New Here? Get the Free Newsletter

Oblivious Investor offers a free newsletter providing tips on low-maintenance investing, tax planning, and retirement planning. Join over 21,000 email subscribers:

Articles are published Monday and Friday. You can unsubscribe at any time.

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.

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.

Want to Learn More about Social Security? Pick Up a Copy of My Book:

Social Security cover Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less
Topics Covered in the Book:
  • How retirement benefits, spousal benefits, and widow(er) benefits are calculated,
  • How to decide the best age to claim your benefit,
  • How Social Security benefits are taxed and how that affects tax planning,
  • Click here to see the full list.

A Testimonial from a Reader on Amazon:

"An excellent review of various facts and decision-making components associated with the Social Security benefits. The book provides a lot of very useful information within small space."
Disclaimer: By using this site, you explicitly agree to its Terms of Use and agree not to hold Simple Subjects, LLC or any of its members liable in any way for damages arising from decisions you make based on the information made available on this site. I am not a financial or investment advisor, and the information on this site is for informational and entertainment purposes only and does not constitute financial advice.

Copyright 2020 Simple Subjects, LLC - All rights reserved. To be clear: This means that, aside from small quotations, the material on this site may not be republished elsewhere without my express permission. Terms of Use and Privacy Policy

My new Social Security calculator (beta): Open Social Security