Legislation affecting Social Security has been reintroduced by U.S. Sen. Patty Murray, who calls her proposals a “common sense” way to “modernize and protect our Social Security system in a fiscally responsible way.”
The Retirement and Income Security Enhancements (RAISE) Act would strengthen benefits for struggling seniors – women in most cases -and disabled persons and young adults who face serious hardships, and also would “shore up” the trust fund for future generations by asking those who can most afford it to pay their “fair share,” Murray said.
According toWashington’s senior senator, highlights of the legislation she reintroduced in November include:
• Enhances benefits for divorced spouses. Under current law, the divorced spouse is only entitled to receive benefits under the former spouse’s earnings if she or he was married for ten years. Beginning in 2016, the RAISE Act would allow those with less than ten years of marriage to be eligible for benefits under the former spouse’s earnings. Eligibility would be phased in, so that those married less than ten years would receive less than 100 percent of the spousal benefit. These partial benefits would gradually decrease in increments of 10 percent and phase out for those with less than five years of marriage. For example, those with nine years of marriage would receive 90 percent. The same formula will apply to survivors’ benefits for divorced spouses.
• Enhances benefits for widows and widowers. The RAISE Act would establish an alternative benefit for a surviving spouse of couples in which both husband and wife established insured status as retired workers. For the surviving spouse, the alternative benefit would equal 75 percent of the sum of the survivor’s own worker benefit and the Primary Insurance Amount (PIA) of the deceased spouse. The alternative benefit would be paid only if more than the current law benefit. This benefit would be available to surviving spouses on the rolls at the beginning of 2016 and those becoming eligible after 2016.
• Extends benefit eligibility for children of retired, disabled or deceased workers. This provision of the RAISE Act applies if the child is in high school, college, or vocational school. Under current law, minor children under the age of 18, and high school students under age 19 are entitled to benefits if they are the child of a retired, disabled, or deceased worker. Beginning in 2016, this provision extends benefits for full-time students until the age of 23 if they are a child of a retired, disabled or deceased worker.
* Asks those who can most afford it to pay their fair share towards strengthening and shoring up the Social Security Trust Fund. Beginning in 2016, the RAISE Act would apply a two percent payroll tax rate on earnings over $400,000, with the threshold wage-indexed after 2016. The bill provides a corresponding credit for earnings in a secondary average indexed monthly earnings (AIME) formula for benefit computation.
Murray, citing a 2014 estimate from actuaries, said RAISE would extend the life of the Social Security trust fund by one year,.
Social Security benefits were originally designed to meet the basic needs of single-income families in which only one spouse worked outside the home, and at time when American companies often offered generous pension plans in retirement, Murray said. Today, she noted, such pensions “are a relic of the past.” In addition, women comprise nearly 50 percent of the workforce, and middle-class workers have seen their wages stagnate relative to inflation, making saving for retirement even more challenging, the senator said.
When a spouse dies, the surviving spouse is often faced with a sudden and significant loss of household income. Under current law, a widow or widower from a dual-income couple receives a significantly smaller Social Security survivor benefit than the survivor of a single-earner couple with the same lifetime earnings, Murray said.
“It is time to modernize the system to account for a changing society in which both men and women spend their working years paying into the Social Security system. This is an especially critical issue for women,” Murray said.
Women represent approximately 68 percent of Social Security beneficiaries over the age of 85. Many of them are widows, and many are struggling with costly healthcare needs, Murray said.
Under current Social Security regulations, women who are married for less than 10 years are ineligible for any spousal or survivors benefits.