Navigating the world of Social Security benefits can be confusing, especially when it comes to understanding how benefits are calculated for parents.
In this blog post, we will break down Section 404.373 of the Social Security regulations to help you better understand how a parent’s monthly benefit is determined based on their entitlement.
Section 404.373 outlines two scenarios for calculating a parent’s monthly Social Security benefit amount. These scenarios depend on whether one or more parents are entitled to benefits based on the earnings record of the insured person.
- One Parent Entitled
If only one parent is entitled to benefits based on the insured person’s earnings record, the parent’s monthly benefit is equal to 82.5% of the insured person’s primary insurance amount (PIA). This calculation ensures that the parent receives a substantial portion of the insured person’s PIA as their monthly benefit, providing financial support for their needs.
- More Than One Parent Entitled
In cases where more than one parent is entitled to benefits based on the insured person’s earnings record, the monthly benefit for each parent is equal to 75% of the insured person’s PIA. This reduction from 82.5% to 75% occurs to ensure that both parents receive a fair share of the insured person’s PIA while still providing substantial financial support.
It is important to note that these percentages are applied before any reductions that may be made, as explained in Section 404.304. These reductions could include adjustments due to early or delayed retirement or other factors that may impact the overall benefit amount.
Example:
Let’s consider a hypothetical example to better illustrate how Section 404.373 affects a parent’s monthly benefit amount.
John is an insured person with a primary insurance amount (PIA) of $2,000. He has two parents, Mary and Tom, both of whom are entitled to benefits based on John’s earnings record.
Scenario 1: One Parent Entitled
If only Mary were entitled to benefits based on John’s earnings record, her monthly benefit would be calculated as follows:
Mary’s Monthly Benefit = 82.5% x John’s PIA Mary’s Monthly Benefit = 82.5% x $2,000 Mary’s Monthly Benefit = $1,650
In this scenario, Mary would receive a monthly benefit of $1,650.
Scenario 2: More Than One Parent Entitled
However, since both Mary and Tom are entitled to benefits based on John’s earnings record, their monthly benefit is calculated differently:
Mary’s Monthly Benefit = 75% x John’s PIA Mary’s Monthly Benefit = 75% x $2,000 Mary’s Monthly Benefit = $1,500
Tom’s Monthly Benefit = 75% x John’s PIA Tom’s Monthly Benefit = 75% x $2,000 Tom’s Monthly Benefit = $1,500
In this scenario, both Mary and Tom would each receive a monthly benefit of $1,500.
Remember that these calculations are made before any potential reductions, as explained in Section 404.304.
Conclusion: Understanding how parental benefit amounts are calculated can help you better navigate the complex world of Social Security benefits. By breaking down Section 404.373, we’ve demonstrated that a parent’s monthly benefit amount is determined by the number of parents entitled to benefits based on the insured person’s earnings record. As a result, it is crucial to be aware of your entitlement status and the potential impact on your monthly benefit amount.
https://www.ssa.gov/OP_Home/cfr20/404/404-0373.htm
At Hugo Fierro & Michael Perez, we have the expertise to help you understand the complexities of your Social Security disability claim.