Non-Covered Pension - WEP/GPO
Hi, I have a complicated situation and would appreciate your help. Here are the facts:
1) My wife and I divorced 9 years ago
2) As part of the divorce settlement, my wife’s Massachusetts county pension was split evenly such that we each received and continue to receive ½ the monthly benefit and each get a separate statement for tax purposes. The Domestic Relations Order (DRO) issued by the judge in our divorce says “For purposes of Section 72 and 402(a)(9) of the Internal Revenue Code, the Alternate Payee shall be treated as the distributee of any distribution or payment made under this order.” I am the alternate payee.
3) My wife and I remarried 3 years ago
4) I purchased Maximixe my Social Security and plugged in the numbers which show a much bigger SS benefit if the ½ that I am receiving will be considered mine when I file for SS. This is because I have 30+ years of substantial earning which dilutes the WEP/GPO effect on my benefit. My wife has very few substantial earning years so if the entire pension was assigned to her when we claim then there will be a major reduction effect.
My question of course is whether I’m able to file for SS with the ½ pension still attached to me as opposed to my wife since it was legally given to me through the DRO and that language says I am to be treated as the distributee or does the fact that we remarried somehow void that even though I continue to receive it under my name.
Thanks for your time.
I'll start out by explaining that although I answer questions submitted to this forum, I don't have access to our software customers' data. Therefore, the information that I can give you is limited since I don't know your and your wife's ages nor earnings histories. Software customers are encouraged to submit any questions they have using an online contact form available in the help menu so that their questions can be answered by one of our experts with access to their data.
What I can tell you is that since the non-covered pension you refer to is not based on your earnings it would have no effect on your own Social Security benefit rate, nor would it affect any spousal or survivor benefits for which you may qualify. The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) provision can only apply if you receive a non-covered pension that's based on your own earnings.
However, since the pension that you and your wife are receiving is based on her earnings and assuming that no exceptions apply, then WEP would apply to any Social Security benefits your wife qualifies for on her own record and GPO would apply to any spousal or survivor benefits for which she would otherwise be eligible. The entire pension amount would count as belonging to your wife, regardless of the fact that half of the pension is paid in your name. Section C of the following reference from Social Security's operations manual specifies that the countable pension amount is the gross monthly rate prior to any reduction for assignments (e.g. spouse's share of pension): https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364.