Hi! I turned 62 in July of 2018 and became eligible to receive benefits in August. I continued to work, with less hours and staying under the $14,040 monthly limit. I made more than that in August, coincidentally when I received a form from Social Security to estimate what I would make for the rest of the year. I told them that I went over in August and would make a certain amount as the annual amount, which I calculated as my income limit for the remaining months. Obviously I goofed, because my entire December payment was withheld in January, 2019. I began to go over the limit and quit my job in September, (quitting also due to health issues.) I did not receive anymore income for the rest of 2019.

What I made through July 31st doesn't count. According to my calculations, and using the $1 for every $2 earned, I should have been paid about $560 as a December payment, if it is calculated monthly. If it is averaged out over the 5 months, my income is under the $7200 5 month limit and my full benefit should be refunded.

I first appealed it and got a call back from a very rude lady, who only told me that I told them I said I estimated to make over the limit, and I would only get the $25 increase. I later got a letter stating that the December payment was all that was owed and I would resume to normal for January's payment.

I called again in January and was told once my taxes were reviewed, I would get a check in March. Financially lacking I called again today and a lady called me back about an hour later. I was trying to find out when and how much to expect this month. She finally "maybe" understood what my question was. She told me that AERO (Automatic Earning Reappraisal Operation) was not figured until late March or in October. She indicated payments should be made in May if it was due to be paid.

My questions are:. 1) Is the earned income calculated on a monthly basis? and 2) When will I get repaid? 3) I've also read that the payment could be rolled into my benefits when I reach FRA. (Hoping not.)

Thanks for any advice.

Hi,

First off, I need to correct you on a few points. The monthly earnings test exempt amount for 2018 was $1420, and average monthly earnings aren't relevant to the monthly test. There is no $1 for $2 withholding involved with the monthly test. Either your earnings are under the limit in which case you can be paid your entire Social Security payment for that month, or you're over the limit in which case you lose your entire Social Security payment for that month. I'm assuming that you worked for wages as opposed to self-employment, but if you were self-employed the monthly test would be based on the number of hours devoted to your business in a month as opposed to your monthly earnings (https://www.ssa.gov/planners/retire/rule.html). Also, it's not correct to state that your earnings through July 31st don't count, because they do count for purposes of the annual earnings test.

As the name implies, the annual earnings test is based on your calendar year earnings (i.e. January 1 through December 31), unless you file taxes on a different fiscal year basis. Therefore, your earnings for the entire calendar year count for purposes of the annual earnings test even if you only claim benefits for the last several months of the year. Monthly earnings are irrelevant with regard to the annual earnings test.

The monthly earnings test is entirely separate from the annual test. The monthly test allows a person to be paid benefits in their initial year of entitlement to Social Security benefits for any months in which their earnings don't exceed that year's monthly limit. No benefits are payable for months in which a person's earnings exceed the applicable limit.

Social Security uses whichever earnings test is more favorable to the beneficiary. So, if you had earned less than the monthly limit in all months from August through December you'd have been fine. But, if you earned more than $1420 in any of the months from August through December 2018, you'd have to repay your entire Social Security payment for those months unless your calendar year earnings in 2018 were below $17,040, in which case you could be paid for all months regardless of your monthly earnings.

You don't say how much you earned for the calendar year of 2018, but if it was well over $17,040 then you wouldn't have been eligible for any benefits for any of months in which you earned more than $1420 in 2018. Social Security will propose to recover any overpayment of benefits by withholding your future benefits for as long as it takes to recover the overpayment. I can't tell from your description whether you're overpaid or underpaid at this point, so I can't tell you when to expect your payments to resume. If you haven't already done so, you should file what's called an annual report with Social Security to tell them the exact amount of your 2018 calendar year earnings and in which months you earned $1420 or less. The annual report does not need to be in writing, and can be done by phone. Social Security should then resume your payments as long as any overpayment of benefits has already been recovered.

By the way, the monthly test only applies in a person's initial year of entitlement to benefits, so if you earned $1420 or less in at least 1 month in 2018, the monthly test will not be available to you in starting in 2019. In order to be due all of your benefits for 2019, your earnings can't exceed $17,640 for the year.

Best, Jerry