On October 28, 2015, the House amended and passed the Senate amendment to H.R. 1314, the Bipartisan Budget Act of 2015, by a vote of 266-167.  The Senate passed the measure on October 30, 2015 by a vote of 64-35, clearing the measure for the President.  The President signed the bill into law on November 2, 2015. 266-167? Seriously? This thing wasn’t even close. Here’s  some highlights of the key points:

 

Changes of the Bi-Partisan Budget Act of 2015

Change to Section 831(a)

· Extends Deeming rule to all ages for anyone born 1/2/1954 and later

o Prior to the act, when you reached full retirement age you could file for only a spousal benefit and allow your own benefit to accumulate Delayed Retirement Credits, and then switch later to your own larger delayed retirement benefit.

o Now, only people born 1/1/1954 or before can do this (must have turned 62 before 1/1/2016)

· Applies deeming for any age of eligibility, not just the month of initial entitlement

o Before, if you were not eligible for a spousal benefit because your spouse had not yet filed, you didn’t have to take it. You could later, have the choice of when you add the spousal benefit.

o Now, if you file for a retirement benefit, and later become eligible for a spousal benefit, the spousal benefit must immediately be paid upon your eligibility.

o There is no longer the month of entitlement rule that allows you to avoid eligibility and then later switch over.

· Impact

o Restricted application for only spousal benefit with ability to later switch to retirement benefits will no longer be available for people born on 1/2/54 or later, age 62.

 

Change to Section 831(b)—Voluntary suspension rules

· Modifies Voluntary Suspension to require suspension of all benefits payable under a wage earner’s record, not just the wage earner’s benefit

o The means that other people can’t claim benefits based on the wage earner’s work record

o If you have a spouse that is claiming off of you, and you suspend your benefit, via a voluntary suspension, in the past, only your benefit would stop and your spouse could continue to claim off of your earning record. Now if you suspend your benefits, your spouses’ benefit will stop as well.

· Eliminates ability to claim other benefits while the wage earner’s benefit is in suspense

o If you suspend your benefit, but could still claim some type of spousal benefit during the suspension, you wouldn’t be able to do that under the new rules.

· Eliminates ability to request retroactive benefits back to the beginning of suspension

o Under the old rules, you could file and suspend at FRA, wait till 70, and then request a check for all benefits, lump sum, going back to age 66.

· Applies to suspensions requested 180 days or more from the date of the enactment

o April 29, 2016 is the deadline

o If you request a voluntary suspension before the deadline, you’re grandfathered in.

· Impact

o Voluntary suspension will only be available to people who are 66 by 4/29/2016

o You can still use voluntary suspension if you claimed early, missed your one year window to withdraw the application. If you filed at 62 and receive the smaller benefit, you can still suspend your benefits at age 66, or whenever, and delay those benefits to a future date like age 70, and earn delayed retirement credits while your benefit is in suspense. No one else can claim on your record during the suspense.

Total impact on planning

· Timing options are still available

· All widow planning options are still available, as rule changes impact only spousal and retirement benefits

· No ability to request a retroactive lump sum, so the only reason to use a Voluntary Suspension is to fix a mistake

· Understanding which rule set applies to each member of a couple will be critical

o You can have two different rule sets applying to each spouse!

Key messages:

1. There are now three sets of rules

a. Until 4/29/2016

b. 4/29/2016 – 2020

For the people that are 62 today but will be 66 in 2020 and Full retirement age

c. 4 years and beyond

Those that turn 66 in 2020 and beyond

2. Age gaps for couples mean they could fall under different set of rules

3. Window of opportunity will close—they expire 4/29/2016

Learn what Social Security options you have available, and how Social Security can impact you! Find out all of your possible Social Security claiming strategy options!

 

Here’s the complete 2015 Bi-Partisan bill for your reading pleasure:

GENERAL.—Not later than September 30, 2017, 3 the Commissioner of Social Security shall establish and implement a system that—
(1) allows an individual entitled to a monthly insurance benefit based on disability under title II of
the Social Security Act (or a representative of the individual) to report to the Commissioner the individual’s earnings derived from services through electronic
10 means, including by telephone and Internet; and
11 (2) automatically issues a receipt to the indi12
vidual (or representative) after receiving each such re13
port.
14 (b) SUPPLEMENTAL SECURITY INCOME REPORTING
15 SYSTEM AS MODEL.—The Commissioner shall model the
16 system established under subsection (a) on the electronic
17 wage reporting systems for recipients of supplemental secu18
rity income under title XVI of such Act.
19 Subtitle C—Protecting Social
20 Security Benefits
21 SEC. 831. CLOSURE OF UNINTENDED LOOPHOLES.
22 (a) PRESUMED FILING OF APPLICATION BY INDIVID23
UALS ELIGIBLE FOR OLD-AGE INSURANCE BENEFITS AND
24 FOR WIFE’S OR HUSBAND’S INSURANCE BENEFITS.—
25 (1) IN GENERAL.—Section 202(r) of the Social
26 Security Act (42 U.S.C. 402(r)) is amended by strik71
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1 ing paragraphs (1) and (2) and inserting the fol2
lowing:
3 ‘‘(1) If an individual is eligible for a wife’s or
4 husband’s insurance benefit (except in the case of eli5
gibility pursuant to clause (ii) of subsection (b)(1)(B)
6 or subsection (c)(1)(B), as appropriate), in any
7 month for which the individual is entitled to an old8
age insurance benefit, such individual shall be deemed
9 to have filed an application for wife’s or husband’s
10 insurance benefits for such month.
11 ‘‘(2) If an individual is eligible (but for section
12 202(k)(4)) for an old-age insurance benefit in any
13 month for which the individual is entitled to a wife’s
14 or husband’s insurance benefit (except in the case of
15 entitlement pursuant to clause (ii) of subsection
16 (b)(1)(B) or subsection (c)(1)(B), as appropriate),
17 such individual shall be deemed to have filed an ap18
plication for old-age insurance benefits—
19 ‘‘(A) for such month, or
20 ‘‘(B) if such individual is also entitled to a
21 disability insurance benefit for such month, in
22 the first subsequent month for which such indi23
vidual is not entitled to a disability insurance
24 benefit.’’.
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1 (2) CONFORMING AMENDMENT.—Section 202 of
2 the Social Security Act (42 U.S.C. 402) is amended—
3 (A) in subsection (b)(1), by striking sub4
paragraph (B) and inserting the following:
5 ‘‘(B)(i) has attained age 62, or
6 ‘‘(ii) in the case of a wife, has in her care (indi7
vidually or jointly with such individual) at the time
8 of filing such application a child entitled to a child’s
9 insurance benefit on the basis of the wages and self10
employment income of such individual,’’; and
11 (B) in subsection (c)(1), by striking sub12
paragraph (B) and inserting the following:
13 ‘‘(B)(i) has attained age 62, or
14 ‘‘(ii) in the case of a husband, has in his care
15 (individually or jointly with such individual) at the
16 time of filing such application a child entitled to a
17 child’s insurance benefit on the basis of the wages and
18 self-employment income of such individual,’’.
19 (3) EFFECTIVE DATE.—The amendments made
20 by this subsection shall apply with respect to individ21
uals who attain age 62 in any calendar year after
22 2015.
23 (b) VOLUNTARY SUSPENSION OF BENEFITS.—
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1 (1) IN GENERAL.—Section 202 of the Social Se2
curity Act (42 U.S.C. 402) is amended by adding at
3 the end the following:
4 ‘‘(z) VOLUNTARY SUSPENSION.—(1)(A) Except as oth5
erwise provided in this subsection, any individual who has
6 attained retirement age (as defined in section 216(l)) and
7 is entitled to old-age insurance benefits may request that
8 payment of such benefits be suspended—
9 ‘‘(i) beginning with the month following the
10 month in which such request is received by the
11 Commissioner, and
12 ‘‘(ii) ending with the earlier of the month
13 following the month in which a request by the
14 individual for a resumption of such benefits is so
15 received or the month following the month in
16 which the individual attains the age of 70.
17 ‘‘(2) An individual may not suspend such benefits
18 under this subsection, and any suspension of such benefits
19 under this subsection shall end, effective with respect to any
20 month in which the individual becomes subject to—
21 ‘‘(A) mandatory suspension of such benefits
22 under section 202(x);
23 ‘‘(B) termination of such benefits under section
24 202(n);
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1 ‘‘(C) a penalty under section 1129A imposing
2 nonpayment of such benefits; or
3 ‘‘(D) any other withholding, in whole or in part,
4 of such benefits under any other provision of law that
5 authorizes recovery of a debt by withholding such ben6
efits.
7 ‘‘(3) In the case of an individual who requests that
8 such benefits be suspended under this subsection, for any
9 month during the period in which the suspension is in ef10
fect—
11 ‘‘(A) no retroactive benefits (as defined in sub12
section (j)(4)(B)(iii)) shall be payable to such indi13
vidual;
14 ‘‘(B) no monthly benefit shall be payable to any
15 other individual on the basis of such individual’s
16 wages and self-employment income; and
17 ‘‘(C) no monthly benefit shall be payable to such
18 individual on the basis of another individual’s wages
19 and self-employment income.’’.
20 (2) CONFORMING AMENDMENT.—Section
21 202(w)(2)(B)(ii) of the Social Security Act (42
22 U.S.C. 402(w)(2)(B)(ii)) is amended by inserting
23 ‘‘under section 202(z)’’ after ‘‘request’’.
24 (3) EFFECTIVE DATE.—The amendments made
25 by this subsection shall apply with respect to requests
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1 for benefit suspension submitted beginning at least
2 180 days after the date of the enactment of this Act.
3 SEC. 832. REQUIREMENT FOR MEDICAL REVIEW.
4 (a) IN GENERAL.—Section 221(h) of the Social Secu5
rity Act (42 U.S.C. 421(h)) is amended to read as follows:
6 ‘‘(h) An initial determination under subsection (a),
7 (c), (g), or (i) shall not be made until the Commissioner
8 of Social Security has made every reasonable effort to en9
sure—
10 ‘‘(1) in any case where there is evidence which
11 indicates the existence of a mental impairment, that
12 a qualified psychiatrist or psychologist has completed
13 the medical portion of the case review and any appli14
cable residual functional capacity assessment; and
15 ‘‘(2) in any case where there is evidence which
16 indicates the existence of a physical impairment, that
17 a qualified physician has completed the medical por18
tion of the case review and any applicable residual
19 functional capacity assessment.’’.
20 (b) EFFECTIVE DATE.—The amendment made by sub21
section (a) shall apply with respect to determinations of dis22
ability made on or after the date that is 1 year after the
23 date of the enactment of this Act.