Social Security and Same-Sex Marriage: Post Obergefell v. Hodges
Released: 2015-12-18T00:00:00

I n United States v. Windsor , the U.S. Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional, finding, in part, that it violated the Constitution's equal protection and substantive due process guarantees. Section 3 had required that marriage be defined as the union of one man and one woman for the purpose of federal enactments, rendering individuals in a same-sex marriage ineligible for spousal Social Security benefits. After the Windsor decision, the Social Security Administration (SSA) started processing Old-Age, Survivors, and Disability Insurance (OASDI) applications for some claimants in a same-sex marriage. Under the Social Security Act, eligibility for spousal benefits depends on the applicant's marital status as defined by the state in which the Number Holder is domiciled. ("Number Holder" simply refers to the person on whose work record benefits are based.) However, until Obergefell v. Hodges , the legality of some same-sex marriages remained in flux as state legislatures and courts changed and interpreted state marriage laws. Because the Social Security Act determines marital status by considering the laws of the state in which the Number Holder is domiciled, SSA could only process spousal benefits for some same-sex couples whose domicile state would recognize their marriage, even if they were married legally in another state. In Obergefell , the U.S. Supreme Court held that the Fourteenth Amendment requires a state to permit a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out of state. Thus, because same-sex couples may now marry in all states, individuals in a same-sex marriage are eligible for spousal Social Security benefits, if they have met other statutory requirements.

This report addresses eligibility for Social Security spousal benefits for individuals in a same-sex marriage. The report begins with an overview of the Social Security program, followed by a discussion of the marital requirements regarding eligibility for Social Security spousal benefits. The report concludes by analyzing how the recent Supreme Court cases have impacted Social Security eligibility for same-sex couples.

Overview of Social Security

Social Security is a federally administered, work-related entitlement program authorized by Title II of the Social Security Act. The program is financed primarily by payroll taxes paid by individuals who work in Social Security-covered employment and their employers. Employees and their employers each pay 6.2% of covered earnings, up to an annual limit on taxable earnings; self-employed individuals pay 12.4% of net self-employment income, up to an annual limit on taxable earnings. The program is also credited with federal income taxes that some beneficiaries pay on a portion of their benefits; reimbursements from the general fund of the Treasury for a variety of purposes; and interest income from the Treasury on the investment of Social Security revenues in special federal government obligations.

The program provides monthly cash benefits to eligible retired or disabled workers and their family members, and to the family members of deceased workers. To be eligible for a retired-worker benefit, a worker needs a minimum of 10 years of covered employment, among other requirements. Fewer years of covered employment are needed to qualify for a disabled-worker benefit, depending on the age of the worker when he or she becomes disabled. As of September 2015, there were nearly 60 million Social Security beneficiaries: 43 million retired workers and their family members (72%); 11 million disabled workers and their family members (18%); and 6 million survivors of deceased workers (10%).

A Worker's Eligibility for Benefits

A worker becomes eligible for Social Security benefits by working in Social Security-covered employment for a specified period, among other requirements. To be eligible for a retired-worker benefit, a worker needs a minimum of 40 earnings credits (10 years of covered employment). Fewer credits are needed to qualify for a disabled-worker benefit if the worker is under age 62. The number of credits needed varies, depending on the age of the worker when he or she becomes disabled. For example, a worker who becomes disabled before age 24 needs six credits (1½ years of covered employment) in the three years before the onset of the disability. For Social Security purposes, disability is defined as the inability to engage in substantial gainful activity (SGA) by reason of a medically determinable physical or mental impairment that is expected to last for at least 12 months or result in death. Generally, the worker must be unable to do any kind of substantial work that exists in the national economy, taking into account age, education, and work experience.

A worker is eligible to receive a retirement benefit as early as age 62. However, if a worker begins receiving a retirement benefit before the full retirement age (FRA), his or her benefit is permanently reduced to take into account early retirement and the longer period of expected benefit receipt. The FRA ranges from age 65 to age 67, depending on the worker's year of birth.

