I get really upset when readers tell me they spoke to a Social Security officer in hopes of understanding some confusing Social Security rule and the only response they got was this, “It’s the law.” In my opinion that is a bad answer. First and foremost, people need to get a reason why a particular Social Security law exists.
I’ve always taken pride in not only knowing the Social Security rules and regulations, but also being able to explain the reasoning behind the laws, which some people (even SSA employees) find confusing and confusing. That’s why, when I was still working for the SSA, I gave an employee training session that I simply called “Rationale.” And in that class I taught the rationale behind rules and laws that were sometimes difficult to understand. (And judging by the number of “It’s the law” answers readers tell me from SSA employees, maybe someone from the agency should pick up where I left off when I retired 18 years ago.)
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After bragging about my understanding of the rationale behind the rules, I must admit that there have always been laws that I myself have never been able to understand, and I will discuss them in today’s column.
no. 1: Why doesn’t a wife share in the bonus her husband earns before his benefits commence after full retirement age? I really do not know.
A retiree can earn a small bonus in his Social Security checks if he delays the start of his Social Security benefits until after full retirement age. He gets an additional two-thirds of 1% added to his retirement check for each month he waits – until age 70. (No bonus is paid for months after age 70.) Depending on what your full retirement age is, that may range from 24% to 32% bonus for a retiree.
But if that man has a wife who qualifies for benefits, her spousal support is based on his full retirement age, not his increased deferred retirement benefit. That’s the bad news. The good news is that if he dies, the widow’s benefit is based on his higher deferred pension. In other words, a woman does not share in these deferred pension loans, but a widow does. And again, I can’t explain why.
Also a note for clarification. I referred to a man who received a pension benefit and a woman who received a spousal benefit on his record. I did that because 95% of the time this is how these rules work. And that’s because, for several reasons often discussed in this column, the man has a higher Social Security benefit than the woman. But if you happen to be part of a household where the woman makes more money than the man, just reverse the genders in my discussion of the rules above.
no. 2: Why is there a six-month waiting period before Social Security disability benefits can be paid? I really do not know.
The law says that if you apply for disability benefits and your application is approved, no benefits can be paid for the first six months. Well, actually the law says no benefits can be paid for the first five full calendar months of disability. So, unless you happen to become disabled on the first day of the month, you’ll end up waiting six months for your Social Security checks to begin. (There are a number of serious medical conditions where the waiting period is waived.)
Let’s give an example of how this works out. Bob has a heart attack on March 15. In April, he applies for disability benefits, and his claim is approved on June 25. He is given a “letter of grant” stating that he became incapacitated for social security purposes on March 15. The letter also tells him that he will get his first Social Security check after five full calendar months have passed. So the first disability check he has to pay is for the month of September, payable in October. (Social security checks are always a month behind.)
Why does Bob have to wait until October to get his first disability check if he became disabled in March? I’m really not sure.
I checked the SSA website for information on this. It says the six-month waiting period is intended to ensure the condition is not a short-term disability. (By law, disability benefits are only paid for long-term disabilities.) But that doesn’t make much sense to me. The medical review process for disability claims is quite extensive. Therefore, it takes several months for a disability application to be processed. And part of that process is eradicating short-term disabilities. In other words, once a claim has been approved, it has already been decided that the person has a long-term disability. So why wait another six months?
Number 3: Why is there a wage penalty if you are under full retirement age? I really do not know.
When Social Security started in the 1930s, the law said you had to be retired to get “retirement” benefits. So if you were a senior who worked and had some income, you couldn’t get Social Security. Over the years, Congress has gradually relaxed that restriction. In the beginning, they said if you were over 72 and working, you could get Social Security checks. Then they lowered that to 70. And in the 1990s, they lowered it to full retirement age. So if you are over full retirement age and working, you can get Social Security checks no matter how much money you make.
But they upheld the penalty for Social Security recipients below full retirement age. The law says that for every $2 you earn above an annual threshold ($19,560 in 2022), $1 must be written off from your Social Security checks.
So why the fine for people under full retirement age? I suspect there should be an incentive to discourage seniors from claiming benefits until they reach full retirement age, but I’m really not sure.
If you have a Social Security question, Tom Margenau has a book with all the answers. It’s called ‘Social Security: Simple and Smart’. You can find the book at creators.com/books. Or search for it on Amazon or other bookstores. Visit www.creators.com to learn more about him, read past columns and see features from other Creators Syndicate writers and cartoonists.