Court Widens Benefits for Wives Working With Mates

Widows or disabled women who owned businesses with their husbands should be entitled to higher Social Security benefits than a discriminatory federal law allowed, a federal appeals court has ruled.

The decision by the U.S. 9th Circuit Court of Appeals on Friday involves benefits since 1950 and affects women in California and about half a dozen other states that have community property laws.

However, the court limited the benefits awarded by a lower court to the husbands of some of the women.

Community Property

The case concerns the way income is figured for the purpose of earning Social Security benefits in states that treat all income of the husband and wife as community property, owned equally by both spouses.

The federal law said income from a business that was community property should be considered the husband’s income, for Social Security purposes, unless the wife managed and controlled the business.

The law allowed a woman to collect only Social Security dependent’s benefits if her husband died, instead of worker’s benefits, which may be substantially larger, according to Eileen Sweeney of the National Senior Citizens Law Center.

No Benefits

In addition, if a woman who helped run a “mom-and-pop” store became disabled while her husband were alive, she would get no disability benefits.

Two other federal appeals courts ruled in 1980 that the law was unconstitutional because it discriminated by sex. The federal government did not appeal the rulings, but objected to awarding benefits back to 1950, when Social Security rules on self-employment took effect.

The current case arose when Mildred Edwards, a blind woman from Eureka who helped run a family gem business, was denied retirement benefits in 1978 under the federal law. After the law was ruled unconstitutional, U.S. District Judge Marilyn Hall Patel broadened Mrs. Edwards’ case to apply to all those who had been denied benefits under the law.

Patel then ruled benefits must be awarded, dating back to 1950, on the basis of the amount of work each spouse contributed to a jointly owned business.

The appeals court on Friday upheld that decision, saying even though the first federal sex-discrimination ruling did not occur until 1973, it would be unfair to deny benefits to women in an earlier period because of an unconstitutional law.