Readers are always telling me they are worried about the future of Social Security. And they say they are inclined to file for Social Security benefits before they originally planned to because they are convinced benefits will be dramatically cut as part of any upcoming Social Security reform. They plan to do this because they want to be "grandfathered" into the current program.
My advice: NEVER make a decision about when to file for benefits based on assumed future cuts to Social Security. Why? Because benefit cuts are rare and usually involve ancillary kinds of benefits. And when they are major and affect almost everyone, they are phased in over a long period of time.
An example of the latter scenario is the increase in the retirement age from 65 to 67. That law was passed back in 1983 and didn't start going into effect until 2003. Beginning then, people born in 1938 had to be age 65 and 2 months to get full Social Security benefits. And the "full retirement age" has been going up in monthly increments ever since. It won't be fully implemented until 2027 when folks born in 1960 or later must be 67 to get full benefits.
In other words, if Congress increases the retirement age again as part of a Social Security reform package, that increase very likely will affect our children and grandchildren, not anyone currently in their 50s or 60s.
I mentioned that some ancillary benefits could get cut with more of an immediate impact. But it's usually nothing most of us have to be worried about. Here are some examples of past cuts in Social Security benefits.
Since the very earliest days of Social Security, the dependent minor children of a retired or deceased parent, and since the mid-1950s, the dependent minor children of a disabled parent, were eligible for monthly benefits on the parent's Social Security record.
Those benefits were paid until the child turned 18 but could continue beyond age 18 in two circumstances: 1) if the child was disabled, in which case they could continue for the rest of the child's life, even into their adult years; and 2) if the child was still in school, in which case they would continue until age 22.
In 1981, Congress decided to eliminate benefits to students over age 18. They reasoned that because so many other forms of government loans and grants were available to students, there was no need to further subsidize higher education through the Social Security program.
Mother's Benefits Curtailed
Congress was looking for other ways to trim Social Security outlays in 1981, and widowed mothers and dependent wives/mothers of retired or disabled husbands with minor children ended up in their crosshairs.
For decades, the law had said that wives and widows of any age with young children in their care could receive monthly benefits (in addition to the benefits paid to their kids) as long as at least one of their children was eligible for benefits. But in 1981, they changed the law to say that benefits to the mother would end when the youngest child turned 16. They figured that once all the children were over age 16, the mother ought to be able to work, if necessary, to help support her family.
(By the way, although these situations rarely occur, the same benefits and the same cutbacks also applied to widowed fathers and dependent stay-at-home husbands with minor children.)
Death Benefit Restrictions
In the early days of Social Security, Congress offered a one-time death benefit to the family members of a taxpayer who died before having a chance to collect Social Security benefits. Over the years, this partial refund of Social Security taxes morphed into an official Social Security death benefit payable to the family members of anyone who died, even if he or she had been a Social Security beneficiary.
Most people mistakenly referred to the one-time payment as a "burial benefit." It never was meant to be that, especially considering that it was capped at $255 many decades ago. As anyone who has ever planned a funeral knows, $255 would barely cover the cost of flowers, let alone all the other burial or cremation costs.
Anyway, in yet another attempt to curtail Social Security expenditures, Congress in 1981 decided that the death benefit should be paid only to a widow or widower who was living with the deceased at the time of death or to any minor children.
Benefits to Prisoners Suspended
Prior to 1992, it was assumed that people getting Social Security had earned their benefits, so they were legally due their Social Security checks no matter where they lived. But in the early 1990s, Congress came under intense pressure to suspend monthly benefits to anyone in jail or prison. People felt that since prisoners were already getting their room and board paid for by the taxpayers, they didn't need taxpayer-funded Social Security checks.
Drug Addicts and Alcoholics
There was a rash of news stories in the mid-1990s highlighting certain disabled people who were allegedly spending the proceeds of their Social Security disability checks on drugs and alcohol. Knuckling under the pressure to do something about this, Congress eventually passed a law that essentially denied such benefits to anyone whose only disabling condition was drug addiction or alcoholism. The law was largely pointless, though, because most of these folks have other conditions that qualified for disability. For example, a hardcore alcoholic probably has some kind of kidney or liver damage, and that impairment keeps the disability checks rolling in.
If you have a Social Security question, Tom Margenau has a book with all the answers. It's called "Social Security: Simple and Smart." You can find the book at creators.com/books. Or look for it on Amazon or other book outlets. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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