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A Social Security Spousal Benefits Loophole for Caregivers

A Social Security Spousal Benefits Loophole for Caregivers

February 05, 2024

An individual who has retired may apply to begin receiving Social Security retirement benefits. If they have a child with a disability, the child may qualify for certain Social Security benefits, too. For instance, your child may be eligible for Social Security Disability Insurance (SSDI) based on your work record.

Yet many parents of children with disabilities are unaware of a little-known provision in the Social Security regulations called the Child-in-Care benefit. Continue reading to learn more about this loophole that applies to spouses.

The Social Security Disability Spousal Benefits Loophole

Let's say you have retired after a 30-year career and are now receiving your Social Security retirement benefits. You have a child whose disability has been present since birth. Based on your work record, your child, who may never have been able to work, is now eligible to begin receiving SSDI benefits.

What you may not realize is that your spouse may also be able to receive Social Security benefits. In fact, they don't even have to have reached retirement age to qualify for these benefits. They may be eligible, through this loophole, if they are serving as a caregiver at home for your child with disabilities.

Here's an example: Evan retires at age 67 and begins receiving his Social Security of $2,500. He is a father to daughter Katie, who developed a disability prior to turning 22. She begins receiving SSDI benefits of $1,250 (50% of Even's benefit) at this point under the Social Security Administration (SSA)'s Disabled Adult Child program. (Note that if Katie marries, she will likely no longer qualify for this program.)

Evan's spouse, Bonnie, age 58, serves as Katie's full-time caregiver at home. Under the Child in Care benefit, Bonnie may also begin receiving spousal Social Security benefits of up to 50% of Evan's benefit, even though she has not reached the minimum retirement age. The Social Security disability spousal benefits loophole makes this a possibility.

As you may expect, there is a catch: Together, Evan's, Bonnie’s and Katie's benefits exceed the limit that the SSA places on family benefits. (Note that this limit can vary, depending on several factors but is usually around 180% of the primary wage earners benefit.)

As a result, the SSA will reduce Bonnie's and Katie's benefit proportionally. However, the combined benefit still ends up exceeding Katie's benefit alone – in this case about $750 a month.

Bonnie can continue to receive this $9,000 a year until she chooses to claim her own Social Security benefit. his will certainly make a significant difference in the resources they have available to care for their daughter.

As the Social Security Administration states, a parent caregiver can receive these benefits if they exercise parental control and responsibility over their child or perform services for their child with a physical disability. (Read more about child benefits in this online SSA resource.)

In many cases, the SSA will inform the caregiver spouse of this opportunity if they were already receiving spousal benefits before the child turns 16. However if not, the family has to proactive request this benefit.

If your spouse is a caregiver for your child with disabilities and yet not receiving these benefits, be sure to explain the situation to the SSA when you retire and apply for Social Security.

Consult With Your Special Needs Planner

This area of benefits planning can prove particularly complicated. You can reach out to the Social Security Administration with your questions via the following avenues:

  • via email
  • by calling 1-800-772-1213 or the TTY number, at 1-800-325-0778 (Support via these phone numbers is available on weekdays between 8 a.m. and 7 p.m.)
  • through a local Social Security Office (Search online with your ZIP code for an office near you)

In addition, work closely with your special needs planner. They can help you fully analyze your Social Security retirement options. Social Security claiming strategies are different when there is an adult child with disabilities.

They also can ensure what approaches are best in providing for your disabled child. One wrong turn could result in a significant reduction in Social Security benefits. With professional support, you can best avoid this.

The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

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