Rules I Can’t Explain – Social Security

I really get upset when readers tell me that they talked to a Social Security Administration employee hoping to get an understanding of some confusing Social Security rule and the only reply they got was this: “It’s the law.” In my opinion, that’s a bad answer. People should be given a reason why a particular Social Security law exists in the first place.

I’ve always prided myself on not just knowing Social Security rules and regulations, but on being able to explain the reasoning behind the laws, many of which some people (even SSA employees) find confusing and perplexing. That’s why, while I still worked for the SSA, I used to conduct a training session for employees I simply called “Rationale.” And in that class, I provided the rationale behind rules and laws that were sometimes difficult to understand. (And judging by the number of “It’s the law” responses that readers tell me they get from SSA employees, maybe somebody at the agency needs to pick up where I left off when I retired 18 years ago!)

Having bragged about my understanding of the rationale behind the rules, I must admit there have always been some laws I’ve never been able to understand myself, and I’ll discuss them in today’s column.

No. 1: Why doesn’t a wife share in the bonus her husband earns for starting his benefits after full retirement age? I really don’t know.

A retiree can earn a little bonus in his Social Security checks if he delays starting his Social Security benefits until after his full retirement age. He gets an extra two-thirds of 1% added to his retirement check for each month he waits — up to age 70. (There is no bonus paid for months beyond age 70.) Depending on what your full retirement age is, that can be anywhere from a 24% to a 32% bonus for a retiree.

But if that guy has a wife eligible for benefits on his record, her spousal rate is based on his full retirement age benefit, not his augmented delayed retirement benefit. That’s the bad news. The good news is that if he dies, the widow’s benefit is based on his higher delayed retirement rate. In other words, a wife doesn’t share in these delayed retirement credits, but a widow does. And again, I can’t explain why.

Also, a note of clarification. I referred to a husband getting retirement benefits and a wife getting spousal benefits on his record. I did that because 95% of the time, that’s the way these rules play out. And that’s because, for a variety of reasons discussed many times in this column, the husband has a higher Social Security benefit than the wife. But if you happen to be part of a household where the wife makes more money than the husband, then just turn the genders around in my above discussion of the rules.

No. 2: Why is there a six-month waiting period before Social Security disability benefits can be paid? I really don’t know.

The law says that if you file for Social Security disability benefits and your claim is approved, no benefits can be paid for the first six months. Well, actually, the law says that no benefits can be paid for the first five full calendar months of a disability. So, unless you just happened to have become disabled on the first day of the month, you end up waiting for six months before your Social Security checks start. (There are a couple of severe medical conditions where the waiting period is waived.)

Let’s give an example of how this plays out. Bob has a heart attack on March 15. He files for Social Security disability in April, and on June 25, his claim is approved. He gets an “award letter” telling him that he became disabled for Social Security purposes on March 15. The letter also tells him that he will get his first Social Security check after five full calendar months have elapsed. So, the first disability check he is due will be for the month of September, payable in October. (Social Security checks always come one month behind.)

Why does Bob have to wait until October to get his first disability check if he became disabled in March? I’m really not sure.

I checked the SSA website for information about this. It says the six-month waiting period is intended to make sure that the condition is not a short-term disability. (By law, Social Security disability benefits are only paid for long-term disabilities.) But that doesn’t quite make sense to me. The medical review process for disability claims is quite extensive. That’s why it takes several months to process disability claims. And part of that process is to root out short-term disabilities. In other words, once a claim is approved, it’s already been decided that the person has a long-term disability. So why wait another six months?

No. 3: Why is there an earnings penalty if you’re under full retirement age? I really don’t know.

When Social Security began in the 1930s, the law said you had to be retired to get “retirement” benefits. So, if you were a senior citizen who was working and had any kind of income, you couldn’t get Social Security. Over the years, Congress gradually eased that restriction. At first, they said if you were over 72 and working, you could get Social Security checks. Then they lowered that to 70. And then in the 1990s, they lowered it to full retirement age. So, if you are over your FRA and working, you can get Social Security checks, no matter how much money you make.

But they kept the penalty in place for Social Security recipients under FRA. The law says for every $2 you earn over a yearly threshold ($19,560 in 2022), $1 must be taken out of your Social Security checks.

So why the penalty for people under full retirement age? My guess is it’s supposed to be an incentive to keep seniors from filing for benefits until they reach full retirement age, but I’m really not sure.


Scroll to Top