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When Does WEP NOT Impact My Social Security?

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Recently we covered the Windfall Elimination Provision a bit more completely, including how to eliminate WEP and how WEP can impact your dependents. This prompted quite a few folks to write to me about their own situations, wondering if WEP would impact them.  So today we’ll cover those cases where you might be wondering about this, when WEP does NOT impact your Social Security.

First of all, if you have worked all your life in a job where Social Security tax was withheld, WEP does not impact your Social Security at all. This is true even if you worked in a government job – as long as your wages (earnings) were subject to Social Security tax withholding, WEP will not impact you.

As well, if you have worked and received substantial earnings from Social Security covered jobs for 30 or more years during your career, and you also have a pension coming from a non-SS-covered job, then WEP will not impact your Social Security benefit.

In addition, if you worked in a job where the earnings were not subject to Social Security tax withholding, but you didn’t work there long enough to generate a pension from those earnings, then WEP will also not impact your Social Security. This is to say, if you do not have a pension (of any type, lump sum, annuity, or other) coming from the non-Social Security-covered job, WEP does not impact your Social Security.

Also, if you are receiving a pension based on someone else’s work – your spouse for instance – that was not subject to Social Security taxation, this pension will not cause WEP impact to your own Social Security, or to a spouse benefit from Social Security. WEP is based upon a pension being received for YOUR work, and it would impact YOUR retirement Social Security benefit. In this case, the pension is not based on your work, it is based on your spouse’s work.

Another way that you could be receiving a pension from a non-Social Security-covered job where WEP would not impact you is if the pension is from a foreign (non-US) government that has a totalization agreement with the United States Social Security system. It’s highly unlikely that this situation would come about because the totalization agreement typically means that your credit in one government’s system is applied to the other government’s system and you only receive one of the pensions. I only mention this situation to complete the picture of possibilities.

Lastly, if you have received a lump sum payment of a pension from a job where Social Security taxes were not withheld, and you have lived past the actuarially-defined timespan that the pension was determined to last, then WEP will no longer impact your Social Security benefit.

I can’t say for sure that this is an exhaustive list – this is just the list that comes to mind at the moment. If you have other situations where WEP is not impacting you, please let me know in the comments section below.

46 Comments

  1. Elizabeth A says:

    I believe from the article WEP won’t impact me, I receive half a pension from my ex. It does go through OPM and is in my name, not paid like alimony straight from him. I have a small amount of Social Security to collect when I want to file. I was less clear about GPO from the article, but it looks like this is not a concern either. Am I understanding this correctly, if so, you just made my day!

    1. jblankenship says:

      Unless the pension is based upon your own earnings, WEP nor GPO should not come into play for you.

  2. Rick B says:

    My wife is affected by WEP, but I am not. Her spousal benefit from me is higher than her own benefit. Will WEP be applied to the spousal benefit or will she get the full 50% spousal benefit at FRA?

    1. jblankenship says:

      No – WEP will not apply to spousal benefits, but GPO will. GPO is more aggressive and can wipe out a spousal benefit altogether.

  3. I have dual citizenship (France and US). I have worked in France for 6 years while I have 31 years of covered Social Security Earnings in the US. Looking at the table of WEP yearly Substantial Earnings from 1978 thru 2015 against my US covered Social Security Earnings for the same time period, only 26 years out of the 31 years of covered SS Earnings show an equal or higher amount than the ones listed for each year in the WEP Substantial Earnings table. However the total amount of all covered SS Security Earnings from 1978 thru 2015 is much higher than the total amount of WEP required Substantial Earnings for the same time period because some covered SS Earnings were considerably higher than their corresponding Wep amount. I will be 62 years old in Feb 2016 and plan to ask for early retirement in both countries. Will the WEP process consider 26 years only of covered SS Earnings in my case?

    1. jblankenship says:

      Unfortunately, each year is considered separately. So only 26 of your years of earnings will be considered as substantial with regard to WEP treatment.

      1. Thanks a lot. Is there any chance the Wep provision will disappear in the near future?

        1. jblankenship says:

          I don’t expect it. Just my humble opinion.

  4. Elmo says:

    I didn’t have enough social security credits when I enrolled into CSRS. Does WEP apply if I intend to work after CSRS voluntary retirement (age 57) in which I will contribute to social security until I am 65?

    1. jblankenship says:

      If you are not collecting SS benefits, WEP doesn’t apply until you start the benefits. Your work record will continue to apply toward your SS benefits, even if you work past the point where you’re receiving a pension that would trigger WEP.

