Social Security’s Filing Rules: Changes Enacted in 2015

Social Security’s Filing Rules: Changes Enacted in 2015

July 15, 2016
Social Security’s Filing Rules: Changes Enacted in 2015
Overview
would allow the person to receive a full spousal benefit now
The Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114-
(the dual entitlement rule would not be applied at this time)
74, signed November 2, 2015) contained a number of
and to file for a higher retired-worker benefit later.
Social Security-related provisions, including changes to
(Retired-worker benefits are increased 8% per year from
certain rules that apply when a person files an application
full retirement age up to age 70 based on delayed retirement
for Social Security benefits. Specifically, Section 831 of the
credits.) Some beneficiaries used this claiming strategy as a
BBA 2015 made changes to two types of filing rules: (1)
way to maximize their Social Security retired-worker and
deemed filing and (2) the voluntary suspension of benefits.
spousal benefits.
In both cases, the changes affect options available to
claimants who are full retirement age or older (the full
The BBA 2015 eliminated the restricted application option
retirement age ranges from 65 to 67, depending on the
for claimants who are full retirement age or older. Like
person’s year of birth).
claimants who are below the full retirement age, they are
deemed to file for both a retired-worker benefit and a
The changes in Social Security’s filing rules were intended
spousal benefit, if eligible for both.
to prevent the use of “claiming strategies” viewed as
inconsistent with the concept behind Social Security
The deemed filing change is effective for people born in
spousal benefits and that otherwise allowed workers and
1954 or later (i.e., people who reach age 62—the age at
spouses to collect more in Social Security benefits than
which one first becomes eligible for retirement benefits—
Congress intended. The claiming strategies addressed in the
on or after January 2, 2016). People born before 1954
BBA 2015 were not based on practices explicitly approved
(people who reached age 62 and first became eligible for
by Congress. Rather, they stemmed from interactions
retirement benefits before January 2, 2016) are
between filing rules in place and various legislative changes
grandfathered under the old rules. They can file a restricted
to the program over time.
application for spousal benefits only or retired-worker
benefits only when they reach full retirement age. If they
Deemed Filing
claim benefits before full retirement age, they are subject to
A worker who qualifies for both a retired-worker benefit
deemed filing rules.
and a spousal benefit generally cannot restrict his or her
application to only one type of benefit. Rather, when the
Voluntary Suspension of Benefits
person files for one type of benefit, he or she is required (or
Social Security benefits replace a portion of earnings lost
deemed) to file for the other type of benefit at the same
due to the worker’s retirement, disability, or death.
time. The person becomes simultaneously entitled to a
Therefore, family members generally cannot claim benefits
retired-worker benefit and a spousal benefit, and the
on a worker’s record if the worker has not claimed benefits.
spousal benefit is subject to reduction under the dual
Before the BBA 2015, a worker who was full retirement
entitlement rule. Under the dual entitlement rule, a person
age or older could file an application for retired-worker
receives his or her own retired-worker benefit first, plus a
benefits and then request that the benefit payments be
spousal benefit that has been reduced by the amount of the
suspended. This file and suspend approach (1) allowed the
retired-worker benefit. Depending on the circumstances, the
worker to accrue delayed retirement credits during the
spousal benefit may be reduced to zero. In effect, the person
period of suspension (i.e., his or her benefit would increase
receives the higher of the two benefit amounts (not both).
8% per year from full retirement age up to age 70), and, at
the same time, (2) allowed eligible family members (such
Deemed filing applies to retired-worker benefits and
as a spouse or dependent child) to claim benefits on the
spousal benefits (including divorced spouse’s benefits),
worker’s record.
with some exceptions. Deemed filing does not apply if a
person receives spousal benefits and is also entitled to
In addition, a beneficiary who had voluntarily suspended
disability, or if a person receives spousal benefits because
his or her own retired-worker benefit could receive a
he or she is caring for the worker’s eligible child (a child
spousal or widow(er)’s benefit based on another person’s
who is under the age of 16 or disabled). In addition, it does
record. A spousal or widow(er)’s benefit would be reduced
not apply to widow(er)’s benefits.
under the dual entitlement rule as if the beneficiary’s own
retired-worker benefit had not been suspended (i.e., the
Before the BBA 2015, deemed filing applied only to
beneficiary could receive any excess spousal or widow(er)’s
claimants who are below the full retirement age. A claimant
benefits). Also, a worker could “unsuspend” his or her
who was full retirement age or older could file a restricted
benefits on a retroactive basis and receive a lump sum
application for benefits; that is, he or she could file an
payment for the past-due period.
application for spousal benefits only, for example, and wait
until a later time to file for retired-worker benefits. This
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Social Security’s Filing Rules: Changes Enacted in 2015
Under the BBA 2015, a worker who is full retirement age
