Voluntary Suspension
The “file and suspend” benefit claiming strategy will  no longer be available in about 6 months. This strategy involves one spouse, usually the higher earner, claiming their benefits and immediately suspending them. The purpose was to allow the worker’s spouse to begin a spousal benefit while the worker’s benefit continued to earn delayed retirement credits.

When the legislation becomes effective, all benefits paid from an account will be  suspended when a person suspends their benefit. Previously, a beneficiary could suspend their benefits while a spouse or qualifying children could continue collecting a benefit from their account. The new legislation will require that a beneficiary be receiving his or her own benefit in order for other benefits to be paid from their record.

The new legislation does not prevent the suspending of benefits for the purpose of accruing delayed retirement credits. If a person files early and later decides it was a mistake, they will be able to suspend benefits at full retirement age and accrue delayed retirement credits. However, any other benefits being paid from the suspended benefit will stop.

Someone who has already claimed benefits with a file and suspend strategy, or anyone who implements such a strategy within the next 6 months, can continue with their strategy.

Restricted Application
The other major change is the elimination of the “restricted application.” Restricted application allowed a spouse who had attained full retirement age, who was also eligible for their own retirement benefit, to collect only a spousal benefit. At a later date, usually age 70, the spouse would switch to their own retirement benefit which would have grown to its maximum with delayed retirement credits.

The new legislation extends a concept called “deemed filing.” Deemed filing has only been a factor before reaching full retirement age. Prior to reaching full retirement age, if a person filed for any benefit, they were “deemed to be filing” for all benefits. This meant that if someone was eligible for their own benefit and a spousal benefit, they would only be paid a single benefit, the higher of the two. But if the individual waited until full retirement age to claim a benefit, they could choose which benefit to receive. If the choice was made to receive a spousal benefit, their own retirement benefit would continue to accrue delayed retirement credits. The new rule extends the deemed filing provision to age 70, meaning that the payable benefit will always be the higher benefit if eligible for more than one.

The new rules about restricted application apply only to individuals who attain age 62 after 2015. For those who achieve age 62 prior to 2016, it remains possible to file a restricted application for spousal benefits only at full retirement age. However, this option is being effectively “phased out” over the next four years.

Widows and Divorced Benefits
Nothing in the legislation mentions widows benefits, and some believe the strategies available to widows remain unchanged. It will still be possible for a widow to begin a widow benefit and switch to their own retirement benefit at a later date or vice versa.

Divorced benefits seem to have suffered what some are calling an unintended consequence of the legislation. As of now, since filing a restricted application will not be available for anyone reaching age 62 after 2015, divorced individuals will not able to use this option unless they fall into the grandfathered group who will already be aged 62 by the end of 2015.

The above is an edited version of several explanation prepared before the enactment of the legislation.  It is possible the published version of the legislation may differ.  Your plans included the above tactics, you should revise your plans.  You may need to act quickly if you are close to age 62 to preserve these tactics for your situation.