Possible WEP/GPO repeal [WEP / GPO repealed - How will affect you?]

[Duckie]

Retirees who are currently subject to the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) may get an increase in their Social Security payments if the Senate approves a bill (and the president signs it). I realize it may not happen and this thread will be locked but if you have not already heard about it, now you have.

Millions of people may get expanded Social Security benefits.

[Kendall]

This thread has run its course and is locked. Speculation about future legislation is prohibited by forum policy, see: Unacceptable Topics

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The whole point of the policy is to (1) eliminate contentious disagreements that result from these discussions and (2) keep investors from making bad decisions. Proposed legislation changes many times between the time it's introduced and signed into law.

Update: See below.

[trueblueky]

[Thread merged into here --admin LadyGeek]

The Senate voted early this morning to repeal GPO/WEP. President Biden says he'll sign it. Passage was just ahead of the continuing resolution to avoid a government shutdown.

OpenSocialSecurity indicates we should start Social Security now. Our situation:
* me, over 70, CSRS retirement, no Social Security
* her, over 62 but under 70, eligible for Social Security

We had been delaying SS for her to 70, which OpenSocialSecurity and the considered wisdom here recommended. Now that I can receive 1/2 of her FRA, it says to start now.

I understand about IRMAA and tax brackets. 85% of the SS will be taxed for us. Any other concerns?

The act applies to the start of 2024. Is there value in getting the lump sum for earlier as well?

[runner3081]

Can't be discussed yet.

[Wiggums]

I would make your decision based on existing laws, other factors such as health, and perhaps Roth conversion strategy. In mind, collecting 2% less than the optimal SS number is fine.

[LadyGeek]

This thread has run its course and is locked. Speculation about future legislation is prohibited by forum policy, see: Unacceptable Topics

Politics and Religion

In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:

• Common religious expressions such as sending your prayers to an ailing member.
• Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
• Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
• Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.

This forum is focused on investing that is directly actionable to personal investors. We don't hold debates on conjecture.

The whole point of the policy is to (1) eliminate contentious disagreements that result from these discussions and (2) keep investors from making bad decisions. Proposed legislation changes many times between the time it's introduced and signed into law.

The disagreements will indeed occur, which is more work for the moderators and results in locking the thread. See: Yellen: "We're taking a look at negative interest rates."

This thread will be unlocked when the president signs the bill into law.

Here is the official status: H.R.82 - Social Security Fairness Act of 2023, from congress.gov

(This thread is now in the Personal Finance (Not Investing) forum (Social Security).

[PoppyA]

If you or anyone who worked for the local, state, or federal government are receiving SS and it’s being reduced Because of Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO) you Are effected by HR82 Social Security Fairness Act change. This includes beneficiaries of these pensions…ie: spousal.

The bill eliminated WEP &GPO making you eligible for the benefits you paid for.

https://apnews.com/article/social-secur ... UOT_1YURRQ

[rob]

Thx for the heads up... My spouse was impacted so nice to remove that from the list of stuff to deal with.

[ClaycordJCA]

I moved PoppyA’s topic into the existing, currently locked thread.

[IowaFarmWife]

[Topic also merged into the existing thread - Moderator ClaycordJCA

I know there are a lot of educators on this forum, and I thought this may be of interest to many of them:

https://www.nea.org/nea-today/all-news- ... d=10239853

[BD w/ Kung-Fu Grip]

They should expand this. I'd sure like to be able to opt out of social security for most of my career, and then take advantage of its most generous provisions right at the end.

[capran]

Unfortunately, there may be many educators that worked in states that had a less generous pension in exchange for paying their social security tax on all their earnings.

[Bammerman]

I'm wondering if anyone knows when this change might be implemented.
(Not an educator myself, but a former FSO who was covered the first seven years of my career by the Foreign Service Retirement and Disability System (FSRDS), during which time I did not pay into Social Security, and as a result have been affected by the WEP.)

[dukeblue219]

They should expand this. I'd sure like to be able to opt out of social security for most of my career, and then take advantage of its most generous provisions right at the end.

Not quite what's happening....

[runner3081]

Nothing has happened, no president signature. Can't discuss.

[Nohbdy]

They should expand this. I'd sure like to be able to opt out of social security for most of my career, and then take advantage of its most generous provisions right at the end.