As of September 2015, retired workers accounted for 67% of the beneficiary population, and disabled workers accounted for 15% of all beneficiaries.

Amount of Benefits Received

A worker's monthly Social Security benefit is based on his or her career-average earnings in covered employment. Specifically, a worker's primary insurance amount (PIA) is his or her monthly benefit payable at the FRA. The PIA is determined based on the following steps: (1) the worker's annual earnings in covered employment are indexed to historical wage growth, to bring past earnings up to near-current wage levels; (2) the highest 35 years of indexed earnings are summed to get the total earnings; (3) the total earnings are divided by 420 months (35 years x 12 months) to get the amount of average indexed monthly earnings (AIME) over the worker's career in covered employment; and finally, (4) a progressive benefit formula is applied to the worker's AIME (the progressive benefit formula is designed to provide a higher replacement rate for lower-wage workers compared to higher-wage workers).

The monthly benefit that is payable to a worker may be less than or greater than his or her PIA, depending on circumstances. For example, a worker's benefit is permanently reduced if he or she claims retirement benefits before the full retirement age, to take into account the longer period of expected benefit receipt (based on average life expectancy). Similarly, a worker's benefit is permanently increased if he or she claims retirement benefits after the full retirement age (up to age 70), to take into account the shorter period of expected benefit receipt. In addition to benefit adjustments based on a worker's age at the time of entitlement, benefits may be adjusted for other reasons. For example, under the r etirement e arnings t est , benefits are temporarily reduced if a beneficiary is below the FRA and has earnings above specified thresholds.

As of September 2015, the average monthly benefit was $1,338 among retired workers and $1,165 among disabled workers.

Family Member Eligibility for Benefits

In addition to qualifying for Social Security benefits based on one's own work record, a person may qualify for benefits based on another person's work record as an eligible family member. Benefits are payable to the spouse, divorced spouse, or child of a retired or disabled worker. Benefits are also payable to the widow(er), divorced widow(er), child, or dependent parent of a deceased worker. In addition, a mother's/father's benefit is payable to a young widow(er) who is caring for a deceased worker's child, if the child is under the age of 16 or disabled and the child is entitled to benefits. Table A-1 in the Appendix to this report provides a summary of Social Security benefits payable to family members based on the worker's record, including the basic eligibility requirements and benefit amounts for each type of benefit.

If a person becomes simultaneously entitled to benefits based on his or her own work record and the work record of another person as an eligible family member, the person does not receive both benefits in full. Rather, under the dual entitlement rule , the person receives (1) his or her own benefit, plus (2) the benefit based on another person's work record (the auxiliary benefit) after it has been reduced by the amount of the person's own benefit (in some cases, the auxiliary benefit may be reduced to zero). In effect, the person receives the higher of the two benefit amounts. Other adjustments to auxiliary benefits may apply. For example, auxiliary benefits are reduced if total benefits payable based on the worker's record exceed the maximum family benefit .

As of September 2015, dependents and survivors of retired, disabled, or deceased workers accounted for 18% of the beneficiary population.

Social Security Act's Determination of Family Status

Sections 216(a) through (g) of the Social Security Act define the terms spouse, surviving spouse, wife, widow, divorced spouse, child, husband, and widower for purposes of qualifying for benefits as an eligible family member of the worker. In order to qualify for these benefits as one of these family members, the applicant must meet the relationship requirements to the Number Holder (also referred to as the insured) as set out in these provisions. (As noted previously, the Number Holder is the worker on whose record benefits are claimed.) Section 216(h) of the Social Security Act ( Determination of Family Status ) references the use of state law in the determination of entitlement to Social Security benefits as a spouse, surviving spouse, child, or parent of the worker. While state law does not affect a person's entitlement to benefits as a retired or disabled worker, it does affect a person's entitlement to benefits as a family member of a retired, disabled, or deceased worker.

