Skip to Content
news

Blog Posts

Social Security Changes in Bipartisan Budget Act of 2015

Most retirees will not be affected

Washington, DC, March 9, 2016
You may have recently heard commercials or received mailings with dire warnings that you must act by May 1, 2016 in order to preserve your Social Security benefits. Although the Bipartisan Budget Act of 2015 did make changes to both the retirement and disability programs, most beneficiaries will not be affected whatsoever.

You may have recently heard commercials or received mailings with dire warnings that you must act by May 1, 2016, in order to preserve your Social Security benefits. Although the Bipartisan Budget Act of 2015 did make changes to both the retirement and disability programs, most beneficiaries will not be affected whatsoever.

Below is information on changes to Social Security retirement benefits.  Go here for information on changes to Social Security Disability Insurance.

What are the changes under the Bipartisan Budget Act?

  • If an individual suspends their own retirement benefits after May 1, 2016, the benefits for spouses and dependents collecting on their record will now be suspended as well. 
  • Individuals who did not turn age 62 by January 1, 2016, will no longer be able to collect spousal benefits at full retirement age while delaying benefits on their own record.

Who is NOT affected? 

  • Retirees who are receiving benefits on their own record.
  • Widows and widowers will still be able to collect survivors benefits while delaying benefits on their own record.
  • Spouses and dependents can continue collecting benefits on an individual’s record if that person has already suspended their retirement benefits or does so before May 1, 2016.
  • Spouses who turned 62 on or before January 1, 2016, will still able to receive spousal benefits at full retirement age and delay their own benefits up to age 70.

Find detailed information on the changes at: 
https://www.ssa.gov/planners/retire/claiming.html

Old-Age and Survivors Insurance

Changes to the Old-Age and Survivors Insurance program—commonly referred to as retirement benefits—mostly affect those who are approaching full retirement age and are considering ways to maximize their and their spouse's Social Security Income through age 70.  Please note that if you are currently receiving Social Security retirement on your own record, and your spouse is already receiving retirement benefits on his or her own record, these changes will not affect either's benefits.

Two changes under the budget act affect financial planning strategies on when to start receiving retirement and/or spousal benefits.  NOTE: Full retirement age for those born between 1943 and 1954 is 66.  Every year an individual delays receiving Social Security past full retirement age increases their eventual benefits 8% until age 70. The new law preserves this incentive, but adds new restrictions on how it can be used. 

If you feel these changes will affect you, go to Social Security’s website for detailed information.

NO LONGER ALLOWED: Collecting spousal benefits while delaying personal benefits

Prior to the passing of the budget act, an individual at full retirement age—who was entitled to both a spousal benefit on a spouse’s record and retirement benefits on their own record—could choose to start receiving spousal benefits while delaying the start of their own benefits.  Under this strategy, the beneficiary was able to receive a monthly spousal benefit while their eventual personal benefits increased. 

Under the new law anyone who turns age 62 after January 1, 2016, and is eligible for both benefits, must file for both benefits.  Beneficiaries can no longer delay the start of retirement benefits once they also apply for spousal benefits.  Retirement applicants who are already age 62 as of January first of this year will still be able to delay their own retirement benefits at age 66 and received a monthly spousal benefit.

NO LONGER ALLOWED: Suspending your personal benefits while a spouse or dependent collects benefits on your record

The other strategy used to increase Social Security income was for an individual to file for Social Security at full retirement age, then immediately suspend payments.  A spouse, dependent child, or dependent parent could then collect benefits on that person’s record while the primary filer’s benefits increased.

When the new law goes into effect May 1, 2016, this will no longer be allowed. Whenever the record holder suspends their own retirement benefits, the spousal and dependent benefits will also be suspended. Those who have already filed and suspended will not be affected.

Social Security Disability Insurance

Changes were made to the disability insurance application process to help prevent fraud by requiring that a medical doctor approve all initial and reconsideration disability decisions.  These changes will not affect disabled beneficiaries who are already receiving benefits. More importantly, the act prevents the Disability Insurance (DI) Trust Fund from becoming insolvent at the end of this year. Changes in funding to the DI Trust Fund will keep this program funded through 2022. (Please note that the retirement trust fund remains solvent until 2035.)
Back to top