This comment makes me think that we need a thread clarifying the existing law…

[Colorado14]

This is the Social Security Fairness Act, which President Biden said he would sign. It has not yet been signed by the President although it's possible he could sign it as early as today.

[BD w/ Kung-Fu Grip]

They should expand this. I'd sure like to be able to opt out of social security for most of my career, and then take advantage of its most generous provisions right at the end.

This comment makes me think that we need a thread clarifying the existing law…

This comment makes me think the same.

[WoodSpinner]

This comment makes me think that we need a thread clarifying the existing law…

This comment makes me think the same.

What do find inaccurate?

WEP and GPO make sense and are there for a reason. OTW there is a huge advantage in your SS payments despite having much lower contributions.

WoodSpinner

[TdF fan]

I'm wondering if anyone knows when this change might be implemented.
(Not an educator myself, but a former FSO who was covered the first seven years of my career by the Foreign Service Retirement and Disability System (FSRDS), during which time I did not pay into Social Security, and as a result have been affected by the WEP.)

According to the text of the bill shown on this site: https://www.govtrack.us/congress/bills/118/hr82/text

Sec 4.
Effective date

The amendments made by this Act shall apply with respect to monthly insurance benefits payable under title II of the Social Security Act for months after December 2023.

But that is the effective date of course, not the actual implementation date.

[TravelforFun]

This comment makes me think the same.

What do find inaccurate?

WEP and GPO make sense and are there for a reason. OTW there is a huge advantage in your SS payments despite having much lower contributions.

WoodSpinner

Agree!

TravelforFun

[Eno Deb]

What do find inaccurate?

WEP and GPO make sense and are there for a reason. OTW there is a huge advantage in your SS payments despite having much lower contributions.

My undestanding is this: say person A and B both work for 20 years in identical jobs that are covered by SS. After that, person A stops working for good, and person B takes a job that isn't covered by SS but earns them a pension. With the WEP, person B gets lower SS benefits even though they have paid the same contributions into the system. Seems hardly fair.

[CenTexan]

[Thread merged into here --admin LadyGeek]

Amazingly, it appears WEP and GPO are a thing of the past!

This is super news for many folks (including me). I have found a source saying it will affect SSA payments back to December 2023. Does anyone have more insight or sources to learn about how this will play out?

[Random Poster]

Subject to Biden signing the legislation, yes, they are history.

It will help my mother tremendously.

I presume that SSA will pay those affected a lump sum for the amounts due from December 2023 to present, and then the full SS payment that they are due on a monthly basis going forward. But that is just a guess and I have no idea how long it will take for the payments and recalculations to be made.

[LadyGeek]

I merged CenTexan's thread into the ongoing discussion. This thread will be unlocked when the president signs the bill into law.

Here is the official status: H.R.82 - Social Security Fairness Act of 2023, from congress.gov

[runner9]

[Thread merged into here --admin LadyGeek]

My spouse and I are both teachers with pensions forthcoming through Ohio STRS. Therefore, my knowledge of social security is limited.

Spouse and I each have one living parent who was a teacher paying into STRS and is now many years retired. Each of those parents is widowed, the deceased spouse paid into social security their whole life.

With the change in law many teachers and widowed survivors will see an increase in SSA benefit, which was otherwise reduced. I'll see both my parent and my spouses parent in the coming days for the holidays. As this topic is likely to come up, what documentation can they/us look at to determine if their payment is reduced currently and therefore will increase going forward?

Thanks!

[LadyGeek]

I merged runner9's thread into the ongoing discussion.

The topic will be unlocked when the president signs the legislation into law.

Here is the official status: H.R.82 - Social Security Fairness Act of 2023, from congress.gov

[oldcomputerguy]

The President has now signed the bill into law. The thread is unlocked to allow the discussion to continue.

[runner9]

Thank you. Asking again how a relative can figure out if the new law will change their income.

[LadyGeek]

It's official. The president has signed the bill into law. This thread is now unlocked to continue the discussion.

(Thanks to the member who reported the post and explained what's wrong.)

[bsteiner]

If you're receiving Social Security benefits that were reduced by reason of WEP or GPO, your benefits should be increased retroactively to January 2024.

However, if you would have received Social Security benefits but for WEP or GPO, and as a result never applied for them, you should apply immediately, since Social Security benefits are only payable retroactively for 6 months. That applies, for example, to people who worked in non-covered employment and were unable to receive benefits as a spouse or surviving spouse of someone who worked in covered employment.

