Kennedy_Windsor_TEA_FINAL

1 | The Expatriate Administrator / April 2015
The Expatriate Administrator
A publication from
KPMG’s Global Mobility Services practice
What Have the Social Security Regulations Helped to Clarify
Since the Court’s Windsor Decision?
by Ed Kennedy, KPMG LLP, Atlanta
(KPMG LLP in the United States is a KPMG International member firm)
Much has been said and written about the
immigration and income tax implications for
same-sex couples of the Supreme Court’s
ruling in Windsor v. United States.1
But it is
also important to focus on the implications
of this ruling on Social Security benefits.
On August 8, 2014, the Social Security
Administration (SSA) issued guidelines on
how the Windsor decision impacts benefit
claims, both in a domestic and international
context. Since these are procedural issues
dealing with the implementation of the
Supreme Court decision, the SSA provided
guidance in its Program Operations Manual
System (POMS).
Depending on their particular facts,
inbound or outbound same-sex married
couples may not be eligible for the
same benefits that other married
individuals may receive. As a result,
the SSA guidance is important for
both international assignee program
managers and assignees themselves.
This article discusses some of the more
common issues arising from the SSA’s
interpretation of the Windsor decision
including claims for Old Age, Survivors and
Disability Insurance (OASDI) and Medicare
benefits made by eligible individuals
(including those who are in same-sex
relationships and have been, will be, or
are currently on international assignment).
It is important that international human
resources (IHR) and global mobility
professionals have a basic understanding
of these policies and practices and the
social security issues related to same-sex
couples on international assignment.
Background
On June 26, 2013, in Windsor v.
United States, the Supreme Court
ruled Section 3 of the Defense of
Marriage Act (DOMA) unconstitutional.2
This decision effectively required the
U.S. federal government to recognize
legal marriages between persons of the
same sex, which, as of this writing, is
allowed in more than 30 states, plus the
District of Columbia. While the federal
government could no longer define
marriage in exclusive terms as a union
between a man and a woman, ultimately
decisions around marriage still remained
with the states. However, since then,
many states, either by legislation or
court decision, now permit same-sex
marriages, although several still do not.3
1.
United States v. Windsor, 133 S. Ct. 2675 (U.S. 2013).
2.
For an insightful article on the background of the Windsor decision and its impact on international assignment programs, see R. Rothery,
“Supreme Court’s Same Sex Marriage Decisions Clarify Some Issues, Cloud Others,” in KPMG LLP’s The Expatriate Administrator (2013).
3.
The SSA has issued a table showing where same-sex marriages are recognized on a state-by-state basis.
See: https://secure.ssa.gov/apps10/poms.nsf/lnx/0200210003. This is discussed later in this article.
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network
of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a
Swiss entity. All rights reserved. NDPPS 363935

