Q & A
What’s the difference between WEP and GPO?
Complete Question: I know a government pension affects Social Security benefits in some way, but what’s the difference between WEP and GPO? How do I know which one applies to me?
Answer: You are right that government pensions affect Social Security benefits. There are many people (such as teachers who work outside of the school during the summer) who are eligible for both government pensions and Social Security. If this applies to you, your Social Security benefits could be reduced because of your government pension. Both the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) are related to this issue. There is one major difference between them, though.
WEP applies when you worked for a government agency that did not withhold Social Security taxes, but is paying you a pension, while at the same time you paid into Social Security at some other point and earned enough credits to receive Social Security benefits. If this applies to you, you will receive your pension, which could possibly reduce your Social Security benefit depending on how many years you paid into Social Security. (You can email me at cmiles@amacfoundation.com if you would like to determine how WEP will affect your specific situation.) WEP does guarantee that it will not eliminate all of your Social Security benefit, just in case your pension is fairly low. The provision guarantees that the reduction in your Social Security benefit will not be more than half of the amount of your pension. For example, if your pension is $500/month and your Social Security is $1000/month, WEP guarantees that your SS benefit will not be reduced by more than $250. This means your MINIMUM total benefit would be $1,250 ($500 pension + $750 Social Security). Note that this is a minimum, and a true calculation can only be determined after examining a person’s specific work history.
A Government Pension Offset (GPO) is different because it applies to spousal and survivor benefits (WEP applies only to the worker’s benefits). Just like WEP, GPO might lower your Social Security Survivor or Spouse benefits if you are receiving a government pension. Furthermore, the GPO does NOT have a guarantee. There is a possibility that Spousal or Survivor benefits can be reduced to $0. It is also important to note that WEP and GPO reductions are calculated differently.
Thank you for the interesting discussion.
My worked for the US Post office in NY for about 22 years. Then in the private sector for about 15 years.
She began collecting her “deferred annuity” from the USPO at age 62.
She will be eligible for Social Security benefits at age FRA 67.
Her SS benefit before WEP is lower than 50% of the my PIA, so the plan is to for her to start collecting “spousal” benefit at FRA age 67.
Will the spousal benefit be reduced by both WEP & GPO provisions?
Bob,
Your wife cannot separate her personally earned Social Security retirement benefit from her SS spousal entitlement – whenever she applies for Social Security she will be automatically deemed to be filing for all benefits she is entitled to when she claims. But because your wife has a “non-covered pension” from the USPS (and assuming it is a federal CSRS pension), her personally earned SS retirement benefit will be reduced by the Windfall Elimination Provision (WEP), and the “spousal boost” to her own benefit (which she is eligible for as your spouse) will be subject to the Government Pension Offset (GPO). The GPO will reduce your wife’s spousal entitlement by 2/3rds of the amount of her non-covered USPS pension, which may eliminate her potential spousal boost. WEP will affect your wife’s personally earned SS benefit, and the GPO will affect her spousal entitlement from you and, depending on the amount of her USPS pension, your wife may not be entitled to a spousal benefit.
FYI, here is a link to an article I previously published about the GPO: https://socialsecurityreport.org/ask-rusty-government-pension-offset-gpo/
Social Security will make the final determination when your wife applies for her Social Security benefits, but I’m afraid your wife’s SS entitlement may be much less than you are anticipating because of WEP and GPO. If you have additional questions, please feel free to contact us directly at SSAdvisor@amacfoundation.org, or call us at 1.888.750.2622.
Russell Gloor
National Social Security Advisor
THE AMAC Foundation
Hi, I am getting a Italian social security benefits $600, I am also getting a USA S/S benefit $1000. Since I am going to apply for a spousal S/S benefit, will the Italian S/S benefits be added to the USA S/S benefits for the spousal calculation? Being my spousal S/S $1800, would i get a difference of $200 or $800? thanks much Pio
Pio
A foreign pension does not affect the amount of your spousal or survivor benefit, so the increase to your own Social Security benefit of $1,000 should be $800, the full spousal benefit.
If you have further questions please contact us by emailing ssadvisor@amacfoundation.org or calling 888-750-2622
Sharon Kleczka RSSA
AMAC Foundation, Inc.
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i am hopeful that the President will terminate the two Social Security Fairness Act laws, which is the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) in order that I may be able to collect my deceased husband’s social security. it is a shame that my husband paid into the fund his 40 quarters and passed away before he was old enough to collect any of his social security, however, I was told that I can not draw from his record because I retired from the Federal Government. I feel like I am treated very unfairly because, I based my retirement on collecting social security his social security.in order to make ends meet.
Willema,
Legislation to either reform or eliminate both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) have been introduced in every Congress in recent memory. None of these introduced bills have ever made it past being simply introduced and “referred to committee,” where they languish without serious consideration. The most recent bill in the 117th Congress is H.R. 82 – The Social Security Fairness Act of 2021, which proposes to eliminate both WEP and GPO. AMAC, of course, monitors progress on this legislation, but I’m afraid we cannot, based upon history, offer you an optimistic outlook for passage. The so-called “fairness” of WEP and GPO is debatable in Congress, although AMAC supports reform of both of these provisions in the context of broader program changes to restore Social Security to solvency. GPO and WEP were enacted by Congress in 1977 and 1983 respectively, and only Congress can change how these provisions work. So despite the impact these laws have on the retirement income of millions of other public service retirees like you, I’m not optimistic that they will be changed in the foreseeable future.
Russell Gloor
National Social Security Advisor
The AMAC Foundation
Hi
My wife works and pays her own social security tax and receives social security statement every 2-3 years on how much she would get when she reaches retirement age at least 62 and so forth. Can my State pension affect my wife’s social security retirement benefit when she applies for her own benefit not spousal benefit?
