Does WEP Affect Spousal Benefits?

Jul 24 2016 - 11:00am

My husband and I applied for retirement benefits and spousal benefits together. Both of us are above 70 years of age.My husband was recieving a pension and SSA has applied windfall elimination provision and send him a letter about it. Will the same be applied to spousal benefits also? I too am getting a pension.

Hi,

When the Windfall Elimination Provision (WEP) applies to the worker's benefit, spousal benefits payable on that record are also reduced. This is because spousal benefits are based on 50% of the worker's full retirement age benefit amount (PIA), so if WEP reduces the worker's PIA, the spousal benefit is reduced accordingly.

WEP does not affect survivor benefits, however. If your husband dies first, his PIA will be recomputed using the regular computation formula, and your potential widow's benefit would be derived from a starting point of 100% of his PIA, plus any delayed retirement credits that apply.

You state that you are also receiving a pension. If your pension was based on work for a government agency that was exempt from paying Social Security taxes, your spousal benefits will likely be reduced or eliminated altogether by the Government Pension Offset (GPO) provision. This would also be true of any future widow's benefit for which you may otherwise be eligible. If GPO applies, an amount equal to two-thirds of the gross amount of the spouse's non-covered pension is withheld from their Social Security spousal or widow's benefits, which can reduce the amount payable to zero.

For more information on the WEP & GPO provisions, see these SSA publications: https://www.ssa.gov/pubs/EN-05-10045.pdf & https://www.ssa.gov/pubs/EN-05-10007.pdf.

Best, Jerry