GN 02409: Waiver and Voluntary Suspension of Benefits

Effective Dates: 10/19/2016 - Present

TN 6 (10-16)

A. Processing voluntary suspension requests in the FO

1. Explain effects of voluntary suspensions and delayed retirement credits (DRC)

Inform the number holder (NH) that requesting voluntary suspension of his or her retirement insurance benefits (RIB) on or after April 30, 2016:

may increase his or her future monthly benefit amount and the potential benefit amount payable to his or her widow(er);
will not allow him or her to retroactively reinstate benefits for any months in the period of voluntary suspension;
will suspend all auxiliary benefits (except divorced spouse) that SSA pays on his or her record for the duration of the period of voluntary suspension;
will not allow him or her to collect any benefits on another record during the period of voluntary suspension; and
will cause ineligibility for his or her SSI benefits, if applicable.

For more information on the effect of voluntary suspension on other potential benefits, see GN 02409.110. To estimate the percentage of the primary insurance amount (PIA) payable based on different DRC amounts, use the chart in RS 00615.693.

2. Examples of DRC computations for voluntary suspensions

The following examples show how suspending benefits for either a short or a long period after full retirement age (FRA) and before age 70, changes the retirement insurance benefit (RIB) amount. For benefit amount computations with DRCs, see RS 00615.692.

NOTE: The following examples do not include any possible Cost of Living Adjustments (COLA) or recomputations based on earnings.

Example 1 – NH earns full amount of DRCs:

A beneficiary’s date of birth (DOB) is July 15, 1945 and he attained his full retirement age of 66 in July 2011. He is entitled to a benefit of $1000 (full PIA) but elected to suspend his benefits and earn DRCs beginning with July 2011. He earned DRCs of 2/3 of 1 percent per month, or 8 percent a year. In July 2015, he attained age 70. If he remained in suspense for the entire period, he earned 48 DRCs for a total increase of 32 percent. His benefit amount in July 2015 was $1,320.00.

Example 2 – NH earns partial amount of DRCs:

A beneficiary’s DOB is November 05, 1944 and she attained her FRA of 66 in November 2010. Based on a new claim for RIB filed in January 2011, she was entitled to a benefit of $1,000 (full PIA) as of November 2010, but elected to voluntarily suspend her benefit and earned DRCs beginning with November 2010. She earned DRCs until age 67 in November 2011, when she asked to have her benefits reinstated as of November 2011. She earned two DRCs in 2010, which were payable for November 2011 and December 2011 and increased her benefit of $1,013.30. She earned an additional 10 DRCs in 2011, which were first payable in January 2012, and increased her benefit to $1,080.80 effective January 2012.

3. Reporting requirements during voluntary suspension

Beneficiaries are required to report changes that may affect their benefits to the Social Security Administration (SSA) during their voluntary suspension period, as if they are receiving benefits.

4. Medicare payments during voluntary suspension

Medicare premiums are payable by direct billing during the period of voluntary suspense.

5. Voluntary suspension processing for initial claims

For voluntary suspension requests that fall under the rules in effect prior to April 30, 2016:

Use the voluntary delayed retirement credits (VDRC) screen to process voluntary suspension of benefits during the processing of an initial claim. The VDRC screen is available for Modernized Claims Systems (MCS) claims and A101s. For instructions on processing VDRCs, see SM 03020.250, SM 03005.085, and MS COMMON 005.030; and
Document the voluntary suspension request on the Report of Contact (RPOC) screen or on a Form SSA-5002 (Report of Contact).

For voluntary suspension requests that fall under the rules in effect April 30, 2016:

Use the Legislative Suspensions and Reinstatements (LEGI) screen to process voluntary suspension requests during the processing of an initial claim. The LEGI screen is available for MCS claims and A101s. For instructions using the LEGI screen, see SM 03005.145, SM 03020.180, and MS COMMON 005.023; and
Document the voluntary suspension request on the Report of Contact (RPOC) screen or on a Form SSA-5002 (Report of Contact).

