My wife filed for her RIB at age 62 earlier this year. Our disabled adult child filed for a DAC benefit based on my wife's record at the same time. I have now turned 62 and have filed for my RIB. Our disabled adult child's DAC benefit has now been switched to my record and my wife has filed for a child-in-care spousal benefit on my record. Technically, my DAC and child-in-care spouse should each be entitled to an unreduced benefit of 50% of my PIA, even though I claimed my benefit early. Since our DAC is simultaneously entitled on both our records, we were able to combine our individual family maximums. However, our combined maximums totaled $6,243, so we were limited by the CFM upper limit of $5,507.90, which was the 1/19 effective limit at the time of our filing. After subtracting my PIA from this upper limit, the proportioned balance was not enough to give my DAC and my wife the 50% of my PIA benefit. Since my wife is dually entitled and receiving a portion of the payment from her record, part of her unpaid portion from my record was transferred to my DAC to bring my DAC's payment up to the full 50% of my PIA. However, my wife's total payment (from her record and the partial from my record) falls short of the 50% of my PIA that she is technically entitled to for the child-in-care spousal benefit.
All of this boils down to a couple of questions that I have about the CFM upper limit. Since our filing, I have noticed that the CFM upper limit has been updated to $5,596.00 effective 12/19 and $5,707.60 effective 01/20. Both of these amounts are still below the $6,243 combined sum of our individual family maximums. Will these increases in the CFM upper limit allow my wife's child-in-care spousal benefit to increase toward the 50% of my PIA that she is technically entitled to, or are we stuck with the $5,507.90 upper limit that was used at the time of our filing? Also, how does the CFM limit work with SS cost of living increases? Can the CFM limit keep someone from getting the cost of living increase?
The 12/2019 combined family maximum (CFM) limit of $5596 is simply the current $5507.90 limit after the upcoming 1.6% Social Security cost of living increase is applied (i.e. $5507.90 x 1.016). That will then become the new applicable CFM for your family starting with your benefits for 12/2019 (i.e. the benefits payable in January 2020). As a result, you and your wife and child should all see roughly a 1.6% increase in your benefit rates starting with the payments you receive in January 2020.
The upcoming COLA won't otherwise materially affect the computation of your wife's benefit rate, though. And, the January 2020 maximum CFM of $5707.60 only applies to family maximums first combined in the year 2020, so that amount won't be applicable to your family since your benefits were first combined in 2019.
Our software (https://maximizemysocialsecurity.com/purchase) is fully programmed to handle CFM computations, so you may want to consider using the software to see if an alternate filing strategy might be advisable in your family's case.