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1 1 (July 15, 2016)

handle is hein.crs/govcdzr0001 and id is 1 raw text is: FF. July 15, 2016 Social Security's Filing Rules: Changes Enacted in 2015 The Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114- 74, signed November 2, 2015) contained a number of Social Security-related provisions, including changes to certain rules that apply when a person files an application for Social Security benefits. Specifically, Section 831 of the BBA 2015 made changes to two types of filing rules: (1) deemed filing and (2) the voluntary suspension of benefits. In both cases, the changes affect options available to claimants who are full retirement age or older (the full retirement age ranges from 65 to 67, depending on the person's year of birth). The changes in Social Security's filing rules were intended to prevent the use of claiming strategies viewed as inconsistent with the concept behind Social Security spousal benefits and that otherwise allowed workers and spouses to collect more in Social Security benefits than Congress intended. The claiming strategies addressed in the BBA 2015 were not based on practices explicitly approved by Congress. Rather, they stemmed from interactions between filing rules in place and various legislative changes to the program over time. A worker who qualifies for both a retired-worker benefit and a spousal benefit generally cannot restrict his or her application to only one type of benefit. Rather, when the person files for one type of benefit, he or she is required (or deemed) to file for the other type of benefit at the same time. The person becomes simultaneously entitled to a retired-worker benefit and a spousal benefit, and the spousal benefit is subject to reduction under the dual entitlement rule. Under the dual entitlement rule, a person receives his or her own retired-worker benefit first, plus a spousal benefit that has been reduced by the amount of the retired-worker benefit. Depending on the circumstances, the spousal benefit may be reduced to zero. In effect, the person receives the higher of the two benefit amounts (not both). Deemed filing applies to retired-worker benefits and spousal benefits (including divorced spouse's benefits), with some exceptions. Deemed filing does not apply if a person receives spousal benefits and is also entitled to disability, or if a person receives spousal benefits because he or she is caring for the worker's eligible child (a child who is under the age of 16 or disabled). In addition, it does not apply to widow(er)'s benefits. Before the BBA 2015, deemed filing applied only to claimants who are below the full retirement age. A claimant who was full retirement age or older could file a restricted application for benefits; that is, he or she could file an application for spousal benefits only, for example, and wait until a later time to file for retired-worker benefits. This would allow the person to receive a full spousal benefit now (the dual entitlement rule would not be applied at this time) and to file for a higher retired-worker benefit later. (Retired-worker benefits are increased 8% per year from full retirement age up to age 70 based on delayed retirement credits.) Some beneficiaries used this claiming strategy as a way to maximize their Social Security retired-worker and spousal benefits. The BBA 2015 eliminated the restricted application option for claimants who are full retirement age or older. Like claimants who are below the full retirement age, they are deemed to file for both a retired-worker benefit and a spousal benefit, if eligible for both. The deemed filing change is effective for people born in 1954 or later (i.e., people who reach age 62 the age at which one first becomes eligible for retirement benefits on or after January 2, 2016). People born before 1954 (people who reached age 62 and first became eligible for retirement benefits before January 2, 2016) are grandfathered under the old rules. They can file a restricted application for spousal benefits only or retired-worker benefits only when they reach full retirement age. If they claim benefits before full retirement age, they are subject to deemed filing rules. Social Security benefits replace a portion of earnings lost due to the worker's retirement, disability, or death. Therefore, family members generally cannot claim benefits on a worker's record if the worker has not claimed benefits. Before the BBA 2015, a worker who was full retirement age or older could file an application for retired-worker benefits and then request that the benefit payments be suspended. Thisfile and suspend approach (1) allowed the worker to accrue delayed retirement credits during the period of suspension (i.e., his or her benefit would increase 8% per year from full retirement age up to age 70), and, at the same time, (2) allowed eligible family members (such as a spouse or dependent child) to claim benefits on the worker's record. In addition, a beneficiary who had voluntarily suspended his or her own retired-worker benefit could receive a spousal or widow(er)'s benefit based on another person's record. A spousal or widow(er)'s benefit would be reduced under the dual entitlement rule as if the beneficiary's own retired-worker benefit had not been suspended (i.e., the beneficiary could receive any excess spousal or widow(er)'s benefits). Also, a worker could unsuspend his or her benefits on a retroactive basis and receive a lump sum payment for the past-due period. K~:> p\w -- , gnom goo mppm qq\ M , q 'M I 11LIANJILiM,

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