Google Search
Justia Law Firm Web Site Designs

# 71 - Social Security, SSI and Child Support

Monograph # 71                                                             Rev 11.01.10

SOCIAL SECURITY, SSI and CHILD SUPPORT


By Lawrence D. Gorin, Attorney at Law, Beaverton, Oregon

Introduction

    References to “Social Security,” “SSI” and “SSDI” are frequently encounter by family law lawyers when dealing with clients and colleagues.  The terms are often used in the same breath, without distinction and all too often without a full understanding of what is, and its not, involved. Problems and confusion arise when the terms are unthinkingly used interchangeably, particularly  in connection with discussions regarding child and spousal support.  Lawyers need to be cognizant of the distinctions.  The purpose of this article is to advance that goal.

Social Security
 
     “Social Security,” as that term is commonly used, refers to the federal “Old Age, Survivors and Disability Insurance” (OASDI) program that provides retirement benefits, life insurance benefits and disability insurance benefits for insured workers and their qualifying dependents and survivors.  The Social Security OASDI program is funded by employee contributions withheld from wage and salary income pursuant to the Federal Insurance Contributions Act (FICA), together with matching employer contributions.  Title II of the Social Security Act, codified at 42 USC § 401 et seq, comprises the enabling federal legislation.

   As an insurance program, Social Security benefits are paid upon the occurrence of qualifying and triggering events (retirement, disability or death).  Specifically, Social Security retirement benefits are available commencing at age 62.  Social Security disability insurance benefits --- often, and correctly, referred to as “SSDI” --- may paid whenever the insured worker becomes disabled.  And upon the death of an insured worker, “survivor’s insurance benefits” are payable to qualifying surviving spouses and dependents of the deceased worker.  OASDI benefits are paid without regard to any consideration of individual “need.”

(NOTE:  As this article explains, Social Security disability insurance benefits  -- SSDI -- must be distinguished from Supplemental Security Income benefits -- SSI.  The benefits are derived from two separate and distinct  governmental programs and neither has anything to do with the other, although both programs are administered by the Social Security Administration.)

Supplemental Security Income

    “SSI” refers to the Supplemental Security Income program, which is a “needs-based” public welfare program, the basic purpose of which is to provide "a subsistence allowance, under federal standards, to the Nation's needy aged, blind, and disabled.”  To be eligible for SSI benefits, a claimant must be aged, blind or disabled, as defined by 42 USC § 1382c, and must have "income" and "resources" below certain levels.  Money for the payment of SSI benefits comes from congressional appropriations taken from general tax revenues (and not from the Social Security and Medicare trust funds).  While the SSI program is administered by the federal Social Security Administration (SSA), it is not part of the Social Security OASDI program itself.  In essence, SSI is a federally operated low-income (or no-income) welfare program for qualifying persons based on age and physical condition, coupled with financial need. Title XVI of the Social Security Act, codified at 42 USC § 1381 et seq, comprises the enabling federal legislation.  

    SSI benefits are available to qualifying disabled children under age 18.  To qualify as being disabled, the child must have a medically determinable physical or mental impairment that results in marked and severe functional limitation(s) that can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.

    In addition to qualifying as disabled, eligibility for receipt of SSI benefits by a child under age 18, and the amount of such benefits, depends on the child’s income and resources.  If a disabled child is under age 18, not married, and lives at home with a parent, a portion of the parent’s income and resources will be “deemed” as being available to the disabled child.  Generally, the more income that is deemed to be available to the child, the less will be the child’s SSI benefit amount, even to the point of fully eliminating SSI eligibility.  The federal SSI benefit rate for 2010 was $674 per month.  If the income that is deemed as available to a disabled child equals or exceeds the SSI benefit rate, there will be no SSI benefit.

    Supplemental Security Income (SSI) recognizes that disabled children under age 18 generally have greater financial needs than nondisabled children.  Accordingly, the underlying intent of the program is to supplement -- but not replace -- the financial resources otherwise available to the disabled child, including money available to a child as a result of a court-ordered child support obligation imposed on a divorced, separated or never-married parent.  Stated differently, SSI benefits for a disabled child are received by the child in addition to, and not in lieu of, a parent’s court-ordered child support obligation.

