COLUMN-Gay marriage ruling boosts key retirement benefits
(The writer is a Reuters columnist. The opinions expressed are his own.)
CHICAGO, June 26 (Reuters) - The U.S. Supreme Court's decision striking down a key provision of the Defense of Marriage Act (DOMA) means that the spousal benefits of the two most important U.S. retirement programs - Social Security and Medicare - will be extended to married, same-sex couples.
But for some same-sex couples, much will depend on how the Obama Administration, federal agencies and courts interpret and implement the decision.
Social Security and Medicare are the most important pillars of economic support for older Americans, and their spousal benefits are among the most valuable features. Social Security alone keeps 21 million seniors out of poverty, according to U.S. Census data. The survivor and spousal benefits of these programs are a major feature, but under DOMA, they weren't available to married same-sex couples.
Social Security's survivor rules permit widows or widowers to receive up to 100 percent of a deceased spouse's benefit or his/her own benefit, whichever is greater. And a spouse can receive up to half of a living spouse's benefit, if it's larger than his or her own.
The rules even apply to divorced spouses in certain situations. Likewise, if a worker is eligible for Social Security disability benefits, a spouse or divorced spouse may qualify for up to 50 percent of the disabled worker's benefit amount.
The DOMA ruling also will open up valuable Medicare benefits to some married same-sex couples. Medicare eligibility is based on the number of quarters in which you have paid payroll taxes into the system. At age 65, anyone with a work history of at least 40 quarters can enroll for Medicare Part A (hospitalization) without paying a premium. Everyone pays a premium for Part B (doctors' visits), Part D (prescription drugs) or a supplemental Medical policy. Access to the entire program is predicated on Part A enrollment.
However, married spouses can enroll without paying a premium even if they don't have the requisite quarters of work history - another benefit that now will be available to same-sex couples.
What's that worth? Seniors without adequate work credits can buy into the system by paying a Part A premium out of pocket. This year, the monthly Part A premium is $243 for beneficiaries with 30 to 39 quarters of work history, and $441 for those with less than 30 quarters in the system.
The extension of Social Security spousal and survivor benefits is today's most significant retirement benefit story. But experts point to ambiguity about exactly how the DOMA decision will reverberate through the Social Security program.
WHERE YOU LIVE
Same-sex couples who were married in states recognizing gay marriage, and who still live in that state, will be recognized for purposes of federal benefits. But the picture gets murkier for married couples who move to states that don't recognize same-sex marriage. The Social Security Act's definition of a spouse relies on the definitions in the state where an applicant lives.
What happens now to a couple that is married in a state that recognizes legal same-sex marriage, but currently lives in one that doesn't?
"I think it will take some time to sort out which marriages will be recognized," says David Codell, legal director at the Williams Institute, a think tank focused on sexual orientation and gender issues at the University of California, Los Angeles School of Law.
The marriages of same-sex couples living overseas will be recognized, adds Gerald McIntyre, directing attorney of the National Senior Citizens Law Center, because the applicable law for those couples is the District of Columbia, which has legalized same-sex marriage.
Children constitute a major category of Social Security beneficiaries. The Social Security Administration says 4.4 million children receive benefits because one or both of their parents are disabled, retired or deceased.
Adopted children generally are eligible to file on the record of either parent in the case of heterosexual couples, but some states don't recognize joint adoption. That could impact same-sex couples who adopt, says Webster Phillips, senior legislative representative at The National Committee to Preserve Social Security and Medicare.
"Prior to the repeal of DOMA," Phillips said, "a child could qualify on a parent's record, but not on that of a stepparent. Will that change now? We'll have to see how far the Obama Administration goes in the way it interprets and implements the court's decision."
Although it will take time for the federal programs to accommodate newly eligible seniors, married spouses who think they have a claim to Social Security or Medicare benefits should apply immediately in order to qualify for the maximum retroactive benefit, McIntyre says.
"You can get six months of retroactive benefits, so it makes sense to apply right away, even though there might be some lag time before you receive those benefits," he says.
For more from Mark Miller, see http://link.reuters.com/qyk97s
(Follow us zReutersMoney or at http://www.reuters.com/finance/personal-finance. Editing by Leslie Gevirtz)