The Government Pension Offset affects individuals who apply for Social Security spousal benefits, the amount of their spousal benefits will be reduced by two-thirds of their non-SS-covered pension. It can cause a total loss of Social Security benefits.

The Windfall Elimination Provision affects individuals who apply for their own (not spousal) Social Security benefits. If you do not have 30 years of “substantial income” in Social Security covered work, a complex formula will significantly reduce your benefit. The reduction may be no more than one-half of the government pension to which the person is entitled in the initial month of entitlement to the pension. For 2006, the maximum reduction is $328 a month.

The WEP affects persons who:

1. Work(ed) for a state or local government in non-SS-covered employment;
2. Are entitled to a government pension from that employment;
3. Are also entitled to a Social Security retirement or disability benefit from SS-covered work.

The GPO affects persons who:

1. Work(ed) for a state or local government in non-SS-covered employment;
2. Are entitled to a government pension from that employment. (The Social Security Administration [SSA] deems you to be “entitled to a pension” when you file an application for the pension and a benefit is payable);
3. Are entitled to a Social Security survivor/dependent benefit.

The GPO affects approximately 464,500 individuals, and the WEP affects about one million individuals. The GPO and WEP have had a devastating effect on the retirement incomes of many federal, state and local government employees.

The GPO does not apply for persons who:

• Work the last five years of a state or local government job in a position covered both by Social Security and the same government pension as the non-SS-covered position;
• Receive a government pension from state or local government employment that is not based on their own earnings (such as a survivor’s annuity from a deceased spouse);
• Were eligible for a dependent/survivor benefit before December 1, 1977;
• Were eligible to receive a government pension from non-SS-covered employment before December 1, 1982, and met the requirements for a dependent/survivor benefit in effect in January 1977; or
• Receive a government pension from non-SS-covered military reserve service.

The WEP does not apply for persons who:

• Have 30 or more years of coverage under Social Security. Those with 21 to 29 years of coverage are eligible for a partial exemption; or
• Have a government pension from non-SS-covered military reserve service.

Yes. The trigger is receipt of the pension from non-SS-covered employment.

Yes. For purposes of the GPO, SSA will determine how much the government pension would be if paid monthly and then reduce the monthly survivor/dependent benefit accordingly. For purposes of the WEP, the pension-paying agency will usually prorate the lump sum to determine a monthly amount. If it does not, SSA has a method for determining the amount.

Yes, unless one forfeits the right to the government pension from the non-SS-covered employment (by withdrawing contributions and interest before becoming eligible to receive such a pension). The trigger is whether the person is eligible for the pension from the non-SS-covered work.

No. If an individual subject to the WEP dies and has one or more survivors entitled to a benefit, the SSA recomputes the amount in a manner that eliminates the WEP and results in a higher benefit.

In 1977, Congress revisited the Social Security Act and looked at many issues, including the dual entitlement rule, which forbids an individual from receiving both a Social Security benefit from his/her own work and a Social Security dependent/survivor benefit. Congress decided that someone with both a government pension and a survivor/dependent benefit violates the dual entitlement rule. It reached that conclusion by equating the government pension with a Social Security retirement benefit. Congress could have just as easily determined that the government pension is analogous to a pension from a private sector employment or SS-covered work for a state or local government, in which case no dual entitlement would arise. It chose not to do so, however.

When it enacted the GPO, Congress forgot that the original purpose of the dependent/survivor benefit was to provide additional income to help a financially dependent husband or wife once the breadwinner retires, is disabled or dies. By reducing the dependent/survivor benefit, the GPO harms the financially dependent spouse. Those most likely affected by the GPO are women who spend most of their lives raising their families and who work outside the home for only a short period of time. The GPO has a harsh effect and undermines the original purpose of the Social Security dependent/survivor benefit.

SSA uses a formula for computing Social Security benefits that provides individuals with low average lifetime wages a proportionally higher rate of return on their contributions to Social Security than individuals with relatively high average lifetime wages. Those who have spent most of their careers in non-SS-covered employment with a state or local government and a minimal amount of time in SS-covered employment will appear to SSA as lower-paid workers. Congress enacted the WEP in the belief that one should not receive a Social Security benefit as a low-paid worker, plus receive a government pension from non-SS-covered employment.

The WEP causes public employees outside the Social Security system, such as educators, to lose a significant share of their Social Security benefit. It fails to account for the severe effect of the WEP on low-wage state or local government employees.

They are Alaska, California, Colorado, Connecticut, Georgia*, Illinois, Kentucky*, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island*, and Texas.

* = Not all districts

In the 1960s, state and local employees were given the opportunity to elect to participate in the Social Security system. Public sector employees in 36 states opted to enroll in Social Security in the 1960s and 1970s. The remaining states (or local governments in some states) chose instead to maintain and enhance their existing retirement systems. Since public employees in these states don’t pay into Social Security, they are affected by the offsets. The unintended issue was that many public sector employees held Social Security covered jobs also.

Although the offsets only affect educators who have worked in one of the impacted states, the mobile population assures that there are impacted individuals everywhere. The offsets limit choices for educators who might be unable or unwilling to relocate to an impacted state. Most importantly, the offsets represent unfair public policy.

Police, firefighters, postal workers, air traffic controllers, customs agents, all government employees and many state and local workers are penalized by WEP and GPO.

Addressing the offsets requires congressional action. We seek total repeal of both the GPO and WEP . The Social Security Fairness Act, HR 235, introduced by Representatives Berman (D-CA) and McKeon (R-CA) in the House and S484, in the Senate, introduced by Senator Feinstein (D-CA) would completely repeal the GPO and WEP.

Some of those who oppose repeal of the GPO and WEP cite cost as a factor. Others believe that allowing a person to receive both a full government pension and Social Security survivor/dependent or earned benefits would constitute “double dipping.” Such a scenario should be treated no differently than receipt of a private pension and Social Security benefit. “Double dipping” is not an appropriate characterization when an individual has worked two jobs and earned two benefits.