How can you make the most of your Social Security benefits? One way is to use a process called “limited application.” Social Security laws that underwent many changes in 2015 altered the right to do a limited application for those born on or after January 2, 1954.
Limited Application
The limited application informs the Social Security office that you are not applying for all the benefits you are entitled to at the same time. This is also known as “scope limitation” of your application.
When using the limited application, you only request one type of benefit. This approach is often used by those hoping to receive higher benefits than they would get using other options.
Limited Application Restricts Types of Benefits
In many cases, the limited application allows you to apply for other types of benefits later. Let’s take a look at the reasons you might use this rule and some things you may be eligible for:
- A benefit based on your earnings record; this is known as “Retirement Insurance Benefit” (RIB)
- A benefit based on the earnings record of a spouse or ex-spouse; this is known as “Spousal Insurance Benefit” (SIB)
- A benefit based on the earnings record of a deceased spouse or ex-spouse; this is known as “Widow or Widower Insurance Benefit” (WIB)
- A benefit if you are disabled; this is known as “Disability Insurance Benefit” (DIB)
You can use the limited application to claim a spousal benefit while allowing your own benefit to continue to grow if:
- You were born on January 1, 1954, or earlier. You are currently married; or divorced (and eligible for a benefit based on the ex-spouse’s record). You have reached full retirement age and have not yet applied for your own benefits.
What if your benefit is higher than the spousal benefit? You can simply switch to your benefit amount when you reach age 70.
Rules Changed for Those Born Later
If you were born on January 2, 1954, or later, the limited application may not be used to claim spousal benefits or ex-spouse benefits, but widows and widowers can use the limited application at any age to claim spousal benefits or ex-spouse benefits.
The section on application scope states:
“When the claimant is eligible for more than one benefit at the time of filing, the claimant, for any reason, may choose to limit the scope of the application to exclude a category of benefits unless there is an exception. The reason may be to receive higher current benefits or to maximize the benefit amount over time, including the effect of delayed retirement credits (DRC).”
There are some key points to note about the rules of limited application:
- The spouse must be at full retirement age (FRA) born before January 1, 1954. They can then file a limited application for spousal benefits only. They should also not have started their own benefits yet.
- A widow or widower or survivor of an ex-spouse can file a limited application, even if they have not yet reached full retirement age. It does not matter when they were born.
- Claimants who are caring for a child (under age 16 or an adult disabled child) who is entitled to child benefits may have the option to limit the application to spousal benefits only, even if they have not yet reached full retirement age.
Limited Applications and Spousal Benefits
Let’s assume that the spousal claimant was born before January 1, 1954, and is at full retirement age or older. They have the right to limit the application to exclude RIB. However, these claimants must file for RIB in the case of reduced benefits when the spousal claimant is insured for RIB where the provisions regarding “presumed application” apply.
It means
“Reduced benefit status” means that you apply before reaching your full retirement age. When you apply before reaching full retirement age, it is considered that you are also applying for spousal benefits at the same time you are applying for your own retirement benefits (if your spouse has already applied for their benefits).
In the case of an ex-spouse, they must be at least 62 years old; however, they do not have to have applied yet. Being prevented from applying before reaching full retirement age keeps you from using claiming strategies that may allow you to switch between benefits later.
For those born on or after January 2, 1954, when you apply for benefits, you will also be considered to be applying for all benefits you are eligible for. You will not be able to restrict your application to just one type of benefit unless you are a widow or widower.
Note: If your spouse has not already applied for benefits, you will not be considered to be applying for spousal benefits. Later, when they apply for their benefits, the deemed filing rules will come into play. If it turns out that your spousal benefit is greater than your own benefit each month, the additional amount will be paid to you.
Limited Applications and Widow or Widower Benefits
According to the Social Security Administration in section GN 00204.020E.4.a:
“A widow or widower, or surviving ex-spouse may wish to exclude reduced RIB from the scope of the application and defer filing for unreduced RIB due to increased benefits due after full retirement age because of DRCs.”
To exclude the reduced RIB, the Social Security Administration needs a statement in the application. For example, you could state “I do not wish for this application to be considered a claim for reduced benefits on my own record.”
If your spouse or ex-spouse is deceased, you may qualify for a widow or widower benefit on their earnings record. You will have greater flexibility to limit the scope of your application, even if you have not yet reached full retirement age. It does not matter when you were born.
You may do this to claim widow’s benefits for several years; at the same time, you can allow your own benefit to continue to accrue delayed retirement credits. At age 70, you can then switch and claim your own benefit (now significantly larger).
Limited Applications When Caring for a Child
Spouses can restrict their benefits when caring for a child under age 16. You can choose to restrict your benefits and receive spousal benefits (at any age) while receiving the spouse’s benefits for the child being cared for.
Once the child turns 16, benefits related to the cared-for child typically stop. If you are under age 62, there are no other Social Security options available to you, but the child can still receive benefits. If you are at least 62 years old, you will have the option to apply for your own benefits or spousal benefits, or wait until full retirement age to receive your benefits.
Other Considerations
If you are married or widowed, a Social Security calculator can often provide the kind of analysis you need. It can help you find the best Social Security approach for your situation.
Due to the complexity of the rules, some people prefer to seek advice from a lawyer about their claiming options. If you have dependents, or have multiple ex-spouses who may be eligible for disability benefits, or any other complicated situation, dealing with a professional may be helpful.
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Sources:
- Social Security Administration. “Benefits Planner: Retirement.”
- Social Security Administration. “Scope of the Application.”
- Social
- Social Security Administration. “Application for Retirement Insurance Benefits.”
- Social Security Administration. “Benefits for Spouses.”
- Social Security Administration. “Social Security Widow(er)’s Insurance Benefits.”
- Social Security Administration. “Benefits Planner: Disability.”
- Social Security Administration. “Deemed Filing for Retirement and Spouse’s Benefits FAQs.”
- Social Security Administration. “Early or Late Retirement.”
- Social Security Administration. “Benefits Planner: Retirement—Benefits For Your Family.”
- Social Security Administration. “Benefits Planner: Retirement—If You Are Divorced.”
- Social Security Administration. “Parents and Guardians.”
- Social Security Administration. “Benefits for Children.”
Source: https://www.thebalancemoney.com/social-security-rules-for-restricted-applications-2388915
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