that is, to provide the worker with the same amount of
or older can file for retired-worker benefits and voluntarily
benefits over their lifetime as if they had not delayed
suspend benefits between the full retirement age and age 70
retirement (based on average life expectancy). The formula
to earn delayed retirement credits (as before). This
for calculating the credits assumes that no spousal benefits
approach could be used by a beneficiary who claims
are being paid when the worker is not receiving benefits. As
retired-worker benefits and then returns to work, for
a result, the file and suspend rules allowed those who used
example. Under the new rules, benefits are no longer
this option to collect more in benefits than was intended.
payable to eligible family members based on the worker’s
(SSA, Bipartisan Budget Act of 2015 Closes Social Security
record during the period of suspension, with the exception
Loophole, April 2016.)
of divorced spouses. A divorced spouse may collect
benefits on the worker’s record during the period of
Use of Claiming Strategies
suspension. Widow(er)’s benefits are also payable on the
To use the restricted application and file and suspend
record of a deceased worker who had suspended his or her
options that were available before enactment of the BBA
own retired-worker benefits.
2015, a person had to be full retirement age or older. A
majority of beneficiaries claim benefits before they reach
In addition, a worker can no longer receive benefits based
full retirement age; therefore, most claimants will not be
on another person’s record while his or her own retired-
affected by the changes in Social Security’s filing rules. In
worker benefit is suspended; nor can a worker “unsuspend”
2014, for example, 60% of new retired-worker beneficiaries
his or her benefits retroactively and receive a lump sum
claimed benefits before full retirement age.
payment. The period of benefit suspension ends with the
earlier of (1) the month before the individual turns age 70,
According to SSA, a relatively small number of
or (2) the month following the individual’s request to have
beneficiaries were using the claiming strategies in place
benefit payments resume.
before the BBA 2015 (less than 0.2% of Old-Age and
Survivors Insurance beneficiaries as of December 2014, or
The changes apply to requests for the voluntary suspension
less than 100,000 beneficiaries). SSA points out, however,
of benefits made after April 29, 2016. (Social Security
that the public had become aware of these claiming
Administration (SSA), Program Operations Manual
strategies only in recent years, and that the number of
System, EM-16007: Processing of Voluntary Suspension
people taking advantage of them was expected to increase.
Requests.)
The most recent legislative change related to these claiming
strategies was in the Senior Citizens’ Freedom to Work Act
Rationale for Changes
of 2000 (P.L. 106-182). The act eliminated the Retirement
Changes in Social Security’s filing rules enacted as part of
Earnings Test for beneficiaries who are full retirement age
the BBA 2015 were intended to address claiming strategies
or older (i.e., these beneficiaries can have any amount of
viewed as inconsistent with the concept behind spousal
earnings without triggering a withholding of their benefits),
benefits. Benefits for spouses (as well as children and
and it allowed beneficiaries to voluntarily suspend their
certain other family members) were created by Congress in
benefits between the full retirement age and age 70 to earn
1939 to supplement the benefits paid to workers who have
delayed retirement credits. (SSA, Bipartisan Budget Act of
dependent family members. Benefits were established for
2015 Closes Social Security Loophole, April 2016.)
spouses who are dependent on the worker for economic
support because they have little or no earnings history of
The Social Security Board of Trustees estimates that the
their own. Since 1939, the dual entitlement rule has been
changes in Social Security’s filing rules under the BBA
used to gauge a spouse’s dependence on the worker. It was
2015 will result in a small amount of program savings.
also established as a way to address concerns at the time
about the cost of creating a new category of benefits
payable to spouses.
Additional SSA Resources at www.ssa.gov:
▪ Recent Social Security Claiming Changes
Before enactment of the BBA 2015, the rules allowed a
▪ Deemed Filing FAQs
person who was at least full retirement age to apply for a
▪ Voluntary Suspension FAQs
spousal benefit only, when he or she also qualified for a
retired-worker benefit. The person could receive full

spousal benefits for several years with no reduction because
the dual entitlement rule would not apply. The restricted
For an overview of the Social Security program, see CRS
application and file and suspend options were also being
Report R42035, Social Security Primer.
used in combination by some married couples, for example,
to allow both members of the couple to maximize their own
(This product was written by CRS analyst Dawn Nuschler.
retired-worker benefits (through the accrual of delayed
Congressional clients may contact the current author
retirement credits), and to allow one member of the couple
regarding any questions.)
to receive full spousal benefits at the same time.
William R. Morton, Analyst in Income Security
Allowing a worker to accrue delayed retirement credits
while spousal benefits are being paid on his or her record
IF10435
created a further inconsistency. As SSA explains, delayed
retirement credits are calculated to be “actuarially fair”—
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Social Security’s Filing Rules: Changes Enacted in 2015

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