New Rules for Social Security Create Confusion Over Claiming Strategies

The Social Security Administration finally posted information on February 24 to its Web site in an effort to help the public understand the rules for the phasing out of two popular Social Security claiming strategies. The consumer information comes nearly four months after these strategies were nixed by the enactment of the Bipartisan Budget Act of 2015 -- and comes as the clock quickly ticks down on one strategy that disappears in two months.

The agency recently sent details on the changes to its staff. But apparently even representatives at the Social Security Administration are somewhat confused. Kiplinger.com reader Joe Neiner, of Cumming, Ga., says that he and his wife, Helen, have tried to apply for benefits using both the “file and suspend” strategy and the “restricted application” strategy. He says he was told by Social Security that they could not use these maneuvers, although both spouses clearly fall within the age deadlines under the new law. Under the old rules, using one or both of these strategies could help a couple take a spousal benefit while the higher earner delays his benefit to earn delayed retirement credits of 8% a year.

Now that official guidance is released, hopefully any confusion will quickly clear up. If you think you qualify for these strategies but are told otherwise by Social Security representatives, there are steps you can take.

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Make sure you are up to speed on the new rules. Two key things to know: First, those who are full retirement age or older as of April 30 must submit a request to file and suspend a benefit by April 29 to use the old rules, which allows a spouse or minor kids to take a benefit while the worker delays his or her benefit. Second, those who were age 62 or older as of January 1, 2016, are eligible to use the restricted application strategy to file for only a spousal benefit once they hit full retirement age.

You can find our latest coverage on the new rules on our Social Security special report. And read the information recently posted by the Social Security Administration: Find information about the law changes and who is affected at https://www.ssa.gov/planners/retire/claiming.html; find answers to frequently asked questions about the new rules for voluntarily suspending a benefit at https://www.ssa.gov/planners/retire/suspendfaq.html; and find answers to frequently asked questions about how the new rules affect the restricted application strategy at https://www.ssa.gov/planners/retire/deemedfaq.html.

Be ready to provide documentation. This step is a little easier now that the Social Security Administration has issued guidance for both its staff and the public. Print out pertinent information from the Social Security Web site to cite if you need it. The ultimate source for these new rules is Section 831 of the 2015 Bipartisan Budget Act.

Ask for a supervisor. If you get a "no" from the representative you speak to at the Social Security Administration, ask for a supervisor. In our experience at Kiplinger's Retirement Report over the years, readers who have asked for a supervisor have been able to get their claim problems resolved. But, "if that does not resolve the problem, insist on filing so you can get a formal decision. Social Security cannot refuse to take your claim," says Jim Blair, a former district manager for an Ohio Social Security office and a partner at Premier Social Security Consulting, in Sharonville, Ohio.

Be persistent. These two claiming strategies have long been a source of confusion for both beneficiaries and Social Security representatives. As these strategies gained popularity in the past decade or so, Kiplinger’s Retirement Report readers who have run into problems trying to use these strategies have often been able to resolve the problem by not taking the first no as a final answer.

If you are certain you qualify to make use of these strategies and are told no, keep trying -- but also keep good records. As you pursue your claim, Blair says, be sure that throughout the process you get the name of each person you talk to and keep a record of what they told you. "If you can show misinformation by a government employee, Social Security can go back to your first contact and approve benefits," he says.

One other option if you keep getting told no: Blair notes that you can visit your local congressional office and request their assistance. He says each office has an employee who works with Social Security.