Many readers of my article on how to maximize your Social Security benefits have written me with questions about disability payments. Here's a round-up of those questions, with answers:
Q: I started receiving Social Security Disability at age 53. I had 32 years of work credits when I became unable to work. If I get married, would my payment be reduced because my future wife is still working? Her income is higher than mine was. She’s 56 years old, and plans to continue working. –RL via email
A: Not to worry. Your disability benefit won’t be affected by your marriage. You’ll still keep receiving the same amount every month.
And when your wife eventually applies for her Social Security retirement benefit, you may be eligible to collect a spouse’s retirement benefit based on her work record.
The maximum spousal benefit you can receive is 50% of her ‘unreduced benefit’ – i.e., the retirement benefit she’d get at her full retirement age. (Since she’s currently 56, she was born in 1954 and her full retirement age will be 66.)
But you can’t collect your disability benefit and your spousal benefit at the same time. You’d receive an amount equal to the bigger of the two.
Here’s an example:
Let’s say your Social Security disability benefit is $800 a month. If your wife decides to take her retirement benefit early, at age 62, she gets a reduced benefit. Let's assume that at 62, her reduced benefit is $750 a month. Had she waited until she turned 66, her unreduced benefit would be $1,000 a month.
In that case, you
wouldn’t qualify for a spousal benefit because your $800 disability benefit is
more than 50% of her unreduced benefit ($500).
You’d continue to receive your disability benefit because it’s the larger amount.
Q: My husband just turned 62. He has been receiving Social Security disability for about 11 years now. I’m also 62,and I work fulltime. I hope to continue working until I’m 66. We have been told by several people that my husband will have to apply for Social Security when he turns 66, even though he is receiving disability payments from Social Security. Is that true? –MI, via email
A: No. When your husband
turns 66 – his full retirement age -- his Social Security disability benefit
will automatically become a retirement benefit. The amount he receives won’t change. It will simply be paid out of the Social
Security Administration Retirement Trust Fund instead of the Disability Trust
The amount he receives won’t change. It will simply be paid out of the Social Security Administration Retirement Trust Fund instead of the Disability Trust Fund.
When his disability benefit turns into a retirement benefit, it will be based on his age rather than on his disability. As a result, he'll no longer be subject to the disability work rules. That means that if he works, he won't lose any of his benefit regardless of the amount he earns. (For more information about these rules, read What you Need to Know When You Get Social Security Disability Benefits.)
Q: My husband and I both receive Social Security. He is now 69 years old, and I am 63. I applied for a retirement benefit when I was 62. He has been receiving Social Security disability since his early 50s. His benefit is $1,067 a month, and mine is $956 a month. My question is about survivor’s benefits. Should he pass away, do I receive his disability payment together with my retirement benefit? Or do I get the higher amount, which is his? Also, should I pass away first, does he get any portion of my Social Security check? Should we apply for survivor's benefits? -- IN via email
A: A surviving spouse should always call the Social Security Administration and ask about a survivor's benefit. It's the only way to find out if you're entitled to one.
Here are the basic rules:
If your husband
died first, you wouldn’t receive both your benefit and his. You’d get get the
higher of the two. Which benefit that is would depend partly on your age when your husband passed
away, says Linda Lauria, a Social Security Administration spokeswoman in New York City.
If your husband died after you reached your full retirement age, you would be entitled to his full $1,067 benefit, Lauria says. If he died before you turned 66, that $1,067 would be reduced by the number of months that you were away from your full retirement age. (If you were 65 and a half, that would be six months.)
If it turned out that a reduction made your own benefit the larger amount, then you’d continue receiving only your own benefit. (You would also get a one-time lump sum death payment of $255.)
Your husband is 69 years old, so he’s already over his full retirement age. But his potential survivor benefit based on your record is reduced by the fact that you applied for your benefit at 62.
He would receive the higher of two amounts, says Lauria -- either the amount you were receiving at the time you died, or 82.5% of your unreduced benefit, i.e., the benefit you would have received if you hadn’t started taking it until you were 66.
Based on what you’ve
said, she estimates that your ‘unreduced’ benefit is about $1,270 a month.
So 82.5% of that would be $1,047. Since your husband’s disability benefit is a
bigger amount -- $1,067 – he would continue to receive his own benefit instead
of a widower’s benefit.
P.S. In case you wondered, your husband’s disability benefit is the same amount he would have received as a retirement amount at 66. A disability benefit is not reduced, regardless of the age at which you take it.
Please send your questions to Lynn@LynnBrennersFamilyFinance.com. I'm sorry I can't respond personally to every email. Questions are only addressed online.