Report: SSI structure hurts women

Report: SSI structure hurts women

	Published : Wed, 18 Jul 2007 22:51 By : Agencies Print this Story

NEW YORK (AP) - Women get lower Social Security benefits than men, but they are more dependent on them, a report by the American Academy of Actuaries said Monday.

More than 40 percent of women 62 or older rely on Social Security for 90 percent of their income, according to a policy brief by the actuaries' social insurance committee. In contrast, only 28 percent of men older than 62 rely on Social Security for 90 percent of their income.

The poverty rate for single women 65 or older is among the highest of any subgroup in the United States, the actuaries say. Twenty percent of single women over 65 lived in poverty, compared to 5 percent of married couples over 65.

'When the current benefit structure was set up, the traditional roles of men in the family as primary wage earners and women as primary child care providers were well established,' the actuaries' report said.

'As women have increasingly assumed roles as heads of families or as primary or co-equal wage earners in their families, situations frequently arise where Social Security provides lower benefits for the same contributions, or requires significantly higher contributions with little, if any, increase in benefits compared to the 'traditional' family,' it said.

For instance, in families where the husband makes $34,200 a year and the woman makes nothing, the wife would receive Social Security benefits of $1,350 a month. In contrast, for a couple where each makes $17,100 a year and one spouse dies, the survivor would get a Social Security benefit of only $875.

Some of the differences in Social Security benefits arise because women make less money than men, are more likely to do unpaid work, have longer life expectancies, a greater chance of outliving their husbands and are more likely than men to take temporary breaks from paid work, the actuaries said.

Steve Goss, the chief actuary for Social Security, countered that women's longer lives can translate into higher total Social Security benefits.

'If one person lives for 20 years and another lives for 25 and they have the exact same earnings, the one who lives longer will get the monthly benefit longer,' he said.

Goss also said that Social Security's weighted formula means that if one worker's income is 30 percent lower than another, her Social Security benefit won't be 30 percent lower.

According to the current formula, workers with a monthly income up to $680 get 90 percent of that as a Social Security benefit. Workers in the next bracket, who earn up to $4,100 get 32 percent of the $3,420 they earned above $680. Workers get 15 percent of earnings above $4,100. And total benefits are capped: The maximum amount for 2007 for a person retiring at 65 years and 10 months is $2,116.

Goss added that since Social Security is calculated based on average pay for 35 years of work, gaps in a woman's employment will only affect her payment if she worked fewer than 35 years, since Social Security will take an average of a 35-year work life -- including zeros.