For federal tax purposes, the IRS looks to
state or foreign law to determine whether
individuals are married. The IRS recognizes
a same-sex marriage if it was validly entered
into in a domestic or foreign jurisdiction
whose laws authorize the marriage of
two individuals of the same sex, even if the
married couple now resides in a domestic or
foreign jurisdiction that does not recognize
the validity of same-sex marriages.4
The SSA, on June 17, 2013, issued an
announcement that it was working
with the Department of Justice to
develop rules to implement the Windsor
decision.5
On August 8, 2014, the SSA
issued the implementing rules,6
which
are subject to change.
The SSA describes the individual whose
earnings record is the basis for the claim
as the “number holder” (NH) and the
individual filing for benefits under the
earnings record as the “claimant.” For
purposes of Title II, which covers Old
Age Survivors and Disability Insurance7
and Medicare benefits/claims8
, the SSA
first looks to the laws of the state, or the
foreign jurisdiction, to determine whether
the SSA can recognize the marriage. If the
NH is alive, the SSA then looks to the NH’s
domicile at the time of application or while
the claim is pending a final determination
in order to determine benefits eligibility.
If the NH has died, the SSA looks to
the NH’s domicile at the time of his or
her death. In other words, even if the
individual was legally married in a state that
recognizes same-sex marriages, if, at the
time of applying for benefits or while the
application is pending, he/she is domiciled
in a state that does not recognize same-
sex marriages, the NH will be considered
to be not married.
Which Benefits Are Affected?
The specific benefits claims that are
based entirely on these rules under Title
II include Aged Spouse and Spouse with
Child-in-Care Benefits9
, Benefits for
Surviving Spouses10
, Child’s Benefits11
,
and the Lump Sum Death Payment12
and Medicare benefits.13
Other benefits
claims are based in part on these rules
and are briefly discussed later.
General Rules of Applicability
The SSA’s underlying position is different
from the IRS’ position in that, unlike the IRS,
the Social Security Act requires the agency
to make two separate determinations: first,
it must determine whether the marriage
was valid in the state or foreign jurisdiction
where the marriage was celebrated; then
in determining eligibility for benefits, the
SSA has to determine whether the location
of the individual’s domicile at the time the
social security claim is filed or is pending
would recognize this marriage.
Applying a Three-Part Analysis
To accomplish this, the SSA generally
applies a three-part analysis in
determining whether the claimant is
married for benefit purposes:
1. Is the same-sex marriage material for
benefit purposes?
2. If so, did the same-sex marriage occur
in a jurisdiction which recognized
same-sex marriages at the time the
marriage occurred?
3. When the individual is filing a claim based
on a same-sex marriage, is the individual
domiciled in a jurisdiction, at the time
of filing the claim or while the claim is
pending, which recognizes the marriage
at the time of the filing of the claim?14
Generally speaking, this approach can
raise unintended consequences in the
case of both domestic and international
same sex-couples, as many jurisdictions
recognized same-sex marriages before
the Windsor decision.
4.
See Revenue Ruling 2013-17 in 2013-38 IRB 201; see: http://www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-Same-Sex-Married-Couples.
5.
See: http://www.socialsecurity.gov/news/press/releases.html#!/post/7-2013-1.
6.
See: https://secure.ssa.gov/apps10/poms.nsf/lnx/0200210001.
7.
Social Security Act §§ 201-233.
8.
Social Security Act §§ 1801 et seq. which covers Medicare.
9.
10.
11.
12.
13.
See: https://secure.ssa.gov/apps10/poms.nsf/lnx/0200210002; Social Security Act §§ 1801 et seq. which covers Medicare.
14.
See: https://secure.ssa.gov/apps10/poms.nsf/lnx/0200305001. Note, if the individual on whose record the claim is being filed is deceased, the SSA would look to the
domicile at date of death. See: https://secure.ssa.gov/apps10/poms.nsf/lnx/0200210002.

Regarding the last of the three-part
analysis, the SSA considers a person’s
domicile to be the place where a person
has his/her true, fixed, and permanent
home to which the individual intends
to return.15
A domicile once established
continues until a new one is acquired.
To change a domicile a person must:
• intend to make a home in the new
place permanently or for an indefinite
period; and
• be physically present in the new place
while having that intent.16
This is particularly important in an
international context, as assignees
may be on assignment for an extended
period of time but never intend to
establish a domicile in the host country.
To understand entitlement to benefits in
this context, the international assignee
needs to understand the rules relating
to domicile and whether a new domicile
has been inadvertently established.17
In order to consider the international
implications of the SSA’s approach, it is
important to understand first how the
SSA is applying the rules in a domestic
context, and then apply these same rules
to international same-sex marriages.
As a result, we will first discuss the
general rules using the SSA’s examples18
and then apply these rules in an
international context.
(1) Is the same-sex marriage material for
benefit purposes?
The first question which must be
addressed is whether the marriage is
material for social security benefits
purposes. Marriage becomes material
when an individual is making a claim
based on the spouse’s earnings record.
If the individual is filing a claim NOT
based on the spouse’s earnings record,
then the marriage is not material for
benefits purposes.
• Example 1
Tom (NH) and Steve (claimant) are
married in a state which recognizes
same-sex marriages and are domiciled
in that state when Steve retires
(for example, New York). Steve has
worked his entire career and his
social security record indicates that
he is entitled to the maximum benefit
permitted. As a result, he does not
need to consider Tom’s earnings in
determining his benefit. Therefore, the
marriage is not material in determining
his benefit and the claim is processed
using only Steve’s record.19
• Example 2
The facts are the same as above, but
after the marriage occurred, Steve
stopped working and stayed at home
during the marriage to take care of the
couple’s adopted children. As a result,
obtaining spousal benefits would
result in a greater benefit then just
relying on Steve’s record. Therefore,
the marriage is material for purposes
of determining the benefit.
(2) Did the same-sex marriage occur
in a jurisdiction which recognized
same-sex marriages at the time the
marriage occurred, and
(3) when the individual is filing a claim
based on a same-sex marriage, is the
individual domiciled in a jurisdiction
which recognizes the marriage at the
time of the filing of the claim?
These two components are considered
together as the same approach applies
to both. The SSA has published a list
of the dates states recognized same-
sex marriages in that state, as well as a
list of the dates each state recognized
same-sex marriages performed in other
states.20
• Example 3
Sheldon (NH) and James (claimant) are
domiciled in Georgia, but they marry
while on vacation in Massachusetts (at
a time when Massachusetts permits
same-sex marriage). James files for
aged spouse’s benefits on Sheldon’s
record while they both live in Georgia.
While the application is pending,
James and Sheldon move to and
become domiciled in Massachusetts.
Because they became domiciled
in Massachusetts while the
application is pending, the marriage
15.
See: https://secure.ssa.gov/apps10/poms.nsf/lnx/0200305001#a2.
16.
17.
This article does not address this further as this is important in all marital relationships, not just same-sex marriages.
18.
We provide some illustrations that derive from the SSA’s POMS (http://policy.ssa.gov/poms.nsf/lnx/0200210002).
19.
20.

