Social Security Rules (Not Reps) Confuse Readers

August 6, 2020 Updated: August 6, 2020

Anyone who has read my column for any length of time knows that I have occasionally been critical of some of my former colleagues at the Social Security Administration for misleading people with misinformation about Social Security programs and policies.

But I totally understand that, many times, people who tell me they have been misled by an SSA representative have, in fact, received good information from the agency. But they have not understood what they were told. Or they misinterpreted something that was explained to them, leaving them all befuddled and confused. And then they write to me to complain that SSA reps have led them astray—when, in fact, they haven’t. Today’s questions provide examples of that.

Q: I have been so misled by SSA reps. I don’t know where to turn. I will be 68 in August, and I wanted my Social Security checks to start then. So, I filed and said I want my checks to start in September (because I know the August check comes in September). I had previously calculated my benefit myself and figured I will get $2,385, and that includes the 16 percent bonus I was due for waiting until age 68 to file. So, imagine my shock when I got a letter from the SSA telling me my first check would come in October and that I would only get $2,170. I called SSA’s 800 number immediately. The first person told me my benefit would be recalculated in 2021. What’s that about? Then I called back because I forgot to ask about my checks starting in October, and a different guy told me that’s what I asked for on my application. I did not do that! I got so mad I hung up. But then I called back and got a third person, and she told me I could have gotten back pay and suggested I change my application to start my benefits in January. I thought that sounded like a good idea until she told me I’d get a smaller check. I got so confused I just hung up again. Why can’t the people at the SSA get their stories straight? Why are they lying to me?

A: No one is lying to you. You just didn’t understand what they were trying to explain to you. And maybe if you would have stayed on the line instead of hanging up so quickly, they might have been able to help you comprehend what is going on. So, now I will take a shot at it.

Let’s start with your benefit start date. The application form would have asked you when you want your benefits to start. You told me you wanted your checks to start when you turned 68 in August. But you did what so many people do with this issue. You overthought the question. Instead of simply indicating August as your start month, you reasoned that Social Security checks come one month behind, so you must have indicated on your application that you want your checks to start in September.

Well, by answering that way, the SSA’s computer system thinks you want your benefit start date to be September. So that’s why the “award letter” you got said your first check (the September check) would be sent to you in October.

The second issue that confused you is the amount of your benefits. I’m not sure how you came up with the $2,385 benefit rate you figured. But for now, let’s just assume that was right. You said you added in “the 16 percent bonus.” That’s where the problem lies—and here is why.

You actually get a “delayed retirement credit,” or a DRC, of two-thirds of 1 percent for each month you delay benefits after age 66. That comes out to 8 percent per year, or 16 percent for the two years that you waited to start your benefits.

But here is the catch. You can’t get any DRCs for a year until the year is over. So, the benefit rate you start out getting in September 2020 will include all DRCs you were due through the end of 2019. And you can’t get any DRCs for 2020 until next year. That’s what the SSA rep was trying to explain to you when he said your benefit will be recalculated in 2021. It will. That’s when you will get all of the delayed retirement credits for 2020 added to your Social Security check.

Finally, let’s get into that retroactive check business. Any Social Security claim filed after your full retirement age comes with the possibility of claiming up to six months’ worth of retroactive benefits.

I’m guessing you filed your Social Security claim in June. At that time, you could have said you wanted the 6 months’ worth of retroactive benefits. In other words, that means January 2020 would have been your starting date. Had you done that, you would have received the big back-pay check. But your ongoing benefit rate would be smaller. Why? Because you wouldn’t be eligible for any delayed retirement credits after January. That means your ongoing benefit rate would be about 5 percent less.

If you want, you could call the SSA and tell them you want to change your start date to January. But then be prepared for a little less money each month in the future.

Q: I feel I have been lied to and cheated. I turned 62 on June 23 and applied over the phone for my Social Security benefits to start then. I know Social Security checks come a month late. So, I expected my first check to show up in July. But the SSA clerk I talked to told me my first check wouldn’t come until August. She couldn’t explain why, and I just assumed she was wrong. But I just received my official benefit letter from the SSA, and it says my first check won’t show up until Aug. 26! Why am I being cheated out of one month’s Social Security check?

A: You aren’t being cheated out of anything. It’s too bad the Social Security representative couldn’t explain the rules to you. But now, I will.

In the 1980s, the Reagan administration and Congress were looking for some ways to save a few nickels in Social Security outlays. And one of the little gimmicks they came up with was a law that says you must be 62 for an entire month before you can get your first Social Security check.

You turned 62 near the end of June, so that means July is the first month that you are age 62 for the whole month. So, the July check is the first one you are due. And based on your day of birth, the July check will be sent to you on the fourth Wednesday in August.

Tom Margenau worked for 32 years in a variety of positions for the Social Security Administration before retiring in 2005. He has served as the director of SSA’s public information office, the chief editor of more than 100 SSA publications, a deputy press officer and spokesman, and a speechwriter for the commissioner of Social Security. For 12 years, he also wrote Social Security columns for local newspapers. If you have a Social Security question, contact him at thomas.margenau@comcast.net.