On June 26, 2013, the Supreme Court handed down a landmark decision concerning same-sex marriage. In United States vs. Windsor the court held that Section 3 of the Defense of Marriage Act (DOMA), which denied federal recognition of same-sex marriage, was a violation of the Due Process Clause of the Fifth Amendment. Before being struck down, Section 3 of DOMA defined marriage to mean a legal union between a man and a woman as husband and wife.
The ramifications of this decision were substantial. Some of the effects were as follows: (1) same-sex couples might now file joint income tax returns; (2) they might now have the same inheritance rights under federal law as other married couples; and (3) they might claim federal spousal benefits such as Social Security.
There was a caveat in the Windsor decision, however. The federal government recognized same-sex marriages so long as the marriage was entered into in a state whose laws authorized the marriage. States which did not authorize same-sex marriage were not required to recognize marriages of same-sex couples performed elsewhere. What did this mean for couples who married in a state that recognized same-sex marriages but may have moved to a state that did not? Did they lose the rights and benefits they already had? Obviously, Windsor was fraught with shortcomings.
The deficiency in Windsor was addressed in a second Supreme Court decision, Obergefall vs. Hodges which was handed down two years to the day (June 26, 2015) after Windsor. Obergefall required that states must permit same-sex marriages and furthermore must recognize same-sex marriages recognized in other states and jurisdictions.
The Windsor and Obergefall decisions changed the landscape for financial planning for same-sex couples. This is especially true for eligibility for Social Security benefits. Same-sex couples are now eligible for the same Social Security benefits as other married couples. The Social Security Administration recognizes same-sex couples’ marriages in all states.1 Although the Administration does not generally recognize domestic partnerships as qualifying for Social Security benefits, a same-sex couple may be considered a “spouse for benefit purposes when the state of the Number Holder’s (NH) domicile would allow the partner to inherit a spouse’s share of the NH's personal property should the NH died without leaving a will. Under these circumstances, we will treat the couple’s non marital legal relationship as a marital relationship for Title II and Medicare benefit purposes.” 2
Apart from retirement benefits, Social Security may pay many other kinds of benefits. As a result of the Obergefall decision, the following types of benefits may now be payable to eligible same-sex couples.
Spousal benefits
- A spouse is potentially eligible for Social Security benefits on the record of the other (worker) spouse.
- The worker spouse must be receiving retirement or disability benefits.
- The spouse must be either (1) age 62 or older, or (2) caring for a young child of the worker who is under age 16 and who is collecting child’s benefits on the worker’s record.
- The spouse must have been married to the worker for one year prior to claiming benefits.
- The amount of the spousal benefit may be as much as ½ of the worker’s full benefit amount.
Surviving spouse’s benefits
- A surviving spouse is potentially eligible for benefits on the record of a deceased spouse.
- The surviving spouse must be either (1) at least age 60 (age 50 if disabled), or (2) caring for the young child of the worker who is under age 16 and collecting child’s benefits on the worker’s record.
- The surviving spouse must have been married for nine months prior to the worker’s death.
- The maximum benefit amount payable depends upon whether the surviving spouse is claiming benefits based upon age or caring for the child of the worker. If claiming is based upon age, the benefit amount may be as much as the deceased worker was receiving at the time of death. If claiming is based upon caring for a young child, the amount may be as much as ¾ of the deceased worker’s full benefit amount.
Divorced spouse’s benefits
- A divorced spouse is potentially eligible for benefits on the record of the other (worker) spouse.
- The marriage lasted 10 years.
- The divorced spouse is unmarried.
- The divorced spouse is age 62 or older
- The benefit the divorced spouse is entitled to receive on their own work record is less than the benefit they would receive on the worker’s record.
- The divorced spouse may receive as much as ½ of the worker’s full benefit amount.
Surviving divorced spouse’s benefits
- A surviving divorced spouse is potentially eligible for benefits on the record of the deceased ex-spouse.
- The marriage must have lasted 10 years.
- The surviving divorced spouse must be unmarried, or remarried after age 60.
- The surviving divorced spouse must either (1) be at least age 60 (age 50 if disabled), or (2) caring for the young child of the worker who is under age 16.and collecting child’s benefits on the worker’s record.
- If the surviving spouse applies for benefits based upon having a young child in care, the length-of-marriage rule does not apply.
- The maximum benefit amount payable depends upon whether the surviving divorced spouse is claiming benefits based upon age or caring for the child of the worker. If claiming is based upon age, the benefit amount may be as much as the deceased worker was receiving at the time of death. If claiming is based upon caring for a young child, the amount may be as much as ¾ of the deceased worker’s full benefit amount.
Social Security spousal and/or surviving spousal benefits may represent additional dollars for same-sex couples. Much is at stake. It should come as no surprise that the Obergefall decision could generate additional court actions where issues may not have been specifically addressed in the landmark case. Two areas in particular are worthy of note: retroactive application of the decision and the duration-of-marriage requirement.
Shortly after the Obergefall decision, SSA stated that it would apply the marriage ruling retroactively and process pending spousal benefits claims for same-sex couples who lived in states that did not previously recognize their marriages.3
In a recent court decision, Thornton vs. Saul (Sept 11, 2020), a federal district judge declared unconstitutional Social Security’s denial of surviving spouse’s benefits for someone whose partner died in 2006 in Washington because Washington did not allow same-sex marriage until 2012. The District Court prohibited the agency from denying benefits to surviving partners of same-sex relationships without first considering whether they would have married their partners if state laws had permitted same-sex marriage earlier. The Social Security Administration is still deciding whether to appeal the decision.4 If the decision is ultimately decided in favor of the plaintiff, it potentially could open the floodgates for surviving spouse’s benefits for those who would have been married if state law had not precluded it.
Another court decision overturned the nine-month duration of marriage requirement for surviving spouses of same-sex couples. In Ely vs. Saul (May 27,2020) the United States District Court in Arizona prohibited the agency from denying claims for Social Security widow(er)’s benefits filed by surviving spouses of same-sex couples when the marriage did not last at least nine months without first considering whether unconstitutional State laws prohibiting same-sex marriage prevented the couple from marrying earlier. The Social Security Administration is currently appealing this decision.5
Other court cases are likely to follow. For example, one area that is getting attention is retroactive recognition of common-law marriages for purposes of benefits. Many states in the United States recognize common-law marriages if contracted prior to a specific date. Should these marriages now be recognized if the only reason they were not recognized at the time was because the state may not have recognized same-sex marriage? 6
It is probably fair to say that the fallout from the Obergefell decision is likely to continue. If you would like to know more about the ramifications from Obergefell, or if you would like to know more about maximizing Social Security benefits for same-sex couples, please feel free to contact us. Remember, we are here to help.
Doug Lemons, CFP®
CRN-3495613-031621
1https://www.ssa.gov/people/same-sexcouples/
2https://secure.ssa.gov/apps10/poms.nsf/lnx/0200210004
3https://www.lambdalegal.org/news/us_20150820_ssa-apply-obergefell-retroactively-spousal-benefits
4https://www.ssa.gov/thornton/ See also https://www.lambdalegal.org/news/wa_20200911_victory-same-sex-partners-ssa-benefits
5https://www.ssa.gov/ely/