New Social Security Rules Changes

Recent major changes made to the rules of Social Security come as a big surprise to much of the industry. President Obama signed into law a new budget bill that included restrictions on the file and suspend and spousal only strategies. What makes this bill unique is it came through with no public hearings or any preceding specific Social Security legislation. It was able to pass unnoticed through the big picture budget agreement.

These changes came about as an effort to close various “unintended loopholes” under the old law; more specifically items that have been on the books for over 15 years. The new bill will save less than 1% of the projected Social security funding deficit. Below are a few things that are important to note about these changes:

–          File and Suspend is not being eliminated, but after April 30, 2016 it can no longer be used to trigger a spousal benefit or child’s benefit.

–          Spousal Only allows someone who is already a FRA (hasn’t previously filed) to collect a benefit based on their spouse’s work record, without it affecting their own.

–          The combination strategy (often used when two spouses are close in age) will no longer be availabe.

–          Deemed Filing rule has been changed to no longer allow your client to apply for SS benefits before his/her FRA.

Click here for more information on this topic. If you have any questions, please contact a Lewis & Knopf team member at 810.238.4617.