The Subsidy of Marriage by Social Security

(cross posted at Same Facts)

Josh Barro notes that marriage cannot be an entirely state issue because of the way in which it impacts things like Social Security and Medicare eligibility. Below is the majority of a post I wrote in September, 2011 on the subsidy of marriage provided by Social Security…..

Gene Steurle and Stephanie Rennane have a nice policy brief put out by the National Institute for Health Care Management on the lifetime contributions and benefits of Social Security and Medicare. This is mostly familiar stuff, with lifetime Medicare benefits consistently being several times larger than contributions to the pay-as-you-go program, and Social Security lifetime contributions and benefits being more similar for singles and two-earner couples. However, one thing jumped out from this figure (circled):

The profound subsidy of marriage that is inherent in how Social Security determines benefits for spouses who do not pay Social Security taxes in earlier life. As Steurle notes:

While a single woman who worked a full career at the average wage can expect to receive Social Security benefits roughly in line with her payroll contributions, a married woman who never worked but whose husband paid the same taxes as the single woman can expect to receive about $180,000 in spousal and survivor benefits. Unlike private pensions, these additional benefits are essentially free but only to those who are married, regardless of need, contributions or any child rearing.

The subsidy would be the same if the gender roles were switched.

Determining what type of contracts (marriage, civil union, etc.) provide the benefit described here–allowing one member of a couple to obtain eligibility for Medicare and a Social Security pension even if they have no market wages that were subject to payroll taxes over their younger years– and whether all American citizens have access to this subsidy, is a key public policy detail that will have to be worked out if marriage equality is to have its fullest meaning.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

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