State Specific Case Law

SOCIAL SECURITY OFFSETS

The following is a summary of case laws we have come across in our research of this topic.

*If a particular state is not listed it is because we have not found any pertinent Case Law relative to this topic.

ALASKA: Mann v. Mann, 778 P.2d 590 (Alaska 1989)

• No Offset - If a portion of a pension constitutes replacement for Social Security, it should be valued and distributed without deducting the hypothetical amount of Social Security benefit that would be receive if the pension-holder had participated in the Social Security System.

ARIZONA: Kelly v. Kelly, 9 P.3d 1046; 2000 Ariz.

• Husband's pension benefits that were in lieu of social security benefits were exempt from distribution as community property following divorce, just as wife's social security benefits were separate property.

ARKANSAS: SKELTON, 5 S.W.3d 2; 1999 Ark.

• No Offset - If a portion of a pension constitutes replacement for Social Security, it should be valued and distributed without deducting the hypothetical amount of Social Security benefit that would be receive if the pensioner had participated in the Social Security System.

COLORADO: In re James, 950 P.2d 624 (1997)

• A public employee's lack of Social Security may not be considered in determining the value of his or her pension benefits.

FLORIDA: Johnson v. Johnson, 726 So. 2d 393 (Fla. 1st DCA 1999)

• Social security replacement plans are marital assets subject to equitable distribution.

FLORIDA: Bain v. Bain, 553 So. 2d 1389 (Fla. DCA 1990)

• Offset. - A portion of a pension should be exempted from the marital estate to the extent that part of the pension might figuratively be considered "in lieu of" social security benefits, since social security benefits are exempt by federal statute from being part of the marital estate. Inequitable results may arise when court awards portion of pension plan in lieu of social security if non-employee spouse also receives social security payments.

KANSAS: In re Marriage of Sedbrook, 16 Kan. App. 2d 668, 827 P.2d 1222 (1992)

• No Offset - If a portion of a pension constitutes replacement for Social Security, it should be valued and distributed without deducting the hypothetical amount of Social Security benefit that would be receive if the pensioner had participated in the Social Security System.

MASSACHUSETTS: Mahoney vs. Mahoney, 425 Mass. 441

MISSOURI: Knapp v. Knapp, 874 S.W.2d 520 (Mo. Ct. App. 1994)

• Court did not abuse its discretion when it awarded wife her entire teacher's pension (separate property under Missouri law) because her husband acquired Social Security benefits through his work.

NEVADA: Wolff v. Wolff, Nev. -, 929 P.2d 916 (1996)

• No Offset - If a portion of a pension constitutes replacement for Social Security, it should be valued and distributed without deducting the hypothetical amount of Social Security benefit that would be receive if the pensioner had participated in the Social Security System.

NEW JERSEY: White v. White, 284 N.J. Super. 300, 664 A.2d 1297 (Ch. Div. 1995)

• Offset against spouses Social Security. By offsetting the CSRS pension by the Social Security benefit actually earned by the non-employee spouse, since the employee spouse under CSRS does not earn Social Security benefits. If the non-employee spouse has no Social Security of his/her own, the offset is zero, which is equitable. The reason for the offset is because the CSRS employee has no Social Security, while the non-employee spouse does. If the non-employee spouse has no Social Security, there is no offset.

NEW JERSEY: Hayden v. Hayden, 284 N.J. Super. 418, 665 A.2d 772 (App. Div. 1995)

• No offset. - Valuation of pension is not reduced by amount of social security benefits husband would have received in equivalent private employment, because husband may actually receive Social Security benefits based on other employment during or after state police career.

NEW JERSEY: Panetta v. Panetta370 N.J. Super. 486 (App. Div. 2004)

• Offset against spouse who does contribute to Social Security
• The reasoning behind the Social Security offset is the spouse with the CSRS pension does not have Social Security while the non-employee spouse does. Since Social Security is non-divisible, this means the non-employee spouse has a non-divisible asset, while the CSRS employee spouse does not have the same asset. This disparity is deemed to be unfair in several states, including New Jersey and Pennsylvania.

NORTH DAKOTA: Olson v. Olson, 445 N.W.2d 1 (N.D. 1990)

• No Offset - If a portion of a pension constitutes replacement for Social Security, it should be valued and distributed without deducting the hypothetical amount of Social Security benefit that would be receive if the pensioner had participated in the Social Security System.

OHIO: Helgeson v. Helgeson, CASE NUMBER 8-2000-14, COURT OF APPEALS OF OHIO, THIRD APPELLATE DISTRICT, LOGAN COUNTY, 2000 Ohio App. LEXIS 5290, November 15, 2000

• The trial court did not err when it offset wife's monthly pension benefit with a hypothetical social security benefit in order to achieve an equitable division of husband's pension in a divorce cause of action.

