Photo courtesy of ahmadreza sajadi via Unsplash.com.
If you are receiving a pension from a non-Social Security covered job and you’re also entitled to receive Social Security benefits, the Windfall Elimination Provision (WEP) may reduce your Social Security benefit. There are ways that this WEP reduction can be eliminated.
How to Eliminate WEP
As discussed in other articles, it is possible to reduce the impact of WEP by working in a Social Security-covered job and earning “substantial earnings” ($22,050 in 2015) for 21 or more years. For the first 20 years, there is no reduction to the WEP impact. For each year of substantial earnings greater than 20, the impact of WEP is reduced by 10%. When a total of 30 years of substantial earnings have been recorded on your earnings record, WEP is eliminated completely.
Another way to eliminate WEP is when the primary numberholder (the individual subject to WEP) dies. This is because WEP only impacts your PIA when you are receiving a pension based on non-covered employment. If the primary numberholder dies, she is no longer receiving the pension – therefore, WEP no longer applies. If the surviving spouse chooses to continue (or begin) receiving a Spousal Benefit, the PIA against which the spousal benefit is calculated is restored to non-WEP impact.
In addition – when a pension from a non-covered job is received in a lump sum, SSA calculates a number of years over which the lump sum would have been spread had it been received as an annuity. The recipient can eliminate WEP impact if he or she out-lives that time span determined for the deemed annuitization of the lump sum. After that time has elapsed, your PIA will be restored to the pre-WEP level.
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.
Thanks for your response but I did not make myself clear in my question.
Any foreign person who has a previous pension in his country and arrived to USA at the age of 50 and work here for 16 years and is claiming for SS benefits for these 16 years, is it fair that SS retains from your benefits here the amount you receive in your home country? Is there any exemption? We work for a non profit organization in our country. Any idea to avoid the WEP?
Thanks
Martha Espinel
The answer I left you is the same. The only way to eliminate WEP application is to have 30 years of substantial earnings subject to Social Security taxation.
Thanks again.
Dear Mr Blankenship;
We are so happy to find you, an expert in WEP. I am applying for my SS benefits and I am 67 . My surprise was when they told me that my benefits will be reduced because I have a pension abroad. I was a public teacher in Colombia and I worked in my country until 2001. My employer over there knew nothing about paying taxes for USA SS. So all the jobs is colombia are not SS covered because there is no reason. In 2001 I came to USA to work as a Teacher and during these years and through my job, I obtained the US citizenship (3 years ago) I have more than 30 years working here and there. I don’t find the reason why my former job should have been paying SS taxes if this job is out side the US and was performed by a Colombian citizen. What can I do to removed WEP?
Thanks; Martha Espinel
The only thing that can be done to eliminate WEP impact is to work in a Social Security-covered job for substantial earnings for 30 years or more. If you have worked in the US for 19 years (2001-2019), that means you’d need another 11 years in SS-covered employment in order to completely eliminate WEP impact. There is no way to use the Colombia-based employment for that credit.
Hello again,
I claimed social security starting May of last year. The SSA agent gave me a monthly benefit number but stated it would be subject to the WEP adjustment, which I knew would be the case.
At the time of claiming I had already reached 28 years of significant earnings but just recently in 2018 but still before the date I claimed, yet they discounted my monthly benefit by $127.20, which from my research means they only gave me credit for 27 years of significant earnings.
Is this just a timing issue and SSA are simply waiting for my employer to report my annual earnings for 2018 which for 2018 reporting I understand is done to the SSA by January 31, 2019, or should I be more concerned and seek a meeting with another SSA agent?
I took my years of significant earnings directly from my SSA record posted on the SSA website and mailed to me, so I don’t think I have miscalculated the years.
I’m interested in your observations as I continue to work in 2019 and hopefully 2020 and make significant earnings in each year so I hope to see the WEP adjustment eventually disappear.
Again, thanks for the great advice and insight available on your site.
Kind regards.
