Once you have filed for Social Security benefits, other members of your family may be eligible for benefits as well.  Those individuals likely to benefit include: a spouse that is at least 62 years old; a spouse of any age who is caring for a child who is entitled to benefits on your claim (younger than 16 or disabled); former spouses of marriages that lasted at least 10 years and who are at least 62 or older; children 18 and under or up to 19 if they have not graduated from high school yet; and disabled children even if they are 18 and older as long as they are unmarried (although there are exceptions to that rule).  Over 3 million children receive benefits as dependents of retired, disabled or deceased workers according to the Center on Budget and Policy Priorities.

There is a limit to the amount of money that can be paid out on a worker’s benefits.  That limit is called the maximum family benefit.  The worker’s benefit is not affected at all but Social Security limits the amount that can be paid out to family members to an amount 150 to 180 percent of the worker’s benefit.  The more individuals in a family claiming on a worker’s benefit, the smaller the payment to each one of them.

Mike and Carol Brady are both 66.  Now that Mike has reached his full retirement age, he applied for his benefits.  Carol applied for spousal benefits from Mike’s record.  Mike is entitled to a monthly payment of $1600 and Carol’s spousal benefit of half of Mike’s benefit is $800 a month.  If Mike’s family maximum is $2400, Carol will receive a full payment for her spousal benefit.

A spouse who either has low earnings for his or her benefit record or no earning can be entitled to as much as half (claiming early on either individual’s part will tilt this benefit to less than half) the working spouse’s benefit.  Social Security pays a combination of earned benefit and spousal benefit with the earned benefit being paid first.  If the spouse claiming on the worker worked somewhere that did not take out for Social Security taxes such as federal civil service, some state and local government employment or a foreign country, the spousal benefits will be reduced by two-thirds of the pension.  For example if a spouse’s pension is $600, two-thirds or $400 of that $600 must be deducted from the spousal benefits.  So if the spousal benefit would have been $600, it will be adjusted to $200 ($600 spousal benefit minus the $400 adjustment).

Now suppose that Carol Brady’s work history allows her to claim a benefit of her own.  Her benefit is $600 a month.  But her spousal benefit would have been $800 a month.  So it would look like this:

If Carol’s full retirement age is 65 and she chooses to collect benefits at age 62, she’ll receive 37.5 percent of Mike’s benefit as long as Mike waits until his full retirement age.  The effect of Carol applying for Mike’s benefits at age 62 is that she would get between 32.5 percent and 37.5 percent of Mike’s benefit as long as Mike waits until his full retirement age.  If Carol is caring for a disabled child who is 16 and under she would get full benefits regardless of the age she chooses to collect benefits as long as Mike waits until full retirement to take benefits. A current spouse cannot receive benefits on a worker’s record until the worker files for benefits.  However, that worker can use a process called file and suspend to make it possible for a spouse to collect benefits while also allowing the worker to maximize their benefits.  Only one spouse can apply for spouse only benefits.

Now suppose that Mike and Carol have two minor children, Bobby and Cindy still at home.  They too can receive benefits at 50 percent of Mike’s benefit with a caveat.  Carol, Bobby and Cindy cannot make more than $800 between the three of them if they are all claiming on Mike’s record (the maximum family value of $2400 minus Mike’s benefit).  Mike’s benefit amount will never change no matter who claims on his record.  The $800 of benefits would be split between the three of them. 

Suppose Carol divorces Mike and doesn’t remarry.  Carol claims on Mike’s record as Mike’s former spouse so that she can wait until 70 before claiming on her own record.  (If Carol and Mike have been divorced at least two years and both she and Mike are at least 62, she can collect benefits even if Mike is not retired.)  The Social Security Administration does not consider former spouses as part of the family unit.  Therefore her claim on Mike’s record has no bearing on the family maximum.  That leaves Mike still receiving his full benefit and each one of his eligible children claiming a split of the remaining $800 benefit.

Carol and Mike’s dependent children could claim benefits from both parents if both parents are eligible for benefits.  In which case, the maximum family benefit can be as much as the sum of each family benefit.  So if Carol’s benefit amount is $1200 and Mike’s benefit amount is $1600, the two of them between them could have a combined family maximum of $1400 (the sum of half of Mike’s and Carol’s benefit amount)

Similarly, if Mike adopts two additional children once again we would see that the benefit amount for Mike’s two minor children would change but Mike’s benefit would remain the same.

These are only a few of the possibilities of how family benefits might pertain to you.  Andy Landis in his book, Social Security: The Inside Story 2012 Edition wrote, “No matter how complex the government makes its rules and categories, the next person to walk through the door will have a life more complicated than the rules.”  Contact your local Social Security office or call 1-800-772-1213.

Note:  For purposes of ease in calculations, I used a straight 1.5 times a worker’s benefit.  In actuality the Social Security office uses a complex four part computation that weighs things like when a person begins drawing their benefits and their employment wage history to create a percentage between 150 to 180 percent of a worker’s benefits.  Therefore these numbers are meant to act as a guide only and should be on the low side and are not to be taken as gospel.  If you are interested in how the family maximum benefit is figured you can go here to see what it might mean to you.  To get an estimate of your family benefits, you can go online to my Social Security and sign up for your statement.  The statement will provide an estimate of what a child’s family benefit might be and what your maximum family benefit is.