Social Security "child's insurance benefits"

    Under the Social Security insurance program (OASDI), when an insured worker who is a parent retires, dies or becomes disabled and has a qualifying child, “child’s insurance benefits” become payable.  The underlying premise is that, prior to retirement, death or becoming disabled, the insured worker was financially supporting his or her child with income  earned from gainful employment.  When an insured worker’s employment income ceases due to retirement, death or becoming disabled while still having a parental duty of support, the Social Security “child’s insurance benefit” becomes payable on behalf of the insured worker, thereby allowing continued fulfillment of the parental duty of support, with the source being the Social Security insurance dollars rather than employment income dollars.

    In the case of an insured parent’s retirement or disability, the resulting child's insurance benefit is paid in addition to the parent’s own retirement or disability insurance benefit, so that the parent’s own Social Security benefit continues to be paid in full, without any reduction.

    To qualify for Social Security “child’s insurance benefits,” the insured worker’s child must be unmarried and either (1) younger than 18 or (2) younger than 19 and a full-time secondary school student.  Social Security “child’s insurance benefits” remain payable until the first occurrence of any of the following events: (a) the child dies; (b) the child reaches age 18 and is neither disabled nor a full-time student; (c) the child marries; or (d) the child's parent is no longer entitled to Social Security disability insurance benefits (if the parent’s disability was the basis for the child’s entitlement).  If the child is younger than 19 and still attending a secondary school, the child’s insurance benefit will continue until the child graduates or until two months after reaching age 19, whichever comes first.

    For the qualifying child of a retired or disabled worker, the amount of the “child’s insurance benefit” is generally 50% (one-half) of the worker’s full retirement or disability benefit.  For the qualifying child of a deceased worker, the amount of the “child’s insurance benefit” is 75% of the deceased parent’s basic Social Security benefit. However, there is a limit to the amount of money that can be paid to a family. The family maximum payment is determined as part of every Social Security benefit computation and can be from 150% to 180% of the parent’s full benefit amount. If the total amount payable to all family members exceeds this limit, each person’s benefit is reduced proportionately (except the parent’s) until the total equals the maximum allowable amount.

Social Security "mother’s or father’s insurance benefits"

    If a retired or disabled worker is the parent of a qualifying child who is under age 16 and the child is “in care” of the retired or disabled worker’s spouse, and the spouse is under age 62 and is “the natural mother or father of the worker's biological son or daughter,” a Social Security “mother’s or father’s insurance benefit” is available.  The amount of the spouse’s insurance benefit is generally 50% of the retired or disabled parent’s full retirement or disability benefit and is paid in addition to the qualifying child’s own Social Security child’s benefit.  The “mother’s or father’s insurance benefit” payable to the retired or disabled worker’s spouse due to the spouse being under age 62 and having “in care” the qualifying child of the retired or disabled worker comes to an end when the child attains age 16 (and the child is not disabled), or the child is no longer in the spouse’s care, or the spouse and the retired or disabled worker get a divorce, whichever event first occurs.  

Social Security "surviving mother’s or surviving father’s insurance benefits"

    If an insured worker dies being survived by a qualifying child who is under age 16 and a spouse who is under age 62 and who has “in care” the deceased worker’s child, the surviving spouse (widow or widower) is entitled to a surviving “father's or mother's insurance benefits.”  The amount of the surviving “father's or mother's insurance benefit” is generally 75% of the deceased worker’s primary Social Security insurance amount. The surviving “father's or mother's insurance benefit” benefit otherwise payable in this circumstance ends when (a) there are no children of the deceased worker under age 16 (or disabled) who are entitled to a child's insurance benefit; or (b) the surviving spouse remarries. The surviving “father's or mother's insurance benefit” is payable in addition to the surviving child’s own Social Security benefit.

Social Security "surviving divorced mother’s or divorced father’s insurance benefits"

    Further -- and this is important for family law lawyers but often overlooked -- when a deceased worker’s qualifying child is under age 16 (or otherwise entitled to child's insurance benefits) and is in the custody and care of the deceased worker’s divorced spouse who is under age 62 and has not remarried, and the child is the natural or legally adopted child of the divorced spouse, a “surviving divorced mother’s or divorced father’s insurance benefit” becomes payable to the surviving divorced spouse, the amount thereof being 75% of the deceased worker's primary insurance amount. This payment for the surviving divorced spouse who is caring for the deceased worker’s qualifying child is in addition to the surviving child’s own Social Security child’s insurance benefit (which itself is 75% of the deceased worker's primary insurance amount).  In effect, the Social Security pay-out amounts to 150% of the deceased parent’s primary insurance amount.

