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Substantial Earnings With Regard to WEP


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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. Here’s how substantial earnings can help.

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 eventually eliminated if you amass enough years of substantial earnings.

Each year’s substantial earnings is only applicable to that particular year. So if you earned more than the substantial earnings in one year, this doesn’t carry over to the next year. At the same time, if you miss the substantial earnings limit for the year, even by one dollar, you cannot count that year as a substantial earnings year.

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
1976 $3,825
1977 $4,125
1978 $4,425
1979 $4,725
1980 $5,100
1981 $5,550
1982 $6,075
1983 $6,675
1984 $7,050
1985 $7,425
1986 $7,825
1987 $8,175
1988 $8,400
1989 $8,925
1990 $9,525
1991 $9,900
1992 $10,350
1993 $10,725
1994 $11,250
1995 $11,325
1996 $11,625
1997 $12,150
1998 $12,675
1999 $13,425
2000 $14,175
2001 $14,925
2002 $15,750
2003 $16,125
2004 $16,275
2005 $16,725
2006 $17,475
2007 $18,150
2008 $18,975
2009-2011 $19,800
2012 $20,475
2013 $21,075
2014 $21,750
2015 $22,050
2016 $22,050
2017 $23,625
2018 $23,850
2019 $24,675
2020 $25,575

So, if your earnings from your Social Security-covered job are substantial according to the table above, it is possible to change the reduction factor, increasing it from the standard 40% – and even possibly eliminating it, depending upon how many years you’ve earned those substantial earnings.

As long as you’ve had those substantial earnings for more than 20 years, follow the table below to determine what your first bend point factor would be.

Years First Bend Point
Percentage Factor
30 or more 90%
29 85%
28 80%
27 75%
26 70%
25 65%
24 60%
23 55%
22 50%
21 45%
20 or less 40%

What this means is that if you had 20 or fewer years in a Social Security-covered job with substantial earnings, your WEP-reduced factor on the first bend point is 40%. For each year more than 20 of substantial earnings, your WEP-reduced factor increases by 5%, and if you have 30 or more years of substantial earnings, the WEP doesn’t impact your first bend point factor at all.

Effectively, with 20 or fewer years of substantial Social Security-covered earnings, your projected benefit is reduced by 50% of the first bend point (from 90% to 40%). See the article on calculation of your PIA for more on how the bend points work.


  1. SN says:

    I am covered by a local government pension and will have 21 years as a federal employee paying into SS at age 62. Of course I am looking to limit exposure to WEP. I served on active duty in the military for 4 years paying into SS but 3 of those years fall below the Substantial earnings amount and don’t count toward substantial years. Should’nt military service even below substantial earnings be counted?

    1. jblankenship says:

      Unfortunately my opinion doesn’t carry any weight with SSA.

  2. Elizabeth says:

    I am retiring after 12 years as a teacher and getting that pension. I have 22 yrs of “substantial earnings” paid to SS. I plan to do self-employment work for the next 8 years. How much do I need to earn each year to reach the point of “substantial earnings” to keep reducing the WEP? I see the amount that is considered substantial earnings, but is that all I need to earn or is it more than that and how much more than that?

    1. jblankenship says:

      If you earn at least the “substantial” amount in Social Security-covered employment each year, that will satisfy the addition of a year of credit. Keep in mind that the substantial earnings amount increases every year, along with the other inflation-indexed items of Social Security.

  3. Melissa Burlison says:

    Maybe it’s just me, but I’m so confused! I am 63 years young and according to the chart and my SS statement, I have 22 years of substantial income. For the last 5 1/2 years I have been in a government job. I plan on working at my govt. job until I’m at least 67 1/2, with the goal of making more in SS to supplement my 10 years of govt pension. Am I doing the right thing by waiting, or should I be collecting SS now since if I’m understanding you correctly, it will not be effected by the windfall provision. Help!

    1. jblankenship says:

      If you’re still working, you probably don’t want to start receiving Social Security now because of the earnings limits.

