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Social Security changed earnings limit penalties for survivor benefits? Getting partial payments instead of withholding all?

I started receiving Social Security survivor benefits when I turned 60 back in 2021. For the past 4 years, I've consistently earned above the earnings limit, which I know affects my benefits. The way it's worked is that SSA completely stops my survivor payments until around June/July each year, then I receive full payments for the remaining months. Here's what I'm wondering - has SSA recently changed how they handle the earnings limit penalties? I heard from a coworker that they might now just reduce each monthly payment by a percentage instead of withholding everything for months at a time. So instead of getting ZERO for 6-7 months and then FULL payments for 5-6 months, you'd get PARTIAL payments all year long. This would be so much better for my monthly budget if true! It's really difficult planning around 6+ months of no survivor benefits followed by larger payments later in the year. Has anyone experienced this change? Is this something new for 2025?

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14 comments

Rajiv Kumar

•2M

Yes, there was a change in how SSA handles the earnings test withholding! Starting in 2024, they implemented a more proportional method where they withhold a percentage of your benefits each month rather than withholding 100% of benefits until the "debt" is paid off. The change was part of their systems modernization efforts to help beneficiaries with budgeting. Instead of withholding all benefits for X months, they'll reduce each monthly payment by calculating your annual excess and spreading the withholding throughout the year. You'll need to contact SSA to make sure your record has been updated for this new calculation method, but it's definitely a positive change for those who work while receiving survivor benefits before FRA.

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Liam O'Reilly

•2M

Be careful with this info! I just called SSA last month about this exact situation and the rep told me the old system is still in place for most people. They said something about a "phased implementation" and that not everyone is being switched to the new system at once. It depends on your benefit processing center and other factors. You DEFINITELY need to call and confirm your specific situation. Don't assume you'll start getting partial payments until SSA confirms it for your particular case. They told me my benefits would still be fully withheld for the first half of 2025 because my processing center hasn't implemented the new system yet.

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Ava Harris

•2M

I was having the same problem trying to reach SSA about my disability review. After getting disconnected 4 times, I used a service called Claimyr (claimyr.com) that got me through to an agent in about 20 minutes. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU - basically they wait on hold for you and call you when an agent picks up. Saved me hours of frustration. Worth it to get a clear answer about whether you're on the new proportional withholding system or not.

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Jacob Lee

•2M

Let me clarify the actual policy: The Social Security Administration has implemented what they call "proportional withholding" for the earnings test, but it's being rolled out gradually. Here's how it works: 1. They estimate your annual earnings that exceed the limit 2. They calculate the total amount to be withheld based on the $1 for $2 or $1 for $3 rule (depending on whether you're before or in the year of FRA) 3. Instead of withholding 100% of benefits until the withholding amount is satisfied, they now withhold a percentage from each payment For example, if they need to withhold $6,000 for the year and your monthly benefit is $1,000, under the old system they'd withhold 100% of your benefits for 6 months. Under the new system, they might withhold 50% of each monthly payment all year. But remember, this doesn't change the TOTAL amount withheld - just how it's distributed throughout the year. You'll still lose the same amount to the earnings test either way.

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Rajiv Kumar

•2M

The rationale behind the earnings test is that Social Security retirement benefits are designed to replace lost income when someone retires. If you're still working and earning significant income, the program reduces benefits accordingly. However, remember that any benefits reduced due to the earnings test are recalculated into your benefit amount when you reach Full Retirement Age, so you'll get that money back in the form of higher monthly payments later. It's not actually a penalty in the long run.

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Isabella Russo

•2M

I really appreciate all the responses! I'm going to call SSA tomorrow to find out if I'm under the new proportional withholding system or still on the old all-or-nothing approach. Either way, it's good to know that changes are happening, even if gradually. And just to be clear - I understand I'll still lose the same TOTAL amount to the earnings test either way. I'm just hoping for smaller reductions spread throughout the year rather than zero benefits for half the year. Makes budgeting so much easier!

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