In determining family relationship for purposes of a person's application for benefits as a spouse or surviving spouse , SSA looks to the laws of the state—as interpreted by the courts of that state—where the Number Holder is domiciled at the time of the application, or at the time of the Number Holder's death, as specified in Section 216(h)(1)(A) of the Social Security Act. SSA has interpreted "domiciled" in this context to mean the "true and fixed home (legal domicile) of a person ... to which a person intends to return whenever he or she is absent." The relationship requirement is met if the applicant and the Number Holder were validly married under state law as interpreted by the courts of that state at the time of application for spousal benefits, or at the time of the Number Holder's death in the case of an application for surviving spouse benefits.

Alternatively, the relationship requirement is met if, under state intestate law, the applicant would be able to inherit a wife's, husband's, widow's, or widower's share of the Number Holder's personal property if the Number Holder were to die without leaving a will. The Uniform Probate Code, which serves as a guideline for the intestate laws of some states, does not explicitly define "spouse" or "marriage." For the purposes of defining marriage in intestate law, the Uniform Probate Code instead directs state legislatures to incorporate that state's particular legal definition of marriage.

If a relationship by marriage cannot be established under state law, the applicant may be eligible for benefits as the wife, husband, widow, or widower of the Number Holder under other circumstances (i.e., based upon a deemed valid marriage), as specified in Section 216(h)(1)(B) of the Social Security Act. For example, the regulations state, in part:

You will be deemed to be the wife, husband, widow, or widower of the insured if, in good faith, you went through a marriage ceremony with the insured that would have resulted in a valid marriage except for a legal impediment. A legal impediment includes only an impediment which results because a previous marriage had not ended at the time of the ceremony or because there was a defect in the procedure followed in connection with the intended marriage.

Social Security and Same-Sex Marriage

Same-sex couples were not always eligible for Social Security spousal benefits, as Section 3 of the Defense of Marriage Act (DOMA) had required that marriage be defined as the union of one man and one woman for the purpose of federal enactments. Under the Social Security Act as discussed above, SSA looks to the laws of the state in which the Number Holder is domiciled to determine whether the applicant and Number Holder are married for the purposes of spousal benefit eligibility. Changes in the state laws and the Supreme Court decisions in U.S. v. Windsor and Obergefell v. Hodges have impacted SSA's processing of spousal benefit claims for applicants in a same-sex relationship. The following sections analyze the changes in Social Security eligibility for individuals in same-sex marriages by tracking the recent Supreme Court cases and their impact on state marital laws.

Social Security Eligibility After United States v. Windsor

On June 26, 2013, in United States v. Windsor , the Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional, finding, in part, that it violated the Constitution's equal protection and substantive due process guarantees. Section 3 had required that marriage be defined as the union of one man and one woman for the purpose of federal enactments. According to the Court, federal statutes that refer to a marriage for federal purposes should be interpreted as applying equally to legally married same-sex couples. The Court did not address Section 2 of DOMA, which allows individual states to refuse recognition of same-sex marriages.

In response to the Windsor decision, SSA started processing Social Security (OASDI) applications for some claimants in same-sex marriages. Because eligibility for spousal Social Security benefits depends on the applicant meeting the relationship requirement to the Number Holder, as outlined in 216(h), some but not all applicants in a same-sex marriage were eligible for these benefits during the period between the Windsor and Obergefell decisions. As discussed in the previous section, the Social Security Act's Section 216(h) states that when determining family relationship for purposes of a person's application for benefits as a spouse or surviving spouse , SSA looks to the laws of the state—as interpreted by the courts of that state—where the Number Holder is domiciled at the time of the application, or at the time of the Number Holder's death. Thus, in order for SSA to have recognized a same-sex couple as married during this period of time, the couple must have had a valid marriage and the Number Holder must have been domiciled in a state that recognized such marriage at the time of the application. For example, an applicant in a same-sex marriage was eligible for spousal benefits if the couple married and lived in a state that recognized same-sex marriage. However, an applicant in a same-sex marriage was not eligible for spousal benefits if the couple legally married in one state and then, at the time the applicant filed the application, the Number Holder moved to another state that did not recognize same-sex marriage.

