My wife started collecting SSI when she was 62 and out of work, then was employed again 6 months later. We wen to the social security office and asked what our options were. They stated that we could withdraw her application for early benefits, repay the 6 months of benefits that were paid and then her benefits would be recalculated and full retirement age. Or...since she was going to make more than the $15 or so that was allowed, her benefits would be suspended and then be recalculated when again when she was at full retirement age. The benefit would be higher because she had been working another 3 1/2 years and would only be penalized by the 6 months that she collected maybe 3%. She turned 66 in April and now it's almost October and the benefit she is receiving is still the same as when she collected it at 62. We went to the SS office and they told us that it would take a year before they would recalculate. Unfortunately I don't trust what they say. What is your take on this.
It sounds like what you were told by Social Security is correct. This process is called a reduction factor adjustment, and results in a benefit rate increase to compensate beneficiaries for months of non-payment due to their earnings between the years from age 62 to full retirement age (FRA).
Reduction factor adjustments are done on an automated basis, and are generally not done until about 18-24 months after the person attains FRA. One of the reasons for the delay is due to the fact that Social Security needs to verify that all of the person's pre-FRA earnings have been posted to their record in order to determine how many months of benefits they were actually due prior to FRA. The increases are fully retroactive to FRA, though, so your wife will receive any back pay she's due at the time her rate increase is processed.