Hi Larry. A few years ago I received your calculations on how to maximize my SS benefit. Money well spent! I have a couple of questions about the SS DAC benefit but first let me give you some details about my/our situation. My current plan is to retire and take SS benefit at age 66 in 2020 (my FRA). My wife will be age 59 at that time. My income over the last 35 years has been much higher than hers. My current SS age 66 est. benefit is $2855/mo. My current est. family benefit total is $4997/mo.
My wife plans to begin taking her reduced SS retirement benefit in 2023 at age 62 (my age 69). We estimate that her spousal benefit at that time will be $950/mo (33% of my FRA benefit). Her own SS benefit at age 62 will be $754/mo. Subtracting the $754 from the $950 means that $197 of her total $950/mo will be a "spousal benefit".
Our 23 year old son has a disability since birth and currently lives with us and collects the max. $760/mo SSI pmt from SS. We are led to believe that when I begin drawing my age 66 $2855/mo SS benefit that his current SSI monthly pmt will go away and be replaced by an approx $1427 SSDI benefit amt which is equal to ½ of my FRA benefit.
Now to the "questions" part of my query: According to SS, my estimated total family benefit is $4997/month. If our son is still living with my wife and I when I begin drawing my SS benefit at age 66, will my wife be able to collect a "child in care" benefit at that time even though she will only be age 59? Is there a way of knowing what that "child in care" benefit amount would be? If, at some point in the future, our disabled adult son lives physically apart from us (group home, apt with assistance, etc) but my wife and I are still managing the majority of his affairs and making the majority of decisions related to his life, health, activities, finances, etc does my wife still qualify for the child in care benefit? Lastly, will her collecting her own age 62 reduced benefit and spousal benefit at age 62 affect the continued payment of the child in care benefit and, if so, in what way?
Sorry to have so many questions but I am hopeful that you can provide information and answers. Also, please feel free to correct any errors or misconceptions in my information. Thank you in advance for doing so. Regards. Jeff
Hi Jeff,
Yes, your wife could potentially qualify for child-in-care spousal benefits when you start drawing your benefits regardless of her age at that time, but only if your son qualifies for disabled adult child (DAC) benefits and if he either has a) a mental impairment, or b) a physical impairment that requires your wife to perform personal services for him (e.g. help with dressing, bathing, eating, etc.). Your wife could potentially qualify for child-in-care spousal benefits even if your son isn't living with her, but only if your son has a mental impairment and if your wife is continuing to exercise parental control and responsibility (https://secure.ssa.gov/apps10/poms.nsf/lnx/0301310035).
If your wife does qualify for child-in-care spousal benefits then the family maximum benefit (FMB) will come into play when determining her and your son's benefit rates. They would normally both qualify for 50% of your full retirement age rate (i.e. primary insurance amount, or PIA), but they couldn't be paid that much without exceeding the FMB. If your FMB is $4997 and your PIA is $2855, then your wife and son would have to split the difference in those amounts. In other words, they would each receive roughly $1071 (i.e. ($4997 - $2855)/2).
Your son's SSI would be offset basically dollar for dollar by the amount of his DAC benefit, so his SSI will stop if and when he starts receiving his higher DAC benefits.
If your wife is drawing child-in-care spousal benefits and then files for her own Social Security retirement benefits at age 62, her retirement rate would be reduced for age. If she qualifies for any excess spousal benefits those benefits would not be reduced for age as long as she continues to have a child in care, but her combined rate could still potentially go down because of the reduction applied to her retirement benefit rate. Also, the FMB would continue to apply, but if and when your wife files for her retirement benefits then her FMB could be combined with your FMB to potentially allow more family benefits to be paid. There is a maximum combined FMB amount, though, which in 2019 is $5507.90. But, the total amount payable to your family would be less than that full amount if your wife files for her retirement benefits prior to her full retirement age (FRA), because of the resulting reduction that would be applied to her retirement benefit rate.
Due to the reduction that would apply to your wife's retirement benefit rate if she applies for her own benefits prior to FRA, it may be better for her to simply continue drawing child in care spousal benefits at least until she reaches FRA. That would depend in part on the exact amount of her own PIA, though, so you and your wife may want to re-subscribe to our software (https://maximizemysocialsecurity.com/purchase) when your wife is close to age 62 in order to determine when would be the optimal time for her to claim her own benefits.
Best, Jerry
