One of our clients recently brought to our attention a Social Security benefit that was news to us. He and his wife care for their adult daughter with a disability in their home. Our client retired and began receiving Social Security benefits. As a result, his daughter was able to drop her Supplemental Security Income and switch over to Social Security Disability Income (SSDI), a much better benefit for a number of reasons.
Unusual Benefit for Parent of Adult Disabled Child
What he didn't know and we didn't know, was that because they care for their daughter at home, his wife was able to begin receiving spousal Social Security benefits even though she wasn't 62 yet, the normal earliest date for drawing Social Security retirement benefits.
Since the combination of the mother and daughter's benefits exceeded Social Security's limit on family benefits, the result was that the daughter's benefit was reduced. But the combined benefit still exceeded the daughter's benefit alone by more than $500 a month. Over the five years from when the husband began taking Social Security benefits until the mother reaches age 62, the family will receive more than $30,000, which will make a large difference in their ability to care for their daughter.
One of the Many Extra Benefits of Social Security
To get on my political soap box for a moment, this is just one of the many little-known benefits of Social Security. Social Security also provides disability benefits, widows benefits, and support for minor children of parents who have passed away. When President George W. Bush sought to privatize Social Security he compared the "return on investment" of our Social Security taxes in relation to our Social Security retirement benefits with historical stock market returns. This, of course, was just before the great recession, which took a lot of wind out of the sails of the privatization movement. But Bush and the proponents of privatization never factored in all of the other benefits of the Social Security system that would be foregone were it privatized. (Of course, there are other criticisms of privatization, for instance, that few investors are sufficiently disciplined to do as well as the stock market in general, there's no guarantee that the market will do as well in the future as it did in the past, and that Social Security provides longevity protection, meaning that it will keep paying even if you live to 100, by which time you would have run through your privately-invested funds.)
But It's Hard to Find Out About
The problem with Social Security is that maximizing your benefits depends on knowing the options, and that's not always easy. In terms of our newly-discovered benefit, the quite informative Social Security Administration website at www.ssa.gov can be confusing. Here's what it says:
A spouse may receive payments based on the retired worker's benefits:
At any age if he or she is caring for your child under age 16 or disabled and receiving Social Security benefits.
Your spouse would receive these benefits until the child reaches age 16. At that time, the child's benefits continue, but your spouse's benefits stop unless he or she is old enough to receive retirement benefits (age 62 or older) or survivor benefits as a widow or widower (age 60).
The first line seems to indicate that the spouse can receive benefits if she is caring for a child who is "disabled and receiving" SSDI. But then the next paragraph seems to say that this stops when the child reaches age 16. It turns out that the second paragraph only applies to the first part of the prior sentence, but it's confusing. (Click here to see the entire page.)
A separate Social Security handout on Benefits for Children includes the following language:
If the child is disabled, your benefits can continue if you exercise parental control and responsibility for a mentally disabled child. Your benefits can also continue if you perform personal services for a child who's physically disabled. Before the child reaches 16, we'll send a notice to you describing the conditions under which your benefits can continue.
While this paragraph does discuss the parental benefit, it is really in the context of benefits for parents of non-disabled children under age 16 whose other parent has passed away or begun receiving Social Security retirement or disability benefits. It's unclear how parents of whose children did not begin receiving before age 16 would ever hear about this continuing benefit.
So, that's why we're telling you about it here.