Q&A: Ex-spouse still gets Social Security benefits, under right circumstances

Q: I have been receiving Social Security disability benefits for the last two years. I am 62 and receive $2,200 per month. I know when I reach full retirement age 65 it goes to regular Social Security with no reduction of benefits.

I want the maximum for my spouse now and after I pass. She will be turning 62 in November 2017. Is she entitled to half my disability benefit when she turns 62? She has applied for Social Security disability and was denied and she is waiting  for a hearing. Both of us are in very poor health. Her estimated disability benefit is around $780 per month. Please advise what would be beneficial for us long-and-short term, based on that situation.

My next question pertains to my ex-spouse. Based on my disability benefit what would my ex receive , if anything? She is 64 and receives $500 per month based on her own claim. She never remarried, and we were married almost 20 years. How much would she be entitled to and at what age?

A: You are correct that your disability benefit converts to a retirement benefit, says David Cechanowicz, a senior financial planner with REDW Stanley Financial Advisors.

But first, he says, you should know this: Whenever an ex-spouse has the ability to make a claim for Social Security benefits, it does not affect any of the benefits that are payable to a spouse or other auxiliary beneficiaries who are entitled to benefits.

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That said, spousal benefits are limited to a maximum of 50% of your primary insurance amount (PIA) which is the amount you receive now as a disability benefit, says Cechanowicz. “In your case, the maximum spousal benefit would be payable when your spouse reaches her full retirement age of 66,” he says. “If she claims a benefit early, the benefit will be reduced by what is known as an actuarial reduction. At age 62, the maximum spousal benefit is reduced by 30%.”

Now when your wife turns 62 next year, Cechanowicz says she’ll be eligible for a spousal retirement benefit of $770 a month, just about the same as the disability benefit that she has applied for on her own work record. “In the short run, if she is denied a disability claim on her own work record, she will become eligible for a reduced spousal benefit in November of 2017,” he says. “Even if she is granted the disability benefit before November, she will become eligible for spousal benefits if they will give her additional income in excess of her disability claim. The benefits should be automatically added to her benefit check.”

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As for your ex-spouse, Cechanowicz says she is also eligible to file for a spousal benefit on your work record. “Since she is already 64 years old, she is eligible for a benefit that is 83.33% of your current disability benefit, or $916 per month,” he says. “Since you were married for 10 years and she has never remarried, she could file immediately for the spousal benefit.”

Of note, the Social Security Administration treats the spousal benefit as an add-on to her existing retirement benefit and increases the amount she receives accordingly. “However, depending on her personal circumstances, if she could afford to wait until her full retirement age of 66, she could file at that time and receive a combination of her reduced early claim and a portion of the maximum spousal benefit on your work record,” says Cechanowicz

Now, you spoke of wanting your spouse to be able to obtain the maximum benefit after you pass. “That benefit is known as the survivor benefit and is equal to the amount of your current benefit, or $2,200 per month,” says Cechanowicz. “The full $2,200 per month survivor benefit is only available to your spouse when she reaches her own full retirement age.”

So, for example, if you were to die two years from now, your spouse would be age 63 and subject to a reduction for claiming the survivor benefit early, says Cechanowicz. “At that time, her age 63 Social Security benefit would switch from a spousal claim of approximately $770 per month (claimed at age 62) to a survivor benefit of approximately $1,886 per month for the rest of her life,” he says, noting that the benefit will increase over time as cost-of-living adjustments are made.

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As for spousal benefits, many people don’t know that an ex-spouse is eligible for survivor benefits as long as the marriage lasted for at least 10 years, says Cechanowicz. “So, in the example above, at the time your wife is eligible for a survivor benefit of $1,886 per month, your ex-spouse will be eligible for a benefit of $2,200 per month because she will have reached her full retirement age,” he says.

Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch. Got questions about money? Emailrpowell@allthingsretirement.com.