[delamer]

My SS was reduced by roughly $35/month when I started collecting just under 5 years ago.

I assume my retroactive payment and the added monthly amount going forward will reflect all intervening cost-of-living adjustments?

[warner25]

Well, it certainly didn't take long for the other thread on this to get locked... Let's see what happens here.

I occasionally advise my sister-in-law on financial concerns, and she's a teacher in a state with a non-covered pension, so I tried to understand this when it first came up last month. I think this means she can now expect 50% of her husband's full SS benefit on top of her full state pension.

Looking at it more abstractly, I think this means that jobs with non-covered pensions just became much more attractive. Like potentially more attractive than jobs with covered pensions, assuming one is married to someone else who pays into SS, right?

I've always thought my sister-in-law was assuming risk by being handcuffed to a job in a particular state with a shaky pension system and no SS to fall back on. I think this still doesn't address that risk (i.e. not being able to stay long enough to actually get the pension, and also not having any SS earnings record), but now that risk can be rewarded.

[nanciT]

I have been watching this really closely. Last year I started a Post and explained somehow when I started SS they took 66% out for WEP. I have a very small teachers pension. I sent the Appeal in January 2023. It's been a full year of calls, we went to the SS office and was told it was in review, faxed the appeal again and again. I could not get an answer. No one would give me an answer.

Hopefully this goes through!

[Ron Ronnerson]

Hopefully this goes through!

It has already been signed into law as of earlier today.

[snic]

[Unnecessary comment removed. Thread merged into here. --admin LadyGeek]

Both my parents were government employees. My father died a while back, and my mother receives her government pension, a survivor's pension, and social security. I suspect that her social security check has been reduced by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), but I don't know by how much. Now that these provisions have been repealed, I would be interested in hearing from government retirees re their specific circumstances, how much their social security check was reduced by the WEP and GPO, and how much they expect the new law to increase their social security benefits.

Also, if you know of a way to find out how much a person's social security benefit was reduced by these provisions, please let us know how to do that.

[chemocean]

If you're receiving Social Security benefits that were reduced by reason of WEP or GPO, your benefits should be increased retroactively to January 2024.

However, if you would have received Social Security benefits but for WEP or GPO, and as a result never applied for them, you should apply immediately, since Social Security benefits are only payable retroactively for 6 months. That applies, for example, to people who worked in non-covered employment and were unable to receive benefits as a spouse or surviving spouse of someone who worked in covered employment.

My spousal SS benefits were completely eliminated by GPO due to my CSRS, so I never applied. I applied Dec. 31, 2024 for spousal benefits with a requested start date of July 1, 2024. It will be interesting to see if my early request for coverage helps (first in line of the rush with a request on record at the time of the enactment) or hinders (denied under old rule and have to start over again months down the line) my application.

[LadyGeek]

Well, it certainly didn't take long for the other thread on this to get locked... Let's see what happens here.

The other thread got locked for the reasons stated in that thread. Let's stay focused on personal situations here.

[LadyGeek]

I merged snic's thread into the ongoing discussion. I also retitled the thread. Please focus on how this new legislation affects your personal situation.

(Thanks to the member who reported the post and provided a link to this thread.)

[LadyGeek]

trueblueky's thread has also been merged into here.

[pahkcah]

Thank you. Asking again how a relative can figure out if the new law will change their income.

Here's how the Windfall Elimination Provision (WEP) works:
https://www.ssa.gov/policy/docs/program ... ision.html

Here's an SSA calculator where people can determine what the impact of the WEP will be:
https://www.ssa.gov/benefits/retirement ... pjs04.html

To use the calculator, you will need to enter the relative's total SS yearly earnings and the monthly amount of the pension that was not covered by SS.

I can give you an example, which is DW and me. We both retired from jobs with pensions that were not covered by SS. We also worked in jobs that were covered by SS, such that we both qualify for SS. The impact of WEP is that our combined monthly SS payments are, or were, reduced by almost $1,000.

You can also check out the WEP chart: https://www-origin.ssa.gov/benefits/ret ... r/wep.html
That chart shows the maximum monthly amount a benefit may be reduced because of the WEP.

We were also affected by the Government Pension Offset (GPO). My SS monthly payment is far larger than DW's, but she would not have been able to claim any of my payment if I predeceased her due to the size of her pension. With the new law, her monthly SS payment would be increased significantly if I die first.

