Controversial WEP & GPO Bill Has Decent Chance of Passage - AMAC & The Hill
The Windfall Elimination Provision (WEP) and Government Offset Provision (GPO) are reviled by public employees, whose Social Security benefits are cut as a result of having only worked sparingly in jobs that paid into Social Security. But not all agree the provisions are unfair, and outright repeal of both would be costly, thus hastening insolvency. Aris Folley of The Hill provides excellent analysis here of the issue. She quotes Social Security expert Andrew Biggs of the American Enterprise Institute, who notes that WEP and GPO “were devised at a time when the government didn’t have kind of all the data it could get today, so they had to have these sort of crude rules to do it. And so, on average, it’s about correct, meaning, on average, people are being treated more or less fairly. But it doesn’t necessarily work fairly in every case. There have been some reforms that propose new data and new formula to try to get much closer to accurate every case, but if you have some people who are being treated unfairly, just law of averages means you’ve got other people who are getting a better deal than they should be getting.”
The bill dubbed The Social Security Fairness Act is slated for a House vote in the lame duck session (after the election), having received over the 218 vote threshold in a discharge petition to force a floor vote. Senate passage is uncertain. Full piece here.
I appreciate your knowledge of this controversial matter. Most articles define both WEP and GPO as ‘stealing’ benefits. No one mentions the fact that the dollars they aren’t paying into SS in their ‘non-covered’ employment can be invested throughout their career, unlike those individuals who have ‘covered employment’ and pay into the SS system. Every little bit helps, and working in ‘uncovered employment’ gives the individual the opportunity to invest the amount they would be otherwise be paying into SS. Many sides to this issue, for sure. Your position, as follows, is on point: The outcome of H.R. 82 remains something that the future must decide, but hopefully, Congress will ensure that “fairness” is applied equally to all Social Security recipients.
Teri:
A sincere thanks for your well-articulated synopsis of the WEP/GPO issue. There is another point often overlooked in the argument on the “fairness” of these provisions, and that relates to the design of pension plans for those in jobs that do not participate in Social Security. Typically, these plans are designed to compensate for the absence of Social Security benefits.
Again, thank you for your comments.
Gerry Hafer
Certified Social Security Advisor
The AMAC Foundation
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The WEP and GPO has effected my monthly income by over $700+. I have paid into Social Security well over 10+ years, qualify for all benefits but do not receive any. I also worked as a teacher for almost 30 years, I am a widow now and still working at a job that I continue to pay into Social Security that I will never see unless this passes. I am living on $20,000 before taxes, I have worked hard all my life so I could at least live without worry, but not happening.
Hi Kathy,
WEP (the Windfall Elimination Provision) cannot eliminate your Social Security retirement benefit, so if you have “over 10+ years” contributing to Social Security (and at least 40 SS “quarter credits”) you should get at least some Social Security retirement benefit. WEP will reduce your Social Security retirement amount, but does not completely eliminate it. Especially if you now work and are contributing to Social Security via payroll taxes, you should contact Social Security at 1.800.772.1213 (or your local SS office) to explore whether you are eligible for at least some SS retirement benefit. Based on what you’ve shared, you likely are, in spite of WEP.
Since you say you are a widow, any survivor benefit you might have been entitled to from your deceased husband will be separately affected by the Government Pension Offset (GPO). The GPO will reduce any surviving spouse benefit you are entitled to by 2/3rds of the amount of your non-covered teacher’s pension, which can actually eliminate your surviving spouse benefit. But that is separate from your SS retirement benefit, so I suggest, with over 10 years contributing to Social Security, you contact the Social Security Administration at the above number to determine if you are eligible for a Social Security retirement benefit (which can be reduced, but not eliminated, by WEP).
Russell Gloor
Certified Social Security Advisor
The AMAC Foundation
WEP is unfair and the bill should be passed.
Hi Kimberly,
WEP is considered “unfair” by many, especially those who are affected by it. But there are also others (including many in Congress) who believe the fundamental premise of WEP is sound – to wit, those with a pension earned without contributing to Social Security should not get the same level of benefits as those who have contributed to SS for a lifetime. This issue will, I’m sure, continue to be controversial even if H.R. 82 comes to a vote in Congress. But we fully understand and respect your opinion, and will continue to monitor progress on H.R. 82 in Congress.
Russell Gloor
Certified Social Security Advisor
The AMAC Foundation
Many have worked 2 jobs simultaneously, contributing to social security for 20+ years, not sparingly as suggested. Why should their earned pensions be treated differently than those of a parent who stays at home to raise children, and does so by choice? Why cut their pensions when there are millions collecting benefits that have not worked a day in their lives? What about those with a foreign pension that are affected? They are never mentioned, social security is withholding 60% of my pension because I have a small pension from England. I paid social security to both countries on every cent earned, but the SSA is taking the WEP law and is bending it to suit their own purpose. The amount they take continues until the day that you die, like a mortgage with no pay off date, they are collecting on average 3 times what the social security tax would have been every single year. They don’t want to look at this because they don’t want to loose the $19 billion they are stealing from us each year. For 40 years public servants and those with a foreign pension have been propping up an ailing SS system.
Tell me why this should be our responsibility?
