Who is affected by the new Social Security rules?

By Mary Beth Franklin

Assuming the Senate passes the legislation and President Obama signs it, these are the changes to look out for.

FILE AND SUSPEND

If you have already filed and suspended your benefits approximately May 1, 2016 — you can still request to file and suspend your benefits to trigger spousal or dependent benefits. If you are 66 or older within the first six months after the law is enacted in order to trigger spousal benefits for your wife or husband and/or dependent benefits for a minor or disabled child, your family will continue to receive benefits on your earnings record.

After May 1, 2016 (approximate date), the rules for file and suspend will change. No one will be able to collect benefits when the primary beneficiary files and suspends. And the person who files and suspends will no longer be able to request a lump sum payout of suspended benefits at a later date.

After May 1, 2016, the only use of file and suspend will be for those people who claimed reduced Social Security benefits before full retirement age. They will still be able to suspend benefits in order to earn delayed retirement credits of 8% per year between ages 66 and 70. But no one will be able to collect spousal or dependent benefits; known as auxiliary benefits; while the primary beneficiary suspends benefits. es.

RESTRICTED CLAIM FOR SPOUSAL BENEFITS

Married and divorced spouses who are already collecting spousal benefits worth half of their spouse's or ex-spouse's full retirement age benefit amount — can continue to collect those spousal benefits and switch to their own larger retirement benefit at age 70.

Anyone who is age 62 or older by the end of 2015 will retain the right to claim just spousal benefits when they turn 66 once the other spouse either claims Social Security or if that spouse had requested to file and suspend their benefits within six months of enactment of the legislation. Qualified ex-spouses who have been divorced at least two years can collect spousal benefits at age 66 even if their former spouse has not yet claimed benefits as long as that former spouse is at least 62 years old.

Anyone who is younger than 62 at the end of 2015 will not be permitted to collect just spousal benefits in the future. If they are entitled to both a retirement benefit on their own earnings record and a spousal benefit because they are married (or divorced after at least 10 years of marriage) to someone who is eligible for benefits, they will be deemed to file for both benefits at the same time and receive the higher of the two amounts. They will no longer be able to claim spousal benefits only.

IMPACT ON THE FOLLOWING GROUPS OF BENEFICIARIES

Workers who are 66 or who will turn 66 by May 1, 2016 can still file and suspend their Social Security benefits in order to trigger benefits for a spouse or minor child. They will still be able to request a lump sum payout of suspended benefits any time up to age 70 in lieu of earning a delayed retirement credit of 8% per year. Younger workers will not have that option. If they suspend their benefits at 66, they can still earn delayed retirement credits. But no one can collect benefits on their earnings record during the suspension. Spouses who are already collecting benefits on their mate's earnings record can continue to do so and switch to their own larger retirement benefits at age 70. So can spouses and qualified ex-spouses who are 62 or older by the end of 2015. They can still restrict their claim to spousal benefits. Those who are younger than 62 at the end of 2015 cannot collect spousal benefits only when they reach full retirement age.

Divorced spouses have the same right to collect spousal benefits only as described above depending on their age. Divorced spouses who are younger than 62 by the end of 2015 will not be able to collect only spousal benefits while their own retirement benefits continue to grow up to age 70.

Surviving spouses will continue to be able to choose to collect either a survivor benefit or retirement benefit first and then switch to the other benefit later if it would result in a larger amount. The legislation does not change the rules for surviving spouses.

Dependent minor children under age 18 (or 19 if still in high school) can collect dependent benefits worth 50% of a parent's full retirement age amount when the parent claims benefits or requests to file and suspend their benefits within six months of enactment of the new law. After six months, dependents can only claim benefits if the parent is actually receiving Social Security benefits. The same rules as described above apply todisabled childrenwho were disabled before age 22. They can continue to collect dependent benefits for the rest of their lives while their parent is alive and survivor benefits worth 75% of their parent's full retirement age amount when the parent dies.

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