Divorce: Economic Issues

It is often suggested that Social Security benefits paid to divorced spouses are two low. The 50 percent of the ex-spouse's Social Security PIA received by many divorced spouses is typically below the poverty index used by the federal government to assess income adequacy. Thus it has been suggested, for example, that the divorced spouse benefit be increased to, say 75 percent of the PIA. This would bring the benefit level roughly into line with the levels received by other beneficiary groups composed primarily of unmarried women (e.g., disabled widows and child in care widows). However, this benefit level would still be below the regular widow's benefit of 100 percent of the PIA.

Some people fear that raising divorce benefit levels will encourage divorce relative to the current law. Such a reform, however, is unlikely to have a significant effect on young or middle-aged persons who are not apt to be thinking about their retirement years when divorce is considered. Even at later ages, however, such a change is unlikely to have a major effect, given the many other considerations that go into such decisions.

With a continuing focus on federal budgetary matters and the possible "privatization" of Social Security benefits, benefit level reform has received little political attention. Because of this and the lack of information, it is not likely that the economic issues related to divorce and its impact in old age will be addressed in the near future.