For applicants in a same-sex domestic partnership or civil union, SSA generally determined eligibility for spousal benefits by looking at whether the domicile state would grant inheritance rights to the applicant. When considering these types of relationships, SSA first determined whether the nonmarital legal relationship was valid in the place it was established and whether the relationship qualified as a marital relationship under the laws of the state of the Number Holder's domicile. SSA determined whether a nonmarital legal relationship qualified as a marital relationship using the intestate laws of the Number Holder's domicile. If under such a state's intestate laws, an applicant could inherit a spouse's share of the Number Holder's personal property if the Number Holder died without a will, then SSA would have considered the same-sex couple's relationship as a marital relationship for the purposes of determining entitlement to Social Security benefits. If the Number Holder's domicile-state at the time of application did not recognize the nonmarital legal relationship for same-sex couples or does not grant that type of relationship with the rights to inherit under intestate law, then SSA would not have considered that marriage as valid for the purposes of determining entitlement to benefits.

Social Security Eligibility After Obergefell v. Hodges

On June 26, 2015, in a 5-4 decision, the Supreme Court struck down state same-sex marriage bans in Obergefell v. Hodges. The Court held that the fundamental right to marry includes the right of same-sex couples to marry under the Fourteenth Amendment's due process and equal protection guarantees. Under the Court's decision, all states must both permit same-sex couples to marry in their respective states and recognize same-sex marriages that were celebrated in other states.

Because eligibility for Social Security spousal benefits depends on whether the state would recognize the applicant's marriage to the Number Holder at the time of the application, individuals in a same-sex marriage are now eligible for spousal Social Security benefits, if they have met other statutory requirements.

SSA's Response to Obergefell

Following the Obergefell decision, SSA noted that "more same-sex couples will be recognized as married for purposes of determining entitlement to Social Security benefits." With respect to policy guidance concerning the processing of applications for same-sex couples who may have been ineligible for benefits before Obergefell , SSA further stated: "We are working with the Department of Justice to analyze the [ Obergefell ] decision and provide instructions for processing claims." The agency indicates that new information regarding implementation of the Obergefell decision will be posted to its website as it becomes available.

The following table shows the dates when states and U.S. territories permitted or recognized same-sex marriage. The dates are considered, for example, when establishing whether a same-sex marriage is valid and the duration-of-marriage requirement is met for purposes of determining entitlement to Social Security benefits. In some cases, the specified dates are consistent with the recent Supreme Court decisions affecting Social Security eligibility for same-sex couples: United States v. Windsor (June 26, 2013) and Obergefell v. Hodges (June 26, 2015).

Appendix. Social Security Benefits Payable to Family Members Based on a Worker's Record

Table A-1 summarizes the different types of Social Security benefits payable to eligible family members based on a worker's record, including basic eligibility requirements and basic benefit amounts before any applicable adjustments. Benefits payable to family members may be subject to adjustments for a variety of reasons. For example, if a person becomes simultaneously entitled to benefits based on his or her own work record (a worker benefit) and the work record of another person as an eligible family member (an auxiliary benefit), the auxiliary benefit is reduced by the amount of the person's own worker benefit under the dual entitlement rule . In effect, the person receives the higher of the two benefit amounts (not both benefits in full). In other examples, auxiliary benefits are reduced if the person becomes entitled to auxiliary benefits before attaining the FRA; total benefits payable based on the worker's record exceed the maximum family benefit ; the auxiliary beneficiary receives a pension from work that was not covered by Social Security (under the government pension offset ); or the auxiliary beneficiary is below the FRA and has current earnings above specified thresholds (under the retirement earnings test ).