The biggest Social Security changes in 30 years are in effect immediately and directly impact all divorcing people in the U.S. Social Security rules for claiming benefits, especially spousal benefits, have been dramatically changed by the Bipartisan Budget Act of 2015, which was signed November 2, 2015. These changes became effective immediately, and everyone is scrambling to understand them. -
In the past, ex-spouses were able to anticipate making independent decisions regarding when they would file for Social Security benefits. Being divorced, they each had their own individual qualifications to meet for filing a claim: age, marital status, benefit entitlements, etc. If an ex-spouse wanted to file a claim based on a worker’s benefit, the ex-spouse could do so without consideration of the worker’s filing status. That has changed. Under the new rules, a worker must be actively collecting benefits in order for an ex-spouse to be able to collect a spousal benefit based on the worker’s benefit.
This is a significant change. Perhaps it is in the worker’s best interest to delay benefits until age 70 so as to maximize their own benefit. That means the ex-spouse must also wait until the worker collects benefits. However, there is no monetary benefit to the spouse to wait, since their benefit will not increase beyond the worker’s Full Retirement Age (FRA) benefit, which may have been at the worker’s age 66. The spousal (or ex-spousal) benefit is equal to 50% of the worker’s FRA benefit, adjusted for reductions if the ex-spouse is under their own FRA.
Another aspect of the new rules are that an ex-spouse is completely at the mercy of the worker spouse regarding the availability of benefits. The worker spouse can actually block the ex-spouse from receiving much needed benefits by simply not collecting benefits themselves. This is not a favorable situation, given the continued animosities that occur between some ex-spouses
Thus, when negotiating your settlement, always discuss social security benefits, at what age the worker spouse intends to collect, and financial consequences if that worker spouses opts not to or blocks the other, now ex, spouse altogether.