Divorcing in the Golden Years raises many issues about the longevity of careers, rising health care expenses, disability, retirement and how these significant events impact one’s financial affairs.  This means that a divorce later in life makes every possible source of income critical. One source of income that many people do not realize they may be entitled to is a “derivative benefit” from Social Security.

Social Security Benefits are Not Divisible in Divorce

In California, assets and debts acquired during the marriage are generally considered community property and are subject to an equal division by a family court during a divorce action.  Social Security benefits are an exception to this rule.  Social Security benefits are derived from payroll taxes collected by the federal government (these taxes are recognizable on paycheck stubs as FICA, or “Federal Insurance Contributions Act”) and are paid to eligible individuals based upon contributions that they, their spouses or their ex-spouses make into the Social Security system.  Primary Social Security benefits belong to the worker spouse (i.e., the spouse who paid into Social Security).  They are not a community asset, are not subject to division and cannot be used to offset an alternate award of community property.

10 Years Is the Magic Number

A former spouse married for ten (10) years or longer to a worker spouse who paid into the Social Security system may be entitled to receive derivative Social Security benefits based upon the worker spouse’s contributions into the Social Security system.  These derivative benefits do not affect the amount of benefits the worker spouse receives.  For the former spouse to be eligible, the basic requirements are:

The spouses must have been married for at least 10 years, measured from the date of marriage to the date marital status is terminated;

• The worker spouse is entitled to Social Security retirement or disability benefits;
• The former spouse has filed an application for Social Security benefits;
• The former spouse is 62 years old, or older;
• The former spouse is unmarried at the time of applying for the derivative benefits; and
• The former spouse is not entitled to Social Security benefits, or is entitled to Social Security benefits based on their own Primary Insurance amount, which is less than one-half of the worker spouse’s Primary Insurance amount.

Almost 10 Years…Seek Court Relief

If the divorcing spouses’ marriage is approaching the 10-year mark, a spouse may request that the court enter an order delaying the date on which marital status terminates.  Some spouses want to terminate the marital status before all other issues are determined, which could jeopardize eligibility for spousal benefits. However, family courts have authority under Family Code Section 2337(c)(10) to impose any “just and equitable” condition on the early termination of the marital status and may delay the termination date of marital status upon a showing of good cause.  Ensuring that future Social Security benefits are received is likely a good reason to delay the termination of the marital status if the 10-year mark is near.

That’s Not All….

This blog post highlights the existence of an income source that many people do not know exists.  Social Security has a complex set of rules.  The gateway to seeking derivate benefits is a marriage that lasts at least 10 years.  Once the 10-year date is met, it is advisable to review the Social Security Administration’s current rules about these and other benefits (such as survivor benefits).  It is essential to know your right to Social Security benefits in dissolution actions, particularly for older spouses who plan on relying on Social Security benefits for meeting their monthly expenses.