What are differences between the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)?

Both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) may affect Social Security recipients who receive pension income from "non-covered" employment, where compensation was not affected by Social Security taxation. Both the WEP and the GPO can have significant impacts on the benefits paid to the recipient by Social Security. 

  • The WEP was enacted in 1983 to remove the unintended advantage (the windfall) that regular Social Security calculations provided to workers who also had the "non-covered" pension income. At this point, the WEP does include a guarantee that the reduction in the Social Security benefit amount caused by the WEP can never exceed more than one-half of the non-covered pension amount. 
    • The first bracket of the Primary Insurance Amount calculation is reduced from 90% to 40% for people with fewer than 21 years of substantial earnings in a Social Security covered job. For each year beyond 20, up to 30, the percentage is increased by 5% so that people who have 30 or more years of “substantial earnings” do not have a reduction due to WEP.
  • The GPO dates to 1977, with a major revision completed in 1983, and it provides benefits to the spouses and widow(er)s, because immediate family members are presumed to be dependent on a worker for financial support and, therefore, still in need of support in the case of retirement, disability or death of the earner.  The GPO is intended to replicate the dual entitlement rule for spouses and widow(er)s who receive pensions based on noncovered employment.
    • The amount the spouse is receiving from the government pension is multiplied by 2/3 and the spousal or survivor benefit is reduced by that amount.
Further detail for WEP and GPO can be found by clicking the respective acronym. If you need additional assistance, please don't hesitate to reach out to our support team.