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.