  5. AndyT says:

    I’m a US citizen but worked in the UK for a number of years and accumulated a small pension there. It looks like I am impacted by the WEP and will have my SS benefit reduced by about 50% of the UK pension. My wife will be claiming SS as well based on my benefit so there will be a further 25% WEP adjustment. So it looks like WEP will absorb 75% of my UK pension, When I factor in income tax, it looks like my UK pension is actually a liability and I will owe the US government more than the value of this pension.

    Am I right in thinking I am better off losing this pension somewhere? If so how can I do it?

    I’d read somewhere that if I take a bulk payment before my UK retirement date (in 3 months) I just pay US income tax on the amount and WEP is history. Is this true?

    I assume that the UK tax free provision for bulk withdrawal of 25% of the pension pot doesn’t apply when filing US tax returns.

    1. jblankenship says:

      If you take a lump-sum distribution of the pension before you are eligible, you may eliminate the WEP impact.

      “Before you are eligible” is key here: eligible means that you have met every test to receive this pension except for applying for it. So in other words, if you would be able to apply for the pension now (instead of 3 months from now) then you’re eligible for the pension. Taking a lump-sum at this point would not eliminate WEP impact.

      On the other hand, if in 3 months you will have crossed a specific milestone (such as a birthday) that makes you eligible for the pension and you were not eligible for it before that date, then taking a lump sum could eliminate WEP for you.

  6. WW says:

    Jim – thanks a lot again – I hope Congress will do something about this and hopefully soon – some senators had already some propositions – but……you know that body.
    WW

  7. Jim – really thanks a lot,- of course, you are helpful but not these paragraphs that apply in general to our USA diversity of plans. My pension is from Poland and looks to me that SSA can be pretty frivolous in its interpretations here. If you want me to describe it briefly,just for your professional couriosity, of course I can do this and of course will be happy to know your oppinion. What you can tell me now is, what is the next proper step in case of my disagreement with SSA justification – is this just a court….. and which one ?, or some legal body, commission or whatever…….. in between ?.
    Thanks a lot again.
    WW

    1. jblankenship says:

      I would suggest that you check with SSA about what your next steps can be.

  8. Dear Jim Blankenship
    In your explanations for “How to reduce or eliminate Windfall Elimination Provision Impact to Your Social Security Benefit” , I see such sentences : It is important to note that WEP impact only occurs if the pension is consdered to be the primary retirement plan………If the plan is considered to be a supplemental plan (for example, as a 403(b) plan moght be to a regular pension plan), then if the source of funds is solely from the employee, this plan will not produce a WEP impact. ”
    This is exactly my case and therefore my question to you is about any formal written law that supports your explanation. Is there some paragrph or statue in the law, that I can take to the court and defend my benefits, – or just your oppinion – or maybe some court precedence that you know of. Would you be so polite to respond with explanation.
    Thanks in advance.
    WW

    1. jblankenship says:

      See the following POMS reference: RS 00605.364 Determining Pension Applicability, Eligibility Date, and Monthly Amount. Pay particular attention to 1.b, 3.a, 3.b, and 3.c.

      jb

  9. linda.l.wright@navy.mil says:

    My husband is a retired Federal employee under the CSRS system & currently receiving (his) social security & hit with the WEP, I also am a Federal employee under the FERS system, when I turn 62 if I apply & suspend if he draws on my social security will the WEP still affect him (under mine)?
    LLW

    1. jblankenship says:

      You cannot suspend benefits until you are at Full Retirement Age.

      WEP would not impact a spousal benefit for your husband based on your earnings, but the Government Pension Offset would. When you see the impact of GPO you’ll long for the days when you only had WEP impact – GPO is much worse, reducing benefits by 2/3 of the amount of the pension.

      jb

  10. Misa says:

    Hi, I worked in Tx for a little more than a year and withdrew retirement. I was about 34. The TRS (retirement system) said I got a lump sum, 1100 or so, but I would not have been eligible to retire, and I only withdrew my portion and the interest, not the employer’s portion. Would I have a WEP?

    1. jblankenship says:

      Probably not. Since you withdrew the money before you were eligible for the pension, it *shouldn’t* cause WEP impact.

