How Would Our Family's Benefits Be Calculated?

Sep 27 2017 - 12:16pm

My wife and I are both now 66 (she in July 2017 and I in August 2017) and we have a disabled daughter living with us on SSI who currently gets $735/month. My wife's PIA is $940 and my PIA is $2341. My wife just started receiving her monthly $940 and we were planning on my applying for spousal benefits at $470 and letting my account grow at 8% until it reaches my maximum of $3090 when I am 70. That would have been an interim total of ($940+$470+$735)= $2145, but family maximum kicks in, with a family maximum of $1410 under that scenario, which would mean my daughter and I each get only ($1410-940)/2 or $235 each.

So instead if we switch to taking my benefits now, the family maximum is $4096 and I would receive $2341 and my wife and daughter would receive ($4096-$2341)/2 = $877 each. Is that correct, even though my wife is eligible for $940 under her own earnings? Or is my wife going to get $940 and my daughter be reduced to ($4096-$2341-$940)=$815. And since the family maximum stays at $4096 there is no reason to delay to let my amount grow at 8% until age 70, correct? Our primary concern is to make sure my daughter does not lose SSI which would then threaten her Medicaid eligibility.



Your case is obviously quite complicated. If your PIA is at least $2341, though, I don't see any way that your daughter would continue to be eligible for SSI (Supplemental Security Income) once you start drawing your retirement benefits. I say that because it sounds her Social Security disabled adult child's (DAC) benefit rate would then exceed the maximum federal SSI payment rate, which would cause her SSI to stop. I'm not an expert on the Medicaid program, though, so I can't tell you whether or not that would necessarily make her ineligible for Medicaid.

Your calculations with regard to what would happen when you file for your retirement benefits aren't exactly correct. It sounds like what would happen at that point would be that your and your wife's family maximum rates could be combined, since your daughter should then qualify for DAC benefits on both of your records. She would only receive benefits on the record with the higher PIA, though, which would obviously be yours. The maximum combined family maximum rate is currently $5268.20, which should free up enough for both your wife and daughter to each receive a total of 50% of your PIA once you file for your retirement benefits. In that event your wife would receive her own retirement benefit plus an excess spousal benefit that would bring her up to a total of 50% of your PIA.

If you are concerned about your daughter's Medicaid eligibility, you could keep the status quo by not filing for your own retirement benefits until you turn age 70. Your daughter will qualify for Medicare once she's been entitled to DAC benefits for 2 years, so she should qualify for Medicare based on her DAC entitlement on your wife's record well before you reach age 70.

Circumstances like yours are exactly why we developed the maximization software available on this website. You should strongly consider using it to compare your options and determine your best overall filing strategy.

Best, Jerry