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WEP, Explained (Sort of)

The idea behind WEP - the Windfall Elimination Provision - is that a FEW people were taking advantage of the ability to get a government pension, then take a non-government job, and get Social Security benefits, as well. According to Wikipedia:
"The Windfall Elimination Provision (abbreviated WEP[1]) is a statutory provision in United States law[2] which affects benefits paid by the Social Security Administration under Title II of the Social Security Act. It reduces the Primary Insurance Amount (PIA) of a person's Retirement Insurance Benefits(RIB) or Disability Insurance Benefits (DIB) when that person is eligible or entitled to a pension based on a job which did not contribute to the Social Security Trust Fund. While in effect, it also affects the benefits of others claiming on the same social security record."
How it affects me: both my husband and myself worked primarily in teaching jobs over the last 25+ years. My husband is less affected, as he had more of a history with SS-connected jobs previously. He was 'dinged' by the fact that many of those jobs were in the food industry, which had wages not part of the tax system.

KIDS: if you do work as a waitress/bus boy/bartender, DON'T work 'under the table' - you will regret it when you are old, and living on minimal SS.

One provision that might help is for widowers/widows.
"the WEP does not apply once the primary beneficiary has died, and survivor benefits are unaffected. Whereas Widow's and Widower's Benefits take into account the amount of benefits the primary beneficiary may have received while they were living, a fictitious amount is created as if WEP did not apply for this purpose."
 So - it is POSSIBLE that when/if my husband dies, I might get the larger amount (what he gets now + the 40% that is taken by SS for WEP).

This was intended to stop those high-earners in government from 'getting' more than they would by working in a single type of job. It was enacted under Reagan's term of office, and appears to have been one of those "Get those Rich Men!" type of deals - many coming into government at that point were relatively high earners, and would have qualified for that 2nd pension. Who it did affect most were:

  • Police
  • Firemen
  • Military
  • Railroad workers
  • Teachers (my group)
Understand, my biggest complaint is that you can have an income of 1 million dollars a year, but still qualify for SS. You can't have $100 a month coming in from a public pension without losing money from SS benefits.

There is a - kind of - way around this. IF you work 30 covered SS years (has to be above a certain income - so, PT work MIGHT qualify, if you make enough), you don't fall under this provision. I worked about 1/2 and 1/2, so get nailed.

I'd need another 13 years of working - unlikely that I would work until almost 80 years old. So, I'm going to see if any money I bring in quarterly will up this enough to qualify. Each quarter I add in will reduce the offset.

You better bet that I will declare any money I receive, even if I have to pay the extra for self-employed people.

A fuller explanation of WEP is here.

A calculator - you will need a printout of your SS history for this - is here.

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