What are the Government Pension Offset and Windfall Elimination Provision?
Two provisions of federal law reduce a person's Social Security benefits if he/she is also receiving a public pension:
- The Government Pension Offset (GPO) reduces an individual’s Social Security survivor benefits (available to a person whose deceased spouse had earned Social Security benefits) by an amount equal to two-thirds of his/her public pension.
Example:
A widowed retired educator has earned $600 per month from her state retirement plan after 25 years of service. Her deceased husband worked in the private sector and paid into Social Security his entire working life. She normally would be entitled to monthly Social Security survivor benefits of $850.
Because she works in a state where public employees do not participate in the Social Security system, the Government Pension Offset cuts her survivor benefits by two-thirds of her $600 monthly retirement payment or $400. Her survivor benefits instead equal $450 - nearly half of the $850 she would normally receive.
- The Windfall Elimination Provision (WEP) changes the formula used to figure benefit amounts – reducing an individual’s own Social Security benefits (earned while working in a job covered by Social Security).
Example:
A teacher taught 17 years in one state, then moved to a different state and taught another 14 years. According to the Social Security Administration, she earned monthly benefits of $540 per month for her contributions paid into the Social Security system while she worked in the first state.
Because public employees in the second state do not participate in the Social Security system, her actual monthly benefits will be cut $196 due to the Windfall Elimination Provision. She will receive $344 per month from Social Security instead of the $540 she earned.
What is the History of the GPO and WEP?
Who is Affected by the GPO and WEP?
What is the Impact of the GPO and WEP on Affected Individuals?
Why are the GPO and WEP Unfair?
What is the Impact of the GPO and WEP on the Teaching Profession?
What can be Done to Fix the GPO and WEP?
What can I Do to Help Fix the GPO and WEP?