Every Social Security Statement tells a story

Posted Saturday, April 25th, 2015 by Gregory Forman
Filed under Litigation Strategy, Not South Carolina Specific, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys

The Social Security Statement, mailed annually or available for order online at http://www.socialsecurity.gov/forms/ssa-7050.pdf, is often the most valuable piece of financial information for alimony and child support cases. Don’t go to trial without the client’s and opposing party’s statements.  A sample statement follows:

Download (PDF, 496KB)

For any American citizen or legal resident whose primary source of income is wages–most Americans–this document provides an accurate and complete history of that person’s wage income by year from the year that person first started receiving wage income.  It also shows the Social Security benefits that person can expect to receive on retirement.  Social Security Statements tell stories: stories of career success or career stagnation; stories of women deferring career for children or their spouse’s career; stories of career setbacks never fully overcome. These statements, if understood, are often more credible than the person telling them.

A Social Security Statement that shows a trend of 10% annual growth in wages over 30 years is a statement of success: the person making $10,000 annually thirty years ago is now making $174,494.02. A Social Security Statement that shows a trend of 2% annual growth in wages over thirty years is a statement of a career that never developed: the person who started out making $10,000 thirty years ago is now making $18,113.62. Someone who was downsized mid-career might show 10% wage growth for years, and then show a significant drop over a one or two year period, followed by slow growth but not full recovery. Someone who dropped out of the workforce may show a drop to no income for a period of time and a sizable increase when that person reenters the workforce.

Someone who is self employed or whose income is heavily dependant upon commissions or bonuses will show much greater fluctuation in income than someone who works solely for salary. Many established family law attorneys’ statement will show some stagnation or drop in 2009 and 2010, as the recession slowed their business. Someone in a boom-or-bust industry, such as petroleum extraction or real estate sales, will also often show greater income fluctuation. And someone who became a homemaker may show minimal income for a five to twenty year period before that person resumes his or her career.

It is easy for folks to come to court and declare, “I deserve alimony; I put my career on hold so I could raise the children while my husband focused on his career.” Their Social Security Statements, correctly understood, can either verify or refute this claim. “The court needs to be careful in setting my support obligation because my income can vary widely” or “my earning capacity isn’t what it used to be since I was downsized” are more likely to be believed when the Social Security Statement corroborates it. A lifestyle inconsistent with earning history often indicates another source of income–sometimes interest or investment income; sometimes hidden employment income.

Social Security Statements can be the most valuable tool in refuting or corroborating one party’s story regarding the parties’ respective career paths, income, and earning capacity. It should be requested and obtained in any case where financial history is relevant.

5 thoughts on Every Social Security Statement tells a story

  1. Greg, your posts are always informative and almost always contain good advice. In addition to the usual good qualities, this one is particularly well written and interesting.

  2. Conrad Falkiewicz says:

    Greg,
    All of your reflections are helpful but Social Security Statements can be misleading… particularly in small, family owned businesses. For some reason accountants often recommend putting all income into the husband’s earnings to “simplify” paperwork even though both spouses work equally in a business. Several times we have seen this disqualify a working, but unrecorded wage-wise, wife from receiving disability benefits in extremely tragic circumstances.

    1. Conrad,

      These statements can clearly be misleading but there’s usually a good explanation (as there was in the example you posed) to show why it is misleading in that particular case. Typically these statements are very illuminating.

  3. Caroline McKee says:

    Hi Greg. Fairly new SC attorney here. Do you (or other readers) have insight on how to obtain the SSA statement of an uncooperative opposing party? It doesn’t sound like the SSA will honor a subpoena without the written consent of the subject individual.

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