Social Security Benefits and Divorce

Tuesday, August 25, 2015 | 7:59 pm

The Social Security Act (1935) was a social and welfare program passed during the heart of the Great Depression (1929-late 1930s) to help senior citizens in poverty (which exceeded 50%), widows and fatherless children. Social Security is considered social insurance designed to provide financial security to cover workers and their families. It is not payment of deferred wages.

Under California law, defined benefit plans (pensions which pay a set monthly amount for life) earned during a marriage are community property. The non-participant spouse is entitled to receive one-half of the community interest in any defined benefit plan when there is a divorce. Social Security benefits are different. Since Social Security benefits are considered to be social insurance, they are separate property and are not subject to division upon a divorce. Some argue this is unfair because a divorcing spouse would receive one-half of any payment under a defined benefit plan; however, they are not entitled to receive anything from Social Security unless they meet certain criteria.

Spousal benefits, known as derivative benefits, are one-half of the benefits payable to the worker spouse. Derivative benefits may be paid to the spouse beginning at the time that the worker spouse is eligible to receive benefits irrespective of whether benefits are actually paid. The benefits are available to a divorced spouse who has not remarried, was married to a spouse entitled to old-age or disability benefits for a period of 10 years immediately before the date of the divorce, and waited for 2 years after the divorce unless the divorced spouse was receiving benefits before the divorce.

The derivative benefit has no effect on the amount which the worker spouse receives. It is mathematically possible that one worker could support derivative payments to five spouses.

Divorcing or divorced spouses should be familiar with their rights as a derivative spouse before a judgment of dissolution of marriage is entered by the court (to be sure that they are married for at least 10 years); and as to divorced spouses, before a remarriage. A mistake may cost a divorcing spouse thousands of dollars in benefits.

Law Offices of Kearney Baker, 2 North Lake Avenue, Suite 1000, Pasadena, (626) 844-7300 / (866) 859-1507 (Toll Free) or visit www.kearneybaker.com.

 

blog comments powered by Disqus

GOT A QUESTION? NEED INFORMATION? HAVE A TIP OR STORY IDEA? To Contact our Research Desk, Click