      Be sure to clear this with SSA though, as they may have a different interpretation of the rules.

      jb

  11. I was born, bred, and raised in the United Kingdom of English parentage in December 1946. I lived and worked there, paying into the British system, right up until 1990.
    I hadn’t even considered migrating to any other country on the planet up until then, however after a couple of trips to the United States as a tourist I decided to apply for a ‘Green Card’ which I was approved for in 1992, followed by U.S. Citizenship a couple of years later.
    Before taking this step, I had been told by the U.K. Pensions Dept. that any pension I had qualified for based on payments while still a British Subject, would NOT be affected by the U.S. Social Security Pension payments that I would receive upon my retirement here!
    When I finally did retire in Sept. 2012 after 20 years of working in the U.S. the SSA first told me that I would be paid the FULL amount to which I was entitled to !
    Two weeks later I received a letter from them stating that my payment was being reduced due to W.E.P. because I hadn’t paid anything into the U.S. Social Security system while working in the United Kingdom.
    Despite proving that I wasn’t even associated with this country at the time, and continuously asking why I would be expected to pay into the U.S. SS system, I was of the opinion that the SS staff were totally ignorant as to whom the WEP should apply to!
    After my case was denied three times by SS supervisors, I then saw a Federal Judge ( who stated that 99.9% of the cases he reviewed were disability cases and that he would have to make his decision after advisement) and ruled against me which begs the question “Who advised him?”
    Now I am waiting to see an Appeals Council” (which is not an independent body but part of SS)
    I have sent them Official Documents from the U.K. Pensions Dept. that clearly states that my U.K. Pension has nothing to do with the U.S. SS Pension system nor any International Agreements made between the two countries !
    Anyone have any ideas as to how to get through to these fools?
    Respectfully
    Michael T.

    1. jblankenship says:

      I don’t know how to resolve your situation – and a big part of the problem relates to what the judge told you, which is that the vast majority of cases are disability-related. As such, finding competent counsel for a retirement-related problem is very difficult. Unfortunately I do not know of any attorneys who specialize in this area that could help you.

      Best wishes to you – hope it all works out for you.

      jb

    2. Hi Michael, We have just encountered the same problem. My husband has just put in a claim for US benefits and was told because he was claiming UK pension (State Old Age Pension) he would have to take reduced US benefits. It makes no sense at all. Even though he has full 40 credits paid into US system but has been here for 25 years he is being penalised. We were under the impression there was a reciprocal agreement between US and UK regarding all these types of things. Were you able to get anything figured out as I see your post was from a year ago.
      Best Wishes
      Joanna

  12. Mel says:

    I am 64 and a US citizen and have 24 years of SS “substantial payments”.
    I have just used the “Windfall elimination and Foreign payments” tool and find that answering “Yes” to the Question: Are you entitled to a foreign pension based on employment and were you eligible before January 1, 1986? The next page tells me that the WEP does not apply. (I was vested in the UK pension after working for 13 years. I paid UK social security taxes, not US Social security during this time, and finished my UK work in 1985.) I started drawing on this pension at age 60).
    Other than showing this reference to SS officers when applying for my social security, what other references are there to support my not having to pay WEP?

    1. jblankenship says:

      I would get proof that you were eligible for the pension prior to 1986 so that there is no question about it. Otherwise, sounds like you will be in good shape and not impacted by WEP.

      jb

  13. jim jones says:

    If i was vested in my government pension years before the windfall law was passed does this mean my social security can not be reduced by WEP.

    1. jblankenship says:

      Possibly – I would check with SSA to be sure though.

  14. Bob V says:

    I worked for a county government for 20 years and was fired. I went to court and won a workers comp case and a service caused disability retirement income which is payed in monthly installments. This income is tax free, I was 45 year old at the time and have not been able to work sense. Now at 65 years old I applied for social security benefits and should be receiving over $300 from them. I receive $136 from them because of the WEP. My income by IRS rules is not reportable. Sense I have no reportable income how can they use the WEP?

    1. jblankenship says:

      Bob V – That’s a good question to ask the SSA. My guess is that some portion of your payment you’re receiving must be considered “retirement” benefits, therefore causing the WEP reduction. That’s only a guess – SSA should explain the reasoning to you.

      jb

  15. jan lim says:

    What a invaluable service you provide!!!!!! Can’t thank you enough—
    “Substantial” earnings are often mention and critical but wondering
    where one could find a table that reflects and precisely defines the actual “substantial earnings” for each of the last 35 years.
    Many thanks!!

