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More equitable pensions sought for homemakers

Homemakers are the single largest group of people in this country without a retirement pension," claims Iris Mitgang, head of the National Women's Political Caucus. But the social-security system takes the sting out of her argument, with payments to dependents of wage earners.

Last week three Republican senators and 17 members of the House of Representatives proposed legislation to improve the rights of women in economic matters.

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The Economic Equity Act, as it is called, would require a husband to inform his wife if he chose to exclude her from his pension plan if he died. It would reduce estate taxes for women who inherit farms or businesses and would permit homemakers to establish individual retirement accounts in their own names. Other provisions deal with child care, insurance, and military service.

Several other pieces of legislation, meanwhile, are under consideration in the 97th Congress that would extend the pension benefits of certain government employees to their widowed or divorced spouses.

Here are the details:

* Social security. When the system was set up in the 1930s, payments to the spouse at the rate of 50 percent of the wage-earners' pension seemed equitable, generous, and feasible. Now feminists bristle at the term "dependent" and suggest that both members of a marriage share equally in any pension accorded them (HR 7371).

Another bill would allow a couple to split their earnings for social-security purposes, which would equalize their social security payments.

A report on how social security affects women, published by the Department of Health, Education, and Welfare in 1979, highlighted a number of inequities in the system, including:

* A tendency for homemaking to lower social-security payments. Retirement benefits are based on average lifetime earnings, so if a mother drops out of the work force for the years her children are young, it pulls down her benefits. At present, the worst five years are dropped from the averaging; proposals before Congress would increase the "dropout" time to 10 years.

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* No payments to divorced spouses when the marriage lasted less than 10 years , a cutoff seen as arbitrary and unrealistic by some in today's divorce-prone society. A proposal by Rep. Mary rose Oakar (D) of Ohio would reduce this criteria to five years.

* A "widow's gap" that does not allow widowed homemakers under age 60 to receive payments unless they are disabled or have children in their care who are disabled or under 18. "Furthermore," says the HEW study, "disabled widows under 50 are not eligible for disability protection if they worked throughout their lives as homemakers and mothers."

The gap is partially addressed by HR 7373, a bill proposed by Representative Oakar to provide for a "transitional benefit" to the widow or widower of an insured individual if the spouse is at least 50 years old. The benefit, set at 71.5 percent of the wage earner's "primary insurance amount," covers only the first four months after the spouse's death.

Objections to all of these proposals have been raised by the House Subcommittee on Social Security, which points out the monetary difficulties of implementing the plans.

"The social-security system," says spokesman Joseph Hall, "is in a very tight position right now, and these bills, if passed, will add billions to the cost. All the experts agree that women have an advantage under social security as dependents; they don't feel that women are badly treated, except in isolated incidents."

* Government pensions. Last Oct. 17 Jimmy Carter signed into law the Foreign Service Act, a piece of legislation called "visionary" by a lobbyist for the Women's Equity Action League. Originally proposed by Rep. Patricia Schroeder (D) of Colorado, the law extends pension benefits to all exand widowed spouses of Foreign Service officers.

"In the past the benefit agreement required only one signature, so an officer could refuse to designate benefits for his spouse and sign away the benefits without his spouse's knowledge," says a spokesman for Congresswoman Schroeder. "Now, both parties must sign. From here on out, if the couple has been married at least 10 years, the officer's spouse is entitled to a prorated share of his pension benefits."

The law sets a precedent for future pension reform bills, and Representative Schroeder and Sen. Mark O. Hatfield (R) of Oregon are introducing bills this session that would guarantee pension benefits to the widows and ex-wives of military personnel and civil servants.

Meanwhile, lawyer Doris Freed has found an increasing trend among state courts to include pensions in property distribution. "This is true in both community property and equitable distribution states," she says.

* Individual retirement accounts (IRAs). This is one answer to retirement pensions for those individuals -- usually small-business men -- who are not covered under other retirement plans. By law, the individuals are allowed to deposit 15 percent of their earnings -- or up to $1,500 -- in a special account; the account remains tax-free until earnings are drawn at the time of retirement.

Homemakers and other non-earners are precluded from setting up their own IRAs , but a bill proposed by Rep. Paul S. Trible Jr. (R) of Virginia would change that. "I'm married to a full-time homemaker," says the congressman, a young conservative from southeast Virginia, "and I know how hard they work.

"This bill would encourage families to provide for their own future security without having to depend on the government," he says, "while freeing more investment capital for our nation."

Part-time employees -- "those who work as crossing guards or substitute teachers, and are covered by the county's or city's retirement system" -- would also be able to participate in this plan, since the bill eliminates the restriction against those covered by other pension plans.

The congressman sees his bill as a move toward equity in a marriage, since the money in the IRA -- up to $1,500 per year --belongs strictly to the homemaker "no matter who contributes the funds. It is time for us to recognize the economic value homemakers contribute to our society," he believes.

Second of two articles on the legal rights of ho memakers.

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