Some employees of federal, state, and local governments and nonprofit organizations could be eligible for pensions not covered by Social Security. If you now or have worked for an employer who isn't required to pay into Social Secuity, but pays into a pension plan, your Social Security benefits could be affected because of the windfall elimination provision.
This provision primarily affects people who earned a pension while working for a govenment agency and/or jobs that didn't require the payment of Social Security taxes along with other jobs that did require the payment of Social Security taxes. In other words, if you are eligible for a pension and Social Security benefits, your Social Security benefits will be reduced because of the windfall elimination provision. If you fall into this category, the formula used to figure your Social Security is modified to prevent a windfall from provisions aimed at low-income workers. The modified formula does not apply to survivor benefits or if your only pension is based on railroad employment. For more information on the Windfall Elimination Provision, go to the Social Security WEP webpage or the Social Security Retirement Planner WEP webpage. To estimate your Social Security benefit if you have a pension not covered by Social Security, there is an online calculator
The Government Pension Offset
If you are eligible to receive a pension from work not covered by Social Security, any Social Security benefits you might be eligible to receive as a spouse or widow/widower on someone else's record could be reduced because of the government pension offset ruling.
This government pension offset will reduce your spousal or widow/widower's benefit by two-thirds of the amount of your non-Social Security pension. As an example, if your non-Social Security pension is $600, two-thirds, or $400 will be used to offset your spousal or widow/widower's benefits. In other words, your Social Security benefit from your spouse's record will be reduced by $400. To estimate your future spouse's, widow's or widower's benefits under GPO, the Social Security Administration has provided a GPO Calculator
.This offset was put into place because many government employees were qualified for a pension from their agencies and for a spouse's benefit from Social Security even though they were not dependent upon their spouse. The Social Security spouse's benefits were originally intended to provide income for men and women who were financially dependent upon their spouse who worked at jobs covered by Social Security, not as additional income for those already receiving benefits.
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