TN 6 (10-16)

Prior to January 2000, the Social Security Administration (SSA) reduced or suspended retirement insurance benefits (RIB) for a beneficiary who had reached full retirement age (FRA) and was still working based on the annual earnings test (AET), or the foreign work test (FWT). RIB beneficiaries who did not receive benefits based on work after they attained their FRA were able to receive delayed retirement credits (DRCs) until age 70 (age 72 prior to 1984, per RS 00615.690), at which point the AET and FWT no longer applied.

Beginning January 2000, the Senior Citizens’ Freedom to Work Act of 2000 eliminated the AET and the FWT for beneficiaries at FRA. The Act also permitted primary beneficiaries to voluntarily suspend RIB payments to earn voluntary delayed retirement credits (VDRC) effective with FRA and up through the month prior to age 70. Beneficiaries could elect to reinstate benefits prospectively or retroactively.

Effective December 8, 2010, with the publication of the voluntary suspension regulation, RIB beneficiaries could only prospectively suspend benefits. Suspension of benefits could start no earlier than the month after SSA received the request for voluntary suspension. However, for new RIB applications, voluntary suspension of current or retroactive benefits (retroactive up to the earlier of 6 months or FRA) was possible before SSA made a determination that he or she was entitled to benefits and before SSA made a payment. Voluntary reinstatement of benefits could be effective for the current month, a future month, or any past month during the suspension period up until the month before the month the beneficiary attained age 70.

On November 2, 2015, the Bipartisan Budget Act (BBA) of 2015 was signed into law. Section 831(b) of the BBA affects our rules for voluntary suspension of benefits. The new law applies to individuals requesting voluntary suspension who (1) attain FRA on or after April 30, 2016, and to individuals who (2) attain FRA prior to April 30, 2016, but submit their voluntary suspension request on or after April 30, 2016.

The new rules are:

• an individual may not receive benefits for the period of voluntary suspension;

• no auxiliary benefits (except divorced spouse’s benefits) may be paid on the record of a number holder (NH) who requests voluntary suspension for the period of voluntary suspension;

• an individual who requests voluntary suspension cannot receive benefits on another record for the period of voluntary suspension; and

• voluntary suspension will end with the earlier of (1) the month following the month in which an individual requests reinstatement of benefits or (2) the month in which the individual attains the age of 70.

NOTE: An individual, voluntarily suspended under the rules in effect prior to April 30, 2016, continues to fall under those rules for purposes of his or her own benefits, reinstatement of benefits, and eligibility for auxiliary or survivor benefits on another record, for that period of voluntary suspension.

If an individual who was previously in a period of voluntary suspension prior to April 30, 2016, later requests a second period of voluntary suspension on or after April 30, 2016, the new suspension follows the rules in effect April 30, 2016.

For more information see:

• GN 00206.000 Withdrawal

• RS 00615.690 Delayed Retirement Credit (DRC)

• RS 02501.000 History

• RS 02605.000 Work Outside the U.S.A.