The Long and the Short of It
The short answer is yes, if you didn't reach age 62 by Dec. 31, 2015.
The Bipartisan Budget Act of 2015 eliminated two strategies previously allowed by the Social Security Administration (SSA) that couples could use to maximize their benefits. That included letting one spouse collect spousal Social Security benefits before collecting their own benefits.
- Federal law passed in 2015 eliminated two strategies couples formerly used to maximize their Social Security benefits.
- Spouses can no longer claim spousal benefits and later switch to collecting benefits based on their own record.
- The new law also ended "file and suspend," which allowed a spouse to file for benefits but delay collecting them in order to make the other spouse eligible for spousal benefits.
Am I Able To Collect Spousal Benefits If I Have Earned A Pension?
What the 2015 Law Changed
The first strategy the new law did away with was known as a "restricted application." If your spouse had already filed for Social Security benefits and both of you had reached full retirement age (FRA), you could file a restricted application just for spousal Social Security benefits. That allowed you to collect spousal benefits right away but wait up to age 70 to file for benefits based on your own work record. The longer you waited to collect, the larger your monthly benefits would be, until age 70 when benefits maxed out and there was no further incentive to delay.
Under the new law, spouses born after Jan. 1, 1954 were no longer eligible to file a restricted application.
The law also ended a strategy known as "file and suspend," in which one partner in a married couple who had reached full retirement age, but not age 70, could file for Social Security benefits but wait to collect them.
Why would anyone do that? The reason was that the main beneficiary had to file for benefits before their spouse could claim a spousal benefit. But if the main beneficiary didn't want to collect their benefits until some later date, they could file—and immediately suspend—the receipt of those benefits. The other spouse could then file a restricted application that allowed them to collect an amount equal to half the main beneficiary's benefit.
Using this strategy, both spouses could let their benefits grow until they reached age 70, and get a little money in the meantime from the spousal benefit. It didn't matter which spouse filed and suspended, or which spouse filed the restricted application, as long as they were both between full retirement age and age 70.
To illustrate how that worked, consider Sharon and John. Both have both reached their full retirement age, and John's benefit at FRA, were he to collect it, would be $2,000 a month. Under the old system, John could file and immediately suspend his benefits until a later date. If he waited until age 70, for example, his benefit would grow to about $2,700 a month. Meanwhile, Sharon could file a restricted application for her spousal benefit. She would receive an amount equal to half of her husband's benefit, in this case, $1,000 a month. Her own benefit would also continue to grow until she started collecting it in the future.
But, as we've said, this strategy is no longer allowed.
When spouses file for Social Security benefits today, they'll receive an amount based on their own work record plus any difference they'd be entitled to from a spousal benefit.
How Spousal Benefits Work Now
The new law does not do away with spousal benefits entirely. Even spouses who have never worked or contributed to Social Security are still eligible to collect benefits based on their spouse's (or, in some cases, ex-spouse's) work record. To do so, the main spouse must be receiving retirement or disability benefits and the spouse applying for spousal benefits must be at least age 62.
Spouses may begin collecting a permanently reduced benefit between age 62 and their full retirement age; the amount will be based on their own work record (if any) and their spouse's. If their spousal benefit would be higher than their own benefit, they will receive their benefit plus an amount equal to the difference. If they wait to collect until full retirement age, they will receive a spousal benefit of up to one-half of their spouse's full retirement benefit.
Rose Swanger, CFP®, RICP®, CDFA®, EA
Advise Finance LLC, Knoxville, Tenn.
Under the law that became effective Oct. 2015, there is no longer a separation between spousal and individual benefits for a married couple. If you file for the benefit, but qualify for both (your benefit based on your own earning history and a spousal benefit), the Social Security Administration will give you the highest of the two. This is the so-called “Deemed Filing Rule.” The only spouses who are exempt (and can still file a restricted application) are those who had reached age 62 by Dec. 31, 2015.
For many married couples, this means that the spousal benefit, which is often smaller than a retirement benefit, will never be paid. The only other exception to this rule is a surviving spouse. A widow or widower can still choose one benefit first and switch to the other later if it results in a higher amount. So, you are not losing the right to collect your spousal benefit; it’s already determined for you by the SSA.