[Johnny Thinwallet]

Well, it certainly didn't take long for the other thread on this to get locked... Let's see what happens here.

I occasionally advise my sister-in-law on financial concerns, and she's a teacher in a state with a non-covered pension, so I tried to understand this when it first came up last month. I think this means she can now expect 50% of her husband's full SS benefit on top of her full state pension.

Looking at it more abstractly, I think this means that jobs with non-covered pensions just became much more attractive. Like potentially more attractive than jobs with covered pensions, assuming one is married to someone else who pays into SS, right?

I've always thought my sister-in-law was assuming risk by being handcuffed to a job in a particular state with a shaky pension system and no SS to fall back on. I think this still doesn't address that risk (i.e. not being able to stay long enough to actually get the pension, and also not having any SS earnings record), but now that risk can be rewarded.

Nice analysis and thought provoking question.

Our situation sounds similar to your sister-in-law's situation. My wife is a public school teacher with a non-covered pension (STRS Ohio), and this school year is her 17th year teaching. She has only a few SS credits from part-time jobs she worked two decades ago in high school and college so it is extremely unlikely she'll qualify for any SS on her own record.

But a spousal benefit for my wife off my record was always a question for me. Assuming my wife worked a full (or near full) teaching career, my understanding is that the GPO would completely wipe out any potential spousal benefit down to $0. Now it appears that GPO barrier is out of our way so in theory SS will now treat my wife the same as they would treat a lifetime stay-at-home mom and provide a full spousal benefit of 50% of my SS benefit.

This almost feels too good to be true so I'll be very interested to see how this plays out for others and will be definitely interested in reading others' experiences here.

For us, the plan was for STRS Ohio to be my wife's primary source of retirement income (supplemented by savings). But STRS Ohio has been experiencing some recent turmoil and controversy, particularly around COLA benefits. Additionally, STRS Ohio is quite back-loaded which means a hefty haircut when looking at early retirement options. If my wife is now eligible for full SS spousal benefits, this will be very beneficial for us as a supplemental income stream.

[warner25]

...so in theory SS will now treat my wife the same as they would treat a lifetime stay-at-home mom... almost feels too good to be true

I was thinking the same. My wife is a stay-at-home mom, also with a only a few SS credits from part-time college jobs and two years of teaching in a (covered) public school system before we had kids. If she went back to work for just a few more years, it would theoretically be better (I think) for her to teach in a non-covered system (or any job that doesn't pay into SS). Because if she still ended up with fewer than 40 credits, or her PIA was still less than 50% of mine, whatever she paid into SS would effectively be "wasted." If one never pays in, the spousal benefit is kind of free money[1].

...STRS Ohio has been experiencing some recent turmoil and controversy, particularly around COLA benefits...

I don't know if this motivated the legislative change at all, but I think that a notable side effect is some protection for a lot of people who are in shaky state pension systems that have long been underfunded and assuming wildly optimistic investment returns. I certainly feel better for my sister-in-law's future with this.

[1] Or it's kind of recognition and compensation for the unpaid but still economically valuable work that stay-at-home care takers do. I like to think of it that way, but of course even people who don't have kids can claim spousal benefits.

[siamond]

I don't know if this motivated the legislative change at all, but I think that a notable side effect is some protection for a lot of people who are in shaky state pension systems that have long been underfunded and assuming wildly optimistic investment returns. I certainly feel better for my sister-in-law's future with this.

Or just some terribly underpaid educators, not having worked long enough due to personal circumstances (kids, expatriation, etc), hence a very meager pension. That's my wife's case. We're very happy that her spousal SSA benefits are no longer reduced, that is for sure, we just applied a few months ago!

It seems to me there was a good reason for which GPO/WEP was put in place though. An admin with a full working years record and a comfy salary / generous pension really shouldn't get spousal SSA IMHO. It's the other extreme case.

Beats me why it took 40 years to eliminate this GPO/WEP system instead of just tuning it better. It really shouldn't have been hard to find a better formula with a middle ground... Oh well, this isn't how Congress works, I'm afraid.

In any case, our retirement suddenly got an unexpected nice little boost!

[Ron Ronnerson]

This almost feels too good to be true so I'll be very interested to see how this plays out for others and will be definitely interested in reading others' experiences here.

