Did Social Security short you?

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Social Security may owe you or your spouse more money.

The agency was chided this month for its failure to alert some recipients who initially claimed spousal benefits, but who were eligible for an increase in benefits based on their own work records.

Social Security Administration’s Office of the Inspector General, or OIG, a watchdog within the system, sent the agency a letter pointing out that it had first audited Social Security in 2008 and found an estimated 13,580 spouses were eligible for about $123.7 million in higher retirement benefits after attaining age 70. The current audit five years later turned up more.

OIG says that by combining the results of its first and second audits, “We are 90 percent confident the number of spouses eligible for higher retirement benefits ranged from 22,005 to 30,339, and the additional payments ranged from $131.9 million to $258.6 million.”

These underpaid recipients fall into two categories, the OIG says:

  • People whose spousal benefits were higher when they claimed at full retirement age, but because of delayed retirement credits — about 8 percent a year from age 65 or 66 to age 70 — their worker benefits are now greater than what they are receiving as spouses.
  • Social Security didn’t apply what’s known as the “deemed filing provision” properly when some recipients initially applied for benefits. The deemed provision requires that a recipient who files before full retirement age must also file for the larger of a worker benefit or a spousal benefit. In some cases, recipients were given spousal benefits even though they were eligible for higher benefits based on their own work records.

Excuses, excuses

When OIG first discovered this underpaid segment in its 2008 audit, it developed a notification letter for Social Security and asked officials to send it out. Social Security agreed with the findings, but said it didn’t have enough resources to send the letter. This time around, OIG pointed out that not only did Social Security owe this underpaid segment higher benefits, it also owed them back payments. And it told Social Security that it was already notifying widows and widowers at full retirement age and again at age 70 that they could be due higher benefits, so adding more people to the notification process shouldn’t be an overwhelming job.

“If SSA were to notify spousal beneficiaries of their eligibility for higher retirement benefits, it would initially identify about 26,000 beneficiaries. Thereafter, we estimate that SSA would identify about 2,500 spouses, annually, who would be eligible for higher retirement benefits,” according to the OIG report.

If you are a Social Security recipient who gets spousal benefits, and especially if you are turning 70 years old and you claimed at full retirement age, you may be eligible for more money. You also might be eligible for an increase if you worked a substantial number of years but your benefit payment doesn’t reflect any increase based on your own work record.

If you think you fall into one of these categories, go to the Social Security office and ask them to analyze your situation. You may have to request your work record to make sure it is complete. In an example OIG offered Social Security, the underpaid recipient was getting $415, but was due $426 beginning in March 2002. In all, Social Security underpaid — and owed — the recipient $3,105 through 2013, plus the higher ongoing payment. Not a retirement planning fortune, but I wouldn’t leave it lying on the floor.

Want more? Here are 5 little-known facts about Social Security you should know before making any decisions about retirement.