Social security spousal benefits loophole that Still Exists

social security ex spousal benefits loophole, Social security spousal benefits loophole, Can my wife collect my Social Security while I’m alive?

Social security spousal benefits loophole: Until 2014 was Spousal Benefit of Social Security not without myriad loopholes. As the loopholes have detected, a new law was framed and subsequently passed in 2015 by the US Congress.

According to the rectified law, married couples have been allowed to receive more benefits over their lifetimes subject to certain terms and conditions.  The newly legislated The Bipartisan Budget Act of 2015 will, the Congress said “prevent individuals from obtaining larger benefits than Congress intended”.

However, one cannot take the promises of the new law for granted. It is still vulnerable to be attacked by some illegitimate people. Keeping all the loopholes that were prevalent before aside, married couples have the best chance of claiming tens of thousands of dollars more than they actually intended if they had to not used it. There are two methods of gaining these benefits:

File and Suspend | Social security spousal benefits loophole

With this method, a spouse who earns more can claim benefits at his or her full retirement age. Currently, FRA is 66. However, this higher-earning spouse then immediately suspends the benefits until a later date (for example, age 70).

This allows the individual’s Social Security credits to continue growing. More credits mean a higher benefit later on.

In the meantime, the lower-earning spouse should in this case claim Social Security benefits depending on the lifetime earnings record of the spouse. In this case, the lower-earning spouse in total earns more in comparison to his or her own earnings record.

The file-and-suspend strategy method was made conditional in the new law that was passed in 2015. According to the new, the file-and-suspend strategy that claims benefits after April 30, 2016 which is 180 days after enactment has been done away with.

But, as long as you are a beneficiary who had claimed your benefits under this method until April 20, 2016 then you are still eligible. Claiming your benefits under this method beyond the stipulated time (April 30, 2016) is not entertained anymore.

Restricted Application | Social security spousal benefits loophole

The new law called The Bipartisan Budget Act of 2015 has eliminated the Restricted Application method.

This method used to be called “claim some benefits now, claim more later” method. Under this strategy, a spouse attaining FRA and who is eligible for both spousal social Security benefits based on his or her spouse’s earnings and that of Retirement benefit based on his or her earnings could file a restricted application for only spousal benefits. He or she has to delay applying for Retirement benefits until he or she attains 70.

The good part of this was that his or her Social Security credits keep growing.  Those who had turned 62 after 2015 are no more eligible for applying Restricted Application for claiming only spousal benefits.

If one turns 62 or older in that year (2015), then only can you avail this application strategy for only spousal benefits upon reaching full retirement age.

Claiming Social Security benefits has always been a cumbersome process. One should not just get upset by the misconceptions and misunderstanding of the new law. There are still a lot of avenues one should explore so that you can earn more than what was likely to be during the previous laws.

There is an interesting statistics furnished by the government. According to its report, the average monthly benefit for retirees is expected to be somewhere $1,341 in 2016. If the spouses are both retired, they are eligible for an average monthly benefit of $2,212 in 2016.

Can I collect social security if my spouse is still working?

Absolutely No. Unlike pre-2015 law when one could claim a benefit while his or her spouse is working, this time no one is allowed the same any more the new law coming into effect. To collect your spousal benefits, your spouse has to be retired upon FRA so that you can only claim his or her Social Security or disability benefit.

Ever since the Congress closed the file-and-suspend loophole in the 2016 legislation, no spouse has been allowed to claim his or her spousal benefit while he or she is working.

However, there is exception. You can claim benefits on the record of your ex-spouse who has not yet filed for his or her benefits. To claim this spousal benefit with stated condition, you and your ex-spouse have to be 62 or older. They marriage must lasted 10 years minimum and the minimum period of divorce has to be two years.

Can I collect spousal benefits if I earned my own Social Security benefit?

You can avail both the benefits simultaneously, i.e., your spouse’s earnings based on his or her work record and your own retirement payment. But, there has to be an adjustment in the amount you are likely to collect.

When a beneficiary is eligible for two kinds of benefit, that means Social Security does not combine the, but rather compares one to the other. If your retirement income is higher that you are likely to receive in the Social Security benefits than you will be directed to rather receive that higher amount. Doing this will benefit you in other ways like it adds enough of your spousal benefit to make up the difference and match the higher amount.

Spousal benefits are based on your wife’s or husband’s full benefit, that is, the amount you both are entitled to receive from Social Security at FRA (currently between 66 and 67).

You can claim them as early as age 62, but like retirement benefits, they get bigger if you wait, ranging from 32.5 percent of your spouse’s full benefit amount if you file at the minimum age to 50 percent if you claim at your own FRA. ​​

If I receive a spouse benefit, will it reduce the amount that my spouse receives?

Availing of benefits on one’s spouse earnings record does not eat into the mount of the retirement or disability benefits that your spouse gets.

But, there are certain criteria to claim this particular benefit. You must be at least 62 years of age. Your benefit ranges from 32.5 percent to 50 percent of your spouse’s primary insurance amount and that hinges on your age when you file for the benefit.

If you are eligible for both a spousal benefit and your own retirement or disability benefit, you cannot collect the combined total. If your benefit is higher, you’ll receive only that amount. If the spousal benefit is bigger, Social Security will pay you a combination of the benefits.

Can I collect my deceased spouse’s Social Security and my own at the same time?

Social Security cannot take the risk of giving you both benefits of your late spouse and your own benefits on retirement.

You may be eligible for claiming both the benefits. But, then adjustment will be done in this. Therefore, a survivor benefit and your own retirement income will come into picture.

Whichever higher income fetches you will be given to you as a single benefit. You cannot claim the two benefits at the same time.

Social Security Benefits for a Non-working spouse | Social security spousal benefits loophole

One wonderful aspect of Social Security is the fact that one has not ever worked or is working anywhere has the privilege of collecting benefits of insurance based on the working records of his or her spouse. The new law might give the same benefit as it was before.

Below are some key points:

If the non-working spouse files for the benefits on his or her spouse’s FRA, that will accrue him or her the greatest benefits. The FRA is age 66 for those born between the years 1943-1954. 

  • The spousal benefit is ½ of the worker’s primary insurance amount (PIA). 
  • There is a minimum requirement of two consecutive years of marriage period before applying for this benefit.  The working spouse must be entitled to benefits. Actually, he or she would need to file for and start to receive benefits in order for spousal benefits to be available.
  • The spouse is eligible to apply for benefits prior to the FRA as long as she is at least age 62. If the spouse decides to apply for benefits at age 62, she would only receive 35% instead of 50% of the workers. Some different rules apply for divorced and surviving spouses.

Leave a Comment