Social Security Spouse and Survivor Benefits for the Modern Family
Social Security spouse and survivor benefits are somewhat controversial because they advantage single-earner families relative to dual-earner families (or single people) who pay the same amount in taxes. Our paper simulates several different ways of structuring Social Security spouse and survivor benefits. We specifically consider earnings sharing, a system in which a husband’s and a wife’s earnings records are combined and averaged over the duration of their marriage when computing benefits. We also consider whether other changes to Social Security’s benefit calculations—like caregiver credits, minimum benefits, and more modest changes to spouse/survivor benefits—could improve program fairness and better target economically vulnerable people in less complex ways than earnings sharing. All proposals cost roughly the same amount in 2050. We find that all three packages—earnings sharing, replacement of most of the spouse benefit with a minimum, and full spouse replacement with caregiver credits—reduced poverty modestly and made lifetime benefits more similar for couples paying the same amount in taxes relative to current law scheduled. The earnings-sharing proposal, however, only achieved the poverty reduction with significant adjustments to the treatment of surviving spouses through a self-financed survivor benefit. The packages reveal important tradeoffs among beneficiary groups, with particular tensions between the claims of workers and non-workers, and married, never married, divorced, and widowed persons.