Entitlement on More Than One Account
§ 301 In General
§ 302 On Your Own Earnings Record and as a Wife/Husband
§ 303 On Your Own Account and to Widow(er)s Benefits
§ 304 As a Spouse and as a Widow(er)
§ 305 As a Spouse and as an Ex-Spouse
§ 306 As the Widow(er) of Two or More Workers
§ 307 Disability Benefits and to Retirement Benefits
§ 308 Child Entitled on More Than One Account
§ 309 Other Combinations of Benefits
Under certain circumstances, you may be entitled to benefits based upon two or more separate social security accounts. This chapter explains these situations. NOTE: throughout this chapter, reference is made to Full Retirement Age. Beginning with those born in 1938 (for retirement and spouse benefits), and 1940 (for widow(er)s benefits), the age at which unreduced benefits are paid has increased. In the past, benefits were reduced if taken before age full retirement age. This age limit is going up in increments. The increase in Full Retirement Age depends on the year of birth. It is age 66 for those born from 1/2/43 through 1/1/55 for retirement benefits; 1/2/45 through 1/1/57 for widows and widowers. See Section 703 "Reductions" for a full discussion.
The general rules are: 1) you must file on your own account if you have enough quarters of coverage to be fully insured (Section 602); and 2) you must file on your spouse's account as a wife or husband if your spouse is then entitled to benefits and your Primary Insurance Amount is less than one-half of his or hers. This second rule applies if your husband/wife has applied and become entitled, even if not actually receiving monthly benefits because they are being suspended (usually because of earnings). If he or she is not entitled because he or she has not yet applied, this rule does not operate because you cannot be eligible on an account that has not yet been established.
Another exception to the general rules occurs if you are over Full Retirement Age. If so, you may apply as a spouse and wait to apply on your own account. The only advantage would be to obtain Delayed Retirement Credits (see Section 704.6) on your own account when you do apply. However, this advantage could well be offset by by the deferral of the current retirement benefits, and would result in a loss if you died before applying for the retirement benefits.
A person who is entitled to a retirement or disability benefit and to a spouse's benefit will receive his or her own benefit, reduced for age if the retirement benefit is taken before full retirement age, plus the difference between one-half of the spouse's Primary Insurance Amount and his or her own. The difference will be reduced for age if taken before full retirement age, with the spouse's reduction factor for age figured as of the time of entitlement to the spouse's benefit.
Let's look at the situation of Howard and Wanda, who are husband and wife. They are both the same age, have both worked, and are each eligible for retirement benefits. Howard is working full time with substantial earnings. Wanda is not working. They are both age 62. Wanda applies for her retirement benefit. Her Primary Insurance Amount is $800. Because she is under full retirement age, her benefit is reduced to $640. Two years later Howard retires and files for retirement benefits. His Primary Insurance Amount is $1800. Wanda decides to apply for wife's benefits on his account.
Note that she has the option of waiting until she has reached full retirement age to file for the wife's benefit because when she applied for her retirement benefit on her own account, her husband was not entitled because he had not applied. The amount of her wife's benefit is derived by taking one-half of her husbands Primary Insurance Amount ($1,800 divided by 2 = $900), subtracting her Primary Insurance Amount ($800) and then reducing the difference ($100) by the number of months before full retirement age at that time, which in our example is 12. Using the wife's reduction factor (Section 703.3), the $100 difference is reduced to $91. In this case then, Wanda receives $640 on her own account plus $91 on her husbands account as a wife.
The second rule above that requires a wife to file on her husbands account if he is entitled even if his monthly benefits are being suspended can result in an unwanted reduction of the wife's benefit. This occurs when the husband is working, but is "entitled" to a retirement benefit which is not being paid because of the excess earnings. This can happen for example if there is a change in retirement plans. The wife's benefit amount is figured at the age she becomes entitled, even though she may not receive benefits due to work deductions caused by the husbands earnings. If she is under full retirement age, that reduction rate will apply to any benefits she may come to receive when the husbands work deductions cease and the wife's benefit is paid.
In the example of Howard and Wanda above, if Howard had applied before or with Wanda, then Wanda's benefit on Howard's account at age 62 would have been approximately $75. If Howard's earnings were too high, the benefit would be withheld due to work deductions, but the benefit amount would stay the same. When Wanda would begin getting the spouse benefit at age 64 when Howard's earnings no longer caused work deductions, Wanda's benefit amount would be $75, not the $91 she would get in the above example. Fortunately, the reduction factor will be readjusted when Wanda becomes of full retirement age to eliminate months for which benefits were suspended. However, until full retirement age she will suffer the full reduction.
