When your Social Security retirement benefit is subject to the Windfall Elimination Provision (WEP), you’re likely painfully aware of the reduction to your own benefit by this provision. What you may not be aware of is that the effect goes beyond your own benefit – your spouse’s and other dependents’ benefits are also impacted by this provision. However, the impact of WEP does not continue after your death.
Image by London Permaculture via Flickr If you’re subject to the Windfall Elimination Provision (WEP), your Social Security retirement benefit can be reduced in the first bend point to as little as 40% from the normal 90% rate. The WEP applies if you worked in a job that did not require Social Security withholding in addition to a job that was subject to Social Security withholding. However, if you’ve worked in the Social Security-covered job for a significant amount of time and the amount of earnings you received there was substantial, it is possible that the reduction due to WEP could be lessened and possibly eliminated. According to the Social Security Administration, substantial earnings is defined as an amount equal or above the amounts shown in the table below: Year Substantial Earnings 1937-1954 $900 1955-1958 $1,050 1959-1965 $1,200 1966-1967 $1,650 1968-1971 $1,950 1972 $2,250 1973 $2,700 1974 $3,300 1975 $3,525 […]