If you are eligible for a pension based on work you did for a federal, state, or local government, a nonprofit organization, or in another country and you did not pay Social Security taxes, this pension can affect the amount of your Social Security benefits. We refer to this reduction as the Windfall Elimination Provision, or WEP. If you paid Social Security taxes on 30 years of substantial earnings, WEP does not apply to you. Our
WEP factsheet explains if WEP may affect you. If you think your pension will affect your Social Security benefit, you can:
WEP ExamplesThe Windfall Elimination Provision reduces your Eligibility Year (ELY) benefit amount before it is reduced or increased due to early retirement, delayed retirement credits, cost-of-living adjustments (COLA), or other factors. The following examples show how the WEP reduction changes when other factors affect the ELY benefit. Retirement ExamplesThe monthly retirement benefits are increased or reduced based on your age after WEP reduces your ELY benefit. If you turn 62 in 2022 (ELY 2022) and you have 20 years of substantial earnings, WEP reduces your monthly benefit by $512. (Refer to the chart below.) Your full retirement age is 67. If your full retirement benefit is $1,396, your ELY benefit after the WEP reduction would be $884 ($1,396 - $512).* If You Choose Early RetirementIf you decide to start retirement benefits the month you turn 62, you will get benefits before you reach full retirement age. We reduce your monthly benefit to 70% because you will get benefits for 60 additional months. Your age 62 retirement benefit is $618 ($884 x 70% = $618) per month. If your full retirement benefit had not been reduced by WEP, your age 62 retirement benefit would have been $977. If You Choose Delayed RetirementIf you decided to wait to age 70 to receive benefits so you could get Delayed Retirement Credits. Your eligibility year is still 2022. If your retirement benefits start after your full retirement age (67), the benefit increases 8% for each year before age 70 that you delay retirement. If your benefits start at age 70, you get credit for the 36 additional months when you did not get benefits and your monthly benefit will be 24% higher. Your age 70 retirement benefit is $1,096* ($884 x 1.24 = $1,096). If your full retirement benefit had not been reduced by WEP, your age 70 retirement benefit would have been $1,731.* COLA ExampleThe COLA is added to your monthly benefit amount after WEP reduces your ELY benefit. *Benefit amounts are rounded down to the nearest dollar. The examples above apply only to benefits paid to the worker and do not include future COLA increases. The WEP reduction may be larger if family members qualify for benefits on the same record. However, the total WEP reduction is limited to one-half of the pension based on the earnings that were not covered by Social Security. How To Use The WEP ChartThe chart is easy to use.
If your retirement benefits start after full retirement age or your non-covered pension starts later than your ELY, the WEP reduction may be greater than the maximum shown in the chart. WEP ChartMaximum Monthly Amount Your Benefit May Be Reduced Because Of The Windfall Elimination Provision (WEP)*
How do you get past the Windfall Elimination Provision?The one way around the Windfall Elimination Provision that works well is to accumulate what the Social Security Administration calls “substantial earnings.” These are annual earnings of a certain amount where you paid into Social Security in another job.
How much is Social Security reduced if you have a pension?How much will my Social Security benefits be reduced? We'll reduce your Social Security benefits by two-thirds of your government pension. In other words, if you get a monthly civil service pension of $600, two-thirds of that, or $400, must be deducted from your Social Security benefits.
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