How the Supreme Court decision on same-sex marriage impacts Social Security claiming

Katie Godbout, Director of Sales & Marketing
July 27, 2015
    

samesexmarriage.jpgThe June 26th Supreme Court decision that same-sex couples have a constitutional right to marry in all states has significantly impacted the landscape of Social Security claiming decisions.

In some cases, the Obergefell v. Hodges decision offers clarity. In others, many questions remain. Here, we’ll address the areas in which your clients might seek advice.

Prior to this decision, Social Security benefits were made available to same-sex couples based on a combination of legal factors. First, the marriage had to have taken place in a jurisdiction that recognized same-sex marriages. Additionally, at the time of claim, the couple had to be in a jurisdiction that recognized same-sex marriage. At the time of the Obergefell decision, 13 states had prohibitions on same-sex marriages, while 37 states recognized them. 

An additional level of legal confusion centers on whether nonlegal civil arrangements other than marriage qualify as marriage under the rules for claiming Social Security benefits. The core issues before the Social Security Administration (SSA) will center on what constitutes marriage, and when was the marriage effective.

The SSA website states: “We are working with the Department of Justice to analyze the decision and provide instructions for processing claims. We will update this website as new information becomes available.”

Before those issues are clarified, we wanted to give you a broad overview of the issues and planning points that you may need to consider for clients or potential clients.

Benefits

The primary areas of change for claimants focuses on three areas of Social Security benefits —spousal benefits, survivor benefits, and auxiliary benefits. Auxiliary benefits include family members, including children and adopted children and “spousal benefits” for those who are caring for dependent children of an insured individual. Divorced spouse benefits and divorced survivor benefits will also be available to claimants, subject to the10-year requirement for marriage. 

Software issues

Social Security Timing® software is not gender specific. You can run a proposal for two males or two females. We only use the term “spouse” when describing spousal benefits. So you can run proposals for anyone who needs assistance in this area immediately.

Medicare issues

Medicare Part B premiums are calculated based on marital status and income levels. The income levels for the lowest Medicare Part B premiums are $85,000 for single and $170,000 for married couples. Some same-sex couples will now be able to file amended income tax returns to claim married status, which can cause changes in the “income related monthly adjustment amount” or their Medicare Part B premiums. 

Retroactivity

The legal status of same-sex marriage has bounced around in different jurisdictions for quite a few years now. At one point a state may have allowed for same-sex marriages, only to have a voter initiative or legislative change that invalidated that ability. Now that equal footing has been declared the law of the land, there are sure to be challenges and issues that will require interpretation by the SSA, or legal challenges to sort out who qualifies for benefits and when they qualified or will qualify. Some individuals will probably seek retroactive benefits, especially those who were married in a state that allowed same-sex marriage but were living in a state that did not recognize them.

Issues you may need to know about

The SSA website addresses some issues that may be help you field questions from potential clients or from centers of influence in your communities. Here are some of the frequently asked questions and answers from the SSA website:  

Q: Do I qualify for benefits as a spouse if I am now in, or the surviving spouse of, a civil union or other nonmarital legal relationship?

SSA Answer: Social Security is now processing some retirement, surviving spouse and lump-sum death payment claims for same-sex couples in nonmarital legal relationships and paying benefits where they are due. We encourage you to apply right away for benefits, even if you aren't sure you are eligible. Applying now will protect you against the loss of any potential benefits.

Q: If you have a client who is receiving SSA benefits and is in a in a civil union or other nonmarital legal relationship, does your client need to disclose that to the SSA?

SSA Answer: Yes, this may affect eligibility for other benefits.

Q: How does the recent Supreme Court decision about same-sex marriage affect an individual’s enrollment in Medicare?

SSA Answer: Medicare is managed by the Centers for Medicare & Medicare Services (CMS). SSA works with CMS by determining eligibility for and enrolling people in Medicare. You can find information regarding Medicare eligibility and enrollment for same-sex couples at www.medicare.gov.

Q: Will Social Security recognize a same-sex marriage if the ceremony took place in a foreign country?

SSA Answer: We are now able to recognize some foreign same-sex marriages for purposes of determining entitlement to benefits.

Stay up-to-date with Social Security Timing

Social Security Timing will alert you as soon as possible to any developments in how the same-sex marriage decision impacts Social Security claiming. If you have questions, contact us at 877.844.7213.

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Posted by Katie Godbout, Director of Sales & Marketing
Katie thrives on making an impact and achieving big goals. She believes that communication strategy has a major impact on business success. As a strategic communicator with a diverse background in non-profit, B2B, healthcare, and SaaS, Katie combines her expertise in strategy development, marketing and sales to spread the word about how Covisum can help advisors and institutions inform their clients of the best financial decisions.