Thank you for your time and help.
No, your State pension will not affect your wife’s personal Social Security benefit from her own lifetime work record. The only thing that may be affected would be any spousal benefit your wife might be entitled to from you, because her spousal benefit would be computed using your reduced SS benefit amount (reduced because of your non-covered State pension), which would probably make her ineligible for a spousal benefit.
Russell Gloor
National Social Security Advisor
The AMAC Foundation
If you have at least 30 years of employment during which you had “substantial” earnings and contributed to Social Security during that employment, then you will be exempt from the Windfall Elimination Provision (WEP), but not the Government Pension Offset (GPO). Here is a link to Social Security’s table which shows the substantial earnings levels for each year. https://www.ssa.gov/pubs/EN-05-10045.pdf#page=2 Compare your actual yearly SS-earnings to the substantial levels in the chart to see if your earnings were considered substantial. If you have 30 or more years of “substantial” earnings, then WEP will not apply to you. But regardless of your years of substantial SS earnings, the GPO will apply to any spousal or survivor benefits you are entitled to.
Russell Gloor
The AMAC Foundation
Social Security Advisor
Hi, thanks for the article. Trying to make sure we understand this. I worked in a school district for 17 years, recently retiring with a pension. I also qualify for social security.
Questions…
1. When I file for social security, my amount will be reduced by WEP?
2. If I were to file under my spouse’s record, then GPO applies?
3. If spouse predeceases me, GPO still applies to any benefits I (should) receive?
4. What happens if I get a cola for the pension, is it taken into account for either calculation?
5. How accurate are the WEP and GPO calculators on the SSA website?
Thanks for your help!
Dear Ms. Fromen,
1) Yes, unless you have 30 years of substantial earnings.
2) Yes
3) Yes, any spousal or survivor benefit you are eligible for will be reduced by 2/3 of your pension.
4) The cola added to your pension will reduce the amount of any spousal or survivor benefit you might receive.
5) The calculators are accurate, but remember, just like the amount showing on your SS statement, it is an estimate.
I WORKED 34YRS FOR THE POSTAL SERVICE, WHEN I DIE MY WIFE GETS PART OF MY PENSION.
SHE RECEIVES SOCIAL SECURITY. WILL IT AFFECT HER SOCIAL SECURITY CHECK ?
You wife’s Social Security benefit will not be affected even though she will receive part of your Government pension. In fact, if you also receive a Social Security benefit, and it is higher than your wife’s benefit before the WEP reduction to your benefit, she would also receive your higher benefit.
Also….IF…I purchase (buy) 4 years worth of Soc Security covered employment from a KS school district that I worked in….and have it credited to my MISSOURI retirement system….my last 60 months…..will it count towards…the 60 MONTH EXEMPTION ??? Thanks! PB
It has to be from the same retirement system.
Per the Social Security website:
“An individual may purchase credits for service actually performed in the past under the same retirement system and the purchased months of service may be used to reduce the 60-month requirement. However, if an individual’s current retirement system allows the individual to “purchase” or to “transfer” credits for service performed under a different retirement system to increase his or her annuity, neither the “purchased” nor “transferred” credits are considered service and cannot be used to reduce the 60-month requirement.”
WHO CAN GIVE ME INFORMATION ON HOW TO ELIMINATE THE GOVERNMENT PENSION OFFSET??? THERE’S A RULE…THAT IF YOU WORK YOUR LAST 60 MONTHS IN THE SAME RETIREMENT SYSTEM…AND IT DEDUCTS SOC SECURITY…YOU CAN FILL OUT PAPERWORK AND HAVE THE OFFSET ELIMINATED.!!! HOW DO I DO THIS??? PLEASE GIVE ME INFORMATION.
Dear Pam: Form SSA 3885, Government Pension Questionnaire https://www.ssa.gov/forms/ssa-3885.pdf This form can be obtained on line so you can have it completed when you go in for your appointment at Social Security. Take along any documentation that you have to prove you qualify for the 60 month exception rule.
Do I have to work FULL TIME….the last 60 months? Or…can I work PART TIME for the RETIREMENT SYSTEM…and part time somewhere else ? Do I have to make a “certain amount” of earnings? Or….can I work ONE DAY a MONTH ….or does the RETIREMENT SYSTEM have to “tell me” what to do ? I would like more “specifics”. Thank you! PB
Dear Pam,
I am providing you with the rules from the Social Security web site, along with the website link to the page that contains all the rules for determining a month of credit toward the 60-month requirement.
Determining a month of credit toward the 60-month requirement
a. Social Security covered employment during at least 1 day in a given month constitutes a month of service for purposes of meeting the 60-month requirement. For example, if an individual begins covered employment on July 31, the individual would get credit for the month of July as long as there was no noncovered employment that month under the same pension plan. Any month of noncovered employment covered by the government pension system, whether concurrent or not, excludes that month from Social Security covered employment if it occurred after March 2, 2004.
b. If an individual worked under a written contract or oral agreement, you should use the terms of the written contract of employment or oral agreement to determine if an employer or employee relationship existed and the number of months that relationship existed. For example, if a contract period is 6 months, consider the worker employed for 6 months.
c. Teachers usually work under full year contracts that varies in length; e.g., some are for 12 months and some are for 10 months. Teachers earn 12 months of credit toward the 60-month requirement regardless of the contract length provided that they:
o work the entire contract year; and
o covered for the entire school year by both their own government retirement system as well as Social Security.
However, if a teacher does not work for the entire school year (ex. starts later in the school year, retires mid-year, etc.) give credit only for the actual months that they work under both systems.
https://secure.ssa.gov/apps10/poms.NSF/lnx/0202608107