Answers to the frequently asked questions about GPO WEP FAQ
Policy Questions
1. What are the Social Security Offsets?
The Government Pension Offset and the Windfall Elimination Provision are laws that were instituted in the early 80’s to remedy what some saw as an unfair advantage that public workers had with their pensions. They cut back, or in the case of the GPO usually completely eliminate, Social Security retirement benefits that have otherwise been fairly earned by government workers.
2. Who is penalized by GPO/WEP?
Teachers in 15 states and police, firefighters, postal workers, air traffic controllers, federal government employees (hired before 1983 on CSRS), & some state, county, local & special district workers are penalized by GPO/WEP. Even a foreign pension can reduce or eliminate Social Security benefits.
3. In which 26 states are state, county, municipal and special district employees penalized by the GPO/WEP?
There are 26 states where this occurs, with the largest populations in California, Colorado, Illinois, Louisiana, Ohio and Texas.
4. In which 15 states are teachers penalized by the GPO/WEP?
They are Alaska, California, Colorado, Connecticut, Georgia*, Illinois, Kentucky*, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island*, and Texas. (Starred states mean only some school districts affected)
5. Why should legislators in other states care?
Today’s mobile population assures that there are impacted individuals in every state. Most importantly, the offsets represent unfair public policy and primarily hurt middle income as well as low income retirees.
6. What is the Government Pension Offset (GPO)?
The Government Pension Offset is a Social Security provision that penalizes individuals who apply for Social Security spousal or survivor benefits, if they themselves worked for a state or local government in non-SS-covered employment and are entitled to a government pension from that employment. Once they receive that benefit, their earned Social Security spousal or survivor benefits will be reduced by two-thirds of of the amount of their non-SS-covered pension. If their public pension receives a cost-of-living increase, their spousal or survivor benefit will be reduced by ⅔ of that amount.
7. Who does GPO penalize?
The GPO affects persons who:
–Work(ed) for a state or local government in non-SS-covered employment;
–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);
–Are entitled to a Social Security survivor/dependent benefit from a marriage that lasts 10 years or longer.
8. Why is the GPO an unfair policy?
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. Of those penalized by GPO, 83% are women, many of whom have spent much of their lives raising their families and have worked 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.
9. What is the Windfall Elimination Provision (WEP)?
The WEP is a penalty imposed on one’s own Social Security retirement benefit when one begins to collect a pension from a public agency that did not collect FICA taxes during your employment.
10. Who does WEP penalize?
The WEP affects persons who:
Work(ed) for a state or local government in non-Social-Security-covered employment;
Are entitled to a government pension from that employment;
Are also entitled to a Social Security retirement or disability benefit from SS-covered work.
11. Why did Congress enact the WEP?
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.
12. What are the exceptions to WEP?
The WEP does not apply for persons who:
Have 30 or more years of “substantial earnings” 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.
(Substantial earnings are about four times the amount necessary for Social Security Credit)
13. Why is the WEP an unfair policy?
The WEP penalizes those who have had two jobs: One job which entitles them to a Social Security retirement or disability benefit from work which paid the required SS taxes and a second job which did not pay Social Security taxes, but instead entitled them to a pension from a separate pension system. These pensions were earned separately and differently from Social Security, yet they are used to reduce the amount of Social Security benefits that a worker receives during retirement. When participation is required by both Social Security and also State and local pensions, the public pension is earned and collected separately.
Everyone who pays full Social Security taxes should receive full benefits.
14. Does the WEP penalize the Social Security survivor benefit to which a spouse and minor children are entitled if a wage earner dies?
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.
15. What are the arguments on the other side?
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 or other source of income and Social Security benefit. “Double dipping” is not an appropriate characterization when an individual has worked two different jobs and earned two different benefits.
16. What can be done to address the offsets?
Addressing the offsets requires Congressional action. We seek total repeal of both the GPO and WEP. In the 118th Congress (2023-24) the House of Representatives Social Security Fairness (full repeal) bill is: HR 82 introduced by Garret Graves (R-LA) and Abigail Spanberger (D-VA).
17. Do the offsets apply if a government pension from non-SS-covered employment is taken as a lump sum?
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.
18. When do the offsets begin?
The trigger is receipt of the pension from non-SS-covered employment.
Example: The offsets will apply when one retires from non-SS-covered employment, and begins drawing the government pension.
19. How many people are penalized by the GPO/WEP offsets?
GPO: In December 2021, about 724,000 Social Security beneficiaries, about 1% of all beneficiaries, had their benefits reduced by the GPO. Of those people penalized by GPO 71% lose their entire Social Security benefit. 83% of those affected by the GPO tare women.
WEP: According to the Social Security Administration data, as of Dec. 2021, nearly 2 million Social Security beneficiaries were penalized by the WEP. These affected workers were about 3% of all Social Security beneficiaries.
20. What will full repeal of the offsets cost the Social Security program?
The cost of a total repeal of both the Government Pension offset and the Windfall Elimination Program is estimated to be less than 1 ½ % of the total amount of Social Security expenditures each year.