Supreme Court Ruling Creates Confusion Over Social Security Benefits for Same-Sex Couples

Extending Social Security benefits to same-sex couples is one of the biggest financial consequences of last week's decision by the U.S. Supreme Court to overturn the federal Defense of Marriage Act.

While the decision enables gay married couples to access more than 1,000 benefits now enjoyed by heterosexual married couples, few new entitlements will affect as many people or involve more dollars than the extension of Social Security benefits to spouses and children in gay unions.

Benefit programs involving current, divorced and deceased spouses can mean thousands of extra dollars a year to same-sex claimants. In addition, their children can also benefit from payments should their wage-earning parents suffer from job-related disabilities.

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"You only have to be married one year to get spousal benefits and nine months to get survivor benefits," notes Laurence Kotlikoff, a Boston University economics professor and Social Security expert. "Moreover, if your partner has a child below age 16, you can collect spousal benefits regardless of your age."

Qualifying for those benefits, however, may be a different matter. There are currently an estimated 114,000 legally married same-sex couples in the U.S., according to the Williams Institute at the University of California-Los Angeles. Another roughly 535,000 same-sex couples now live in shared households. (In California, which had its own same-sex marriage ban overturned by the Supreme Court last week, the institute estimates there are 1.1 million lesbian, gay, bisexual and transgender adults, and it projects 37,000 California same-sex couples will marry during the next three years.)

What's clear right now is that equal access to Social Security benefits will most swiftly be extended to couples who live in the 14 jurisdictions where same-sex marriage already is legal: California, Connecticut, Delaware, the District of Columbia, Iowa, Maine, Maryland, Massachusetts, Minnesota (takes effect Aug. 1), New Hampshire, New York, Rhode Island (takes effect Aug. 1), Vermont and Washington. Also, because District of Columbia laws are applicable to citizens living overseas, same-sex U.S. couples living outside the country should be able to claim Social Security benefits.

[Read: 13 Social Security Planning Questions.]

There are four states that recognize same-sex civil unions: Hawaii, Illinois, New Jersey and Colorado (which also has a state constitutional ban on same-sex marriage). It's likely, but not guaranteed, that federal benefits soon will be extended to same-sex civil partners in these four states, according to "After DOMA: What it Means to You," a report from a consortium of human and gay rights groups.

In many cases, however, people in a legal same-sex union - who are otherwise entitled to claim a Social Security spousal or family benefit - will live in a state that does not sanction same-sex marriages.

The state of residence is, of course, a non-issue for heterosexual couples. But it's a conundrum for what the Williams Institute estimates are 38,000 same-sex couples who were married where same-sex unions are legal but now live in a state where they are not recognized.

"The Social Security law uses the wage earner's 'place of domicile' as the relevant state law for assessing who is a spouse for benefits purposes," the After DOMA report said. "The Social Security law states that a person is considered a spouse if the courts of the state at the time of application would find that the couple was validly married."

[Read: 12 Ways to Increase Your Social Security Payments.]

There are 29 states with constitutional bans on same-sex marriage: Alabama, Alaska, Arizona, Arkansas, Colorado (which recognizes civil unions), Florida, Georgia, Idaho, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia and Wisconsin. Five other states either ban same-sex unions by law or simply don't recognize them - including Indiana, New Mexico, Pennsylvania, West Virginia and Wyoming.

"Those state laws will likely pose obstacles for legally married couples and surviving spouses in accessing federal protections and responsibilities," the After DOMA report said. "If you meet all of the qualifications for a benefit, you can apply for Social Security benefits now to preserve the start date for your benefits based on the date of your application."

The Social Security Administration said it does not have advisory materials yet on its website to guide same-sex couples on how to the use its programs. "The president has directed the attorney general to work with other members of his cabinet to review all relevant federal statutes to ensure this decision, and its implications for federal benefits and obligations - including benefits administered by this agency - is implemented swiftly and smoothly," according to a statement provided by a program spokeswoman.