It’s most likely a timing issue, and you may not see an adjustment until January of 2020. Most of the time when there is a recalculation, the results start with a new calendar year. And since your earnings have not been reported before the end of 2018, the recalculation will occur after the earnings are reported and the adjustment made at the beginning of the next calendar year, 2020.
So you’ll continue to have a lag in your adjustments as long as you’re still working off the WEP, for perhaps 3 more years in the future.
I hav several years where I was just under the substantial earnings cutoff and 25 that are way over. Do you get partial credit for the years that did not reach the substantial floor?
Unfortunately, no. It’s black or white, you either earned above the threshold or you didn’t. And there is no combining years, either.
I receive SS pension and pension from Russia. My husband (79 years old) work years in USA are not enough for his SS pension and he receives ½ of mine. Russian pension when I reported it was about $260-270 and $1=32 rubles. Now $1=65-70 rubles. The deduction from my SS pension cannot be more than ½ of my Russian pension. Right now almost all my R. pension is deducted from my SS pension, because they do not do recalculation based on “fluctuation” in currency, but it is not “fluctuation”, it is crush! and as the result, our combine SS pensions even less than if I do not have R. pension.
It is written, that deduction cannot be more than ½ from the case (my husband and I), but I am notified it is not our case.
What can I do?
Thank you, and I apologize for possible mistakes
I am sorry but I don’t know the answer to your question. I suggest talking to the Social Security Administration to see if they will do a re-calculation for your benefits. Best wishes to you.
I did, and they will not. Thank you.
My husband receives SS benefits based on my record, may be you know, if they should deduct from our combined pension no more than ½ my Russian pension. Here is the statement I copied from SS.org:
The examples above apply only to benefits paid to the worker and do not include future COLA increases. The WEP reduction may be larger if family members qualify for benefits on the same record. However, the total WEP reduction is limited to one-half of the pension based on the earnings that were not covered by Social Security.
Does the statement applies to us also?
The WEP reduces your benefit as the worker, and since your benefit is reduced then if your spouse is receiving benefits based on your record, his benefit would also be reduced as a result.
but what about that” the total WEP reduction is limited to one-half of the pension based on the earnings that were not covered by Social Security”? Thank you.
WEP reduction to your benefit is limited to one-half of the pension. WEP reduction to your husband’s benefit is also limited to one-half of the pension.
I was a firefighter for 25 years where we did not pay S.S. but have worked 52 years on other jobs paying in. We did not have a defined benefit pension but had a 401k. I was placed under the WEP penalty when I got my SS but a fellow firefighter that worked under the same retirement program as I at the same time in the same department was not because it was considered a lump sum payout. I converted half of my payout to an IRA and the rest to an annuity. When the Ira moneyis all gone will I no linger be under the WEP penalty?
No – when there is a lump sum distribution that becomes subject to WEP impact, there is an actuarial table (SSA supplied) that is used to determine the life of the funds. The tables can be found at this link: https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364
If I continue to work in a social security qualifying (and withholding) company and I continue to meet the substantial income minimums (per IRS minimums), do the years worked AFTER AGE 62 continue to reduce my WEP? I had 24 qualifying years at age 62 and I want to further reduce my WEP. Is this possible? Thank you!!!
Any “substantial” income earned where Social Security taxes are withheld will continue to add to your potential WEP-reducing or eliminating records. The definition of “substantial” is not an IRS definition, but rather it is from a table produced by Social Security. I have reproduced the substantial earnings table at this link.
jb
I read on the SS website that the WEP is applied in your “Eligibility” year. Are you certain that years worked after your “Eligibility” year count towards reducing the WEP penalty? Thanks.
Yes I am certain.
WEP is applied in your eligibility year, but every year thereafter your PIA can be recalculated if something has changed (additional years of work, whether substantial or not, can make a change to your PIA).
