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UN-EARNING YOUR ENTITLEMENTS

The Social Security Administration has an extremely bizarre view on “entitlements.”  By its very definition, an entitlement is your earned right; it is yours–you are entitled to it.  Unfortunately, the SSA does not agree.  You are only entitled to it if  THEY say you are.  And their decision is final.

Let’s consider the case of Ted and Alice.  Ted was a good provider. He earned in excess of $100,000 per year.  Ted married Alice when he was 21 and she was 20, before he even landed his high-paying job.  The first few years were a struggle, and both of them had to work.  Then Ted got his high-paying job,  and Alice’s income went to pay the income tax.  They decided that they would come out ahead if Alice quit working and stayed home to care for their child.  All went well for the next 25 years.  Then Ted died of a heart attack.  At that point in time, he was entitled to $3200 per month upon retirement, and Alice was entitled to half of that, or $1600, for a total of $4800 per month.  If he had worked for another 20 years, until his full retirement age, it would have been considerably more.

For the entire 25 years of their marriage, Ted and Alice filed joint income tax returns.  When Ted died,  the amount credited to him should have automatically been credited to Alice.  If they had formed a legal “Partnership,” that would have happened.  Oh, that’s right, they did–it’s called “marriage.”  Of course the SSA does not see it that way.  They say that Alice is entitled to a “survivor’s benefit” of $1600.  But now things get curioser and curioser.  Widowed at 46, Alice got remarried at 48, immediately un-earning the $1600.  Nobody told her she had to wait until she was 60 to get remarried if she wanted to keep her “entitlement.”  It’s just another government “gotcha.”

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ENTITLEMENTS–WHO GETS THEM?

There is a very strange view of entitlements held by members of our government bodies–they discount marriage in the equation.  When it comes to deciding who gets the benefits of entitlements, marriage should be treated the same as partnerships.  In a partnership, there is no allocation of responsibility in the accrual of income.  Any income is credited to the partnership as a whole.  It should be the same way with a marriage.

As we go through life, we accumulate various “things” to help us on our journey.  One of the primary “things” is our retirement fund, a huge part of which is Social Security.  As long as we continue on our journey, all is well and good.  But a strange thing happens when the primary breadwinner dies–the benefits vanish into thin air.  The “surviving spouse” is “entitled” to benefits of about half that of the primary breadwinner, as long as he or she does not remarry before the age of 60!  (Whose idea was THAT??)

The simple solution would be to credit the marriage with the income, not just the primary breadwinner.  If that were done, once one spouse died, the other would get credited with the entire income from the time they started filing jointly.  Is that too complex for our government to figure out?  Apparently so.

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IS THE GOVERNMENT SEXIST?

The IRS and the Social Security Administration are, perhaps unwittingly, conspiring to discriminate against women.  The IRS decides who is a “wage earner” and the SSA determines who is entitled to that person’s benefits.  In the view of the IRS, a “wage earner” is someone who collects a paycheck from a third party.  There is no room in that view for “community property.”  Though things have changed a lot in recent years, for a large number of those currently of retirement age, the husband was the one who brought home the paycheck.  The wife got to do all of the fun stuff, like laundry, the dishes, the cooking, raising the kids, cleaning the house–in other words, nothing of any value.

When it comes time to retire, the husband is entitled to Social Security benefits based upon the amount of his lifetime earnings, and the wife is entitled to “spousal benefits” of about half of that.  Everything is fine, as long as both parties are around to collect.  If the husband dies, his benefits vanish into thin air, and the wife is left with about one-third of what they would have collected together.  And if she should choose to remarry before the age of 60, she loses even that.  The only winner is the government, who keeps the entire amount.

The problem with this system is that it does not recognize the traditional wife as contributing anything of value.  It does not matter that they filed joint tax returns for forty years–his account gets credited, and hers does not.  The government does not recognize that marriage is a partnership.  The government, unfortunately, is sexist.  How else can we account for this injustice?