Again laws that affect those on low pay, at the peak of my career I earned $50,000 a year, but my average lifetime was $22,000. I paid social security taxes for 48 years to 2 countries in accordance with the legal agreement between our 2 countries. This agreement protects nationals from both countries so that they don’t pay double taxes. Now, and for the rest of my life, I am being penalized in the sum of $5400.00 per year, because I didn’t pay double taxes? If I paid the USA the ACTUAL amount that would have been due on my UK wages, I would have paid $16,000 for my 13 missing years. The SSA will have taken this much from my pension in just 3 years, anything they collect from 2026 onwards is just gravy for the system, if I live to 80, they will have taken $70,200.00 more than they would have been due in taxes. Now tell me that this is fair, and they have been robbing us for 40 years. How about you dig a little deeper, include the facts of some individual stories, there are many, widows and widowers in particular who are reduced to poverty by these laws. They are having to apply for benefits to survive, when I mentioned the offset cost of benefits to my congressman, I was told that the offset benefits were not as significant as the cost, in other words he was happy to continue stealing our rightfully earned pensions to prop up the system.
Of course congress don’t care because they exempted themselves from these laws! What about all the landlords that have an income untouched by social security, or those with an income from their investment portfolios also untouched by social security or everyone earning more than $167,000 a year who pay no social security on their earnings above that threshold? How about we take 60% of their SS pensions? Let’s have a conversation about that!
Not one local or National media outlet has really done their homework to present the true facts of this theft and the way it is affecting folks, but every single one of you want teachers in your child’s classroom and every single one of you wants a response when you dial 911 and all of these public services are facing recruitment crises in every state, mostly because they are amongst the worst paid professions, but also because the word is out there, if you spend any time, even a few years, in these professions it could cost you your retirement income. Finally, for the record, there is a law that the SSA must tell you if you are likely to be affected by either of these laws. A law that they break every day! Most have no time to plan for their financial futures because this law is constantly broken, I found out the day I got my letter telling me that my pension would commence and telling me how much I would receive. By then it was too late for me to get my job back.
Repeal these laws now, then tackle the issue of insolvency in a way that is fair to rich and poor alike. Stop placing the burden on 6% of the population, enough is enough!
Yvonne,
Thank you for your feedback on the article posted at our SocialSecurityReport.org website. As you are obviously aware, the controversy over the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) still continues, decades after the provisions were first passed. As noted in the posted article, H.R. 82 (The Social Security Fairness Act) proposes to eliminate those provisions, but doing so still leaves the question of “fairness” unresolved. The current legislative version is only one of many previous (failed) bills which would have changed the way WEP/GPO affects Social Security. The entire purpose of these two provisions was to equalize the way benefits are paid to ALL Social Security recipients – those with, and those without, a separate pension earned without contributing to Social Security.
As discussed in the posted article, the methodology for determining WEP/GPO benefits was developed a long time ago – before the government had access to the data it has available today. For that reason, the article notes that some people are being treated “less fairly” than others when it comes to determining their WEP and GPO benefits. Nevertheless, the question of “fairness” is important, because it wouldn’t be fair, either, to provide better benefits to those with a pension earned outside of Social Security than to those with no such pension who contributed to SS for their entire lifetime. Many feel that simply eliminating WEP/GPO would be unfair to those who have spent their lifetime contributing. It is, indeed, a controversial topic, and you may find our recent webinar on this topic helpful. See this: https://amacfoundation.org/video/wep-gpo-repeal-or-not-you-decide/
From what you’ve shared, I assume you believe you are in the category of being “less fairly” treated, because you contributed to U.S. Social Security for a substantial number of years working in the U.S. outside of your government position. You apparently also worked in the U.K. and, I assume, used the joint “totalization agreement” to gain eligibility for a U.K. pension. Both your U.S.- based government pension and your U.K. pension were, therefore, earned without contributing to U..S. Social Security. So, it is the Social Security benefit you earned while working elsewhere in the U.S. which is affected by WEP/GPO.
FYI, if you have more than 20 years contributing to Social Security from substantial earnings, your WEP reduction is mitigated and, if you have at least 30 years the WEP penalty is eliminated. You say you “paid Social Security taxes for 48 years” and, if over 20 of those were in the U.S., you may be entitled to a reduced WEP penalty. If that is the case, you should contact Social Security to ask that your WEP penalty be recalculated based on your current SS contributions.
One final clarification: Except for those who joined Congress prior to 1987, all Congressional staff contribute to Social Security from their pay so are not affected by WEP or GPO. Those who joined Congress prior to 1987 did not pay into Social Security and, thus, are affected by WEP/GPO just like all other SS recipient, because they have a non-covered “CSRS” (Civil Service Retirement System).
Yvonne, I fully understand your belief that WEP and GPO are “unfair” but, please understand too that the provisions were not enacted to penalize anyone – they are meant to equalize the way Social Security benefits are paid to all. The outcome of H.R. 82 remains something that the future must decide, but hopefully, Congress will ensure that “fairness” is applied equally to all Social Security recipients. One of the often-discussed compromise positions is to use modern statistical data to recalculate the formulas used in the benefit determinations rather than to totally eliminate the WEP and GPO methodologies, both of which are fundamentally fair in their intent.
Again, thank you for sharing your views on this topic with AMAC.
Russell Gloor
Certified Social Security Advisor
The AMAC Foundation