After the passing of the 2015 Bipartisan Budget Act, Congress effectively changed the eligibility rules for social security benefits. These changes targeted divorced individuals, altering which benefits they would be eligible to receive, and when.
With these amendments came new age restrictions and different options for individuals to utilize delayed retirement credits. While these changes may seem confusing, the end result is that they actually benefited those who were divorced from their spouses by providing greater flexibility to their social security eligibility.
For more information and the various levels of impact, read below.
Under the new budget act, congress split Americans into two separate groups— those born before Jan. 1, 1954, and those born after.
If you were born before this date, you are eligible to have a greater deal of flexibility in how you withdraw benefits. These individuals are eligible for “restricted benefits” starting at full retirement age (66 years).
These benefits work through applying for benefits through one spouse while deferring their own so long as the spouse they are using is older than 62. At this point, an individual can wait until they are 70 to choose to enroll in their own benefits, potentially allowing them to accrue a higher monthly retirement income.
However, this earning strategy is one that was affected by the Act. Those born after this date are not allowed to participate in this kind of maneuver. Instead, the Social Security Administration (SSA) will enroll individuals automatically in whatever benefit plan offers the highest return.
Similarly, married individuals, no matter when they were born, cannot participate in this strategy.
A common tactic before the Bipartisan Budget Act was “file and suspend.”
Through this method, an individual would file with the Social Security Administration at retirement age then immediately suspend their government benefits. This would allow them to accrue additional worth in their work-related benefits while allowing other eligible spouses to become eligible for social security. By doing so, the “file and suspend” method represented a way for individuals to double-dip in the benefits system to receive more than one type of assistance at a given time.
Through the Act, this practice is no longer allowed. Only those who completed their “file and suspend” strategy before Apr. 29, 2016, were grandfathered into the program.
For divorced spouses looking to seek benefits through their spouse, even initially, there are new factors in play regarding who qualifies.
For one, to claim a spouse’s benefits, you must have been married for a minimum of 10 years and divorced for 2. Without meeting both of these requirements, you will not be eligible to file through your spouse’s work history.
In addition to these criteria, the individual seeking aid cannot be remarried to a new spouse. The spouse who you are filing through, however, is allowed to be remarried.
Many divorcing individuals are concerned that their former spouses can prohibit them from collecting social security benefits based on their work records. This is not the case.
When filing for benefits through your spouse, the SSA will not alert them of your filing. So long as you have your ex-spouse’s social security card (or alternately, the place of their birth and names of their parents), you will be able to file the claim completely on your own.
The same is true in reverse: your ex-spouse can also file for benefits through your work history, and you cannot prohibit this filing. Similarly, the SSA would have no reason to inform you of a previous partner’s filing status as it fundamentally does not affect your own.
Survivor benefits are those which you receive when your spouse dies. Here, there are a couple of possible outcomes for receiving benefits based on a spouse’s death.
If you remarried at any point and both your current and former spouses are dead, you may select from which one you wish to receive spousal benefits. However, in the case of your newer spouse, you must have been married for at least 9 months to be eligible for their benefit amount.
While under normal circumstances you must be at least 62 to qualify for claiming benefits, under survivor benefits, there are cases in which you can receive disbursements early.
In the first case, if your former spouse is deceased, you can claim benefits before reaching full retirement age. This allows you to file for benefits as early as age 60.
If your spouse dies and you are disabled, this threshold is lowered even further to 50.
Social security benefits are a retirement lifeline for many individuals, especially those who may not have a nest egg or 401k. As such, knowing your options around benefit eligibility is integral to your quality of retirement as you get older.
Unfortunately, for most individuals, understanding the nuances of social security laws is too much to handle. This is where the help of an experienced lawyer makes all the difference.
Located conveniently in West Palm Beach, we can handle all your interruption insurance needs. Staffed with experienced lawyers, there is very little we have not seen. Start on the right foot by contacting us at 561-729-0095 to schedule an appointment and get your business back on the right track.