Response to 5/25 Moderator Question

[National Dialogue Moderator <moderator>]

		Response to 5/25 Moderator Question

Maureen West, our moderator, asks what widow's benefits should be 
and if they are rightfully earned.  The original question focuses on 
the issue of continuance or discontinuance of widow's benefits on 
remarriage.

I think we need to start by thinking through what widow's benefits 
should be. It costs a surviving spouse (widow or widower) about 75% of 
what it cost the couple to live to continue to live at the same 
standard of living.  The women in many, many married retired couples 
will be widowed, many of them for 15 and more years.  For many of 
them, there is a decline in living standard at time of widowhood. The 
widow's benefit should be a combination of a normal benefit plus an 
added premium to reflect the fact that the cost of living alone is 
more than 50% of family costs.

We have a mix of different family types today - many are two earner 
couples, at least during part of their adult life.  Some still divide 
responsibility so that one person is the "breadwinner" and the other 
the "caregiver and homemaker."  For the single earner family, the 
social security benefit after widowhood is 67% of the benefit the 
couple got while both were alive, not enough to provide the 75% 
needed.  For the dual earner couple who might happen to have earnings 
histories which produce equal benefits for each, the benefit to the 
survivor is only 50% of what the couple was paid will both were alive 
and retired.  This widow, if the family is very dependent on social 
security, gets an income that is 33% less than what is needed.

What is needed for the future is to revamp the widow's benefits and 
method of crediting service through adult life..  First, the current 
method of handling family benefits allows a person with time in and 
out of the workforce, and/or in multiple marriages to get a benefit 
based on personal work, or a spouse's benefit, but not both.  A new 
method is needed of crediting earnings, so that a person with an adult 
life spent in and out of caregiving can combine the years of work and 
caregiving for credit purposes.

It has been proposed that the widow's benefit should be 75% of the 
total benefit provided to the couple.  This would help remedy the 
decline in economic status at widowhood.  Under this proposal, it 
would not be logical to continue the benefit on remarriage without 
change because the benefit was increased to reflect the higher costs 
of a single person household.  

What should be done on remarriage after widowhood?  If each person is 
getting a benefit based on their combined work and caregiving years, 
it may not be necessary to make much change.  However, if there was an 
increase in the benefit to 75% of the couple's benefit before 
widowhood, than an adjustment seems fair. What seems logical is to 
reduce the benefit to the widow on remarriage to 50% of the benefit 
paid previously to the couple, and add that to the new spouse's 
benefit.  This benefit can then be compared to a family benefit based 
on the new spouse's earnings record, and the larger of the two 
benefits paid.  Essentially, if there is insurance to cover the extra 
costs of living alone, then the extra benefit paid to the widow should 
be continued when she is no longer living alone.

I believe what is earned is the basic benefit without the added 
benefit for living alone.  The added benefit for living alone is an 
insurance benefit which should not be automatically continued.

Anna Rappaport