The annual earnings test and other family members

Q: When younger than full retirement age (FRA), I know that my earnings can lower Social Security retirement payable during the year. Is there a retirement earnings test work limit for other family members also receiving Social Security?

A: Yes. The specific type of Social Security benefit involved could make a difference here but the general answer is that anyone younger than full retirement age and receiving Social Security benefits is covered by the annual retirement earnings test.This could include a spouse, child, widow(er) and others.

The major exception is someone receiving Social Security because of his or her own disability. Whether receiving through his or her own work record or that of a parent or spouse, a person receiving Social Security due to their disability must notify Social Security when starting employment. While the annual earnings test does not apply in these situations, many disability work incentives exist.

 Example 1: Social Security benefits paid through one work record

For example, you receive Social Security retirement and are younger than your full retirement age (FRA), so the annual earnings test applies to you. If your spouse also receives Social Security through your work record, and is younger than his or her own FRA, then the earnings test will apply separately to each of you. If younger than FRA in 2013, annual earnings can go up to $15,120 gross wages or net self-employment before reducing benefits for the year. In this example, you each could individually earn that amount. Earnings test amounts cannot be combined if only one of you is working.

Even though you each have your own earnings test limits, if other family members get benefits based on your work, your earnings after you start getting retirement benefits could reduce their benefits, too. However, if your spouse and children get benefits as family members through your record, their earnings affect only their own benefits.

 Example 2: Social Security benefits paid through two work records

Here you and your spouse each receive Social Security retirement through your individual work records. Neither receives spousal benefits on the record of the other. As before, assuming you both are younger than your individual full retirement ages, the earnings test applies separately to each of you. Also as above, the earnings test is individual. Limits cannot be combined if only one of you is working.

Unlike the first example where benefits were through one Social Security work record, here two separate work records are involved. Since retirement benefits are being paid through each person’s own work record, earnings of one person will not affect the SSA benefits of the other.

See “How Work Affects Your Benefits” at www.socialsecurity.gov/pubs/10069.html

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