A new government report finds that the Social Security
system has shortchanged some folks. Find out what to do if you suspect you are
among them.
Millions of Americans count on Social Security as a cornerstone of their
financial retirement
plan. But a recent report found that thousands of widows and widowers have
been shortchanged on survivor benefits in the past.
Find out more about what happened and what you should do if you suspect you are
among those impacted.
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The major Social Security mistake that cost widows and widowers
thousands
An error by the Social Security Administration (SSA) resulted in 8,618 widows
and widowers receiving benefits that were not properly calculated, according to
the report from the federal Office of Inspector General (OIG).
The report found that SSA staffers did not apply the required Widow(er)s
Indexing Computation (WINDEX) when they manually processed some claims of those
entitled to survivor benefits.
An accurate calculation is crucial because it adjusts a deceased spouse’s
earnings record and directly affects the baseline benefit amount for the
surviving spouse.
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The real costs of the mistake
The errors were so significant that the average loss amounted to $5,800 per
person.
Overall, surviving spouses as a group lost out on a combined $50 million,
according to the report. The size of the error means some people may have
struggled to make ends meet when they should have been collecting larger
benefits.
The stakes are high because so many retirees depend on Social Security to get
by. About 40% of older Americans receive all of their retirement income from
Social Security, according to a 2020 report from the National Institute on
Retirement Security (NIRS).
The SSA has noted that Social Security was never intended to be a retiree’s sole
source of retirement income. However, in reality, millions of seniors depend on
the program for most or all of their income.
The problem runs deeper than just one mistake
The report also found that SSA staffers failed to provide complete, clear
instructions about when survivors should file for benefits and how to go about
doing so.
In all, an estimated 5,367 widows and widowers could have received an additional
collective $114 million in benefits if they had been advised to delay retirement
benefits until after collecting survivor benefits, the report found.
The average benefit loss is estimated at $21,000 per individual.
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What are Social Security survivor benefits?
Survivor benefits are paid out monthly to family members of deceased individuals
who qualified for Social Security benefits. Those who may qualify for such
benefits include:
For spouses and ex-spouses, payments typically start at 71.5% of the deceased
spouse’s benefit. The longer you wait to apply, the higher the percentage of the
benefit you might get.
By the time you reach full retirement age — which is now 67 for most people —
you are entitled to 100% of the benefit.
Who was most impacted by the errors?
The report found that those impacted by the SSA errors were most likely to have
had spouses who died before the age of 62, as well as survivors who had their
cases manually processed.
Up to 40% of surviving spouses may have been affected by similar errors during
the period covered by the report.
How the SSA has responded to the report
The report from the inspector general recommends that the SSA identify and
reimburse those who received underpayments.
The SSA says it is taking immediate steps to address the problem by reminding
field office workers about the correct ways to calculate such benefits.
The agency has also said it plans to take other corrective actions.
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How to get your proper benefits
If you suspect you are among those who were underpaid, contact the SSA and ask
them to review your situation. Ask specifically whether WINDEX was correctly
applied in your situation.
If the agency finds that an error occurred in relation to your account, you can
request back pay to make the situation right.
Before you contact SSA, you might want to gather important documentation,
including:
The deceased’s death certificate
Your marriage certificate
The Social Security numbers of both you and your deceased spouse
Any documents you have received that show your history of claims or other
important notices
Don’t wait for Social Security to contact you
Although the SSA is pledging to take proactive and corrective action, it is
probably a mistake to simply wait passively to be contacted.
Critics have charged that the SSA has a long history of inaccuracy and even
misapplied credits. That is one reason why you are probably better off fighting
for the benefits to which you are entitled instead of counting on the SSA to do
the right thing.
Bottom line
In today’s world of high inflation, you are probably looking at every
opportunity to stretch
your retirement dollars further. That is why it is crucial that you get all
the Social Security money to which you are entitled.
So, if you suspect you may not have received your fair share of Social Security
in the past, call the SSA or schedule an appointment at a Social Security office
in your city so you can discuss the matter.
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