Social Security is in place to help workers receive disability and retirement benefits. Family members can receive children's, spousal or survivor benefits based on a worker's Social Security record. There are limits, though, to how much the Social Security Administration (SSA) will pay on one person's history of work. This is called the family maximum limit.
The family maximum limit is a complex, computed amount that the SSA will figure out each year. It is based upon how much money the worker earned over his or her lifetime. While the family maximum limit can lower the amount that some family members will receive, there are sometimes things that can be done to reduce the family maximum limit.
These are the 2017 numbers that are used to calculate the amount of survivor benefits and retirement benefits:
-- 150 percent of the first $1,131; plus
-- 272 percent of the amount between $1,131 and $1,633; plus
-- 134 percent of the amount between $1,633 and $2,130; plus
-- 175 percent of the amount above $2,130.
This is very complicated, but it usually ends up that the family maximum is between 150 percent and 180 percent of the worker's Social Security benefit.
When it comes to retirement, the family maximum often doesn't come into play; however, it is common for it to apply in the survivor context. For example, a spouse can receive as much as 100 percent of the survivor benefit, and children will get up to 75 percent. When there is more than just one eligible child, the family maximum will apply.
As you can see, this is a very complex matter and you may have several questions about how much you should receive. An experienced attorney can help you receive the benefits to which you are entitled.
Source: The Motley Fool, "Social Security's Family Maximum: What You Need to Know," Dan Caplinger, June 28, 2017