If you are potentially eligible on your own earnings record and on the record of your deceased husband or wife you have different options. Unlike the spouse benefit, you may choose to receive reduced benefits on one account and wait until full retirement age to switch over to unreduced benefits on the other account. We will discuss the rules that apply to these situations according to your age.
Under Age 62
Beginning with age 60 you can receive regular widows benefits, reduced for age. If you were born after 1928, the receipt of reduced widows benefits will have no effect on retirement benefits on your own account if you later switch. You cannot receive retirement benefits on your own account until you are attain age 62.
Example: Jane Doe becomes age 60 and applies for widows benefits. Her husbands Primary Insurance Amount (Section 702.1) is $1000. The widows age reduction factor (Section 703.1) causes a reduction of $285, bringing the monthly payment down to $715, based on 60 reduction months because Jane is 60 months under full retirement age. Jane has also worked and earned enough to be entitled to a retirement benefit on her own account. She continues to receive the widows benefit until she turns full retirement age, and applies for benefits on her own account at that time. She then can receive an unreduced benefit on her own account, but the widows benefit will stop. Of course, if the widows reduced benefit is higher than her own benefit, she will continue to receive the widows benefit amount.
Note: If you were born in 1928 or earlier, if you took a widows benefit before age 62 it causes a permanent reduction in your own retirement benefit. The dollar amount of reduction of the widows benefit is deducted from your retirement benefit even if you didnt receive the retirement benefit until full retirement age. However, if the regular age reduction for taking the retirement benefit before full retirement age is greater, only the greater reduction is used, not both. Computation of benefit amounts is discussed fully in Chapter 8.
Between Age 62 and Full Retirement Age
At age 62 you may choose either to take a retirement benefit on your own account or a widow(er)'s benefit on your spouses account. Whichever one you take, it will be reduced for age by the number of months you are under full retirement age when you become eligible. See Section 703.1 for a discussion of reduction of benefits. You can take a reduced benefit on one account before full retirement age, and then switch to the other one unreduced at full retirement age. Your decision as to which one to take now and which one to take at full retirement age should be based on the dollar amount of each benefit, reduced and unreduced. Before making any decision you must obtain benefit estimates (Section 1403).
When you contact Social Security make sure that you file a protective filing statement (Section 402). When you visit or call your local office, you should deal only with a Claims Representative to discuss this decision, not a Service Representative (see Section 105). It is important to provide him or her with recent earnings information to obtain the most accurate estimates (Section 1403). The ultimate decision is yours. Social Security cannot suggest which decision to make, but can only give you the information upon which to base it.
Example: Jane Doe retires at age 62. She has worked under Social Security and is a widow. She goes to her District Office and learns that her Primary Insurance Amount is $1000 and that her deceased husbands Primary Insurance Amount is $1200. Her benefit reduced for age at 62 would be $800 (Section 703.1) and her widows benefit reduced for age at 62 would be $994 (Section 703.1). She can receive either $800/month on her own at 62 and then get $1,200/month on her husbands at full retirement age; or she can receive the $994/month widows benefit now and then $1,000/month on her own account at full retirement age. What should she do?
A helpful way to analyze the situation is this: Jane can receive an extra $194 per month for the 36 months she will receive benefits before full retirement age if she takes the widows benefit first, but she will get $200 less per month starting at full retirement age. If she does this she will receive a total of $6,984 more ($194 x 36 months) before full retirement age. If she does not take this money now and instead decides to wait to get the extra $200 per month, it will take her 35 months to get back the benefits she could have received before full retirement age. This analysis does not take into account interest the extra money now could be earning, assuming it was invested.
Not counting interest, if Jane should take the widows benefit at 62 instead of her own benefit, she will start losing money approximately three years after she reaches full retirement age. If she took the lower benefits on her own account at 62, it would take her approximately three years after full retirement age to get back the money she passed up, but after that she would be ahead $200 per month. If her income requirements allow, and if she expects a normal life span, it may very well be to Janes advantage to take the lower benefit on her own account at 62, and the higher widows benefit at full retirement age. Of course, if she were on a tight budget, or did not expect to live past 68, she might be better off taking the higher benefit now.