can be recognized for purposes of
determining entitlement for Title II and
Medicare benefits.21
• Example 4
Lily (NH) and Wendy (claimant)
consider themselves married
based on a ceremony celebrated in
Washington state on August 23, 2010
(before Washington permitted same-
sex marriage). They are currently
domiciled in Washington. Wendy
files a claim to receive aged spouse’s
benefits from Lily’s record. Because
the ceremony occurred before
Washington permitted same-sex
marriage, the NH and claimant cannot
be recognized as married for purposes
of determining entitlement to Title II
benefits or Medicare.22
• Example 5
John (NH) and Dave (claimant) married
in New York on October 1, 2012.
John died on January 31, 2013, while
domiciled in Minnesota, and Dave
filed for surviving spouse benefits.
Because the date of John’s death
was before the date that Minnesota
recognized same-sex marriages,
the NH and claimant cannot be
recognized as married for purposes of
determining entitlement to Title II or
Medicare benefits.23
In addition, the SSA considers certain
non-marital relationships as equivalent
to a marital relationship based on
the intestacy laws of the state where
the individual whose earnings record is
relevant is domiciled. If, under such law,
a claimant could inherit a spouse’s share
of the individual’s personal property
if the individual died without leaving
a will, the SSA will treat the couple’s
relationship as a marital relationship for
purposes of determining entitlement to
benefits. The SSA has published a chart
listing states which have established
non-marital relationships and whether
these relationships allow such individuals
to inherit property under the intestacy
laws of that state.24
• Example 6
Nicole (NH) and Penny (claimant)
established a civil union in Colorado.
Colorado shows “Civil Unions” as a
“Relationship Type” For the purpose
of intestacy laws. Penny indicates that
the relationship was established after
the “Effective Date” shown in the SSA
chart. Colorado’s civil union law would
allow Nicole and Penny to inherit as
each other’s spouse, according to
the information under “Inheritance
Rights” in the chart.25
When Penny
applied for aged spouse benefits,
Nicole was still domiciled in Colorado.
Thus, the SSA would treat Penny and
Nicole as spouses for purposes of
determining entitlement to benefits.26
• Example 7
Tony (NH) and Tim (claimant) entered
into a domestic partnership in Rhode
Island. The only type of relationship
listed on the SSA chart for intestacy
laws27
for Rhode Island is a “Civil
Union,” and only if the civil union was
entered into between June 1, 201128
and August 1, 2013. Since a domestic
partnership is not considered as a valid
marital relationship in Rhode Island,
Tim would be treated as unmarried for
benefit purposes.
Determining Marital Status Involving
Foreign Jurisdictions
Now that we have addressed the rules
involving same-sex marriages in the
U.S., let’s turn to the application of
these rules in an international context
involving a same-sex marriage or other
same-sex non-marital legal relationship
entered into in a foreign, i.e., non-U.S.,
jurisdiction. For this purpose, a foreign
jurisdiction is anywhere other than
the 50 United States, the District of
Columbia, the U.S. Virgin Islands,
Puerto Rico, Guam, American Samoa,
and the Northern Mariana Islands.
It’s not uncommon that from both an
inbound and an outbound perspective
same-sex couples are accepting
international assignments. Likewise
these individuals may have entered into
differing legal relationships as permitted
in their home jurisdictions. Several
issues can arise when a U.S. person
enters into a same-sex marriage or
21.
22.
Id.
23.
Id.
24.
25.
“GN 00210.004 Non-Marital Legal Relationships (Such as Civil Unions and Domestic Partnerships)” in POMS.
26.
27.
State chart on non-marital legal relationships in GN 00210.004 Non-Marital Legal Relationships (Such as Civil Unions and Domestic Partnerships) (POMS).
28.

