The Bipartisan Budget Bill of 2015 signed into law on November 2, 2015 removed some generous Social Security provisions. Pool/Getty Images

The Bipartisan Budget Act of 2015, signed into law on November 2, 2015, removes some generous Social Security provisions. Pool/Getty Images

Last November, President Obama signed the Bipartisan Budget Act of 2015 into law. It included some key changes to the way couples can file for Social Security.

While the changes were detailed in the law, the nuances weren’t clear until this month when the Social Security Administration released two separate sets of instructions affecting couples — “deemed filing” and “file and suspend.”

These rules are just as arcane as they sound, but they eliminate ways to file that offered many people an enormous financial advantage.

Summary of key details from the reports

  • If you are 66 or older by April 29, 2016, you are grandfathered into the old rules. If you have already filed and suspended your benefits or are claiming a spousal benefit only, you can safely ignore the rule changes. You also can still file under the old rules if you turn 66 by the April 29, 2016, deadline. You must submit a request to file and suspend your retirement benefits by that date. By meeting that deadline, you still will be able to trigger spouse or dependent child-only benefits, while your own benefits earn delayed retirement credits of 8% a year from full retirement age until you turn 70.
  • Don’t delay. If you don’t apply to file and suspend by the deadline, “The opportunity is forever lost,” says Joe Elsasser, a Certified Financial Planner who developed Social Security Timing analytical software. Even if you turn 66 by April 29, any request for voluntary suspension after that date will result in the simultaneous suspension of the benefits of any spouse or child receiving benefits on your record. (This change doesn’t apply to divorced spouses who are claiming on a worker’s record, Social Security makes clear.)
  • Requests to file and suspend benefits submitted by April 29 also allow workers to receive a lump sum payout of suspended benefits instead of earning delayed retirement credits. The option to receive a lump sum might come in handy for someone between ages 66 and 70 with a large medical bill, for example. No lump sum payout will be permitted for requests to file and suspend after April 29, 2016.
  • For those who turn 62 after Jan. 1, 2016, deeming rules now extend beyond full retirement age. That means if you are entitled to both retirement and spousal benefits, you must claim both at the same time, and your Social Security payment will be the higher of those 2 amounts. When you apply for benefits under the new deemed filing rules, the month of entitlement for the filer’s claim will be based upon the first month of eligibility for the second benefit, the directive said.
  • There are 2 exceptions to the deemed filing rule: Someone who is entitled to spousal benefits because he or she is caring for the worker’s child who is under age 16 isn’t required to claim both retirement and spousal benefits. And the new rule doesn’t apply to someone who is entitled to disability benefits.

Here are some other things that Elsasser says you ought to know about these changes:

Definitely, don’t overlook the deadline. Ignoring this deadline could mean you are turning your nose up at a lot of money — as much as $64,000. “The same people who are thrilled to have a $50,000 investment gain are ignoring this opportunity to collect thousands more in Social Security. It’s a big mistake,” Elsasser says.

Get smart help. Elsasser advises people to know the rules and don’t depend on Social Security to get it right. “There are so many reports out there of Social Security personnel misunderstanding the new rules. It makes sense to get an expert to help you understand this before you go to Social Security. Then document any conversations you have with Social Security personnel, especially if they won’t let you file and suspend when you think you are entitled to do it,” Elsasser says.

“If Social Security makes a mistake, the only way you can go back and insist they fix it, is to have proof that they got it wrong,” he says.

Here’s a summary of the changes as they were understood immediately after Congress passed them.

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