Estimating Social Security Benefits for a Divorced Client with a State Pension

Hope all is well. I have a case that I’m working on right now where I’m trying to estimate a clients social security benefit. Could you possibly help point me in the right direction. Here’s info about the client

• She just turned age 65 and is divorced (divorce happened more than 2 years ago) and never remarried.

• Her ex-spouse (married for 30+ years) is also 65 and has not turned on his own SSA benefit.

• She is going to receive a SERS state pension benefit that we estimate to be $1,500 per month.

• Her SSA statement on her work history shows it should be worth $974 per month at FRA.

• While she doesn’t know anything about her ex-spouses SSA benefit, she says that he “made a lot more money than her” and has always worked in an SSA covered job.

• Ex-spouse is still working and probably not looking at retirement in the next few years.

Here are my questions: 

1. Looking back through my notes from our training, it looks like she could claim on her own work history and would be eligible for Independently Entitled Divorced Spouse benefits without needing him to claim benefits first, correct?

2. I’m guessing her benefit would be reduced by the WEP. Would the WEP or GPO have any effect on the Spousal benefit?

3. Is there any way to estimate what she might receive without knowing anything about the spouse’s benefit?

4. How would she go about getting any information about what her benefit might be worth from SSA?

5. Is it best to call in to SSA, schedule a time to meet with someone, etc.?

6. As we talked about in our training, it seems like you get different answers from different people at SSA… What’s the best way to get to someone that knows what they are talking about?

7. The state pension plans have a partial lump sum option where you get a portion of your retirement benefit upfront as a lump sum, but you still receive a monthly benefit. People ask if that would help reduce the WEP effect on their SSA benefit since their income from the pension is lower.

Based on the information you've provided, here’s a detailed breakdown and answers to your questions:

1. Correct. However, GPO will reduce spousal boost by two-thirds of SERS pension.
   Your client is eligible for Independently Entitled Divorced Spouse benefits, even if her ex-spouse has not yet filed for his own benefits. This means she can potentially claim benefits based on her ex-spouse’s record. However, because she is receiving a state pension through SERS, the Government Pension Offset (GPO) will apply. This will reduce her spousal benefit by two-thirds of the amount of her SERS pension. So, if she is receiving a $1,500 pension from SERS, $1,000 (two-thirds) will be deducted from her spousal benefit.

2. Correct. Spousal boost will be reduced by GPO.
   The Windfall Elimination Provision (WEP) will reduce your client's own Social Security benefit based on her work history. Additionally, the GPO will reduce any spousal benefits she might receive. The GPO reduces the spousal benefit by two-thirds of her SERS pension. Therefore, the combined effects of WEP and GPO will reduce both her own benefit and any spousal boost she might be entitled to.

3. You need to know ex-spouse PIA.
   To estimate what she might receive from spousal benefits, you need to know her ex-spouse's Primary Insurance Amount (PIA), which is the benefit amount he would receive at his full retirement age. Without this information, it's difficult to provide an accurate estimate of what her spousal benefit might be. Once you have his PIA, you can calculate her potential spousal benefit and then apply the GPO reduction to get a more precise estimate.

4. Contact SSA at 800-772-1213. Will need to provide divorce decree and possibly marriage certificate.
   Your client should contact the Social Security Administration (SSA) directly at 800-772-1213 to inquire about her benefits. When she calls, she should be prepared to provide documentation such as her divorce decree and possibly her marriage certificate to confirm her eligibility for benefits based on her ex-spouse’s work record. The SSA representative can then provide her with information on both her own and potential spousal benefits.

5. Call SSA first to schedule a visit to the local office.
   It’s often a good idea to start by calling the SSA to schedule an appointment at the local office. This can help ensure that a knowledgeable representative is available to assist with her specific situation. Having an appointment can also reduce wait times and allow for a more thorough discussion of her options, especially if there are complexities related to WEP, GPO, and spousal benefits.

6. Talk with SSA and then email us with details of the conversation. Ask for a supervisor if not comfortable with the SSA representative.
   When dealing with the SSA, it’s not uncommon to receive varying answers depending on the representative. If your client is unsure or uncomfortable with the information provided, she should ask to speak with a supervisor for further clarification. Additionally, it’s a good idea for her to keep a record of her conversations, including the name of the representative and details of what was discussed. She can then share these details with you for further advice.

7. Lump sum distribution will not avoid WEP or GPO. SSA will determine monthly benefit amount and adjust accordingly.
   If your client takes a partial lump sum from her state pension, this will not help her avoid the Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO). The SSA calculates these reductions based on the total pension amount, regardless of whether it is taken as a lump sum or in monthly payments. The lump sum distribution may lower the monthly pension amount, but it will not eliminate the WEP or GPO impact on her Social Security benefits. The SSA will still adjust her Social Security benefits based on the full value of her pension.

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