage of Social Security Benefits by Adult Type

Source: Authors’ calculations from Tables 5.A16 and 5.G3 Annual Statistical Supplement
Notes: Worker percentages include only the worker portions of benefits for dual entitlees, while spouse and survivor percentages include dual entitlement supplements but exclude worker benefits. Figure excludes benefits for disabled adult children.

  • Spouses can receive benefits equal to half of the worker’s primary insurance amount (PIA) while the worker is alive, and 100 percent of the PIA after the worker’s death.
    • PIA is the monthly Social Security benefit received by workers that retire at the normal retirement age (67 for people born in 1960 and later) and is based on lifetime earnings.
    • Workers and spouses who collect before the normal retirement age receive less than the PIA each month because they receive more monthly checks than workers who begin collecting later. Actuarial reduction rates differ for workers and spouses.
    • Workers (but not spouses) who begin collecting after the normal retirement age receive more than the PIA each month. Surviving spouses also receive the enhanced monthly benefit after late-retiring workers die.
    • Spouses with past work experience receive their own benefits or the spouse/survivor benefit, whichever is larger.
  • Unlike most employer-sponsored pension plans, Social Security does not require workers to accept reduced benefits or pay additional taxes for spouse and survivor protection.
  • Divorced workers whose marriages lasted at least 10 years can also receive spouse and survivor benefits.
    • Married people can usually receive spouse benefits based only on their current marriages, even if they could receive higher benefits from former spouses (unless the current marriage began at age 60 or later).
    • Divorced people who are not currently married can usually collect benefits based on their highest-earning former spouses (from qualifying marriages).
    • There is no limit on the number of former spouses that can collect from a given worker’s earnings record.

Why Reform Spouse and Survivor Benefits?

  • The current system, created when nearly everyone married and relatively few wives worked, no longer reflects American society.
    • More people today never marry;
    • Divorce rates are now relatively high;
    • Most married women now participate in the labor force.
  • Spouse and survivor benefits depend on marital histories and lifetime earnings, not on financial need.
    • Spouses of high-earning workers receive larger supplements than spouses of low-earning workers and can even receive higher benefits than some workers.
    • Because workers do not pay extra taxes for spouse and survivor benefits, the system ends up transferring resources from some less well-off people (such as single low- and middle-wage workers) to people with substantial means (such as spouses and survivors of high-wage workers).
  • The system does not allocate benefits equitably or reasonably.
    • A husband and wife with very unequal lifetime earnings sometimes receive much larger combined Social Security benefits than a husband and wife with equal lifetime earnings, even if both couples earned the same combined amount and paid the same payroll taxes.
    • Compounding the inequity, couples with equal earnings generally work more than unequal-earning couples with one spouse that often does not work much.
    • Couples married for 10 years qualify for divorced spouse benefits, but those married for 9 years and 11 months (or less) do not.
    • Divorced spouses receive higher benefits after their ex-spouses die (qualifying them for 100 percent of the ex’s PIA) than when they are alive (and receive only 50 percent of the PIA).
    • People with much older spouses tend to receive more lifetime survivor benefits than those with younger spouses.
  • Spouse and survivor benefits often exacerbate inequities by race, lifetime earnings, and education. For example, spouse and survivor benefits go disproportionately to whites, instead of blacks and Hispanics, because whites are more likely to marry and less likely to divorce.
  • Spouse and survivor benefits also create unintended marriage and divorce incentives. For example, the system penalizes widows and widowers of high-earning spouses who remarry before age 60.
  • Social Security discourages work by people who earn less than their spouses, because additional work often does not increase benefits by much.
  • The current system does not provide all beneficiaries and their families with adequate incomes. Old-age poverty rates are especially high for widowed and divorced women.

How Could We Change Spouse and Survivor Benefits?

