Saturday, August 05, 2000

Spousal benefits questioned

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Pension offset written into law

By Amy Higgins
The Cincinnati Enquirer

        Both sides say it's a matter of fairness.

Eileen Ryan collects information about Social Security. (Tony Jones photo) | ZOOM |

        On one side, there's Eileen Ryan, a 71-year-old widow from Kenwood. She believes she should receive spousal benefits from her husband's Social Security, in addition to her own benefits and public pensions.

        On the other side, there's 65 years of Social Security regulations and policy — specifically, the one passed in order to prevent “double dipping.” Called the offset rule, it enforces the notion that you are entitled to only one Social Security benefit.

        “You can't have your own benefits and a spouse's benefit at the same time — that's the way the law works,” said Rep. Rob Portman, a Republican from Terrace Park who sits on the House Social Security subcommittee. “Fairness depends on where you sit.”

REVISIONS PROPOSED

One proposal floating around Congress to address the government pension offset is H.R. 1217, introduced in March 1999 by Rep. William Jefferson, a Democrat from Louisiana.     The legislation would not repeal the GPO. But the GPO would only apply if a pension from public employment, combined with a Social Security survivor's or spouse's benefit, exceeds $1,200 per month.     The bill has 253 co-sponsors in the House of Representatives — enough to pass.     Rep. Rob Portman, a member of the Ways and Means Committee's Social Security subcommittee, said time constraints likely will prevent legislators from acting on the bill this year.

        Spousal benefits were intended for people (mostly wives) who were financially dependent on their spouses (mostly husbands). Spousal benefits are supposed to guarantee a widow who never worked (and never paid into Social Security on her own accord) would have some income after her husband dies.

        Therefore, if a wife wasn't dependent and indeed did work, her spousal benefits are reduced, or offset, by her own Social Security benefit. But the rules get even more complicated when other government pensions are involved, as they were in Mrs. Ryan's case. She worked mostly in the public schools, paying into a state public pension system and not Social Security — tripping what's called the government pension offset (GPO).

        “It affects spouses, widows or widowers; people getting a dependent benefit,” said Rich Rouse, deputy regional public affairs officer for the Social Security Administration in Chicago. “And it usually affects those not paying into Social Security.

        If they don't pay into Social Security, many civil service workers see their Social Security spousal benefits reduced by two-thirds of their own pension, almost as if that government pension were a Social Security benefit. They could still end up with more than either benefit individually — they just can't get both.

        They are not fully eliminated in order to mimic what might happen if that public pension were a private pension.

        “That one-third is equivalent to the private pension part — at least that was the logic” when the rule was made law in 1977, Mr. Portman said.

        Some public employees are exempt from the GPO, depending on which plan they opt into and what years they served. Still, estimates put the number of retirees it affects at 266,000. Mr. Portman said a full repeal of the offset would cost Social Security $5 billion over five years.

        Mrs. Ryan believes that a state funded pension system should not affect her husband's federal benefits, which he received for only six months before dying in 1990. She wants both — otherwise, she says, she's forfeiting 16 years of working and paying into those systems.

        “It's discriminatory toward anyone who's worked for the public sector,” she said.

        Congress has discussed amending that rule as part of its reform of the Social Security system. Mr. Portman's Social Security subcommittee held hearings on the government pension offset in June. But from the Republican National Convention in Philadelphia this week, Mr. Portman said the House likely won't have this year to act on those talks.

        But he said that whatever lawmakers do will have to be done with delicacy and balance — and in an effort to decide what is fair.

        “It's a pretty complicated issue,” Mr. Portman said. “There's a lot of different approaches, and a lot of different equities to be balanced.”

       

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