NOTE: There is no provision for a Social Security benefit to be paid to a divorced spouse of a retired or disabled worker if the divorced spouse is under age 62, and this is so even if the divorced spouse has in his or her care a qualifying child of the retired or disabled worker who is entitled to child’s insurance benefits.

Consent of retired or disabled worker not required for “child’s benefits”

    Application for the child’s Social Security benefit and entitlement to receipt thereof does not require the consent of the retired or disabled worker.  For example, when parents are divorced and the noncustodial parent is entitled to receive Social Security retirement or disability benefits, the custodial parent may apply to Social Security Administration (SSA) on behalf of the child for the “child’s Social Security insurance benefit” without need of any consent from or involvement of the noncustodial parent.  This sometimes results in the noncustodial parent being totally unaware that the child is receiving an insurance benefit directly from the Social Security Administration that is being paid on behalf of the insured worker.  The SSA generally makes payment of the Social Security child’s insurance benefit to a “representative payee” for the child, most often being the child’s custodial parent (or other legal custodian).  

    In this circumstance, it is not unusual that a retired or disabled Social Security recipient who is under a court order for the payment of child support will continue to pay the court-ordered child support, often using his or her own Social Security benefit to do so, without realizing (or understanding) that the child is also receiving a payment directly from the Social Security Administration in an amount that may equal or exceed the amount of the court-ordered child support obligation.


Effect of SSI on child support obligations

    As may be inferred from the label used, Supplemental Security Income (SSI) is designed and intended to supplement the recipient’s income, not to replace that income.  If a disabled child is eligible for and is receiving SSI, the SSI benefit does not abrogate or reduce a parent’s legal duty and obligation to support his/her child as otherwise mandated by law.  Nor does a child’s eligibility for or receipt of SSI benefits provide a basis for a downward adjustment or elimination of the dollar amount of child support as calculated pursuant to the Oregon Child Support Guidelines.  

    In sum, the amount of child support as calculated under the Oregon Child Support Guidelines remains the same regardless of the child’s receipt (or potential receipt) of SSI benefits.  For a child under age 18 to be eligible for SSI benefits, the child must be disabled (as determined by SSI program standards) and must be financially needy due to lack of available income and resources, including family resources.  It is not the intent of the SSI program to relieve a parent who has financial resources and income sufficient to support his or her child from using such resources and income to fulfill the parent’s duty of support.

    Lastly, it needs to be understood, again, that the SSI program is a federally funded public welfare program that involves the expenditure of public (taxpayers’) dollars.  Consequently, to reduce or eliminate a court-ordered child support obligation otherwise imposable on the child’s parent, doing so for the reason that the child is receiving (or is eligible to receive) SSI benefits, simply results shifting the child support obligation from the parent to the public.  This would be inconsistent with the public policy as expressed in ORS 416.405 “[T]hat dependent children shall be maintained, as much as possible, from the resources of both of the parents, thereby relieving or avoiding, at least in part, the burden often borne by single parents or by the general citizenry through public assistance programs.”

NOTE:  When it is the disabled parent (rather than the child), who is the recipient of SSI benefits, ORS 25.245(1) becomes applicable:

      ORS 25.245(1).   "Notwithstanding any other provision of Oregon law, a parent who is eligible for and receiving cash payments under * * * the federal Supplemental Security Income Program shall be rebuttably presumed unable to pay child support and a child support obligation does not accrue unless the presumption is rebutted."

Effect of Social Security on child support obligations

    Parent’s receipt of Social Security retirement or disability benefits.  Social Security retirement benefits and disability benefits received by a parent are considered as “income” for child support calculation purposes under the Oregon Child Support Guidelines. OAR 137-050-0715.  

    Parent’s receipt of SSI benefits.  However, a parent who is receiving Supplemental Security Income (SSI) benefits is rebuttably presumed unable to pay child support and a child support obligation does not accrue unless the presumption is rebutted.  ORS 25.245; OAR 137-055-5400.  