  • One prominent proposal would reduce or cap the spouse benefit and use the savings to increase the survivor benefit. Raising survivor benefits would reduce widow poverty.
    • Under the current system, some widows and widowers lose up to half of their household Social Security benefits when their spouses die, as the combined payments fall from 200 percent of the worker’s PIA (when spouses had the same earnings) to 100 percent.
    • Instead of setting survivor benefits equal to 100 percent of the highest spouse’s PIA, it could be set equal to some portion of combined PIA (say 75 percent), to reward widows with some work experience.
  • Alternatively, family benefits could be tied to childrearing, which often leads women to reduce work, instead of marital status.

Why Not Change Spouse and Survivor Benefits?

  • The current system is based on the notion of a family replacement rate.
  • Reducing spouse or survivor benefits would disproportionately affect women, especially those who did not work much.
  • Divorce proceedings can compensate former spouses who do not qualify for divorced spouse Social Security benefits (through alimony payments or the award of other assets).

Who Is Proposing Changing Spouse and Survivor Benefits?

  • Hurd and Wise (1991) were among the first analysts to suggest reducing spouse benefits in exchange for larger survivor benefits.
  • The 1994–1996 Advisory Council’s reform plans also proposed reducing spouse benefits and increasing survivor benefits.
  • Other advocates and analysts of such swaps of spouse for survivor benefits include Aaron and Reischauer (1998); Liebman, MacGuineas, and Samwick (2005); and Sandell and Iams (1997).
  • Two plans of the President’s Commission to Strengthen Social Security (2001) included survivor benefits increases without any corresponding decreases in spouse benefits.
  • The National Commission on Retirement Policy (1998) plan included a reduction in the spouse benefit.
  • Representative Nita Lowey (D-NY) has sponsored a range of legislation related to spouse and survivor issues, including a proposal for caregiver credits (H.R. 1161 of the 110th Congress) that does not include offsets to other benefits.

See the Following Report to Learn More:

Favreault, Melissa M., and C. Eugene Steuerle. 2007. “Social Security Spouse and Survivor Benefits for the Modern Family.” Washington, DC: The Urban Institute.


Other References:

Aaron, Henry J., and Robert D. Reischauer. 1998. Countdown to Reform: The Great Social Security Debate. New York: Century Foundation.

Advisory Council on Social Security [1994–1996]. 1997. Report of the 1994-1996 Advisory Council on Social Security. Volume 1: Findings and Recommendations. Volume 2: Reports of the Technical Panel on Trends and Issues in Retirement Savings Technical Panel on Assumptions and Methods and Presentations to the Council. Washington, DC: Author.

Hurd, Michael D., and David A. Wise. 1991. “Changing Social Security Survivorship Benefits and the Poverty of Widows.” Working Paper no. 3833. Cambridge, MA: National Bureau of Economic Research.  

Liebman, Jeffrey, Maya MacGuineas, and Andrew Samwick. 2005. “Nonpartisan Social Security Reform Plan.” http://www.ksg.harvard.edu/jeffreyliebman/
lms_nonpartisan_plan_description.pdf.

Lowey, Nita. 2007. “Social Security Caregiver Credit Act of 2007.” H.R. 1161 of the 100th Congress.

National Commission on Retirement Policy. 1998. The 21st Century Retirement Security Plan. Washington, DC: Center for Strategic and International Studies.

President’s Commission to Strengthen Social Security. 2001. Strengthening Social Security and Creating Personal Wealth for all Americans: Report of the President’s Commission. Washington, DC: Author. http://csss.gov/reports/Final_report.pdf.

Sandell, Steven H., and Howard M. Iams. 1997. “Reducing Women’s Poverty by Shifting Social Security Benefits from Retired Couples to Widows.” Journal of Policy Analysis and Management 16(2): 279–97.

Social Security Administration, Office of Policy. 2008. Annual Statistical Supplement to the Social Security Bulletin, 2007. Washington, DC: Social Security Administration. http://www.socialsecurity.gov/policy/docs/statcomps/
supplement/2007/index.html.

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