Thank You. But I don’t think I made myself clear. I understand that additional work will change your PIA. In my case I had 20 years of substantial work at age 62. 20 years does not reduce my WEP. 21 years does, 22 years does and so forth all the way to 30 years. I am still working (I am 64) and I plan to work for several more years. I was hoping that these substantial years worked after 62 would reduce the WEP penalty, independent of the effect of additional earnings changing my PIA just like anyone that is not subject to WEP. Thanks again.
Perhaps I didn’t make myself clear: substantial earnings years at any time after your age 62 will cause a recalculation of your PIA, reducing the WEP impact for future years. This is regardless of whether you are actively collecting benefits at that point or not.
Thanks for your patience. Much appreciated.
How does rolling over a prior university retirement account (e.g. TIAA variable annuity) into an IRA account well in advance of retirement age impact the calculations for WEP and GPO. I have both covered and non-covered employment but slightly less than 20 years under SS. If rolled into a Roth and not withdrawn, does WEP and GPO apply?
I bet you’ll still have an impact even though it’s not a traditional pension (as we would normally see). SSA receives documentation on all withdrawals and transfers of funds to and from retirement plans, and it’s likely that you’ll have this showing on your record when you file for benefits.
However, I can’t say definitively either way.
I currently have 22 years of substantial earnings. In 2015 & 2016 I will earn more than enough for two more years of credit, bringing my total years to 24. I will turn 62 in 2016. I turn 66 in 2020.
If I earn substantial earnings in 2017, 2018, 2019, & 2020, will those four years also reduce my WEP or does the door close on credit years when you turn 62? What if I delay taking benefits until I turn 70? Will that too reduce my WEP.
Substantial years of credit can be earned at any age. If you’ve already begun to receive benefits, each year your new earnings will be included in the computation (re-computation of WEP) for the coming year’s benefit adjustment.
jb
I am wondering if I understand this correctly. I need to compare my years of paying Social Security to be sure they fall within the “substantial amount” to earn the credits needed in order for the Windfall to not affect me? I have worked at this job for 18 years and it has been where I have earned the most money, and not paying social security. I am trying to figure out if my many years of work previously qualifies for “substantial” earnings.
If you have had 20 or more years (up to 30 to eliminate) of earnings that are “substantial” and that were covered by Social Security in order to begin reducing the effect of the WEP.
jb
Can we get around the negative impact of WEP using the following scenario:
My wife stops working at 62, delays taking her teacher pension until 66 (FRA) but does claims early Social Security at 62 based upon her prior work record when she was covered by Social Security. Lastly, she switches to her SS spousal benefit at her FRA and then also begins to collect her teacher’s pension? Thank you.
Well, that would eliminate WEP impact for the years prior to taking the pension. When she switches over to a spousal benefit, this would be reduced by GPO, which is likely to be a much higher impact.
Also – since she’s already filed for her own benefit, she isn’t really “switching” to spousal benefit, she’s adding the offset amount to her own benefit. Her own benefit would begin to be impacted by WEP as soon as she starts receiving the pension, and if she files for spousal benefit as well, this will be reduced by GPO.
Regarding the WEP being eliminated after the time span determined by the deemed annuitization of the lump sum distribution, is GPO affected in any way?
The same effect would apply – after the timespan has passed for annuitization of the lump sum, GPO would no longer be a factor.
I really appreciare your knowledge on WEP … I have 30 years of substantial earnings and 33 years of federal government service. I retired as CSRS Offset. So I called SSA to ask how I could activate my eligiblity to reduce WEP. They said there is a form to do this that i had to get from my local SSA office. They said they could not tell me the form number and it’s not available on line.
I went to my local SSA office and the specialisr said she could not help me with this because she was new on the job so someone would contact me to come back another day. I have not heard from them.
Can you tell me the form number they are referring to?
Do you have any suggestion on how i can get get my WEP penalty removed?
TY!
Your best bet is to either wait for the local office to get back in touch with you, or to call the SSA hotline at 1-800-772-1213.