Skip to Content

Social Security: Examples , How provisions reduce benefits




Government Pension Offset

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.

Windfall Elimination Provision

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.

Some retirees can get hit by both provisions

Julia, a real Maine teacher, fell victim to the Windfall Elimination Provision. The WEP reduces the earned Social Security benefits of an individual who also receives a public pension from a job not covered by Social Security.

Julia worked in restaurants for 20 years before she went back to school to become a teacher at the age of 53. She taught for 15 years. The Windfall Elimination Provision reduced her $525 Social Security monthly benefit to $152. Medicare takes $45.

Julia, who gets a small Maine state pension, is left with just $431 after other essential deductions. Her husband receives $700 a month as a Social Security benefit. But if he predeceases Julia, the Government Pension Offset will prevent her from receiving any survivor benefits.

That's because the GPO reduces a public employee's Social Security spousal or survivor benefits by an amount equal to two-thirds of his or her public pension.

More real stories about real people

There are countless stories of hardship and some real tragedies caused by the Government Pension Offset and Windfall Elimination Provision amendments to the Social Security Act.

We urge you to read about just some of them.