Over the course of the years that our Association has been fighting to repeal Social Security’s GPO (Government Pension Offset) and WEP (Windfall Elimination Provision), we have received hundreds of communications from our members and other interested parties. Here are some of the most frequent questions and our answers to them.
WHAT IS THE GPO?
The GPO affects members who apply for SS spousal benefits, based upon their husband or wife’s work record under the program, and fail to satisfy two exceptions. Members must either be eligible for their public pension before December 1, 1982 and meet all requirements for SS spousal benefits in effect in January 1977 (i.e., husband received one-half support from his wife), or be eligible for their pension before July 1, 1983 and receiving one-half support from his or her spouse.
Unless a member satisfies one of these two exceptions, then the amount of their SS spousal benefits will be reduced by two-thirds of their public pension. For example, if your pension is $9,000 and you’re eligible for $6,000 in SS spousal benefits, two-thirds of your pension ($6,000) would unfortunately reduce your SS benefits to zero. Note: Even if you do not receive actual benefits, you can still be covered by Medicare.
The GPO was a provision in the 1977 Social Security Amendments signed into law by President Jimmy Carter, at a time when the Democrats controlled both the House and Senate. The provision originated in the Senate Finance Committee, then chaired by Sen. Russell Long (D-LA). House Ways and Means Committee Chairman Al Ullman (D-OR) pushed through an amendment in the House to provide a five-year transition period so that the GPO was not effective until 1982. Subsequent amendments changed the effective date to 1983, and applied the $1-for-$1 offset against two-thirds of the pension, instead of the entire pension used as the offset in the original provision.
The WEP affects members who apply for their own (not spousal) SS benefits and fail to satisfy certain exceptions. A major exception is that members, who were eligible for their public pension before January 1, 1986 (i.e., 20/more years of service under age 55, or 10/more years over 55) or have at least 30 years of substantial coverage under Social Security, are exempt from the WEP. (There is some relief for those with 20-30 years of SS coverage.)
If a member doesn’t satisfy the exceptions, then they are subject to the WEP, meaning that their SS benefits will be calculated using a different formula. Under that different formula, instead of receiving 90% of the first $606, which the member earned on the average each month (in this case, $545.40), the member would receive only 40% of their first $606 ($242.40) – more than 55% less in benefits.
The WEP was enacted as part of the 1983 Social Security Refinancing Act, designed to shore up the financing of the Social Security Trust Fund. That Act was signed into law by President Ronald Reagan, after being adopted by the Democratic-controlled House where Rep. Dan Rostenkowski (D-IL) chaired the House Ways and Means Committee and the Republican-controlled Senate, where Sen. Robert Dole (R-KS) chaired the Senate Finance Committee.
In addition to Massachusetts, there are 26 states that have public retirees and employees who could be hurt by either the GPO/WEP. Like the Commonwealth, the first 6 states, listed below, have almost all or a large majority of their employees not contributing to Social Security, and, therefore, potentially affected by these laws as retirees. The remaining 20 states are ranked in terms of the percent of employees who may be impacted (66-16%). They are: California, Colorado, Illinois, Louisiana, Ohio, Texas, Florida, New York, Nevada, Connecticut, Kentucky, Minnesota, Georgia, Missouri, Michigan, Tennessee, Wisconsin, Washington, Indiana, Pennsylvania, Alaska, Maine, Hawaii, Montana, New Mexico and New Hampshire.
As with any issue – be it at the federal or state level, it’s vital to keep informed.
Second, timing is critical. Over the years, we have called upon members, in specific parts of the country (i.e., Florida, Maine, Vermont, etc.), to contact their congressmen and senators on the GPO/WEP. While we do not discourage individual initiative on these issues, please act if and when we contact you – that’s when we believe you can have the greatest impact.