How do I enter a WEP/GPO case into the software?

Select historical earnings. Enter the client's entire earnings history. Add the pension details to the income section. Change the income type from pension to non-covered pension.

Your client may be subject to the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) if they have a non-covered pension. A non-covered pension is a pension paid by an employer that does not withhold SS taxes from their salary. Typically, these are state and local governments, or non-U.S. employers. Your client paid into this special type of pension, instead of paying in to Social Security.

How to Enter a WEP/GPO Case

  1. After selecting your client’s marital status, entering their name, date of birth and life expectancy, you’ll then navigate to their Social Security folder.
  2. Instead of estimating benefits using the quick entry, you’ll need select ‘historical earnings’.
  3. Your client’s entire earnings history must be entered in order to ensure accurate WEP calculations. This is because once your client has at least 20 years of what was deemed substantial earnings, it starts to lessen the WEP reduction. Enter the first year of earnings from their Social Security statement, and then enter the date your client plans to stop working.
  4. Enter the earnings for each year, including any years with a zero.
  5. Towards the bottom, you’ll see Hypothetical Future Earnings. Even if your client is NOT paying into Social Security, if they’re working, they’re subject to the earnings test. Those earnings should be entered in the ‘non-covered earnings’ column.
  6. Click next, and you’ll navigate to the income section. Because we’ve already entered the earnings history, including hypothetical future earnings, there is no need to add earned income in this section. Doing so would be duplicative. However, it is in this section that you’ll enter the client’s non-covered pension details. You can give it a name, enter the monthly amount of the pension, the date they’ll start taking it, and any applicable COLA attached to the pension.
  7. You must change the income type from pension to non-covered pension.
  8. In the cashflow, you’ll also notice a new column titled WEP PIA. Traditionally, your clients’ benefits are based off of their PIA. However, when a non-covered pension is involved, any benefits that your client is entitled to will be based off of their WEP PIA.

Note: When running the case in Social Security Timing, any benefits that the client is entitled to will have the applicable WEP or GPO reductions applied.

Additional WEP/GOP Resources