Q. How are Social Securities Benefits Divided in Divorce?
A. The Social Security Act of 1935, which as been amended numerous times over the years, is governed solely by the federal law. States are powerless to effect changes in its rules and procedures. Social Security benefits are not actually divided in divorce, and California courts do not divide social security rights. They are not the subject of divorce settlements. Social security benefits are considered the separate the property of the contributing spouse. This is odd, since all other retirement plans are considered as part of the marital estate. Government employees do not contribute to Social Security. It is wasteful because, as discussed below, multiple former spouses can collect benefits on the same worker's history. It is unfair because gays and lesbians who are domestic partners under state law gain no rights in the other's work history.
A spouse of a retired or disabled worker is entitled to derivative social security benefits IF the marriage was at least 10 years in duration. This is defined as the period between the date of marriage and the date of termination of marital status. It has nothing to do with periods of physical separation, and is not affected by a decree of legal separation. It has nothing to do with the filing of a divorce itself.
The Social Security Act originally only covered certain job categories which reinforced traditional stereotyped views of family systems. Women generally qualified for insurance only through their husbands or children. Amendments in 1939 added women, who became eligible to collect on their own earnings' record and became entitled to collect that or 50% of their husband's. It was not until 1950 that benefits were extended to former spouses with children. In 1965, former spouses without children were added but they had to have been married at least 20 years. In 1977 this time period was reduced to 10 years.
Former spouses married for at least 10 years are now entitled to receive 50% of the Social Security beneficiary's benefits (as either derivative or dependent benefits) without reducing the worker's 100% benefit - in order words, in divorce the working spouse who contributed does not divide or share their retirement benefits and so the derivative benefits for former spouses do not cost either spouse. They certainly, however, cost the taxpayers. If the worker spouse dies, a former spouse(s) receives 100% of the benefits of the worker as a surviving former spouse.
This has many strange consequences. One is that since spouses and state courts cannot divide the benefits, and it costs the working former spouse nothing to allow the other spouse to claim these benefits. Imagine what hardship this might cause to a spouse whose marriage is terminated 9 years, 11 months, and 355 days after the date of marriage. They would receive no derivative benefits, period. It would cost the worker spouse nothing to delay dissolving the marriage one more day. Many spouses who anticipate a future divorce strategically hold off filing until they are assured this time has passed or will pass, for good reason. In California marital status cannot be terminated earlier than 6 months after the dissolution is filed and served. I always alert clients to this area of the law, and have many times recommended patience; it would be attorney malpractice not to. Sometimes raging working spouses want an earlier divorce just to deprive the other of this benefit. This can be most unfortunate and downright ugly. There is a procedure in California for dissolving marital status before a divorce case is completely finished (e.g., where property rights have not been determined) called bifurcation of marital status. Sometimes a spouse wishes to get divorced immediately so that they can remarry, and this can interrupt the 10 years if the Court approves it. Courts can order that the bifurcating party indemnify the other out of their own pocket for the loss of benefits, but as a practical matter there is no way for this indemnification to occur.
Another consequence illustrates a major waste within the Social Security system. Imagine that Fred marries Nancy the homemaker when they are 19. After 10 years, they divorce. and Fred marries Jennifer. After 10 years he moves on, dissolving that marriage and marrying Diane next. He is now 49 years of age. With his record, he still may have a couple of more marriages in him. At this point, assuming that none of these three women have remarried or that they remarry after age 60 (a new marriage before age 60 terminates the right to derivative benefits), each of them are eligible to receive 50% of Fred's benefits while he continues to be entitled to 100%. This means that 250% worth of benefits will be paid upon Fred's earning history alone. Even better, if Fred dies before them, each ex-wife is thereupon entitled to receive Fred's 100% - which means 300% will be paid out and, since Fred is a serial monogamist, he will probably leave a widow (Tara) who likewise receives 100%.
Also, note the risks to the women. If Nancy or Jennifer remarry before age 60 they lose any claims to the benefits generated by Fred and the count begins at zero with their new spouse and are based on the new spouse's earnings record with Social Security (assuming this person is not a government worker). If their new marriage does not make the 10 year mark, they receive nothing from Social Security from either spouse. This makes you want to reconsider a second marriage doesn't it - at least if you are a non wage earning wife! Of course, few people ever think about this because they don't know about it; this is one goal of my website as an informational tool.
California has two state pension plans for government workers which exist outside of Social Security. These are the Public Employees' Retirement System (PERS) and the California State Teachers' Retirement System
(CalSTRS). There are a number of city and county pension plans. California teachers, state public safety officers (police and firefighters), and other workers who don't pay into the retirement portion of the Federal Insurance Contributions Act
(FICA), do not receive social security benefits once they retire.
They only may be eligible for some SS benefits based upon their spouse's record or their own earnings from private sector jobs. However, even these benefits may be reduced under the Windful Elimination Provision (WEP) or the Government Pension Offset (GPO). These are complicated rules and formulas which are beyond the scope of this answer.
Good luck out there!