Ask Liz Weston

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Social Security

Q&A: That Social Security check is in the mail. Or will be someday.

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Dear Liz: I was previously denied a portion of my husband’s Social Security because I received a government pension, and the offset rule made me ineligible. Now that the law is being changed, I’m wondering if I would be eligible to receive survivor benefits from Social Security, as my husband is now deceased.

Answer: The Social Security Fairness Act, which did away with the windfall elimination provision and the government pension offset, was signed into law Jan. 5. These two provisions affected people who earned pensions from government jobs that didn’t pay into Social Security.

Social Security says that no action is needed if you have previously filed for benefits that were partially or completely offset, but that you should make sure the agency has your current address and direct deposit information. You can do that by creating or updating a mySocialSecurity account at www.ssa.gov/myaccount. People receiving government pensions who haven’t applied for Social Security can do so at www.ssa.gov/apply.

Social Security is still working on implementing this major change, but you can look for updates at www.ssa.gov/benefits/retirement/social-security-fairness-act.html.

Q&A: Don’t confuse Social Security’s spousal and survivor benefits

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Dear Liz: I waited until 70 to start taking Social Security. My wife, who is the lower earner, took a spousal benefit at her full retirement age. I know she is entitled to my benefit when I pass. However, I understand she does not get my current benefit but the amount I would have received if I had started Social Security at my full retirement age. How do I find that amount?

Answer: You don’t need to. Your wife’s current spousal benefit was based on the amount you would have received at full retirement age. Her survivor benefit — the one she would get if you die first — will be 100% of your current benefit. Because you waited and maximized your own benefit, you also maximized the survivor benefit she may have to live on in the years to come.

Many people confuse the rules for spousal and survivor benefits. Even though they’re based on the same thing — the earnings record of the higher or “primary” earner, which is you — they have different rules for how they’re calculated.

Q&A: A first paycheck means getting to know Uncle Sam

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Dear Liz: My recently graduated child got a job and he will be given a 1099 tax form for his earnings. I know he will have to file his taxes differently and will need to pay both state and federal income taxes, but will he also make payments toward Social Security? Will these months (and maybe years) go toward his lifetime “credits” of paying into Social Security?

Answer: The company is paying your son as an independent contractor rather than as an employee. That means he will need to file his taxes as someone who is self-employed. So yes, he’ll be paying into Social Security — and he’ll be doing so at twice the rate of employees who receive W2s.

Normally, Social Security and Medicare taxes are split between employees and employers. Both pay 7.65% of the employee’s wages, for a total of 15.3%. Self-employed workers must pay both halves.

Your son won’t have taxes withheld from his earnings, so he’ll likely need to make quarterly estimated tax payments to avoid penalties. A tax pro can help him set up these payments and suggest legitimate expenses he can use to reduce his tax bill.

Q&A: Social Security Disability Benefits for Disabled Adult Children

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Dear Liz: This is regarding the writer whose daughter is a 21-year-old single mom with bipolar disorder and major depressive disorder. Adults who are disabled before age 22 can be eligible for Social Security Disability Insurance under the Disabled Adult Child program. After two years of SSDI, she would be eligible for Medicare. An attorney who handles Social Security disability cases can help her apply for this valuable benefit.

Answer: Thank you. Normally, Social Security requires someone to have worked to earn benefits, but there are exceptions, and the Disabled Adult Child program is one of them. Benefits are based on a parent’s earnings record, so the adult child does not need to have a work history.

Q&A: Taking half your spouse’s Social Security payment can be better than taking your own.

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Dear Liz: My bookkeeper cousin told me I could get half my husband’s Social Security instead of my own. I took Social Security at 66, when my benefit was $1,300. My husband waited until 70, when his was $3,295. Does that mean I could be getting a monthly check for $1,600?

Answer: Probably not. Spousal benefits can be up to 50% of the benefit your husband had earned as of his full retirement age, not the amount he claimed at age 70. You can check with Social Security, but your own benefit is likely more than your spousal benefit would have been.

Q&A: Is it only the bread winners who get Social Security?

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Dear Liz: How is it that elderly people who have never contributed to Social Security can collect a check? My wife’s grandmother was getting more than $1,000 a month.

Answer: Spousal and survivor benefits are nearly as old as the Social Security program itself.

Social Security was signed into law in 1935. Initially, benefits were only for retired workers. In 1939, benefits were added for wives, widows and dependent children. Later changes added spousal and survivor benefits for men as well as disability benefits.

Social Security isn’t a retirement fund where workers deposit funds into individual accounts. Instead, it’s a social insurance program designed to provide income to retirees, workers who become disabled and the families of workers who die. Benefits are paid using taxes collected from current workers. Like other insurance, the system is designed to protect people against significant economic risks, such as outliving your savings, losing your ability to earn income or losing a breadwinner.

In other words, your wife’s grandmother may not have paid into the system, but her spouse or ex-spouse did, and that provided her with a small source of income.