Today’s question comes from M. in response to my article on the potential elimination of the Windfall Elimination Provision.
“I read your article about the WEP and wondered how it might relate to someone like me.
I have earned money which was covered first by the Civil Service Retirement (CSR) System from 1977 until 2012 when I retired from Federal Service. Later, I returned to work as a full time contractor covered by Social Security from 2013-2015. I will turn 62 in 2017. Do you think that I would gain or lose retirement income if the WEP was changed?
Also, I wondered if the change would affect my eligibility to gain a portion of my husband’s pension if he should die first. He has always been covered by Social Security and at 67 is currently retired. However, it is my understanding that if he precedes me, I would receive none of his pension. Would a change to the calculation of benefits affect this?
Lastly, would it be worth my while to return to work? As you can see, I only have about 12 quarters of earnings under Social Security and would need about 28 more to have 40 quarters. In addition to earning more money, having a bigger retirement check would be attractive. (This is important since my family is long-lived… Mom and Dad are still going strong at 90+.) Yet, under the current WEP getting a bigger pension check due to Social Security didn’t seem possible.
I acknowledge that the WEP legislation is subject to change (if passed at all) and that anything you tell me would be hypothetical.”
Congratulations on a long career and your coverage under CSRS. That was a great pension plan.
As you stated, you still need to work 28 quarters (7 years) to be eligible for a Social Security benefit. Unless you are willing to go back to work for that length of time, you’ll never be eligible for a SS benefits. If you do go back to work, the Windfall Elimination Provision would apply and you would see a reduction to your benefit amount. That reduction amount is equal to 1/2 of your pension. This is capped at $428 per month (for 2016).
Since the Social Security benefit’s calculation is based on 35 years of work history, and you would only have 10 years, your benefit would not be very high and would likely be completely wiped out by this provision.
If you want to see how Social Security Benefits are calculated, check out this video.
If they change the rule, you may see a small Social Security check start to be paid but even that’s unlikely. Your weighting of 33 years in a job where no Social Security tax was withheld is going to almost certainly prevent you from getting a benefit in any scenario.
Even if you do go back to work, you’ll likely still not be eligible for survivor or spousal benefits from your husband’s Social Security. This is due to the Government Pension Offset, a rule that applies to individuals who are entitled to a Social Security benefit as a survivor or spouse AND have a pension from work where they did not pay Social Security tax. The mechanics of the GPO are simple. If you have a pension from non-covered employment (no Social Security tax paid),your survivor’s or spousal benefit from Social Security will be reduced by an amount equal to two-thirds of your pension.
Here’s my article on the Government Pension Offset.
So if your pension amount from CSRS was $3,000, $2,000 of that would be deducted from a survivor or spousal benefit before it was paid to you.
Thanks for your question!
A note for all readers.
I love Social Security questions! I’ll answer them privately as time allows, but if I think the answer will benefit a wide audience, I’ll also publish them on my blog. Don’t worry, I’ll change up enough personal details so you’ll stay unknown. Send your questions to email@example.com.
If you need individual and specific help, I’m always available for a consultation.
As a final resource, read my article on other ways to find answers to your Social Security questions.