Social Security Matters by Rusty Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Dear Rusty: My wife worked for the US Postal Service in New York for about 22 years, and then in the private sector for about 15 years. She began collecting her “deferred annuity” from the USPS at age 62 and she plans to collect her Social Security benefits at age 67, which is her full retirement age (FRA).
Her Social Security benefit before the Windfall Elimination Provision is less than 50% of my Primary Insurance Amount, so the plan is for her to start collecting a “spousal” benefit from me at age 67. My question is: will my wife’s spousal benefit be reduced by both the Windfall Elimination Provision and the Government Pension Offset (GPO)? Signed: Inquiring Husband
Dear Inquiring Husband: Your wife cannot separate her personally earned Social Security retirement benefit from her Social Security spousal entitlement from you – whenever she applies for Social Security, your wife will be automatically deemed to be filing for all benefits she is entitled to when she claims.
Because your wife has a “non-covered pension” from the US Postal Service (USPS) – and assuming that pension is under the older “CSRS” (Civil Service Retirement System) – your wife’s personally earned SS retirement benefit will be reduced by the Windfall Elimination Provision (WEP). WEP reduces Social Security retirement benefits for anyone who also has a pension earned while not contributing to Social Security.
The Government Pension Offset (GPO) is different: the GPO will affect any additional amount your wife is entitled to as your spouse, which we refer to as her “spousal boost.” The “spousal boost” amount is the difference between your wife’s pre-WEP FRA entitlement and 50% of your FRA entitlement, which is your Primary Insurance Amount. Because of her USPS pension, GPO will reduce your wife’s “spousal boost” by 2/3rds of the amount of her non-covered pension, which may eliminate her potential spousal boost.
So WEP will affect your wife’s personally earned SS benefit, and the GPO will affect her spousal entitlement from you. But, depending on the amount of her USPS pension, your wife will not be entitled to an additional amount as your spouse if 2/3rds of her USPS pension amount is more than her “spousal boost” amount. And if the GPO doesn’t completely eliminate your wife’s spousal boost, it will at least drastically reduce it.
I have previously published several articles about both WEP and GPO and how each provision works, which you are welcome to review at the AMAC Foundation’s special Social Security website – www.SocialSecurityReport.org. In particular, one such article providing more detail on how the GPO works can be found at this link: www.socialsecurityreport.org/ask-rusty-government-pension-offset-gpo/.
Social Security will make the final determination about your wife’s benefit entitlement under WEP and GPO when she applies for her Social Security benefits, but I’m afraid your wife’s entitlement may be much less than you are anticipating because of these two provisions. If you have additional questions, please feel free to contact us directly via email at SSAdvisor@amacfoundation.org or call us directly at 1.888.750.2622.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at email@example.com.