Just a week ago I was casually telling audiences in Philadelphia, as well as individuals who asked, that I wasn’t very worried about the file and suspend technique going out of style anytime soon. After all, the primary noise had come out of the Obama administration budget proposal for fiscal year 2015, and it seems as though nothing that the administration proposes gains any traction in Congress. Moreover, our dysfunctional legislators in Washington seemingly cannot agree on anything, so I had little concern over the disparate factions getting together on something so lower and middle class friendly as Social Security.
As I write this, the House has suddenly passed a budget bill, and the Senate is expected to act within days. If the Senate follows the House version of the bill, there seems no reason for the President not to sign the bill into law. Early reports in the popular press, and the language of the bill itself, suggest the following:
- The popular “file and suspend” technique would be eliminated. No one – including spouses, minor children, and disabled adult children – could receive benefits on the record of someone while that person’s benefits are suspended.
- The ability to file a restricted application for spousal benefits only would be lost. The “deemed filing” rule, which currently applies only to claimants who have not reached their Full Retirement Age, would be extended to include everyone who has not yet reached age 70.
- Exceptions and limited grandfathering:
- Although it is not completely clear, the House Bill would seem to allow an otherwise eligible person (see next bullet) to receive benefits on the record of a person who has filed and suspended up to 6 months from the time the bill is signed into law.
- A spouse or ex-spouse who has attained age 62 by the end of 2015 would be permitted to file a restricted application for spousal benefits only upon reaching Full Retirement Age.
- After the 6-month period described above, no one would be permitted to suspend benefits, either for the purpose of enabling someone else to claim benefits or to claim retroactive lump-sum benefits.
The bill clearly took me, as well as others much closer to the Washington scene, by surprise: no legislation had been introduced and no public hearings had been held. Negotiations between the administration and congressional leaders were held in secret, behind closed doors.
That said, the Senate has yet to act, and until a bill endorsed by both legislative branches has been signed by the President, changes are possible. In the immortal words of the late great Yogi Berra: “It ain’t over till it’s over,” and until it’s truly “over” we cannot be certain of what opportunities remain.
Peter M. Weinbaum, JD