Despite their expectations that each would be financially secure if the other died, Caroline, a retired teacher, experienced a devastating loss in income when her husband, Matthew, died last year.
A special law related to her receipt of a government pension impacts Caroline’s current situation — a law she thinks should be changed and which she believes few people understand. She wants others to be more knowledgeable, to take the necessary steps to avoid the financial shock that has compounded her grief.
For 22 years, Caroline worked in the Massachusetts public school system teaching kindergarten through second grade, all the time contributing to the state pension plan. During winter and summer vacations, she worked retail for which she receives a small amount from Social Security.
Caroline met Matthew in 1982; they married three years later. (These are not their real names.) Matthew was an electrical engineer with a good income securing him a comfortable retirement. He received both a pension and Social Security benefits.
In their early years together, Caroline and Matthew often summered in Maine. They happened upon a coastal town and decided to retire there. Matthew retired two years earlier than Caroline and oversaw the construction of their new home.
Caroline recalled, “We couldn’t wait to get up here. My husband was in a hurry. He called it our ‘little bit of heaven.’”
In 1995, when Caroline retired, they sold their house in Massachusetts. They were financially comfortable, each receiving a $1,500 monthly pension. When they were eligible to receive Social Security, Matthew’s check covered their supplemental health and dental insurance, their car and their home insurance, leaving $2,000 per month for other living expenses. Caroline’s Social Security check is very small at $189 per month.
Their happy, comfortable retirement years ended when Matthew contracted a devastating, incurable illness two years ago. The disease resulted in the organs shutting down — “a hell of a way to go,” Caroline recalled sadly. Matthew and Caroline did not live beyond their means, and Matthew died believing his wife would be able to meet her monthly living expenses for the rest of her life.
When Matthew learned he was terminally ill with only months to live, he turned attention to making sure Caroline would not struggle financially with his passing. He first contacted Social Security to confirm what most people believe, that the surviving spouse receives the larger of the two checks. The Social Security employee reassured Matthew he was correct, Caroline said; the surviving spouse would receive the higher of the two amounts known as survivor benefits.
So it came as a huge shock after Matthew’s death that Caroline was deemed ineligible for Social Security survivor benefits. Because of the incorrect information he received, Matthew left Caroline with only enough savings to cover his burial expenses.
What Matthew didn’t know, nor had the Social Security office told him, was that due to her teaching in the public school system, Caroline is considered a government employee and hence ineligible for survivor Social Security benefits in the state of Maine and 14 other states.
Under what is called the Government Pension Offset, if people receive a pension from a government job in which they did not pay Social Security taxes, some or all of their Social Security survivors’ benefit may be offset or totally lost due to receipt of that pension. While the original purpose of the benefit was to provide additional income to help a financially dependent spouse when the breadwinner retired, became disabled or died, a reduction of the survivor benefit harms the financially dependent spouse — 80 percent of whom are women.
Caroline now must live on one-third of the monthly income available to the couple when her husband was alive. At nearly 80 years of age, she is having a hard time making ends meet and must supplement her pension and small Social Security check by substitute teaching and tutoring. She does not know, for example, how she will pay her yearly property taxes. As she nears 80 years old, she is unsure how long she will continue to do this work.
Caroline reflected on her situation, “When you get older and lose a spouse, your life changes anyway. To have my life change drastically is difficult enough, then to compound the situation with new financial struggles — now I’m handling this new life that I don’t like, and I’m constantly thinking, ‘How did this happen? Why didn’t we know about this? Why didn’t Social Security tell us? How many others are facing this or will face it?’ And I’m writing down what I need to live on, and it’s not adding up.”
She knows she has alternatives, which she is considering as she continues to grieve the loss of her husband and sort through his belongings. She could sell the house, but this would be a dramatic and sad change for her. Her only child, a daughter, and only grandchild live about 15 miles away. Her daughter has offered to move in with her to help share living expenses, but Caroline does not want to be a burden to her daughter who has many responsibilities of her own.
Caroline believes it would be simpler to just have teachers and everyone contribute to Social Security.
Caroline hopes her story is a wake-up call to those who will be receiving public pensions. For people who are expecting to receive spousal benefits, like retired educators in the majority of other states receive, she advised, “I know it is difficult when you are young to discuss ‘just in case,’ “what if,’ but you have to sit down and do this. We tried, but it was too late. It was when he was ill. We believed Social Security when they told us the surviving spouse receives the higher of the two amounts. We thought everything had been looked into and was straightened out, but it wasn’t.”
Sandy Butler is professor of social work and is the graduate program coordinator in the School of Social Work at the University of Maine. Luisa S. Deprez is professor and department chair of sociology and women and gender studies at the University of Southern Maine. They are members of the Maine Regional Network, part of the Scholars Strategy Network, which brings together scholars across the country to address public challenges and their policy implications.