Changes to the Social Security act were part of the Bi-Partisan Budget Act signed by President Obama on November 2, 2015. Changes were made to the Claim and Suspend and Restricted Application strategies. Congress and the President called this the closure of unintended loopholes.
Claim and Suspend
The act of suspending benefits at someone’s full retirement age or later was not eliminated. Claim and suspend and voluntary suspension provisions are still available. The overall effect of that action has changed.
Under the old law, an individual could suspend benefits at their full retirement age or later and allow any other individual on that record to receive their benefits. A spouse or child would receive monthly benefit payments while the number holder suspended benefits and earned delayed retirement credits. Under the old law before you reached age 70 you could go back to the month you elected benefits and suspended them and request payment for those months.
The new law, effective for individuals who attained full retirement age after April 2016 and/or did not request suspension of benefits before April 30, 2016, states when the number holder suspends benefits, all benefits payable on that work record are also suspended. Under the new law suspended benefits will not be paid. The number holder can only request future benefits be paid.
Restricted Application
The term “Deemed Filing” was extended from full retirement age to age 70. This eliminates the ability to file a restricted application. Deemed filing states an application for one type of benefit is an application for all types of benefits an individual is eligible to receive. The new law takes effect for individuals who attained age 62 in 2016 or later. This includes anyone born January 2, 1954 or later.
Under the old law, deemed filing ended at full retirement age. Deemed filing was also effective only in the first month of entitlement to benefits. If entitlement to benefits occurred later than the first month of eligibility to benefits, deemed filing did not apply.
Under the new law, deemed filing is extended to age 70 and applies the month an individual becomes eligible for a benefit, even if after the first month of entitlement. This means you must take any and all benefits due at the time you are eligible if you have filed an application for benefits in the past.
Survivor Benefits
The law does not change how survivor benefits are paid.