    1. jblankenship says:

      Hi Jan –

      You need to look no farther than here in this blog. The article Substantial Earnings with Regard to WEP has this table, updated annually.

      jb

  16. Pat says:

    Golly I am desperate to find information, I can currently retire from my state job with a pension and I qualify for SS as either, widows benefit, caring for deceased disabled child or probably SSDI on my own as I have melanoma with metastatis. I just don’t know which is the best way to go. I have approximately 28 yrs of substantial earning for SS as I have worked 2 jobs for twenty eight years, I’m now tired,

    1. Pat says:

      I forgot to say I am 60

    2. jblankenship says:

      Pat,

      This is going to depend on how much each benefit is, and how they can be coordinated together. In addition, you’ll need to decide what you’re trying to do, either maximize benefits now, or maximize future benefits payable on your record. It would be helpful to work through these numbers with a financial advisor.

      jb

  17. Sandy E. says:

    My husband just changed careers, going ftom 37 years in broadcasting to a job in development (fundraising) for a local university. He paid into SS for close to 40 years. Now he’s paying into both SS and the Texas Teacher Retirement System. I’ve been working as a paraprofessional in the local school district for 19 years, paying into TRS, but nothing to SS. No one can explain to us why he pays into both. Am I correct in thinking that if he works for the university at least 5 years (btw, he’s 59 now), at retirement he would get all of his SS and TRS pension?

    1. jblankenship says:

      Sandy –

      Even though your husband is paying into the TRS, by virtue of the fact that he’s also paying SS tax, WEP will not impact his SS benefit. In addition, having worked in SS-covered jobs (presumed substantial earnings) for 40 years would also remove WEP impact.

      jb

      1. Rene says:

        I’m in a similar situation. I have worked in the private sector for 15 years and paid SS tax. I switched careers and currently work for a school district and I pay both TRS and SS tax. However, I also work part time as an adjunct instructor for a community college that also pays into the same TRS pension, but I am not eligible for a pension from the community college since it is part time. The amount of my TRS pension annuity from the school district is calculated using all earnings from all TRS employment, so employment at the community college will boost my final salary and increase the amount of my TRS pension annuity that I will get from the school district. Will I be subject to WEP in this scenario? Also, my wife also works for a school district but doesn’t pay any SS tax, any impact to SS benefits to me or her? Thanks for all your help and information.

        1. jblankenship says:

          Rene –

          If the earnings from the job in question are *not* subject to Social Security taxation, then WEP will apply. It sounds as if your earnings are all subject to SS tax, but your wife’s are not. This would cause her SS benefits to be subject to WEP, and any spousal benefit that she might receive based on your earnings would be subject to GPO reduction as well.

          Hope this helps –

          jb

    2. Deanna Teel says:

      No one can seem to answer my question: I have worked in higher education since 1987 and do not have a pension. We were offered either Tx. Retirement System (TRS) OR Optional Retirement Plan (ORP), so I chose ORP. This is where we save and invest our own monies. I have saved money but do not get a lump sum payment or annuity when I retire. I have also worked 21 years earning “substantial earnings”, year-to-date. I am 63 yrs. and was planning on working until 65. Does the WEP pertain to my situation since I’m not getting a pension?

      1. jblankenship says:

        Deanna –
        If you are paying Social Security tax on your wages, then WEP would not apply. If you are not, then the ORP would still be considered a “pension” by Social Security rules, and the Social Security benefit that you receive would be reduced by WEP. For more detail on the ORP and Social Security, see this article by Devin Carroll which specifically goes over how it all works.

        Hope this helps –

        jb

  18. Sean Connery says:

    If I worked for 14 years (1988-2001) and ever since then I have worked as a teacher in Texas. I have read that if I have a “low” government pension (that would happen to me in the event of early retirement), then WEP would not apply to me. How do you define “low” pension? How can I find out if I’d be affected? If it turns out that no WEP reduction applies, that would incentivize me to retire early.

    1. jblankenship says:

      Hello Sean –

      If your government pension is low – that is, lower than the first bend point of the Primary Insurance Amount (PIA) calculation, which is $826 for 2015 – then your WEP impact will be limited to 50% of the amount of your pension. If there is another definition of a “low” pension I’m not aware of it.

      jb

  19. Les B says:

    I have a state worker pension (uncoordinated with Social Security) and expect to receive a substantial reduction to my Social Security payment when I begin drawing it, due to the windfall elimination provision. My wife also has a state worker pension but hers was coordinated with Social Security.

    Will my pension trigger a windfall elimination provision reduction in her Social Security benefits? If so, would this still be the case if we file taxes separately?

    1. jblankenship says:

      Hello Les –

      Your pension will not impact your wife’s SS benefits, although if she is anticipating a spousal benefit based on your record the spousal benefit would have a reduction because your Primary Insurance Amount (PIA) is reduced by WEP.

      Income tax filing status has no effect on whether or not WEP or GPO will impact your benefits.

      jb

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