Ask Larry: Can My Wife Suspend, Get Spousal Benefits, Then Restart Increased Retirement Benefits?

Today’s column addresses questions about what’s possible after suspending a retirement benefit, survivor pensions based on a spouse’s non-covered pension, responding to a notice of overpayment from Social Security and why spousal benefits may not have been available. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

Can My Wife Suspend, Get Spousal Benefits, Then Restart Increased Retirement Benefits?

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Hi Larry, I am 69 and My wife is 67. My wife started her Social Security retirement benefit at her FRA of 66 and I am collecting my spousal benefit on her record. I plan to claim my own retirement benefit on my record in April 2021 when I will be 70.

When I start my retirement benefit at 70, can my wife suspend her retirement benefit on her record and start to collect her spousal benefit on my record? Could she then restart her retirement benefit when she turns 70? If so, will it grow during this time? Thanks, Amit

Hi Amit, Your wife could not suspend her own retirement benefits and collect spousal benefits instead. Once a person files for their own Social Security retirement benefits, that becomes their primary benefit for life. Even if they suspend their own benefits, Social Security counts their own benefit as still being payable when calculating whether or not they could qualify for spousal benefits.

Also, due to the Bipartisan Budget Act of 2015, no one can receive another benefit while their retirement benefit is suspended.

So when you file for your own retirement benefits, your wife could only qualify for spousal benefits if 50% of your primary insurance amount (PIA) is higher than her own PIA, or her own PIA augmented by delayed retirement credits (DRC) if she started drawing her benefits after full retirement age (FRA). A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing at FRA. If your wife does qualify for spousal benefits when you file for your benefits, she’d want to claim them effective with the same month that you claim your benefits. Spousal benefit rates do not get higher if you wait past FRA to claim them. You and your wife may want to run my company’s software — Maximize My Social Security or MaxiFi Planner — to explore your potential filing strategies and decide which is best for you. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Will My Wife’s Social Security Benefits Be Reduced If She Receives A Survivor Pension That’s Based On My Government Work?

Hi Larry, I will be receiving a local government pension for which I did not pay into Social Security. My wife does not have a pension, and will rely on what she has paid into Social Security. If I die and she assumes my pension, will that affect her Social Security income, or is she entitled to Social Security regardless of the pension because she paid into it separately? Thanks, Josh

Hi Josh, Your wife’s Social Security benefits won’t be reduced if she receives a survivor pension based on your government work. The only non-Social Security covered pensions that can affect a person’s Social Security benefit payments are pensions based on their own earnings that were exempt from Social Security taxes. A survivor’s benefit based on a spouse’s non-covered pension will not invoke either the Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO). Best, Larry

How Do I Handle This Situation?

Hi Larry, I applied for divorced spouse benefits in early 2015 when I was 68 after receiving notification that I could be entitled to this benefit. I told Social Security I did not want this benefit if it affected my own retirement benefit in any way. I was subsequently approved for this benefit and received a lump sum payment in late 2015. I submitted a request to end my divorced spousal benefit and start receiving my retirement benefits from my own account effective June 2016 when I was 69.

During the time I was receiving divorced spouse benefits Social Security suspended my retirement account. I am now being told that because my account was suspended I owe Social Security over $18K in overpayments. I do not understand why suspending my account could cause an overpayment. Can you provide an explanation and advice on how to handle this. Thanks, Michelle

Hi Michelle, Once you file for your own Social Security retirement benefits, that becomes your primary benefit for life. You can’t subsequently be paid a full spousal, divorced spousal, or survivor benefit even IF you voluntarily suspend your own benefits. If you file for both divorced spousal benefits and your own benefits and your own rate is higher than the divorced spousal rate, you can’t qualify for divorced spousal benefits. It wouldn’t matter whether or not your own benefits are voluntarily suspended. The only way you could qualify for any divorced spousal benefits after filing for your own benefits is if the divorced spousal rate is higher than your own rate, and even then your divorced spousal rate would just amount to the difference in your own rate and the divorced spousal rate. That’s referred to as an excess divorced spousal benefits, which is added to the amount claimed on your own record and together they make up your total divorced spousal benefit. But you can’t even collect an excess divorced spousal benefits if your own benefits have been voluntarily suspended.

Since you were born prior to 1/2/1954, you could potentially have filed just for divorced spousal benefits and delayed filing for your own benefits. But that apparently didn’t happen in your case. If you filed for your own benefits and your benefits were in voluntary suspense when you applied for divorced spousal benefits, then Social Security should never have paid you any divorced spousal benefits. They should have known that, so I can’t explain why they paid you the divorced spousal benefits in the first place if that’s what happened.

If you filed for your own benefits within the last year, then you could potentially withdraw that application and collect divorced spousal benefits, but if you filed for and suspended your benefits more than a year ago then you almost certainly wouldn’t be allowed to do that. There’s probably no other good option.

Assuming that the overpayment you’ve been notified is correct, then it sounds like it was Social Security’s mistake. You could file for waiver (i.e. forgiveness) of the overpayment, but you’ll likely only qualify for a waiver if you meet the financial hardship requirement. That would mean proving that you wouldn’t be able to meet your necessary living expenses if you had to pay the overpayment back, even if the overpayment was collected in monthly installments. Best, Larry

Why Isn’t My Mother-In-Law Receiving Spousal Benefits?

Hi Larry, My mother in-law who is now in her early 80s has never collected Social Security. My father in-law does collect his and I’m wondering why she didn’t get a spousal benefit or up to 1/2 of my father-in-law benefit. She does get a small pension working as a school librarian and she didn’t pay Social Security. Thanks, Shannon

Hi Shannon, A possible reason that your mother-in-law isn’t getting benefits is because of the Government Pension Offset (GPO) provision. If a person files for spousal benefits and they’re receiving a pension based on their own earnings from a governmental agency (e.g. federal, state, local) that wasn’t required to pay Social Security taxes, then 2/3rds of the gross amount of their government pension is offset against their Social Security spousal rate. And depending on the amounts involved, that could reduce the spousal rate to zero.

I don’t have enough details to know whether or not your mother-in-law would be eligible for any spousal benefits from Social Security, but she could apply for spousal benefits in order to find out. The worst that could happen is that she’ll be told that her spousal benefits would be fully offset to zero due to GPO. And if she can get a spousal benefit, she can file up to six months retroactively Best, Larry

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