Readers are at all times telling me they’re nervous about the way forward for Social Safety. They are saying they’re inclined to file for Social Safety advantages earlier than they initially deliberate to as a result of they’re satisfied advantages can be dramatically minimize as a part of any upcoming Social Safety reform. They plan to do that as a result of they need to be “grandfathered” into the present program.
My recommendation: NEVER decide about when to file for advantages based mostly on assumed future cuts to Social Safety. Why? As a result of profit cuts are uncommon and often contain ancillary varieties of advantages. And when they’re main and have an effect on nearly everybody, they’re phased in over a protracted time period.
An instance of the latter state of affairs is the rise within the retirement age from 65 to 67. That legislation was handed again in 1983 and didn’t begin going into impact till 2003. Starting then, folks born in 1938 needed to be age 65 and a pair of months to get full Social Safety advantages. The “full retirement age” has been going up in month-to-month increments ever since. It gained’t be absolutely applied till 2027 when people born in 1960 or later should be 67 to get full advantages.
In different phrases, if Congress will increase the retirement age once more as a part of a Social Safety reform package deal, that enhance very probably will have an effect on our kids and grandchildren, not anybody at the moment of their 50s or 60s.
I discussed that some ancillary advantages might get minimize with extra of an instantaneous affect. Nevertheless it’s often nothing most of us need to be nervous about. Listed here are some examples of previous cuts in Social Safety advantages.
For the reason that very earliest days of Social Safety, the dependent minor youngsters of a retired or deceased mother or father, and for the reason that mid-Fifties, the dependent minor youngsters of a disabled mother or father, have been eligible for month-to-month advantages on the mother or father’s Social Safety file.
These advantages have been paid till the kid turned 18 however might proceed past age 18 in two circumstances: 1) if the kid was disabled, wherein case they may proceed for the remainder of the kid’s life, even into their grownup years; and a pair of) if the kid was nonetheless in class, wherein case they’d proceed till age 22.
In 1981, Congress determined to remove advantages to college students over age 18. They reasoned that as a result of so many different types of authorities loans and grants have been accessible to college students, there was no have to additional subsidize increased schooling by means of the Social Safety program.
Mom’s advantages curtailed
Congress was searching for different methods to trim Social Safety outlays in 1981, and widowed moms and dependent wives/moms of retired or disabled husbands with minor youngsters ended up of their crosshairs.
For many years, the legislation had mentioned that wives and widows of any age with younger youngsters of their care might obtain month-to-month advantages (along with the advantages paid to their children) so long as at the least one in all their youngsters was eligible for advantages. However in 1981, they modified the legislation to say that advantages to the mom would finish when the youngest baby turned 16. They figured that after all the youngsters have been over age 16, the mom ought to have the ability to work, if obligatory, to assist help her household.
(By the best way, though these conditions hardly ever happen, the identical advantages and the identical cutbacks additionally utilized to widowed fathers and dependent stay-at-home husbands with minor youngsters.)
Dying profit restrictions
Within the early days of Social Safety, Congress supplied a one-time demise profit to the members of the family of a taxpayer who died earlier than having an opportunity to gather Social Safety advantages. Over time, this partial refund of Social Safety taxes morphed into an official Social Safety demise profit payable to the members of the family of anybody who died, even when she or he had been a Social Safety beneficiary.
Most individuals mistakenly referred to the one-time cost as a “burial profit.” It by no means was meant to be that, particularly contemplating that it was capped at $255 many many years in the past. As anybody who has ever deliberate a funeral is aware of, $255 would barely cowl the price of flowers, not to mention all the opposite burial or cremation prices.
Anyway, in yet one more try to curtail Social Safety expenditures, Congress in 1981 determined that the demise profit must be paid solely to a widow or widower who was dwelling with the deceased on the time of demise or to any minor youngsters.
Advantages to prisoners suspended
Previous to 1992, it was assumed that folks getting Social Safety had earned their advantages, in order that they have been legally due their Social Safety checks regardless of the place they lived. However within the early Nineties, Congress got here beneath intense stress to droop month-to-month advantages to anybody in jail or jail. Individuals felt that since prisoners have been already getting their room and board paid for by the taxpayers, they didn’t want taxpayer-funded Social Safety checks.
Drug addicts and alcoholics
There was a rash of reports tales within the mid-Nineties highlighting sure disabled individuals who have been allegedly spending the proceeds of their Social Safety incapacity checks on medicine and alcohol. Knuckling beneath the stress to do one thing about this, Congress ultimately handed a legislation that primarily denied such advantages to anybody whose solely disabling situation was drug habit or alcoholism.
The legislation was largely pointless, although, as a result of most of those people produce other circumstances that certified for incapacity. For instance, a hardcore alcoholic most likely has some type of kidney or liver harm, and that impairment retains the incapacity checks rolling in.
In case you have a Social Safety query, Tom Margenau has a e book with all of the solutions. It’s referred to as Social Safety: Easy and Sensible. You will discover the e book at creators.com/books. Or search for it on Amazon or different e book retailers. To search out out extra about Tom Margenau and to learn previous columns and see options from different Creators Syndicate writers and cartoonists, go to the Creators Syndicate web site at www.creators.com.