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Social Security Auxiliary Benefits - Employment Resources_ Inc.ppt

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					Social Security Auxiliary Benefits




                      John Benbow
                               ERI




1
Social Security Title II Benefits
        Social Security Title II benefits are the partial
        replacement of earning lost due to retirement,
        death, and disability:
§       Retirement benefits
§       Disability benefits
§       Auxiliary benefits
§       Survivor benefits



    2
        Auxiliary Benefits
§       For certain family members of person who
        receives social security retirement (RIB) or
        disability benefits (DIB) on own record.
§       Title II of Social Security Act, not Title XVI
        (SSI.)
§       Not part of original Social Security Act of 1935
        – added in 1939 amendments with changes
        since then.
§       Similar to but different from Survivor benefits.
§       POMS RS 002
    3
    Types of Auxiliary Benefits
§   Spouse
§   Divorced Spouse
§   Independently-Entitled Divorced Spouse
§   Child (under age 18)
§   Disabled Adult Child (age 18 and over)




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    Spouse Entitlement
§       Legal spouse of person who is receiving RIB or
        DIB.
§       Married 1 year, or natural mother or father of
        worker's biological child, or entitled to certain
        auxiliary or survivor's benefits month before
        marriage.
§       62 years old, or have in care child entitled to
        benefit on spouse's record (under 16 or
        disabled if 16 or over.)
§       Not entitled to own RIB or DIB with PIA equaling
        or exceeding one-half ex-spouse’s PIA.

    5
        Divorced Spouse
§       Legally divorced spouse of person who is
        receiving RIB or DIB.
§       Married ten years.
§       62 years old.
§       Not married.
§       Not entitled to own RIB or DIB with PIA
        equaling or exceeding one-half ex-spouse’s PIA.




    6
Independently-Entitled Divorced
Spouse
§       Legally divorced spouse of person who is
        insured for RIB entitlement, is at least age 62,
        but not receiving benefits.
§       Married 10 years and divorced for 2 years.
§       62 years old.
§       Not married.
§       Not entitled to own RIB or DIB with PIA
        equaling or exceeding one-half ex-spouse’s PIA.


    7
Spouse Benefit Amount
§       Basic amount: 50% of RIB or DIB beneficiary’s
        Primary Insurance Amount (PIA.)
Reduced for:
§       Age: if spouse under FRA and no entitled child
        in care; 30% reduction at age 62.
§       Earnings: limit on amount spouse can earn and
        still receive full amount; $1 reduction for every
        $2 over $14,860 (2012.)
§       Family Maximum: limit on total amount of
        benefits a family can receive on one record

    8
Divorced Spouse Benefit Amount
§       Basic amount: same as spouse.
§       Reduced for: same as spouse except not subject
        to Family Maximum.

Independently Divorced Spouse
 Benefit Amount
§       Basic amount: 50% of ex-spouse’s PIA,
        computed as if ex-spouse became entitled to
        RIB in first month of divorced spouse’s
        entitlement.
§       Reduced for: same as divorced spouse.
    9
    Spouse Benefit Example
§    DIB beneficiary’s 63 year-old, non-working
     spouse applies in 2012
§    DIB beneficiary’s PIA: $1000
§    Spouse benefit: 50% PIA, reduced for age
§    $1000 PIA x 50% = $500 base spouse amount
§    36 month reduction, 25/36th of 1% per month
     up to 36 months before FRA= 25%
§    $500 x 25% = $125 reduction
§    $500 - $125 = $375 spouse benefit amount


    10
Auxiliary Child Entitlement Factors
 §    Child of Retirement (RIB) or Disability (DIB)
      beneficiary
 §    Dependent upon the RIB or DIB parent (usually
      presumed)
 §    Unmarried
 §    Under age 18, or age 18 but not yet finished
      2ndary school, or over age 18 and disabled
      before age 22 (Disabled Child Benefits)




     11
    Auxiliary Child Benefit Amount
§    50% of Retirement (RIB) or Disability (DIB)
     beneficiary’s PIA
Benefit is reduced for:
§    Earnings: limit on amount child under 18 (or if
     over and still in 2ndary school) can earn and
     still receive full amount – $1 reduction for every
     $2 over $14,860 (2012.)
§    Family Maximum: limit on total amount of
     benefits a family can receive on one record.


    12
    Child Benefit Example
§    Child of DIB beneficiary files for benefits; age
     15 and not working
§    DIB parent’s PIA: $1000
§    Auxiliary child benefit: 50% of PIA
§    $1000 x 50% = $500
§    No reduction for age for child
§    If child starts working, subject to earnings test -
     if other auxiliaries, subject to family maximum
§    At age 18, must still be in 2ndary school or
     disabled
    13
     Survivor Benefit Types
§    Widow(er)
§    Disabled widow(er)
§    Disabled surviving divorced spouse
§    Child (under 18)
§    Disabled adult child (18 and over)
§    Mother/father
§    Surviving divorced mother/father
§    Parent


14
      Survivor Benefits
Number of credits (QC’s) that deceased worker
  must have earned depends on type of benefit.

Widow(er)/parent –fully insured worker: earned 40
  credits, or earned 1 credit for each year after
  age 21 up to year of death (can exclude years of
  disability.)
Child/mother/father – fully insured (above) or
  currently insured: earned at least 6 credits
  during 13-quarter period ending with quarter of
  death or with quarter of entitlement to RIB or
  DIB.

 15
    Survivor Benefit Amount
§    Widow(er) – depends on widow(er)’s age, and
     benefit status and age at death of deceased
     worker - 71.5% to 100% of PIA
§    Child/mother/father – 75% of PIA
§    Parent – 82.5% (one parent) or 75% (two
     parents) of PIA.


May be reduced for earnings (non-disabled
 beneficiaries) and family maximum.



    16
    Auxiliary to Survivor Benefits
§    Some types of benefits automatically convert:
     spouse with child in care to mother/father,
     auxiliary child to survivor child.
§    Application or certification of election needed in
     some conversion situations, e.g. application
     needed if new type of benefit sought.
§    Computations of benefits change with
     conversion.




    17
    Family Maximum
§   Limit on total amount a family can receive on
    one record.
§   Normally around 150% to 180% of PIA but can
    be higher or lower.
§   May cause benefits to go below 50% for
    auxiliaries or 75% for survivors.
§   Can be exceeded in situations with entitlement
    of divorced spouse.

    18
    Family Maximum Example
§   DIB beneficiary: benefit of $1000 and FMax of
    $1500; spouse age 40 and child age 10.
§   Normally auxiliary benefit is 50% of PIA: $500.
§   Total family benefits on record cannot exceed
    $1500, so auxiliary benefits reduced.
§   1500 - $1000 (DIB) = $500 divided by 2 =
     $250 for each auxiliary.
    (Reduction for age and earnings after this)
    19
    Dual/Simultaneous Entitlement
§   Amount paid will not exceed highest single
    benefit to which person entitled.
§   Four methods to calculate multiple entitlement -
    depends on types of benefits involved.
§   Technical entitlement: entitled but not paid on a
    record because higher benefit due on another -
    person technically entitled on a record will not
    affect other beneficiaries on that record.
§   In some cases entitlement terminated on a
    record when entitlement gained on another (no
    technical entitlement.) For example, spouse
    becomes entitled to RIB or DIB on own record
    higher than spouse benefit.
    20
More Information


         Presented by Wisconsin’s Disability Benefits
         Network (WDBN)
     n   John Benbow, Employment Resources, Inc.
     n   More about about the WDBN online at www.eri
         -wi.org/WDBN.htm




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