Windfall Elimination Provision and Government Pension Offset
The Windfall Elimination Provision (WEP) “was enacted as part of the 1983 Social Security Refinancing Act, designed to shore up the financing of the Social Security Trust Fund. That Act was signed into law by President Ronald Reagan” (Mass Retirees).
“The Windfall Elimination Provision primarily affects [a public employee who has] earned a pension in any job where [he or she] did not pay Social Security taxes and also worked in other jobs long enough to qualify for a Social Security retirement or disability benefit” (Social Security website).
WEP reduces any earned Social Security in other jobs because of a state pension benefit. “…Reduction in [a] Social Security benefit cannot be more than one-half of the amount of [one’s public] pension that is based on earnings after 1956 on which [he or she] did not pay Social Security taxes…
“The Windfall Elimination Provision may apply if [the public employee reaches 62] after 1985; or [if he or she] became disabled after 1985; and [if he or she] first became eligible for a monthly pension based on work where [he or she] did not pay Social Security taxes after 1985…” (Social Security website).
According to Mass Retirees, “the WEP affects members who apply for their own (not spousal) Social Security benefits and fail to satisfy certain exceptions. A major exception is that members, who were eligible for their public pension before January 1, 1986 (i.e., 20/more years of service under age 55, or 10/more years over 55) or have at least 30 years of substantial coverage under Social Security, are exempt from the WEP. (There is some relief for those with 20-30 years of SS coverage.”
The Government Pension Offset (GPO) is “a provision in the 1977 Social Security Amendments signed into law by President Jimmy Carter” (Mass Retirees).
“The GPO affects members who apply for Social Security spousal benefits, based upon their husband or wife’s work record under the program and fail to satisfy two exceptions. Members must either be eligible for their public pension before December 1, 1982 and meet all requirements for Social Security spousal benefits… or be eligible for their pension before July 1, 1983 and receiving one-half support from his or her spouse. Unless a member satisfies one of these two exceptions, then the amount of their Social Security spousal benefits will be reduced by two-thirds of their public pension” (Mass Retirees).
“In other words, [with] a monthly civil service pension of $600, two-thirds of that (or $400) must be deducted from Social Security benefits. For example, [if the public employee is eligible] for a $500 spouse’s, widow’s or widower’s benefit from Social Security, [he or she] will receive $100 per month from Social Security ($500 – $400 = $100)” (Social Security Website).
As said by the Illinois Education Association, “nine out of ten public employees affected by the GPO lose their entire spousal benefit, even though their spouse paid Social Security taxes for many years. The WEP causes hard-working people to lose up to sixty percent of the benefits they earned themselves. Many workers rely on misleading Social Security Administration statements that fail to take into account the GPO and WEP when projecting benefits.
“Some 300,000 individuals lose an average of $3,600 a year due to the GPO - an amount