Full Retirement Age and Older
If you are full retirement age or older at the time you first become eligible for benefits, you will receive benefits on the account which has the higher benefit amount. See Chapter 7 for a complete discussion of the computation of benefit amounts.
If you are a widow(er) and have remarried, you may be eligible either as a widow(er) or as a spouse. Generally, widow(er)s who remarry cannot collect benefits on their deceased spouses record, unless they have remarried at age 60 or later (age 50 for disabled widows, see Section 904). If you have remarried after you turn 60 and your spouse is eligible for retirement or disability benefits, you can receive
benefits on whichever account gives you the higher benefit. Usually this is the widow(er)s benefit because the spouses benefit is only one-half of the workers Primary Insurance Amount (Section 702.1). Your entitlement as a widow(er), if you were receiving those benefits before you remarried or before your husband became eligible, will terminate upon your entitlement as a spouse.
Section 305 - As a Spouse and as an Ex-Spouse
If you are divorced from a person receiving Retirement or Disability benefits, you cannot receive benefits as an ex-spouse if you have remarried. In these cases you can only receive benefits as the spouse of your present husband or wife if he or she is eligible for Retirement or Disability benefits. You must be married to your new spouse for at least one year before you can be eligible, unless you meet one of the exceptions listed in Section 211.
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Section 306 - As the Widow(er) of Two or More Workers
If you are the widow(er) of two or more workers, you can receive benefits on the account which gives you the highest benefit. You cannot take one reduced widow(er)s benefit before full retirement age and then switch to an unreduced widow(er)s benefit on another account at full retirement age. Once you have picked which account to take widow(er)'s benefits on you cannot later change to a different workers account.
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Section 307 - Diability Benefits and Retirement Benefits
When a person who is under full retirement age is entitled to Retirement benefits and is also eligible for Disability benefits, he or she has the choice of taking one or the other of these benefits. If you are full retirement age or over, you can take only the Retirement benefit. This is equal to the Disability benefit. But if you are under full retirement age, the Retirement benefit is reduced for age (Section 703.1). The Disability benefit is not reduced for age, and so it is usually to your advantage to take the Disability benefit. However, if you have two or more eligible dependents, Retirement benefits may be better because the Retirement Family Maximum may be higher than the Disability Family Maximum (Section 703.7).
There is a waiting period during which no Disability benefits are payable. This period is the first five full months of total disability (Section 507). If you are age 62 or older during one or more of the months of the disability waiting period, you can receive the reduced Retirement benefit during that time. The Retirement benefit will be reduced in the normal fashion depending on your age (Section 703.1). When your disability waiting period is over, you will then switch over to the Disability benefit. The Disability benefit will be permanently reduced, but only by the number of months you received Retirement benefits before switching to Disability, not by the full amount of the reduction used to figure the Retirement benefit. If you die during the waiting period, widow(er)'s benefits will be permanently reduced by the amount of the retirement age reduction.
Example: John Doe becomes totally disabled beginning with the month he becomes 62. No Disability benefits are payable for the first five months, so he takes reduced Retirement benefits starting with age 62. His Retirement benefit is reduced by 36 months, because he is 36 months under age full retirement age. When his disability waiting period is up he switches over to Disability benefits. Because he received Retirement benefits for only five months before becoming entitled to the Disability benefits, his Disability benefit is reduced by only five months.
A child under age 18 or disabled before age 22 (Sections 205.1-205.4) may be entitled on more than one parents, step-parents or grandparents account. In this case he will be paid on the account which gives the highest benefit.
As discussed in Section 703.7, when two or more dependents are entitled on one account, the Family Maximum can limit the total amount of benefits payable so that each dependent may suffer a reduction of the benefit amount payable to him. However, when a child is entitled on more than one account, and there are other children entitled on one or more of these accounts, the Family Maximum for each account can be combined so that the reduction of benefits which would otherwise apply can be avoided, and each child can receive the full amount payable.
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When a beneficiary is entitled to a combination of different benefits other than what has been discussed in the foregoing sections, the basic rule is that he or she will receive the benefit which gives the highest monthly amount. If the beneficiary has worked long enough under Social Security to be entitled to a benefit on his or her own account, then a benefit on that account will be paid, even if it is lower, but the difference will be added from the other account.