other same-sex non-marital relationship
outside the United States or when a
foreign domiciliary in such a relationship
later moves to the United States. Such
individuals need to understand the
implications of these relationships, both
in their home country (and possible
home state) as well as in their host
country from the social security stand-
point (as well as the tax and immigration
stand-points).
In order to recognize a same-sex
marriage that occurred in a foreign
jurisdiction, the SSA must request a
Regional Chief Counsel’s opinion as
to whether the marriage is considered
valid, unless one has already been
issued with respect to the specific
marital relationship. The opinion must
address whether the foreign marriage
is recognized under state law criteria of
the NH’s domicile, as described below.
In general, a claimant is married if the
foreign same-sex marriage:
• would be recognized by the courts in
the state of the NH’s domicile as valid,
or if the NH’s domicile is a foreign
jurisdiction, by the courts of the
District of Columbia, and
• is valid in the jurisdiction it was
celebrated in.
The District of Columbia permitted
same-sex marriages beginning
March 9, 2010, and recognized same-
sex marriages from other jurisdictions
starting July 7, 2009. Thus, for individuals
domiciled outside the U.S. in a same-sex
marriage recognized by the jurisdiction in
which it was celebrated, only marriage-
based claims for individuals domiciled in
foreign jurisdictions which are filed after
July 7, 2009 would be considered valid.29
In the case of non-marital legal
relationships (for example, a union
under France’s PACS, or an Irish
civil partnership) the Regional Chief
Counsel’s opinion must address whether
the law of the state of the NH’s domicile
would allow the claimant to inherit as
the spouse of the NH, if the NH were
to die intestate. In general, a claimant is
considered married if the foreign same-
sex non-marital legal relationship (e.g.,
civil union, domestic partnership, civil
partnership, life partnership):
• would be recognized by the courts
in the state of the NH’s domicile as
allowing the claimant to inherit a
spouse’s share of the NH’s personal
property if the NH were to die without
leaving a will, or if the NH’s domicile is
a foreign jurisdiction, by the courts of
the District of Columbia, and
• is valid in the foreign jurisdiction where
it was celebrated or established.30
The following examples will help
illustrate and explain how these rules
work.
• Example 8 31
Mary (NH) and Catherine (claimant)
entered into a same-sex marriage on
January 26, 2006, in Barcelona, Spain.
Mary died on December 16, 2012, in
Barcelona, Spain. Catherine continues
to reside in Spain. On April 11, 2013,
Catherine filed for social security
benefits and the lump sum payment
as Mary’s widow.
The SSA must look to that the laws
the District of Columbia courts would
apply to determine whether a valid
marriage existed at the time of the NH’s
death. Under the law of the District of
Columbia, the validity of a marriage is
determined by the law of the jurisdiction
where the marriage was entered into.
The only exception is when the marriage
is in violation of strong public policy
of the District of Columbia. The SSA
noted that the District of Columbia
began formally recognizing as valid
any same-sex marriages entered into
in other jurisdictions beginning on
July 7, 2009. Accordingly, it is clear that
from July 7, 2009, the recognition of
same-sex marriages performed in other
jurisdictions does not appear to violate
a strong public policy of the District of
Columbia. Since the claim was filed after
July 7, 2009, the SSA concluded it would
recognize the marriage provided it was
valid under Spanish law.
29.
See Example 7, infra, for the SSA’s interpretation of these rules in an actual case.
30.
31.