OHIO: Walker v. Walker, 112 Ohio App. 3d 90, 677 N.E.2d 1252 (1996)

• Offset. - A portion of a pension should be exempted from the marital estate to the extent that part of the pension might figuratively be considered "in lieu of" social security benefits, since social security benefits are exempt by federal statute from being part of the marital estate.

OHIO: Eickelberger v. Eickelberger, 93 Ohio App. 3d 221, 638 N.E.2d 130 (1994)

• Offset. - A portion of a pension should be exempted from the marital estate to the extent that part of the pension might figuratively be considered "in lieu of" social security benefits, since social security benefits are exempt by federal statute from being part of the marital estate.
• "As a matter of public policy, a trial court should consider one spouse's Social Security benefits before the court divides the other spouse's entire public pension and retirement plan."

OHIO: Smith v. Smith, 91 Ohio App. 3d 248, 632 N.E.2d 555 (1933)

• It is improper directly to offset the present value of one party's pension benefit by the present-day value of the opposing party's Social Security benefits." However, the court recognized that Social Security benefits "while not marital assets and not subject to division, are to be considered when allocating retirement benefits. Furthermore, Social Security benefits are 'retirement benefits' pursuant to WC. 3105.171. The only relevancy Social Security benefits have in the division of marital property is in the equitable division of retirement benefits. Social Security is not relevant in the division of other marital assets." In other words, Smith nets out the actual Social Security of the covered participant against the government pension.

OHIO: Coats v. Coats, 63 Ohio Misc. 2d 299, 626 N.E.2d 707 (C.P. 1993)

• No offset but consider spouses Social Security. The portion of a civil service pension to be considered as marital property is the present value of the public pension that exceeds the present value of the social security benefits actually earned by the other spouse. However, the circumstances of the parties should be considered in applying this formula.

OHIO: Neel, 113 Ohio App. 3d 24 (1996)

• A civil service employee may exclude from equitable distribution that portion of pension to be received in lieu of Social Security. The amount of the offset shall be the hypothetical Social Security benefit had the employee been employed in a non-exempt job, with the benefit to be calculated using salary history and Social Security tables.

OHIO: Leadingham, v. Leadingham, 120 Ohio App. 3d 496, 698 N.E.2d 465 (1997)

• Consider other spouses Social Security.

PENNSYLVANIA: Cornbleth v. Cornbleth, 397 Pa. Super. 421, 580 A.2d 369 (1990)

• A civil service employee may exclude from equitable distribution that portion of pension to be received in lieu of Social Security. The amount of the offset shall be the hypothetical Social Security benefit had the employee been employed in a non-exempt job, with the benefit to be calculated using salary history and Social Security tables.

PENNSYLVANIA: McClain v. McClain, Pa. Super. 693 A.2d 1355 (1997)

• A hypothetical Social Security offset is not appropriate when one party has a government pension in lieu of Social Security and the other party does not, in fact, have any Social Security. The case therefore addressed the potential problem of unfairness inherent in hypothetical offsets unrelated to the actual Social Security benefits being offset.

PENNSYLVANIA: Elhay v. Elhay #, 413 Pa. Super. 578, 605 A.2d 1268 (1992)

• No Offset - If a portion of both spouses pension would be in lieu of social security.

PENNSYLVANIA: Twilla v. Twilla, Pa. Super. 664 A.2d 1020 (1995)

• When one party is covered by the Civil Service Retirement System (CSRS) and is not receiving Social Security benefits and the other party is a Social Security recipient (which is not considered an asset for equitable distribution purposes) then in making an equitable distribution award, the court should compute what the present value of the Social Security benefits would have been to the CSRS participant during the coverture period and subtract that amount from the value of the CSRS pension in order to determine its marital portion.

RHODE ISLAND: Schaffner v. Schaffner, 713 A.2d 1245 (R.I. 1998)

• No Offset - If a portion of a pension constitutes replacement for Social Security, it should be valued and distributed without deducting the hypothetical amount of Social Security benefit that would be receive if the pensioner had participated in the Social Security System.

UTAH: Jefferies v. Jefferies, 895 P.2d 835 (Utah Ct. App. 1995)

• Retirement plans that replace social security benefits are included in marital property distribution.

WEST VIRGINIA: Loudermilk v. Loudermilk, 183 W. Va. 616, 397 S.E.2d 905 (1990)

• No Offset - If a portion of a pension constitutes replacement for Social Security, it should be valued and distributed without deducting the hypothetical amount of Social Security benefit that would be receive if the pensioner had participated in the Social Security System.

WISCONSIN: Mack v. Mack, 323 N.W.2d 153 (Wis. Ct. App. 1982).

• Retirement plans that replace social security benefits are included in marital property distribution.