      You indicate that you’re planning on working until 67 1/2 in order to make more in Social Security benefits – by this do you mean that your current job is subject to Social Security taxation? If that is the case, each year will likely add to your years of substantial earnings, lessening the WEP impact even further.

      If you were not working, it might be in your better interest to start SS benefits right away and delay the pension until later. This would give you a few years of non-reduced SS benefits, until you start receiving the pension. But as I said before, since you’re working it probably isn’t a good idea to start SS benefits now, because of the earnings limitations.

  4. Claude Godin says:

    I am currently 65 and will have 25 years of substantial income this year. In reading the SSA WEP data page it states that the WEP amount is calculated when you turn 62. Does this mean they will only count the the substantial income years up to when I turn 62?

    1. jblankenship says:

      No, when you have substantial years after that age, your PIA is recalculated with the additional year included.

  5. Steve Prichard says:

    My spouse was a teacher and does qualify for pension upon retirement from the teacher pension of the state we lived in. She now works as a preschool teacher (paying into SSA) who does not make close to substantial earnings per year. Is there any application of the offset if you don’t have any years of substantial earnings? I am trying to determine the greater benefit of taking the pension in a lump sum now and invest in IRA or keep the teacher pension. I need to know if there is an offset though calculate correctly. Thanks!

    1. jblankenship says:

      I’m not exactly sure what you’re asking – the WEP applies in full if you don’t have 20+ years of substantial earnings. This is regardless of whether the pension is taken in a lump sum or as an annuitized payment. If a lump sum is taken, SSA determines a monthly equivalent (as if it were paid out monthly) and applies WEP against that figure.

  6. Nancene Kirby Dieck says:

    When did the substantial earnings go into effect? I was working toward 40 quarters, most of the time I was earning minimum wage.

    1. jblankenship says:

      I think the concept of Substantial Earnings was likely put into place with the 1954 reforms (but may have been later).

      Just to clarify though – this only matters if you are affected by the Windfall Elimination Provision. If you’re not collecting (or planning to collect) a pension based on work that was not covered by Social Security taxation, then you don’t need to concern yourself with Substantial Earnings.

  7. robrien says:

    Is the wep amount determined at age 62 or fra?

    1. jblankenship says:

      The WEP amount is calculated for the first month that you’re receiving both the non-covered pension and the SS benefit. So if you start SS benefits early and later start the pension, WEP does not apply until the pension starts.

      1. Monica says:

        So the years I work while paying into SS after age of 62 and don’t receive any benefits count toward the calculation? I didn’t know that I needed to strive for minimum substantial income until now and would like a chance to add a few qualifying years.

        1. jblankenship says:

          Yes – those years (any years that you earn money under SS-taxation) count toward your earnings record and if they are substantial they count toward your substantial earnings years.

          This applies regardless of whether you are actively receiving SS benefits as well.

  8. Wondering if it is wiser to wait as long as possible to take income subject to WEP. It seems the length of time you are subject to WEP shortens but the amount of the reduction is greater. Can you offer some advice? Many thanks

    1. jblankenship says:

      If you delay the pension that triggers WEP, you could receive non-WEP-adjusted SS benefits in the interim. If the pension increases it could cause a higher WEP reduction, but if you’re already going to be subjected to full WEP reduction then it wouldn’t matter.

      On the other hand, if you start the pension that triggers WEP and delay your SS benefit, the WEP reduction amount would increase as your benefit increases because it’s built into the calculation of benefits. So delaying to age 70 (for example) would result in a WEP reduction that is greater than if you started benefits at FRA. Your SS benefit would be larger as well though, so the end result would still be an increase to your overall SS monthly benefit amount.

  9. Jim Haskins says:

    Be sure to inform veterans that if they were low ranking service people in the 1960’s they did not meet the substantial earnings amount, however SS is supposed to add an amount that reaches the limit. At my first contact with SS the interviewer did not know this and didn’t count a year. I corrected her error later.

    1. jblankenship says:

      Thanks for the information, Jim. I wasn’t aware of that provision – great to hear that this is available for our veterans!


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