REMINDER: An individual does not have to file and suspend to earn DRCs; delaying the initial application will result in the same rate of DRC accrual.

6. Processing instructions for iClaims with voluntary suspension request that falls under the rules effective April 30, 2016.

Review the remarks provided by the claimant in the Remark screen of the MCS path.

The following language is added in iClaims to assist claimants: “NOTE: If you wish to file for benefits and voluntarily suspend them in order to earn delayed retirement credits, please annotate this in the "Remarks" section of your application. For more information, go to Voluntary Suspension Frequently Asked Questions.”

Document the voluntary suspension request on the Report of Contact (RPOC) screen.

7. Voluntary suspension for post-entitlement (PE) actions

For voluntary suspension requests that fall under the rules in effect prior to April 30, 2016:

Use the VDRC screen in the Post Entitlement Online System (POS) to process voluntary suspension requests. For POS input instructions, see MS T2PE 003.013, MS COMMON 005.030, and SM 03020.250; and
Document the voluntary suspension request on a Form SSA-5002 (Report of Contact).

For voluntary suspension requests that fall under the rules in effect April 30, 2016:

Use the LEGI screen in POS to process voluntary suspension requests. For instructions using the LEGI screen, see SM 03005.145, SM 03020.180, and MS COMMON 005.023; and
Document the voluntary suspension request on a Form SSA-5002 (Report of Contact).

B. Voluntary suspension procedures for TSCs

1. TSC processing of voluntary suspension requests

The TSC can receive oral requests for voluntary suspension from individuals who:

are FRA;
have already filed a claim for RIB;
are receiving RIB;
are in LAF C or S6 (DEVADD) on the MBR;
are not receiving SSI;
are not potentially entitled to other benefits, and
are not repaying an overpayment through benefit withholding.

Inform the NH that requesting voluntary suspension of his or her RIB on or after April 30, 2016:

may increase his or her future monthly benefit amount and the potential benefit amount payable to his or her widow(er);
will not allow him or her to retroactively reinstate benefits for any months in the period of voluntary suspension;
will suspend all auxiliary benefits (except divorced spouse) that SSA pays on his or her record for the duration of the period of voluntary suspension; and
will not allow him or her to collect any benefits on another record during the period of voluntary suspension.

For instructions on TSC processing of voluntary suspensions, see TC 11001.130.

2. Document the voluntary suspension request on a Form SSA-5002 (Report of Contact) - TSC referral of voluntary suspension requests to the FO

The TSC refers inquiries about voluntary suspension requests to the FO if the individual is:

not already on the master beneficiary record (MBR) in current pay;
in suspense for an unknown address;
repaying an overpayment through benefit adjustment;
entitled to another benefit, such as Supplemental Security Income (SSI);
calling about his or her voluntary suspension request that was not processed timely;
requesting a future date for their voluntary suspension; or
requesting voluntary suspension of benefits and falls under the rules that are effective April 30, 2016 (LEGI screen does not allow future month inputs).

NOTE: When referring to the FO, TSC technicians must document any requests for voluntary suspension on the #800 Claims Lead Remarks. Include the date of the request and what month they want to suspend benefits. For requests not involving a claims lead, send a Modernized Development Worksheet (MDW) to the FO with the date of the request, suspension month requested, and reason you are unable to process the request. If there is an overpayment, document whether the beneficiary is willing to repay the overpayment in full to allow for voluntary suspension.

C. Voluntary suspension procedures for PSCs

The PSC may receive a request for voluntary suspension directly from a beneficiary or as a referral from a FO or TSC when a POS processing limitations occurs.

For a voluntary suspension request that falls under the rules prior to April 30, 2016, the PSC processes the voluntary suspension using POS or Manual Adjustment Credit and Award Data Entry (MACADE) as instructed in SM 03020.250 and MS COMMON 005.030.

Document the voluntary suspension request on a Form SSA-5002 (Report of Contact).

For a voluntary suspension request that falls under the new rules effective April 30, 2016, the PSC processes the voluntary suspension using POS or MACADE as instructed in SM 03020.180 and MS COMMON 005.023.