I for a detailed description). Objectives, Scope, and Methodology

To better understand the issues involved, Senator William V. Roth, Jr., asked us to (1) describe the concerns about the fairness of the benefits received by job-holding women and their families in retirement, (2) discuss how economic and demographic trends might affect the benefits of such people in the future, and (3) discuss past proposals to address these concerns. Because women tend to have lower lifetime earnings and longer life expectancies than men, they are more likely than men to qualify for spousal and survivor benefits and to be affected by the dual entitlement limitation. The surviving member of a one-earner couple receives about 67 percent of the couple’s total monthly benefit when both were alive. The distinction is important because Social Security benefits are based on lifetime earnings. These costs do not reflect the potentially large administrative burden on SSA that enactment of either of these proposals would require. Under the proposal, for each year a couple is married, the annual covered earnings of the husband and wife would be combined and one-half of this total would be credited to each spouse’s Social Security earnings record. Married individuals would have larger benefits than other married individuals with lower lifetime earnings. Social Security is gender neutral. Because (1) the survivor of a one-earner couple receives approximately two-thirds of the couple’s total benefits when both husband and wife were alive, (2) the survivor of a two-earner couple can receive a smaller portion, as low as one-half, and (3) two-earner couples have smaller total benefits to begin with than one-earner couples with the same total lifetime earnings, we anticipate that there could be increased demands that benefits for survivors of like-earning couples be equalized. Earnings Sharing and the Double-Decker Plan

Under earnings sharing, homemakers would become eligible to receive retired worker and disabled worker benefits and their dependents would be insured for survivor benefits because earnings sharing would provide the homemakers with an earnings history and a benefit eligibility of their own. 9 Supplement. “Women’s Employment and the Social Security System.” Social Security Bulletin, Vol. 10-24. 2-12. 56-67. Congressional Symposium on Women and Retirement.
Why GAO Did This Study

Pursuant to a congressional request, GAO examined whether married women and widows were being treated fairly under the Social Security system, focusing on: (1) how economic and demographic trends may affect women's future benefits; and (2) past proposals that have addressed these concerns.

What GAO Found

GAO noted that: (1) the Social Security Act is gender neutral when it comes to awarding individual retirement benefits; (2) women are more likely to qualify for spousal and survivor benefits and experience dual entitlement limits because of their lower lifetime earnings and longer life expectancies; (3) the monthly benefits for a two-earner couple are one-third less than those of a one-earner couple with the same demographics and lifetime earnings; (4) the survivor of a one-earner couple receives 67 percent of the total benefits received when both spouses were alive; (5) the survivor of a two-earner couple can receive between 50 percent and 67 percent of combined pre-death benefits; (6) a retired married person is often eligible for larger benefits as a spouse or survivor than as a retired worker; (7) an individual's retirement contributions do not necessarily increase his retirement benefits, but may provide disability coverage and family survivor coverage; (8) people with lower lifetime earnings and fewer Social Security contributions receive more Social Security benefits; (9) the issue of benefit fairness is likely to become more widespread as women spend more time in the workforce and increase their earnings; (10) the earnings sharing proposal combines the covered earnings of a husband and wife for each year that the couple is married and credits half of the combined total to each spouse's Social Security earnings; (11) the double-decker plan provides a flat-rate benefit for qualified beneficiaries and a proportional plan based on beneficiaries' lifetime covered earnings; and (12) SSA has not changed the way it administers retirement benefits because of the potential program costs, inequity issues, and administrative burdens.