How Was My Wife's Spousal Benefit Calculated?

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Feb 12 2019 - 5:59pm

My wife has 15 years of covered earnings and 13 years of non-covered earnings. She filed for benefits at 62, so her benefit was reduced by 50% of her pension(WEP $250.50) which amounted to $677 after 2018 COLA. Two years later I filed for benefits at 69 and she was Deemed to have filed for spousal benefits. SSA calculated her spousal benefit and then subtracted two-thirds of her pension from the calculated amount and then added the result to the benefit she was already collecting for a total of $739. What I don't understand is how they calculated her spouse benefit. The only way I can get the same amount as SSA ($739) is to divide my FRA PIA in half, subtract her current benefit and subtract the WEP amount that was applied when she filed at 62. (($2,650/2=$1,325) -($677 +$250))=$398. From this spousal benefit they subtracted her GPO amount of $334, leaving $62 which is added to her $677. Is this correct? They don't adjust the spouse benefit for filing early?

Thanks, Herve

Hi Herve,

Your wife's unreduced excess spousal benefit would be determined by subtracting her primary insurance amount (PIA), not her reduced for age benefit rate, from 50% of your PIA. A person's PIA is the amount they would receive if they started drawing their Social Security retirement benefits at full retirement age (FRA). If WEP (Windfall Elimination Provision) reduced your wife's PIA, the reduced WEP PIA would apply. The resulting excess spousal amount would be subject to reduction for age if your wife became entitled to the spousal benefit prior to her FRA. The age reduction would be applied prior to the subtraction of 2/3rds of her non-covered pension amount if GPO (Government Pension Offset) applies.

For example, say Jane (born 1/2/1954) applies for her Social Security retirement benefits at age 62. Jane's PIA is $1000, but due to the fact that Jane receives a non-covered pension her PIA is reduced to $750. And, since Jane elected to start drawing her benefits at age 62 her benefit rate is reduced for age to $562. When Jane turns 64 her husband files for his benefits and Jane files for spousal benefits. Jane's husband's PIA is $2600, so Jane's unreduced excess spousal benefit is $550 (i.e. $2600/2 - $750). But, since Jane is only age 64 when she files for her spousal benefits that amount is reduced to $458. And, since Jane is receiving a $501 monthly non-covered pension, her spousal rate is reduced by 2/3rds of that amount, or $334. Thus, is eligible for an excess spousal benefit of $124 ($458 - $334) in addition to her $562 reduced retirement benefit.

Your question doesn't contain enough information for me to know if your wife's benefit rate has been correctly computed, but our software can handle all of the computations involved in a case like that of your wife.

Best, Jerry