Same-Sex Couples and Social Security

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In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization's oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.
-- Supreme Court Justice Anthony Kennedy, closing his majority opinion in the Obergefell v. Hodges case that legalized same-sex marriage in the United States in June 2015

The Obergefell v. Hodges case was based on same-sex couples and surviving spouses who were denied Social Security benefits because they lived in states that didn't recognize their marriages. The decision in their favor not only gave same-sex couples the right to marry across America, but it also gave them access to the same Social Security benefits enjoyed by other married couples in the United States. That's a big, big deal, financially, for many people.

In a nutshell

All Americans, gay and straight alike, have long benefited from the Social Security program. Those of us who have paid into the system sufficiently (it only requires the equivalent of about a decade of work in most cases) get to receive retirement benefits when we're older.

The equality stopped there, though, when it came to marriage, because until recently, the Social Security Administration (SSA) didn't recognize the marriages of same-sex couples. Therefore, they were shut out of benefits and strategies available to other married couples. This is a new day, though, and the SSA notes on its Web page dedicated to same-sex couples: "Social Security is neutral with respect to same-sex couples in terms of benefits and we continue our commitment to treating all Americans fairly, with dignity and respect." It adds: " Social Security recognizes valid same-sex marriages for purposes of determining entitlement to Social Security benefits or eligibility for Supplemental Security Income (SSI)."

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What it means for same-sex couples and families

If you are in a same-sex marriage or a same-sex non-marital legal relationship, or you're divorced or widowed from one, the SSA encourages you to apply for benefits immediately. It also encourages you to appeal, if you get a decision you disagree with.

Of course, the earliest one can apply for retirement benefits is age 62, so if you're still in your 20s, 30s, 40s, or 50s, this won't apply to you right away. It might apply to you now, though, if you're young but are widowed. Widows and widowers are able to start collecting as early as age 60 -- or 50, if they are disabled and became disabled before or within seven years of becoming widowed.

The rules are even more generous for some widows or widowers. Per the SSA: "Your widow or widowerwho has not remarriedcan receive survivors benefits at any age if she or he takes care of your child who is under age 16 or is disabled and receives benefits on your record." Surviving children, meanwhile, can collect Social Security benefits when a parent dies -- if they're younger than age 18, up to age 19 and still in elementary or secondary school, or any age if they are disabled and became disabled before age 22. The definition of children even extends to stepchildren, grandchildren, and step grandchildren, in some cases.

The new recognition of same-sex marriages will now make it possible for children to benefit, too.

Being married offers more benefits than civil unions or domestic partnerships. Image: PaulJill, Flickr

If you're not married

Those in the LGBTQ (lesbian, gay, bisexual, transgender, and queer) community who are in committed relationships but are not married aren't likely to benefit from the expansion of Social Security benefits. This is significant because many LGBTQ couples may have been together for a long time without marrying -- in most cases because they could not get married.

Some entered into what are being referred to as non-marital legal relationships (NMLRs), such as civil unions or domestic partnerships, but that won't, generally, qualify them for Social Security spousal retirement benefits, divorcee benefits, or survivor benefits. I say "generally" because there are a few cases where some benefits may be available. As of March 2016, the Social Security website was noting:

Social Security is now processing some retirement,surviving spouse and lump-sum death paymentclaimsfor same-sex couples in non-marital legal relationships and paying benefits where they are due. We encourage you toapply right awayfor benefits, even if you aren't sure you are eligible. Applying now will protect you against the loss of any potential benefits.

Overall, though, for Social Security benefits, it's now marriage that offers same-sex couples maximum benefit and minimum hassle.

Social Security benefits for married couples

In general, couples can benefit more from Social Security benefits than single folks do. (Some people even see this as discrimination against singles, as possibilities available to married people are not available to them.) Here are the key benefits those who are or have been in same-sex marriages should know about:

  • Spousal retirement benefits: Each member of a couple can claim Social Security benefits on their own qualifying work record, just as any individual can do. But couples have more options available to them. Spouses can collect either their own benefit or a "spousal" one equal to 50% of their spouse's benefits. That might not seem like a great deal, but it can be meaningful if one spouse has earned far less than the other and is therefore entitled to far smaller benefits on their own work record. There are lots of claiming strategies that couples can consider, too, such as claiming the lower-earning spouse's benefits early and letting the higher-earning spouse's benefits grow by delaying when you start collecting them.

  • Survivor benefits: If you spouse has died and you were married at least nine months, you may collect either your own or 100% of your late spouse's retirement benefit. The survivor benefit is not available to those who remarry before age 60. But it is if you're at least 60 and were married for at least 10 years. There's also a $255 one-time lump-sum death benefit available from Social Security, payable to a surviving spouse (as long as the marriage lasted at least nine months and the couple was living together when one died) or to a minor child.

  • Spousal disability benefits: If your spouse is disabled (to the degree that their condition is expected to last at least a year or result in death), you may be able to collect up to 50% of his or her benefit. You need to be at least 62 or be taking care of a qualifying child and have been married for at least a year in order to qualify for spousal disability benefits.

Equality in the eyes of the Social Security Administration is a major development and a financially powerful one for same-sex couples. If you're in such a relationship, be sure to explore all the benefits that you may be entitled to. If you find yourself confused, ask the SSA for answers or seek professional advice.

The article Same-Sex Couples and Social Security originally appeared on Fool.com.

Longtime Fool specialistSelena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.