Is The Social Security Representative Correct In This Case?

Jul 19 2018 - 5:35pm

Client A is disabled and stopped working years ago. He started claiming benefits 4 years ago. His wife Client B applied at age 62 (Nov 2014) a month before he received disability benefits to claim her benefits on her record. Now 4 yrs later they are both approaching FRA 66 yrs. Client A just voluntarily suspended his benefits (as he was trying to avoid disability turning into retirement benefits) so he can claim DRC. He plans to turn them back on at age 70.

When he met with Social Security today, the gentleman at the office mentioned that due to Client B claiming benefits at age 62, she was penalized on her work record benefits and her excess spousal benefits will be (50% of Client A FRA benefits $2580 minus her FRA benefits $1200). Her benefit now is $884 and her excess spousal would be like $100. The guy mentioned the social security office made a mistake. He claimed when she filed somebody should have spoken to her about her benefit option’s at that time. He is claiming that she should have received spousal benefits at age 62 until now and that the excess spousal benefits would be no different than vs now. This didn’t make sense as he was on disability and not retirement benefits. Her only option would have been her benefits. I was always under the impression that if she claimed the excess spousal at 62, it too (in addition to her benefit would be penalized). Is that not correct? Should she wait until age 66 or does it not matter and they should claim this amount owed for the last 4 years as the representative is saying to do?

Once again thank you for all you do. This has been quite a learning lesson for them and I appreciate your support throughout.


If it's true that the wife in this case became entitled to her retirement benefits at least a month before her husband became entitled to disability benefits (SSDI), then she'd have the option of filing for her excess spousal benefits now or at age 66. If she starts them 4 month before turning age 66 her excess spousal rate will be reduced by roughly 2.8%, and she couldn't be paid the spousal benefits for any months that her husband's benefits are in voluntary suspense.

The only way this wife could claim excess spousal benefits retroactive to her husband's original entitlement date is if a) his SSDI entitlement date was the same as or earlier than her date of entitlement to retirement benefits, or b) if Social Security establishes a deemed filing date for her that dates back to the time of her husband's SSDI entitlement. If alternative 'a' applies, the wife has no choice but to accept the retroactive excess spousal benefits because deemed filing would apply in that event. In other words, she would not have been permitted to file for reduced retirement benefits without also filing for reduced excess spousal benefits if she was eligible for the spousal benefits in her first month of entitlement to retirement benefits.

Alternative 'b' is only possible if some type of protective filing was established and not acted on, or if Social Security establishes that misinformation occurred that dissuaded this wife from filing timely. And, In that case she'd have the option to either accept or not accept retroactivity due to the fact that she was born prior to January 2 1954. If she had been born after January 1 1954, she'd be deemed to have filed for reduced excess spousal benefits even if her husband's SSDI entitlement date was later than her retirement benefit entitlement date.

Either way, if this lady's entitlement to excess spousal benefits goes back to when she was age 62, her excess spousal rate will be reduced by roughly 30%. So, if her unreduced excess spousal benefit would be $100 at age 66, it would be around $70 if she is permitted or required to go back to start the benefits at age 62.

I can't make the decision for her, so this couple should strongly consider using our maximization software to compare all of their options and determine the strategy that they feel suits them best.

Best, Jerry