Social Security child benefits can be claimed by retirees for their minor unmarried children.  Even if all parties are healthy.  Even if none are disabled.  Maybe you haven’t paid attention to Social Security other than the bite it takes from a payroll check.  Oblivious because it hasn’t been applicable.  I was reading a Miss Manners Column about a 63-year-old retiree collecting social security benefits for his healthy minor children.  Wait – What? Can that be true?  I thought Social Security was going broke.  Recall The Money Skinny™ mission is to save you time and money.   Let’s review the qualifications to receive retiree Social Security child benefits and explore an example to better understand this claiming strategy.

Social Security Child Benefits Eligibility

Minor, unmarried children can collect Social Security child benefits if a parent is disabled or deceased.  We know that.  Children, stepchildren and dependent grandchildren are eligible for Social Security child benefits if the parent is getting Social Security retirement payments.  Regardless of child or parent health.  For example, a 62-year-old that is drawing Social Security can claim benefit payments for unmarried children through high school and under 19-years-old.  The Social Security child benefits are half the full retirement parent payment.  Eligibility details are available at Social Security Retirement Benefits for Children.  The child payment is added to the parent’s check.  The more children, the bigger the payment.  Limits apply.

Social Security Child Benefits Limits

Generally the monthly benefit amount for you and your family is limited to 150 to 180 percent of your full retirement benefit.  It doesn’t matter if you take the early retirement benefit or not.  Explore the Social Security website for more information.

It Gets Worse or Better Depending

The parent can collect retirement benefits early at age 62 or a higher amount at full retirement age beginning at 67.  The half payment to the minor child is based upon the age 67 full retirement, not the age 62 early retirement.  Regardless of when the parent begins collecting retirement benefits.  The child gets half of the full retirement Social Security payment even though the parent collects benefits early.  In summary, Social Security treats Junior like his parent is 67, when his parent is actually 62.

Worse if you’re working and paying into Social Security.  That’s the going broke scenario mentioned earlier.

Better for those retirees that significantly delayed having children.

For Example

Suppose the 63-year-old in the Miss Manners column receives $1500 per month collecting Social Security benefits early.  Waiting until 67-years-old means the parent collects a higher benefit of $2000 per month.  A minor son gets half of the higher full-retirement parent benefit until he finishes high school or turns 19-years-old.  At 62, the parent gets $1500 plus $1000 for the son.  $2500 total per month until the son finishes high school or turns 19.

$1500 parent + $1000 son (half of $2000 full retirement) = $2500 per mo

The payment limit in this example would be 150 to 180 percent of $2000.  So $3000 to $3600 per month.  Again, the limit is based upon the full retirement amount.  The parent gets $1500 per month as an early retiree.  Plus an additional $1000 per month for each additional child up to the maximum payment.

Similar to File-and-Suspend Strategy

This seems similar to the discontinued File-and-Suspend strategy.  Read The Money Skinny™ article Social Security Filing Strategy Eliminated for details.  It’s similar due to calculating the child’s payment based upon a higher full retirement benefit while the parent choses the early lower payment.  File-and-Suspend ended with the “Closure of Unintended Loopholes” in the Bipartisan Budget Act of 2015.

Two Parts

There are two parts to this retiree Social Security child benefit.  One is eligibilty of the retiree’s minor children, stepchildren, even grandchildren.  I thought only children who had lost a parent or were disabled received Social Security payments.  Not the case.  Secondly, the amount is based upon the retiree’s higher future payment.  A retiree chooses between getting a lower payment beginning at age 62 or delaying until 67 to receive a higher payment.  The minor child receives half of that higher payment even though the parent is getting the lower payment.  Additionally, delaying retirement works against the retiree because those are years of minor child payments the retiree won’t receive.

Social Security Rules

The person referenced in Miss Manners with two minor children collected over $60,000 in three years.  Following current benefit claiming rules.  That’s a lot of dough.  Having minor children in your 60s and 70s increases your monthly Social Security payment.

• Children can add to retiree Social Security Benefits.  Even if all parties are healthy.
• The child gets half of the full-retirement Social Security payment even though the parent is getting the lower payment.
• Having minor children in your 60s and 70s increases your monthly Social Security payment.