Is WEP Being Applied Correctly In My Wife's Case?

Oct 14 2020 - 5:02pm

My wife's benefits were reduced due to her government pension. When she began to take the spousal benefit based on my records they reduced the spousal benefit also by 2/3. So in effect the WEP was taken on both benefits. Is that correct? I had used your program for years, but now don't have it since getting benefits but this issue came up.


The windfall elimination provision (WEP) wouldn't have any direct effect on your wife's spousal benefits. The only way that WEP could affect the amount of her spousal benefits is if your benefit rate is reduced by WEP, in which case that would in turn lower your wife's spousal rate. That's because unreduced spousal benefits are calculated based on 50% of the primary insurance amount (PIA) of the worker on whose record the spousal benefits are paid.

If your wife is receiving a government pension based on her earnings that were exempt from Social Security taxes, then any spousal benefits for which she would otherwise qualify would likely be offset by 2/3rds of the amount of her government pension due to the Government Pension Offset (GPO) provision. If your wife is also eligible for Social Security retirement benefits, then those benefits would be subject to a WEP reduction rather than GPO.

For example, say Jane is receiving a monthly government pension of $900 based on her earnings that were exempt from Social Security taxes, and she files for Social Security benefits at her full retirement age (FRA). Jane's own PIA would normally be $800, but her PIA is reduced to $400 due to WEP. Jane's husband is receiving his Social Security benefits and his PIA is $2400. Jane's unreduced excess spousal benefit is calculated by subtracting her PIA from 50% of her husband's PIA, which in Jane's case is $800 (i.e. $2400/2 - $400). However, Jane's spousal benefit is reduced to $200 (i.e. $800 minus $600, or 2/3rds of her $900 government pension) because of GPO. Jane would then be paid her own WEP reduced benefit of $400 plus her GPO reduced excess spousal benefit of $200.

Best Jerry