• Example 9
Tom (NH) and Steve (claimant) are
domiciled in Iowa. Iowa recognizes
same-sex marriages performed
in other jurisdictions on or after
April 30, 2009. On April 1, 2014,
while on international assignment in
the Netherlands, Tom and Steve marry.
Netherlands recognizes same-sex
marriages at the time they are married.
They then return to Iowa and continue
to be domiciled there.
Later, while still domiciled in Iowa, Steve
files a claim for spousal benefits. Since
Iowa recognizes same-sex marriages as
of April 30, 2009, and they are domiciled
in that state when Steve files his claim,
it would appear that Steve is eligible to
file for spousal benefits, although the
SSA would have to request a Regional
Counsel’s opinion to confirm this.
• Example 10
Nicole (NH) and Penny (claimant)
resided in Sweden and established
a registered domestic partnership
on January 1, 2000, prior to Nicole’s
transfer to the United States. Let’s
assume that Sweden has offered
registered domestic partnerships
for same-sex couples since 1995.
Let’s further assume that Sweden’s
registered domestic partnership
law would allow Nicole and Penny
to inherit as each other’s spouse.
Subsequently Nicole is transferred
to New York State. She and Penny
continue to live in New York State
until Nicole retires. Penny then applies
for aged spouse benefits based on
Nicole’s earnings record. Although the
civil union was recognized in Sweden,
New York State does not recognize
civil unions occurring in Sweden
for inheritance purposes. Thus,
Penny would be treated as unmarried
for benefits purposes.
Special Situations
There are certain situations where the
SSA only considers claims based on
individuals in same-sex marriages,
not other legal same-sex relationships:
• The Medicare Special Enrollment
Period (SEP).32
• The Medicare premium surcharge
roll-back.33
• End Stage Renal Disease (ESRD).34
• Individuals not fully insured for
monthly title II benefits and/or
premium-free Hospital Insurance
(HI), but have at least 30 quarters
of coverage (QCs) can consider
same-sex spouse coverage for
eligibility for reduced or free
premiums.35
• Medicare beneficiaries with incomes
over a certain amount are required to
pay an adjustment to their monthly
Medicare Part B (medical insurance),
and Medicare prescription drug
coverage premiums. SSA calls the
adjustment amount the income-
related monthly adjustment amount
(IRMAA).36
• Medicare Low Income Subsidies.37
• Supplemental Security Income
(SSI) claims.38
Additional information concerning these
specific issues can be found in the
POMS document cited in the footnotes.
32.
33.
34.
35.
36.
37.
38.

Comments and Conclusion
The SSA rules for same-sex marriage
benefits are complex and are not entirely
consistent with the IRS approach.
The IRS recognizes valid same-sex
marriages regardless of where the
individuals are domiciled, while the SSA
considers both the validity of the
marriage and the state of domicile
when the claim is filed or is pending.
As a result, same-sex couples may
find that they can file a joint income tax
return but not be eligible for marriage-
based retirement or Medicare benefits.
This can be perplexing and confusing;
and it can cause some degree of stress
and frustration for such couples.
At first glance, the application of the social
security rules seems rather complex
when dealing with same-sex marriages –
not to mention same-sex civil unions
and registered domestic partnerships.
However, SSA guidelines, ample
examples, and the above-discussed SSA
three-part analysis approach, can help
provide some clarity and cut through
much of the complexity.
In addition, same-sex couples in a
non-marital relationship (e.g., registered
domestic partnership, civil union, etc.)
that is not recognized as equivalent
to marriage in their state of domicile,
should contact legal counsel to
determine whether their relationship
status might limit their potential social
security benefits. To highlight, due
to the fact that inbound partners of
assignees who remain in the U.S. may
very well have less than 40 QCs and
thus may have to pay a premium for
Medicare Part A, it would seem the only
way to utilize the partner’s QCs is if the
individuals are legally married, rather
than being in another type of legal same-
sex relationship.39
Interestingly, the SSA has not provided
complete guidance regarding situations
where an individual is eligible for and
begins to receive benefits (i.e., is domiciled
in a state which recognizes same-sex
marriages when the claim is filed or while
the claim is pending) and then becomes
domiciled in a jurisdiction which does not
recognize same-sex marriages.While
the rules do not indicate a loss in benefits
would occur as a result of a change of
domicile, it would be helpful to have clear
guidance in this area.
It is clear that additional guidance needs
to be forthcoming to address this as
well as other practical issues resulting
from the SSA’s approach. Due to the
complexity of the rules, and the fact
that certain of these rules require a
formal marital relationship rather than
just a legal same-sex relationship
that is not “marriage,” international
assignment program managers should
have their inbound and outbound
international assignees in a same-sex
relationship consult with appropriate
benefits counsel to determine how
their relationship will be treated in the
host location.
39.
However, a statement on eligibility in such situations was recently issued by the SSA: http://www.medicare.gov/sign-up-change-plans/same-sex-marriage.html

The following information is not intended to be “written advice concerning one or more Federal
tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department
Circular 230 as the content of this document is issued for general informational purposes only.
The information contained herein is of a general nature and based on authorities that are
subject to change. Applicability of the information to specific situations should be determined
through consultation with your tax adviser.
This article represents the views of the author(s) only, and does not necessarily represent the
views or professional advice of KPMG LLP.
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the
KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. NDPPS 363935
The Expatriate Administrator is a publication
of KPMG’s Global Mobility Services practice
(formerly “International Executive Services practice”).
Contact us at teaeditor@kpmg.com
Editor: Scott Shaughnessy
Technical Editor: Molli Hull
For more information, please contact your
local GMS professional.
kpmg.com

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