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BusinessColumnistsCarrie Mason-Draffen

Doing the math on spouse’s Social Security benefits

Social Security Benefits Application Form

Social Security Benefits Application Form Photo Credit: iStockphoto by Getty Images

DEAR CARRIE: My wife and I were both born in 1950. She retired at age 62 and took reduced Social Security benefits. In addition, she was a part-time state worker, and because of her pension from that job, her Social Security benefits were reduced even more. I still work and don’t plan to start collecting Social Security until I am at least 66, my full-retirement age. The longer I wait, the higher my benefits will be. So my question is this: When I finally decide to apply for benefits, will my wife still be eligible for her benefit to be increased to half of my Social Security? Or will she have to settle for less than half because of her reduced benefits? — Spousal Benefits

DEAR SPOUSAL: The government-pension offset definitely will play a key role in determining whether or not she will receive the spousal benefit.

A spokeswoman in the regional office of the Social Security Administration in Manhattan explained the calculations, starting with the most basic information: Your wife’s full Social Security benefit and how it interacts with yours and her government pension.

“The wife will be eligible for spouse’s benefits if her own full, unreduced benefit is less than one-half the husband’s unreduced benefit,” said the spokeswoman, Linda Lauria.

The key words here are “her own full, unreduced pension,” because that amount is used to help calculate her spousal benefits.

So if your wife had been eligible for an unreduced benefit of $1,000 a month, and your full benefit works out to $2,400 a month, then half your benefit would be $1,200 a month. In that scenario your wife would receive an extra $200 month. But the calculations don’t end here.

Since your wife receives a government pension, her Social Security benefit would be subject to the government pension offset if she had a job that didn’t require her to pay Social Security taxes.

“The [government pension offset] only affects spouse’s and widow’s benefits,” Lauria said.

So your wife’s spousal benefit would be reduced by two-thirds of her government pension.

So if she has a government pension of $1,500 a month, then two-thirds of that, or $1,000, would be subtracted from the calculated spousal benefit above.

Since her spousal benefit was just $200 in the above example, the pension offset would be considered met, Lauria said.

And the upshot is that your wife wouldn’t receive any benefits under your record.

“The wife will, however, continue to receive her own Social Security retirement benefit,” she said.

That would be about $750 a month, based on a $1,000 full- retirement benefit, because, with her early retirement, she would get only 75 percent of her full benefit, Lauria said.

DEAR CARRIE: I work for a small company. I am entitled to 15 vacation days and six personal days this year. But I am worried about losing them if we have a layoff. Sales have tumbled, and heads may roll. If I am let go, does the company have to pay me for any unused paid-time off? — Whose PTO?

DEAR WHOSE: Whether the company has to pay you depends on its paid-time-off policy. Some companies’ policies state that employees forfeit all their unused paid-time off when they leave for any reason. Other employers agree to pay departing employees for unused time. Since paid-time off isn’t mandatory, companies decide the rules. So you need to read the fine print of your employer’s policy or speak with the owner.

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