SOCIAL SECURITY RETIREMENT BENEFITS AND MICHIGAN DIVORCE
An older, divorcing couple rarely has more than one or two assets worth more than their Social Security rights. After a house and pension/retirement plans, Social Security is their next largest “asset.” Yet it is rarely considered by their lawyers, mediators or the parties themselves.
Few divorce lawyers know much more than the oft‑quoted rule that each party vests in the other’s Social Security account after 10 years of marriage, so that even a non‑working spouse can collect some benefits. In fact, there is much more to Social Security. The key point that gets missed is that even with this vesting, the working spouse receives twice as much Social Security as the non‑working spouse.
The spouse with the higher earning record will collect Social Security based upon his or her record, regardless of divorce or even later remarriage. For example, a wife won’t receive a benefit based on her ex‑husband’s Social Security benefits if she could receive a larger benefit based on her own earnings.
The spouse with the lower earnings will be able to collect a benefit based on the higher earning spouse if s/he meets certain rules. Because Social Security is both an insurance and a social welfare program, the higher earner receives 100% regardless of a divorced spouse or even two ex‑spouses (both ex-spouses receive one‑half of the 100%, so that all three taken together receive 200%).
The couple must have been married for 10 years before the divorce to collect on the other spouse’s earnings. This 10‑year rule also permits spouses to receive Social Security Disability benefits on their ex‑spouse’s record.
DIVORCE BEFORE COLLECTING
If the divorce occurs before either party starts collecting Social Security, both former spouses must be age 62 for the lower wage earner to apply.
Second, the lower earner must not have remarried before age 60 or must end that marriage to obtain benefits.
THIRD, THE LOWER EARNER MUST BE DIVORCED FOR TWO YEARS TO COLLECT BENEFITS. This two-year delay could be a real trap for the unwary. In practical terms, it means that if the lower wage earner plans to apply for Social Security retirement benefits within the next two years, then she should apply to collect first, then file for divorce second. If the lower earner plans to keep working for the next two years, then this rule will not apply.
The lower earner can collect even though the higher earner never applies for Social Security or is not collecting because s/he is earning too much. The lower earner also benefits from the higher earner’s delay in retiring as well as the higher earner’s increased Social Security payment due to additional years of work.
In general, the remarriage of the higher wage earner does not affect the benefits of previous spouses, nor the prospective benefits of the new spouse.
The remarriage of the lower earner has no adverse effect if it is after age 60. In addition, after one year or more of remarriage, the lower wage earner can receive benefits based on a new spouse’s earnings record (but not the new spouse’s ex‑spouse) if the new spouse has higher benefits than the former spouse.
Social Security benefits for divorced spouses are not “shared.” What an ex‑wife receives has no bearing on any benefits received by either her ex‑husband or, if he has remarried, his new wife. Similarly, a second wife’s benefits will not be affected by any benefits paid to her husband’s first wife. For example: where a husband is receiving $1,200 a month in Social Security retirement benefits, both a current wife and an ex‑wife could receive up to $600 a month based on his record. After his death, each would receive $1,200 a month.
Your specific situation may be somewhat different from the norm; please call, 734.927.9782, the Canton Michigan Divorce and Family Law Lawyers and Canton Michigan Divorce Attorneys at Stelmock Law Firm, PC to discuss your questions regarding Social Security Retirement Benefits and Michigan Divorce. We represent clients in the Metro Detroit area (Canton, Plymouth, Northville, Livonia, Westland, Ann Arbor, Novi) and throughout Wayne, Washtenaw, Oakland, and Livingston counties. The firm’s office is located at 8556 N. Canton Center Road, Canton, Michigan 48187