In addition to the payments it provides to qualified retirees, Social Security can also offer benefits to the dependents of those people. Potential recipients include surviving spouses, along with dependent parents, children, and grandchildren. Depending on their relationship to the retiree, dependents may receive payments of between 70% and 100% of the qualified retiree's benefits.
- Benefits to the spouses of retired workers will be reduced if the spouses have not reached their normal retirement age, even if the retired worker has died.
- Those who are divorced from retired workers may be entitled to a payment amounting to half the amount the retiree is receiving, provided the marriage lasted at least 10 years.
- Social Security imposes a maximum family benefit that may cause benefits to some dependents to be reduced because the family as a whole has exceeded that limit.
Benefits for the Spouses of Retirees
The husband or wife of a retiree who is already drawing Social Security is eligible to receive a spousal benefit. The payment equals up to one-half of the retired spouse's monthly payment, also known as their full primary insurance amount (PIA). In order to receive this benefit, the spouse receiving the spousal benefit must be at least 62 years old or caring for a child who is younger than 16 or is disabled and is entitled to receive benefits on the retiree's work record.
You must have reached your normal retirement age in order to receive the entire one-half of your retired spouse's PIA. That age is 66 years and two months for people born in 1955 and rises by two months per year of birth until it reaches 67 for those born in 1960 or later. If you opt to receive benefits before that time, you will be penalized according to a formula similar to that used to compute the reduced benefits of workers who retire early.
At the time you are eligible for the spousal benefit, you may be eligible to receive more from Social Security based on your own earnings record than you would receive through that of your spouse. If this is the case, the Social Security Administration automatically provides you with the larger benefit.
If you are still working, the net benefit of taking the spousal benefit early may be further reduced because you hit limits on your allowable income from other sources. Those limits are fairly low; for 2020, they amount to $18,240, or $1,520 per month, although they will rise in subsequent years. If you make more than that amount, your benefits are reduced by $1 for every $2 you earn over the limit. Once you reach your normal retirement age, these penalties no longer apply.
So if, for example, you made $25,000 a year in other income, your Social Security benefits for the year would be reduced by $3,380. That figure would result from $1 being "clawed back" from your benefits for every $2 of the $6,760 you were making in excess of the allowable maximum benefits.
It makes sense for married couples, then, to coordinate how and when they should each begin to collect benefits. You can run these numbers yourself to see how it works by using a Social Security calculator.
Benefits for Surviving Spouses
Survivor benefits are available to widows or widowers, based on their late spouse’s earnings record upon their death. To receive these benefits, you must have reached your normal retirement age.
Survivors who have reached their normal retirement age receive 100% of their deceased spouse’s benefit. For survivors who are at least 60, the benefit ranges from 71.5% to 99% of their deceased spouse’s benefit.
The survivor can instead opt to receive their own benefit if that is more advantageous. However, that calculation should compare not only the immediate monthly payments of the two options. It should also consider the potential long-term impact of a delay in the survivor taking their own benefit, which results in a higher monthly payment.
A one-time lump-sum payment of $255 is also paid upon the death of a spouse, provided the spouses were living in the same residence at the time of the spouse's death.
The surviving spouse is also eligible for a survivor’s benefit if they are at least age 50 and are disabled, provided the disability started before the worker’s death or within seven years of their death.
If you begin to collect Social Security benefits before your normal retirement age, you will be subject to a limit on other income. If you earn more than the limit, half of the excess will be deducted from your benefits.
A younger widow or widower can collect a benefit if they are caring for a minor child of a deceased worker. The surviving spouse cannot remarry and must not qualify for retirement benefits based on their own earnings record or be collecting survivor benefits based on their deceased spouse's contributions. The surviving spouse can qualify for up to 75% of their late spouse’s benefit if they are caring for a child under the age of 16 or who is disabled and receiving dependent benefits based upon their late parent’s earnings record. If the surviving spouse remarries, their benefit as the caregiver of the deceased spouse’s child stops.
Benefits for Divorced Spouses
If you are divorced from a retired worker, you're eligible to receive an amount equal to one-half of your former spouse's PIA, provided you were married for at least 10 years.
The rules are similar to those for spousal benefits described above, with a notable exception: You can begin receiving benefits even before your former spouse has begun to do so. However, you have to be at least 62 years old, and the divorce must have been finalized at least two years if you have not yet reached your normal retirement age.
Divorced spouses who had more than one marriage that lasted at least 10 years do not receive multiple benefit checks or one for each marriage. But the Social Security Administration does automatically choose the former marriage that will yield the largest benefit to the ex-spouse. Divorced spouses generally cannot collect benefits on their former spouse's record unless their later marriage ends (whether by death, divorce, or annulment).
Benefits for Children and Grandchildren
Children can qualify for a benefit as the survivor of a deceased worker or as the dependent of a living parent who receives Social Security retirement or disability benefits. Children need to be:
- Under the age of 18, or
- Under the age of 18 if they are a full-time student in no higher than the 12th grade. If they are 19 and still in school, benefits will continue until the earlier of the date of graduation or two months after their 19th birthday.
Benefits paid for a child will not decrease a living parent’s retirement benefit. The value of the benefits the child could receive, added to the parent’s benefits, may help the parent decide if taking benefits sooner may be more advantageous.
A dependent child can receive up to half of the benefit of a parent that is receiving retirement or disability benefits. If the parent is deceased, dependent children can receive up to 75% of the worker’s benefit, calculated as a percentage of the benefit that the worker would have received had he or she continued working until retirement. If you are taking care of a child and are receiving benefits, then his or her benefits may stop at a different time than your own.
If grandchildren become dependents of their grandparents due to the death of their own parents or other reasons, they can be eligible to receive benefits based upon the earnings record of either of their grandparents. Great-grandchildren do not qualify for dependent benefits, however.
Benefits for Disabled Children
Disabled children are covered under Social Security, but the application process to obtain these benefits can be arduous. Social Security says that the child must have a physical or mental condition that severely limits their activity and is expected to last more than one year and/or result in the child’s death.
The family must also have few, if any, other financial options for providing care. Social Security considers the family’s household income, their other resources, and other factors in making their determination.
The child may receive up to half of the parent’s full retirement or disability benefit. A disabled child would receive a benefit of 75% of the worker’s benefit if the worker has died. A child that is 18 or older is also eligible if they suffer from a disability with an onset that occurred no later than age 22.
Benefits for Dependent Parents
Some parents legally depend on a family member due to economic circumstances or disability. The dependent parents of a deceased worker who are 62 or older would receive 82.5% of the worker’s benefit for one parent or 75% each for two parents.
Family Benefit Maximum
Benefits to dependents are subject to a maximum monthly retirement and survivor payout from Social Security to the family as a whole. This total figure is based on the worker’s own monthly payment. The total payout to the family varies, but dependent benefits typically range between 150% to 180% of the worker’s payment.
The Social Security Administration uses a complex formula to calculate the family benefit maximum. The families of disabled workers are subject to a different formula, one that typically sets the maximum at between 100% and 150% of the worker's payment. As an example, let's look at an elderly parent—named Deborah—with a dependent child. Deborah’s full retirement amount is $1,500, and her family maximum is $2,300. Deborah would receive her full $1,500 per month, and her husband, John, and their dependent child, Ruth, would split the remaining $800 payment ($2,300 to $1,500); each would receive $400.
Note that benefits to your divorced spouses are not counted in your "family maximum" benefit, and they do not affect that maximum.