Social Security Administration Releases Guidance on New Rules

The Social Security Administration recently released two “emergency messages” to its employees regarding the changes to the Social Security rules that occurred as a result of the Bipartisan Budget Act of 2015.

• Here’s the memo about the changes to the deemed filing rules, and
• Here’s the memo about the changes to the voluntary suspension rules.

For the most part, there’s little news in the memos. They say the same things that we’ve been discussing here for the last few months. Specifically:

• You will be affected by the new deemed filing rules (which eliminate the “restricted application” strategy) unless you were at least age 62 as of 1/1/2016, and
• You will be affected by the new rules regarding voluntary suspension (which affect various “file and suspend” strategies) unless you request suspension of your benefits prior to 4/30/2016.

Divorced Spouse Benefits

One thing that is particularly interesting, however, is what the voluntary suspension memo says about ex-spouse benefits. Specifically, it says that, even for people affected by the new rules, if a person suspends his/her retirement benefit, that will not stop an ex-spouse from receiving a spousal benefit on that person’s work record.

The reason this is noteworthy is because it’s directly contrary to the text of the law itself. The law states, “In the case of an individual who requests that such benefits be suspended under this subsection, for any month during the period in which the suspension is in effect […] no monthly benefit shall be payable to any other individual on the basis of such individual’s wages and self-employment income.” [Bolding is mine.]

“Any other individual” is pretty explicit. So it’s interesting to see the SSA stating that ex-spouses will still be able to receive spousal benefits during the period of suspension based on the work record of the person whose benefit is suspended.

I’m not sure what to make of this. Perhaps the SSA has insider knowledge that further legislation is coming (and is expected to pass prior to 4/30/16) that will insert an exception for ex-spouses. Or perhaps the SSA has just decided — of its own volition — that the law doesn’t make sense as it is written, so they’re not going to enforce it.

Better-Informed SSA Employees

Aside from the above discussion about spousal benefits for divorced spouses, the other reason these memos are noteworthy is that they mean that SSA employees have finally at least been exposed to the new rules. That said, because the rules are still very new, mistakes and misinformation on the part of SSA employees is still likely to be more common than it would be for other, unchanged topics. So it’s a good idea to be especially diligent with double-checking any information you receive (from the SSA or otherwise) before relying on it for decision making.