    Child’s receipt of Social Security “child’s benefits.”  As explained earlier, when a parent receives Social Security retirement or disability benefits and has a qualifying dependent child, the child becomes entitled to receive a Social Security “child’s benefit” as a directly result thereof.  The child's insurance benefit is paid in addition to the parent’s own retirement or disability insurance benefit, so that the parent’s own Social Security benefit continues to be paid in full, without any reduction.  

    Under Oregon law, when a child receives Social Security “child’s benefits” as a result of the obligor parent’s own entitlement to Social Security retirement or disability benefits, the obligor parent is entitled to a dollar for dollar reduction (or credit) against the obligor’s support obligation.  ORS 25.275(4).

    ORS 25.275(4).  “The child support obligation to be paid by the obligor and determined under the formula described in subsection (1) of this section * * * may be reduced dollar for dollar in consideration of any Social Security * * * benefits paid to the child [or to the child’s representative payee], as a result of the obligor’s disability or retirement."

    ORS 25.275(4) is implemented through the Oregon Child Support Guidelines.  Specifically, OAR 137-050-0740 says, in essence, that "The support obligation may be reduced dollar for dollar in consideration of any Social Security benefits paid on behalf of a disabled or retired parent to a child or a child’s representative payee."

    The reasoning is that the Social Security benefit paid to the child is part of the Social Security retirement and disability insurance plan to which the insured worker made contributions throughout his/her working years.  Typically, a parent supports his/her child with income (money) derived from employment or other labor.  When the parent retires or becomes disabled, the employment income that was used by the parent to support the child is no longer available (because it no longer exists).  The Social Security “insurance” benefit then kicks-in to fill the void and allow the parent’s court-ordered support obligation to continue to be fully fulfilled even though the parent no longer has employment income with which to do so.  In essence, the Social Security Administration (like any other insurance company) pays the insured’s obligation on behalf of the insured.  This is not intended to be “extra money” on top of court-ordered child support.  Rather, the “insurance dollars” simply replace the “employment dollars,” thus effectively resulting in the child receiving the full "guideline amount" of support as would otherwise be the case, albeit in whole or in part with social security dollars.

    A child’s receipt of “child’s insurance benefits” may also effect proceedings seeking modification of child support obligations under ORS 107.135.  Specifically, ORS 107.135(3)  allows an existing child support order to be modified upon evidence showing that there has been a "substantial change in economic circumstances of a party."  In considering whether a change in circumstances exists sufficient for the court to reconsider an existing support order, ORS 107.135(4)(a)(D) allows the court (or administrator) to consider "Social Security benefits paid to a child, or to a representative payee administering the funds for the child’s use and benefit, as a result of the obligor’s disability or retirement if the benefits."

Social Security retirement benefits, SSDI, property division and spousal support

    Social Security retirement benefits and disability benefits are personal rights that are not subject to division between spouses incident to dissolution of marriage.  Further, the value of such benefits may not be included in the division of marital property nor in determining how much property to award each spouse.  To do so would conflict with applicable federal law, 42 USC §§ 407Swan v. Swan, 301 Or 167, 720 P2d 747 (1986) (“State law, even state domestic relations law, must yield if Congress positively has required by direct enactment that state law be preempted..”)   However, such benefits may be taken into consideration in determining spousal support and fixing the amount thereof.  Cave and Cave, 85 Or App 336, 736 P2d 215 (1987). (affirming trial court decision that “Social Security benefits of both the respondent and the petitioner shall be added up, and each party shall get an amount equal to one-half of the total”).

Conclusion

    It is hoped that the foregoing summary explanation and discussion will enlighten the reader’s understanding as to the differences between Social Security benefits and “SSI” benefits, and make future discussions that employ these terms more accurate and more meaningful.

                                                  ###

LAWRENCE D. GORIN
Attorney at Law
6700 S.W. 105th Ave., Suite 320
Beaverton, Oregon 97008
Phone:  503-224-8884
E-mail:  LDGorin@pcez.com
http://www.divorcesource.com/OR/pages/ldgorin.html
http://ldgorin.justia.net/index.html