Lawmakers: Social Security Shortchanges Women

The Social Security retirement insurance program could run into serious financial problems in the future, but many retirement planning experts say it already is unfair to working women.[@@]

Unless lawmakers make eliminating sex discrimination a goal of Social Security reform efforts, “this Congress will continue to uphold outdated policies and programs that actually punish women, divorced women and widows,” said Rep. Ginny Brown-Waite, R-Fla., according to a version of her remarks published in the Congressional Record.

Brown-Waite spoke during a recent discussion on the U.S. House floor about Social Security program rules that discriminate against women.

Women represent 58% of all Social Security beneficiaries age 62 and older, and about 70% of beneficiaries 85 and older, according to Rep. Judy Biggert, R-Ill., another lawmaker who spoke during the discussion.

When Social Security was created, few marriages ended in divorce, and the rule that a woman had to be married 10 years before being entitled to share in her husband’s Social Security benefits might have made sense, Biggert said.

Today, Biggert said, the 10-year rule is an anachronism.

“Statistics tell us that about one-third of all marriages end before 10 years have been reached,” Biggert said. “This translates into one-third of women who will receive zero Social Security benefits for those years that they were married.”

“I think these iniquities are astounding,” Biggert said.

Brown-Waite pointed out that, because of the way Social Security program rules are set up, a couple in which the husband earns $3,000 per month and the wife stays at home would collect $1,950 in monthly Social Security benefits, while a couple in which the husband earns $2,000 per month and the wife earns $1,000 per month would collect only $1,650 in monthly benefits.

Similarly, widows who worked before their husbands died and paid Social Security taxes could end up getting lower benefits than they would have collected if they had stayed home, Brown-Waite said.

Rep. Thelma Drake, R-Va., talked about women in their 50s or early 60s who become widowed after years of staying home to look after children. If a widow has not yet reached normal retirement age, she may have to struggle to find work before she can begin collecting benefits, and she will have to choose between collecting benefits based on her own earnings or her husbands’ earnings, rather than both streams of earnings, Drake said.

The plight of those widows highlights the need to create personal Social Security accounts and let workers turn a portion of those accounts into personal nest eggs that can be left to family members upon death, Drake said.

Biggert has tried to address the retirement planning challenges facing women and other groups of consumers by setting up the Financial and Economic Literacy Caucus, a congressional group that tries to promote financial education.