Martin on Social Security

Part 2 – Topics

§ M 100. Entitlement to More Than One Benefit

The Act has a series of provisions that deal with overlapping Title II benefits.  These cover situations where an individual is entitled to benefits on the basis of his or her own earnings plus benefits based on a family connection to one or more other insured workers.

The Act’s first principle is that primary benefits, that is benefits based on an individual’s own earnings (old-age insurance or disability benefits), displace family (auxiliary) benefits dollar-for-dollar.  An individual may receive both old-age benefits and spouse benefits.  The total amount will be the same as if he or she received only the larger spouse benefit.  However, the total will be made up of the full old-age benefit amount plus a spouse benefit reduced by the amount of the old-age benefit.

Entitlement to multiple family benefits produces more complicated calculations.  The Act’s basic principle here is that auxiliary benefits do not cumulate one upon another.  Instead, in nearly all cases, the individual will receive the largest of the available family benefits (reduced by the amount of any primary benefit).  A special provision deals with children entitled to benefits on more than one account.  The basic rule in such cases is receipt of a benefit based on the largest Primary Insurance Amount.  If a child would receive a larger benefit from an insured with a smaller PIA, however, and basing his or her benefit on that account would not have an adverse affect on the benefits of others, it is used.

Rev. 11/05

[Supporting and Elaborating References] [Related Sections: Part 1 - Part 2]

§ M 200. Relationship of Family Benefit to PIA

Subject to a family maximum which caps the total amount of monthly benefits payable on the account of any one insured, benefits for any one family member are based on a percentage of the insured worker’s primary insurance amount (PIA).  The percentage is different for different categories of family benefits ranging between 50% and 100%.  The actual monthly payment for a family benefit recipient depends on this PIA-based amount adjusted on account of continuing earnings (excess earnings), the family maximum, and in some cases the age at which benefits were begun.

[Supporting and Elaborating References] [Related Sections: Part 1 - Part 2]

§ M 300. Application of the Family Maximum When There Are Numerous Family Benefit Claimants

With a few exceptions a cap or family maximum limits the total amount of monthly benefits payable on the account of any one insured.  The precise monthly maximum is the product of a formula applied to the individual’s primary insurance amount (PIA).  Depending on the level of the PIA the family maximum ranges between 150% of the PIA to a high of 188%.  (In the case of disability benefits the percentage is likely to be lower.)  Like the underlying benefits the maximum is adjusted annually to reflect cost of living changes.

When the total benefits that are subject to the family maximum exceed its cap, any benefits payable to the insured are subtracted from it and the balance is distributed to the family benefit recipients who all receive pro rata reductions in their amounts.

Benefits paid divorced spouses, except when they are mother or father benefits,  are not subject to this reduction nor are benefits paid to a “state law” spouse when there is a second spouse eligible on the basis of a “deemed valid” marriage.

When one family member is also entitled to benefits on his or her own account, the amount entering into the family maximum calculation is the reduced family benefit.  This lightens the impact of the maximum on benefits to other family members.

Rev. 11/05

[Supporting and Elaborating References] [Related Sections: Part 1 - Part 2]

§ M 400. Application of the Public Pension Offset to Family Benefits

The Act provides for a reduction of spouse benefits and divorced spouse benefits when the individual receives a pension based on uncovered government work (for the Federal government or a state or local government).  If the pension is paid in a lump sum, that lump sum is converted into a monthly amount for purposes of this calculation.

Prior to 2004 the determination of whether or not the government work on which the pension is based was covered by Social Security was made as of the last day of the individual’s work for the governmental organization. The Act was amended that year to require five years of uncovered work, with that stricter requirement phased in over a transition period.

Rev. 12/04

[Supporting and Elaborating References] [Related Sections: Part 1 - Part 2]