Social Security Changes in Section 831 of the Bipartisan Budget Act of 2015

                                                                                          Copyright 2016 by Joan E. Emery
   
          On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015.  Section 831 of that Act contains several important Social Security changes.  Below is a summary of the key changes.  In my next few posts, I will discuss these changes in more detail.

                1.  This is the first important change.  This change modifies the prior restricted application rules. 
                                a.  Section 402(r)(1) creates a presumption of filing (with limited exceptions) for an individual who is eligible for old-age benefits and for a husband’s or wife’s benefit.  Specifically, if a person is eligible for a husband’s or wife’s benefit in any month in which that person is also entitled to an old-age benefit, such person is deemed to have filed an application for the wife’s or husband’s benefit for that month.
                                b.  Section 402(r)(2) creates a presumption of filing (with a limited exception) for an individual who is eligible for old-age benefits and for a husband’s or wife’s benefit.  Specifically, if a person is eligible for an old-age benefit in any month in which that person is also entitled to a wife’s or husband’s benefit, such person is deemed to have filed an application for the old-age benefit for that month.
                                c.  The net effect of these provisions is that you can’t file separately for an old-age benefit or a spouse’s benefit.  Filing for either benefit will now mean filing simultaneously for both benefits.  Filing for both benefits does not and did not (even under the old rules) mean that the applicant received the full amount of both benefits.
                                d.  Effective date for amendment to 42 USC 402(r) -  changes apply to individuals who attain age 62 in any calendar year after 2015.  This means that these changes do not apply to individuals to attained age 62 during or prior to 2015.
                2.  Section 402(b)(1)(B) modifies the requirements for receiving a wife’s benefit (wife in some cases includes a divorced wife) and now requires that the wife or divorced wife must have attained the age of 62 or the wife must have in her care a child entitled to a child’s insurance benefit on the basis of the wages and self-employment income of a person who is entitled to old-age or disability insurance benefits.  This change is referred to in the Bipartisan Budget Act of 2015 as a “conforming amendment” to the change made in 42 USC 402(r).
                                a.  Effective date for amendment to 42 USC 402(b)(1)(B) -  changes apply to individuals who attain age 62 in any calendar year after 2015.  This means that this change does not apply to individuals to attained age 62 during or prior to 2015.  
                3.    Section 402(c)(1)(B) modifies the requirements for receiving a husband’s benefit (husband in some cases includes a divorced husband) and now requires that the wife or divorced wife must have attained the age of 62 or the husband must have in his care a child entitled to a child’s insurance benefit on the basis of the wages and self-employment income of a person who is entitled to old-age or disability insurance benefits.  This change is referred to in the Bipartisan Budget Act of 2015 as a “conforming amendment” to the change made in 42 USC 402(r).
                                a.  Effective date for amendment to 42 USC 402(c)(1)(B) -  changes apply to individuals who attain age 62 in any calendar year after 2015.  This means that this change does not apply to individuals to attained age 62 during or prior to 2015. 
                4.  This is the second important change.
                                a.   New Section 402(z) changes the file and suspend rules (referred to in the Bipartisan Budget Act of 2015 as “voluntary suspension”).
                                b.   Section 402(z) provides that any person who has attained retirement age and is entitled to old-age benefits may request that those benefits be suspended (and generally the person may control the beginning and ending dates of a suspension of benefits until age 70),
                                                1)  However, a person may not suspend benefits if any of                                 the following exceptions apply:
                                                                a)  Mandatory suspension of benefits occurs                                                            pursuant to subsection (x);
                                                                b)  Benefits are terminated pursuant to                                                  subsection (n);
                                                                c)  A non-payment of benefits penalty is imposed                                                  under Section1320a-8a; or
                                                                d)  Benefits are withheld pursuant to any other                                                   provision of law which authorizes the recovery of a debt by                                                  withholding benefits.
                                                2)  This is the more important part of new subsection (z):  So                                  long as the suspension of benefits is due to the request of the person                                  entitled to receive the benefits, the following rules apply:
                                                                a)  No retroactive benefits shall be payable to that                                                  person;
                                                                b)  No monthly benefit shall be paid to any other                                                  individual on the basis of the wages and self-employment                                                  income of the person whose benefits are suspended; and
                                                                c)  No monthly benefit shall be paid to the person                                                  whose benefits are suspended based on another                                                                    individual’s wages and self-employment income.             
                                c.  Effective date new subsection 42 USC 402(z) is at least 180 days after 11/2/15.  This would be on or about April 29, 2016.