Copyright 2016 by Joan E. Emery
A. Changes to 42 USC 402(r)(1) and (2) Imposed by the Bipartisan Budget Act of 2015 (“BBA”)
1. The prior law provided that an person who was at least full retirement age and who had a spouse who was receiving Social Security benefits (or who filed and suspended benefits) could file for only a spouse’s benefit under the work record of the spouse who was receiving benefits (or who filed and suspended benefits). This was referred to as a restricted application and the advantage to the person who received the spousal benefit was twofold – the receipt of the spousal benefit and the ability to allow that person’s own benefit to grow at a rate of 8% per year until age 70. At any time thereafter up to age 70, the person receiving the spousal benefit could continue to receive the spousal benefit or could elect to begin receiving that person’s own benefit (which would have grown at a rate of 8% per year from that person’s full retirement age until receipt of that person’s own benefit), whichever was larger.
2. The changes to 42 USC 402(r)(1) and (2) which were included in the BBA create a deemed filing rule. The effect of the changes in 42 USC 402(r)(1) and (2) are that (a) an individual who is eligible for a spousal benefit and who is entitled to a benefit under that person’s own work record will be deemed to have filed for a spousal benefit, and (b) an individual who eligible for a benefit under his or her work record and who is entitled to a spousal benefit will be deemed to have filed for a benefit under his or her work record.
B. How These Rule Changes Will Impact Social Security Recipients
1. The changes imposed by 42 USC 402(r)(1) and (2) eliminate the restricted application option. The net effect of the new deemed filing rules is that, unless exempted by the effective date rules, a person will no longer be able to receive a spousal benefit and defer his or her own benefit to a later date, usually age 70. Under the new rules, filing for either the spousal benefit or the person’s own benefit is deemed filing for both benefits and the person will receive the higher of the spousal benefit or his or her own benefit.
2. The changes imposed by 42 USC 402(r)(1) and (2) are effective for any person who attains age 62 in any calendar year after 2015. This means that the restricted application option still exists for anyone who attained age 62 during or prior to 2015.
3. However, it is important to note that the BBA changes to the file and suspend rules may limit the ability of a person to file a restricted application for only a spousal benefit, even though that person attained age 62 during or prior to 2015. The changes to the file and suspend rules do not apply to anyone who already has a file and suspend in place or who submits a file and suspend request within at least 180 days after November 2, 2015. For example, if Wife attained age 62 in 2015, her full retirement age is age 66. If Wife files a restricted application for a spousal benefit in 2019 (the year she attains age 66), she will be able to receive a spousal benefit and defer her own work record benefit if her spouse is receiving benefits on his own work record or if he filed and suspended his work record benefits on or before at least 180 days after November 2, 2015.
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