When it comes to Social Security, many government employees have questions about two provisions of the law that may affect them. These provisions are the Government Pension Offset and the Windfall Elimination Provision.
Here are some questions and answers that should help readers understand what the two provisions are about.
Q. Who is affected by Government Pension Offset and Windfall Elimination Provision?
A. Government employees are. The Government Pension Offset reduces the potential Social Security spouse’s/widow’s/widower’s benefit amount someone could receive if he or she also receives a pension from a federal, state or local government for work on which no Social Security taxes were paid. The Windfall Elimination Provision can reduce a worker’s monthly Social Security benefit amount, if he or she also receives a pension from work not covered by Social Security.
Q. What is the purpose of these provisions?
A. They are designed to ensure that all American workers are treated equally under the Social Security system. Government Pension Offset stipulates that any Social Security spouse’s or widow’s benefit that a worker might be entitled to must be reduced by two-thirds of that worker’s government pension. Why? Well, the offset removes an advantage that some government workers once had.
Before the offset, a person who worked in a government job that was not covered under Social Security could receive, in addition to a government pension based on his or her own earnings, a full Social Security spouse’s or surviving spouse’s benefit. No other workers had this option because Social Security benefits payable to a person as a spouse or surviving spouse must be offset, dollar for dollar, by the amount of that person’s own Social Security benefit.
Similarly, the Windfall Elimination Provision takes away an advantage that the regular Social Security benefit “formula” would give people who have substantial pensions from non-Social Security covered jobs. Without the provision, a worker who spent most of his or her career in employment not covered by Social Security and who worked for a short time to get Social Security coverage would end up with much higher benefits than if all of his or her work were done under Social Security.
Q. How many retirees actually see an effect in their benefit payments?
A. Last year, out of more than 55 million Social Security beneficiaries, only about 567,900 were affected by the offset provision. Also, last year there were nearly 1.3 million retired and disabled workers who had their Social Security benefits partially reduced by windfall elimination.
The above information provides just a brief overview of these two provisions. For more information, including examples of just how the two provisions work in real-life situations, visit the Social Security website at www.socialsecurity.gov/gpo-wep or call toll-free, 1-800-772-1213 (for the deaf or hard of hearing, call our TTY number, 1-800-325-0778) and ask for Social Security publications on the Government Pension Offset or the Windfall Elimination Provision.