My sister is 64 and is drawing her late husbands social security. It is about $1200.00 per month. She is working and makes about $21,000.00 a year staying with the elderly. Last year she was notified by the SS and they stated she makes too much money and they stopped her SS benefit payments. They put her behind 8 months on her bills. They also stated that when she turns 66 this November she could get the money owed her. Problem is she is getting way behind and she is going to have to borrow money. Is this correct? Seems to me she is making so little that they should not be holding any checks. Help us needed for her.

Hi,

If your sister will reach her full retirement age (FRA) of age 66 in November 2019, she could earn up to $46920 in the first 10 months of this year and still be due all of her benefits for 2019 (https://www.ssa.gov/planners/retire/whileworking.html). And, there will be no limit on the amount that your sister could earn and draw all of her benefits starting with the month she reaches FRA.

However, the amount that your sister was allowed to earn in 2018 and still be due all of her benefits was only $17040, and it was lower than that in previous years. If your sister earned more than the yearly exempt amount prior to this year, $1 of her benefits would need to be withheld for each $2 that she earned in excess of the yearly limit. And, if she earned too much and didn't tell Social Security how much she'd be earning, they wouldn't have withheld any of her benefits which would have resulted in an overpayment.

Bottom line, it sounds like your sister earned more than the earnings test exempt amount in previous years, and as a result she was apparently paid too much in benefits. Social Security would seek to recover such an overpayment by suspending your sister's current benefits until the overpayment is recovered. If your sister's benefits are still being withheld to recover an overpayment she could ask Social Security to accept a lower rate of recovery, which would permit her to be paid part of her benefits but would extend the amount of time that it would take to recover the overpayment.

On a separate note, since your sister is apparently receiving widow's benefits only she may be eligible for a higher benefit rate based on her own work history. I don't have enough information to know if that's true in your sister's case, but she could find out by using our software or by asking Social Security. If your sister would be eligible for a higher monthly benefit rate on her own record, it would likely be advantageous for her to wait until age 70 to switch to her own account since her benefit rate would keep growing until then.

Best, Jerry