First of all, thanks for answering all our questions. I'll try to make this simple.
My wife is eligible for social security benefit and pension. Pension is from a job that didn't contribute to social security so we are aware of the WEP reduction and have done the calculation on the social security site. However, should we be using her SS benefit OR half of my SS benefit for the WEP calculation? (Since I understand a spouse is entitled to her SS benefit or half of spouse's - whichever is greater.) Half of mine would be higher so I'm thinking we would use mine. Then, if I'm right here, do you base the calculation on half of the amount I would be getting when I choose to start drawing? For example, if I want to draw starting at 62, do we take half of that amount, plug it into the WEP calculator (taking into account her pension amount) and calculate the amount she would get and does that mean she gets that at her age 62? What if she wants to start drawing later than her age 62 as she is younger than me?
WEP (Windfall Elimination Provision) only applies to Social Security retirement or disability benefits payable based on a person's own work record, so you wouldn't use a WEP calculator to compute spousal benefit rates. However, if your wife files for spousal benefits and if the non-covered pension she receives is from a governmental agency, then her spousal benefits will likely be offset due to the Government Pension Offset (GPO) provision (https://www.ssa.gov/pubs/EN-05-10007.pdf).
Assuming that your wife was born after January 1 1954, she couldn't file for spousal benefits without being required to file for her own benefits at the same time. So, if she's has at least 40 quarters of Social Security quarters of coverage (QC), both her own benefits and her spousal benefits (if any) would need to be calculated separately.
For example, say Mary files for Social Security benefits at age 62. Mary is already receiving a monthly non-covered government pension of $1500. Mary's Social Security retirement benefit is subject to WEP, and her primary insurance amount (PIA) using the WEP formula is $500. However, since Mary is only age 62 her rate is reduced for age to $360.
Mary's husband is receiving his Social Security benefits and his PIA is $2400. Mary's unreduced spousal benefit would be calculated by subtracting her PIA from 50% of her husband's PIA, which in her case is $700 (i.e. $2400/2 - $500). But, Mary's spousal rate is reduced for age to $469 since she's filing at age 62. And, since Mary is receiving a non-covered government pension, her spousal rate is offset by 2/3rds of the amount of her government pension. Mary's government pension rate is $1500, so 2/3rds of that amount, or $1000, is higher than her reduced spousal rate of $469. Therefore, Mary's spousal rate after GPO offset is reduced to zero.
So, Mary in our example above could only be paid her own Social Security retirement rate of $360, which is reduced both due to WEP and because she filed at age 62. However, if Mary's non-covered pension was not from a U.S. government agency (e.g. federal, state, county, local), then she wouldn't be subject to GPO and she could be paid her reduced spousal rate of $469 in addition to her $360 reduced retirement rate. Note, though, that spousal benefits can't be paid unless and until the spouse on whose record the spousal benefits are paid is drawing his or her benefits. So, Mary couldn't qualify for spousal benefits at least until her husband starts drawing his benefits.
Our software (https://maximizemysocialsecurity.com/purchase) is fully programmed to handle computations involving both the WEP and GPO provisions, so you and your wife may want to strongly consider using the software to do your Social Security planning.