I found your January 23, 2015 PBS News Hour article “Social Security’s Christmas present: Benefit cuts for millions of disabled workers” today on the internet. I thank you for writing it, because the information it contains is nowhere to be found in similar articles on the web, nor was it ever disclosed in my queries to the SSA before or after being awarded SSDI through Appeal by a SSA Law Judge in July 2018.
I initially filed for SSDI in October 2014 and was awarded $58,424 (October 2013 through 2017) and will have received $14,400 by December 2018; total of $72,824. Prior to the SSDI award, my May 2017 SSA Annual Statement noted a retirement benefit of $1146 at 66 and $1508 at 70; my date of birth is March 17, 1953. A month prior to my SSDI Appeal Hearing, I called the SSA in June 2017, to ask if I could still file a restricted application (due to the law change for people born in 1953) for a divorced spousal benefit at my full retirement age in 2019. My ex-spouse was also born in 1953 with a FRA benefit of $2509 also as of May 2017 statement. The SSA rep stated I could still file for the restricted application for divorced spousal benefit, if I won my case, and recommended I do so 3 months prior to my turning 66, because “my disability benefit will end and automatically change to a retirement benefit at my FRA.” In my understanding/interpretation of her language, thus the reason I should file on my ex’s record 3 months before I turn 66. I planned to file on my own higher retirement benefit of $1508 with cost of living increases at age 70. Nowhere in our conversation was it disclosed to me that I would not be able to file at age 70 for my own retirement benefit, nor is it stated on the SSA website this excludes disabled in the literature for spousal/divorced benefits, nor was it disclosed to me in the SSA Notice of Award or by my attorney.
I discovered all this today, when I called SSA to book the appointment 3 months prior to turning 66 to file to for the ex-spousal benefit for the next 4 years. I was told my disability benefit preempted me from claiming my own higher benefit at age 70, because it “converts” to “a” full retirement benefit at FRA (Who’s!). Basically, I was told to choose one benefit or the other (mine or ex’s), as each will be permanent, unless at 66 I become nondisabled and work to pay into the system (my paying into it ended in 2015 I was told). Choices to common folk should be made clear, instead of finding out after-the-fact with a system that is hard enough to navigate In frustration, I found your article… the only one of its kind on the internet… and I am very grateful.
I do not understand some terms/strategies (ie, excess spousal benefit, withdrawal, conversion), but MY QUESTIONS ARE: Is there any loophole to this for me? I was the low-wage earner spouse, would it behoove me to pay back the $72,824 at age 66 to claim a spousal benefit now and receive $300 more monthly at age 70? I apologize for the lengthiness of this writing, but I wanted to be thorough and clear. I AM BEYOND APPRECIATIVE FOR ANY ADVICE YOU MAY PROVIDE.
Hi,
I sympathize with you. Unfortunately, there is no loophole that would allow you to keep your disability benefits and file a restricted application for spousal benefits only while allowing your own retirement benefits to grow until age 70. As noted in Larry's article that you cite in your question, under Social Security's prior instructions a person was permitted to withdraw the conversion from disability to retirement benefits so that they could file a restricted application for spousal benefits only at full retirement age (FRA), but Social Security has decided not to allow that option for people drawing disability benefits even if they could have done so had they not been drawing disability benefits.
You could insist on filing a withdrawal request on the conversion from disability benefits to retirement benefits and file a restricted application just for spousal benefits only at FRA, but Social Security would not approve it. You would then have to pursue multiple levels of appeal before challenging their ruling in court (https://www.ssa.gov/pubs/EN-05-10041.pdf). All of that would likely take years, and you would likely need to hire an attorney and pay legal fees. I believe that some people are pursuing this option, though, so it's possible that someone could win their court case and establish a precedent that would also benefit you. As I say, though, that would likely not happen until several years in the future.
Your other options are as follows:
1) Withdraw your disability claim and repay all of the benefits you've received; or,
2) File for divorced spousal benefits at FRA; or,
3) Suspend your retirement benefits at FRA.
Option 1 would allow you to file a restricted application for spousal benefits only at FRA while allowing your own benefit rate to grow until age 70. Option 2 would allow you to keep the disability benefits you've received, and starting at FRA you would receive the higher of your own retirement benefit rate or your divorced spousal rate. Option 3 would allow you to keep your disability payments and collect your increased retirement rate at age 70, but you wouldn't be paid any benefits between age 66 & 70.
The choice is up to you, but I think option 2 probably makes the most sense. Option 1 would be a worse choice than option 3, assuming that the amounts you've cited are accurate. If you go with option 2, you wouldn't have to repay any of your disability benefits, and you'd receive the higher of your own retirement rate or 50% of you ex's primary insurance amount starting at FRA. According to your figures, 50% of your ex's PIA would amount to a benefit rate of $1254 (i.e. $2509/2 rounded down). And, if your ex-spouse dies before you your benefit rate would then jump up to roughly his full benefit rate.
What you would gain by options 1 or 3 is a higher rate on your own account starting at age 70, but to get that you'd either be repaying all of your disability benefits or going without benefits for 4 years from age 66 to age 70. And, if your age 70 rate would be $1508, that's a gain of only $254 from your estimated divorced spousal rate of $1254. At that rate, it would take you roughly 20 or more years to recover the amount that you would have lost by either repaying your disability benefits or going without any benefits for 4 years. Bottom line, it sounds like both you and your ex would likely have to live well into your 90s in order to make options 1 or 3 attractive.
Anyway, that's my initial take on your situation based on the amounts you've stated. You may want to consider using our software to get a more precise analysis of your best course of action.
Best, Jerry
