Ask Larry

How Will SSA Calculate The WEP Guarantee If You Become Eligible For A New Non-Covered Pension?

The Windfall Elimination Provision (WEP) guarantee is based on 50% of the amount (in U.S. dollars) of your non-covered pension in your first month of concurrent entitlement to the non-covered pension and Social Security benefits. How will SSA calculate a new pension amount, to subtract 50% of the amount of non-covered pension or introduce some adjustments to this amount like COLA or others.
Thank you

Hi,

As you state, the Windfall Elimination Provision (WEP) guarantee amount is calculated based on 50% of the amount of your non-covered pension in the first month that you're entitled to both the non-covered pension and Social Security benefits. If you're already receiving Social Security benefits when you first become entitled to a non-covered pension, then the WEP guarantee would be based on the amount of your non-covered pension in the first month of your entitlement to the non-covered pension.

If you're already receiving a WEP reduced Social Security benefit and you subsequently become entitled to a second non-covered pension, then the WEP guarantee would be based on 50% of the total amount of both non-covered pensions. If the resulting reduction in your Social Security benefit rate would then result in a lower Social Security benefit rate than what you'd receive using the normal WEP benefit computation formula, then the WEP guarantee would no longer apply.

If you're receiving a Social Security benefit that's reduced due to WEP, any subsequent cost of living adjustments (COLA) are applied to the reduced benefit rate (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605370).

Best, Jerry

Posted: 
Apr 1 2020 - 2:56pm
MaxiFi software running on a laptop
Get What's Yours!
Discover tens of thousands in extra retirement dollars with Maximize My Social Security software!
  • Find your maximized strategy
  • Unlimited what-ifs
  • Step-by-Step filing instructions
  • Our software's lifetime-benefit increase for an illustrative couple earning $65K each and planning to take retirement benefits at 62.

    Results will differ based on your specific case and filing strategy.

Getting Started is Easy
Web-based software. Works on ALL browsers. No download.
$40 Annual Household License
$250 Annual Financial Advisor License