If you’re receiving Social Security benefits, you may be wondering how reductions due to age are calculated and when adjustments may be necessary.
In accordance with § 404.410, benefits are reduced based on the number of months prior to full retirement age that you become entitled to benefits. However, certain months are excluded from consideration when determining the amount by which benefits are reduced.
According to § 404.412, the following months are not counted when reducing benefits:
- Months subject to deduction under § 404.415 or § 404.417
- Months when the individual had a child of the insured individual in their care and the child was entitled to child’s benefits
- Months when entitlement to spouse’s benefits is precluded because the insured person’s disability ceased
- Months when the individual had a child of the deceased insured individual in their care and the child was entitled to child’s benefits
- Months before attainment of full retirement age for which the individual was not entitled to spouse’s or survivor’s benefits
- Months when the individual was entitled to disability benefits instead of old-age benefits
Automatic adjustments are made to exclude the above-listed months from consideration when determining the amount by which benefits are reduced. These adjustments are made each year by examining beneficiary records to identify individuals who have attained full retirement age and have had one or more months described in paragraphs (a)(1) through (6) of this section occur prior to such age during the period of entitlement to benefits reduced for age.
Increases in benefit amounts resulting from this adjustment are effective with the month of attainment of full retirement age. For widow’s or widower’s benefits, this adjustment is made in the month of attainment of age 62 as well as the month of attainment of full retirement age.
Here’s an example to help illustrate how the adjustment works:
Let’s say that John becomes entitled to Social Security benefits at age 62, which is before his full retirement age of 67. As a result, his benefits are reduced by a certain percentage based on the number of months between his entitlement and his full retirement age.
However, during his entitlement period, John had a child in his care who was entitled to child’s benefits. According to § 404.412, any month in which an individual had a child of the insured individual in their care and for which the child was entitled to child’s benefits is excluded from consideration when determining the amount of the reduction.
So, when the Social Security Administration examines John’s records to make the automatic adjustment, they would exclude the months in which John had the child in his care and the child was entitled to benefits. This exclusion would result in an increase in John’s benefit amount, and this increase would be effective with the month of his full retirement age.
In this example, the adjustment would help John receive a higher benefit amount than he would have received if the excluded months were not accounted for in the reduction calculation.
In summary, if you’re receiving Social Security benefits and your payments have been reduced due to age, certain months may be excluded from consideration when determining the amount of the reduction. Automatic adjustments are made each year to ensure that these excluded months are accounted for, and increases in benefit amounts resulting from this adjustment are effective with the month of attainment of full retirement age. If you have any questions about these adjustments, you can contact the Social Security Administration for more information.
https://www.ssa.gov/OP_Home/cfr20/404/404-0412.htm
At Hugo Fierro & Michael Perez, we possess the requisite expertise to provide valuable guidance to our clients in comprehending the intricate details of their Social Security disability claim.