The long-feared Social Security cuts have begun, with the passage and signing of the Bipartisan Budget Act of 2015. Did you believe that your SS benefits are an earned right, and that your FICA payroll taxes entitle you to a benefit in a legal, contractual sense? You’re mistaken. The truth is that, as with all federal entitlement programs, Congress can modify the SS eligibility rules at any time.
According to Boston University professor Laurence Kotlikoff (Forbes magazine), the two-year, bipartisan budget makes radical changes to the way SS provides spousal and retirement benefits. “I’ve never heard of a change in Social Security law that eliminates benefits for people already collecting, but this is what’s in this bill,” wrote Kotlikoff. “Benefits now being received by spouses, divorced spouses or children on the work record of a spouse, ex-spouse or parent who has suspended his or her benefits will be eliminated until the worker restarts his/her retirement benefit. This will cost millions of households tens of thousands of dollars.”
It also induces people who have suspended their SS benefits in order to collect higher benefits at 70 to restart their benefits at permanently lower levels in order to maintain their family’s immediate living standards.
The changes, embodied in Section 831 of the Budget Act, are hardest on people who are currently under 62 years of age (more than half of the baby boomers). The bill extends by four years (formerly 66 years of age, now 70) requirement that if you take your retirement benefit and are eligible to collect your spousal benefit, you are forced to take both at once and vice versa. Since SS only pays the larger of the two benefits, being forced to take both at once means that you lose one of the two benefits.
Kotlikoff calls the benefit cuts “draconian.” He wrote, “We’ve been paying 12.4 percent of our income to Social Security since our first job in exchange for a variety of benefits, including spousal and divorced spousal benefits, in retirement age. … Now, with a couple of sentences, our government is reneging on what for many households can amount up to $50,000 in lifetime benefits.” He believes the law, by inducing households to take their benefits too early at the cost of permanently lower benefits, does “the exactly wrong thing. … And many of these changes will particularly hurt the middle class, women and families with disabled children.”
If you have any questions about your social security or disability benefits, call on an experienced social security attorney to ensure that your legal rights are protected and that you receive the compensation you deserve. For more than 32 years Murphy & Garner has represented plaintiffs in western Georgia and throughout the state. For a free consultation, call 866-942-0552 or 678-563-1584.