I'll share my situation and do have a question as well. After working in private sector jobs for 13 years, I decided to become a teacher in California, where we don’t pay into social security. I was almost 30 years old when I changed career paths. I have over 40 social security credits so qualify for benefits under my own record. However, I’ve been teaching at public schools for the past 22 years (and plan to continue to do so for another 11 years) and haven’t been paying into social security so would have been impacted by the WEP.

Previously, the recommendation on opensocialsecurity.com was for my wife and I to each file for benefits at age 70 (we’re both currently 50 years old). Due to the impact of the WEP, my benefit at age 70 would have been around $300/month. The recommendation now is for me to file at 62 instead and my benefit has increased somewhat to $500/month. So it’s not only a bit higher benefit but would also begin 8 years sooner.

When my wife files at 70 (per the recommendation on opensocialsecurity.com), I’d also start receiving an additional $200/month (roughly) due to spousal benefits that would be stacked on top of my own benefit.

The impact of the GPO being repealed is bigger, though. In the case that my wife (who worked for 30 years in private sector jobs) predeceases me, I would now qualify for survivor benefits. Instead of receiving $0, I’d now get $2,200/month.

By the way, I work in the San Francisco Bay Area and it has been very difficult to recruit teachers around these parts lately. We need qualified people anywhere that we can find them and it just became at least a bit easier to recruit folks considering a career change because they no longer have to worry about the impact on their accrued social security benefits.

I know that there are some people who are happy about the recent change and others who feel the opposite. New laws tend to evoke strong reactions (I'm sure many of us remember the early days of the Affordable Care Act) but this forum isn’t the place to express those opinions as that will just get the thread locked. People have important questions that ought to be answered with the proper mindset: that of helping the individual make the most of their situation under the rules as they exist right now.

So, here is my question. I still haven’t reached the first bend point under social security. Now that the WEP/GPO have been repealed, is it worth my while to try to work a side gig in the decade ahead (from age 50 to age 60) in order to try to get a higher social security benefit based on my own record or is it wiser instead to not do that since I’d qualify for spousal benefits anyhow when my wife files? If more information is needed, please let me know and I’d be happy to provide it.

[rkhusky]

I don't know if this motivated the legislative change at all, but I think that a notable side effect is some protection for a lot of people who are in shaky state pension systems that have long been underfunded and assuming wildly optimistic investment returns. I certainly feel better for my sister-in-law's future with this.

Or just some terribly underpaid educators, not having worked long enough due to personal circumstances (kids, expatriation, etc), hence a very meager pension. That's my wife's case. We're very happy that her spousal SSA benefits are no longer reduced, that is for sure, we just applied a few months ago!

It seems to me there was a good reason for which GPO/WEP was put in place though. An admin with a full working years record and a comfy salary / generous pension really shouldn't get spousal SSA IMHO. It's the other extreme case.

Beats me why it took 40 years to eliminate this GPO/WEP system instead of just tuning it better. It really shouldn't have been hard to find a better formula with a middle ground... Oh well, this isn't how Congress works, I'm afraid.

In any case, our retirement suddenly got an unexpected nice little boost!

Perhaps a future Congress will make the system fairer by requiring everyone to pay into SS. Not sure why these side deals were made anyway.

[calwatch]

So, here is my question. I still haven’t reached the first bend point under social security. Now that the WEP/GPO have been repealed, is it worth my while to try to work a side gig in the decade ahead (from age 50 to age 60) in order to try to get a higher social security benefit based on my own record or is it wiser instead to not do that since I’d qualify for spousal benefits anyhow when my wife files? If more information is needed, please let me know and I’d be happy to provide it.

You would have to determine what the spousal benefit is and what the benefit of getting to the first bend point would be. If the spousal benefit exceeds that of the first bend point, don't bother working.

As far as my case, I have spent all of my post-college career in a non-covered position, but have tried to earn a quarter or two every year from side work. With this change, it definitely makes me want to take a position in a covered position for a few years after I retire from the public sector, to get to the first bend point. Either in my existing field, taking a public position in California which pays into Social Security (for some reason, most State of California workers pay into Social Security, as do many of the smaller cities), or something like FEMA reservist or the Foreign Service. The most likely "fix" once Congress rediscovers that this is a windfall again, would be a proportional calculation based on total income in a manner similar to how non-resident state taxes are calculated (https://www.thinkadvisor.com/2024/12/30 ... -problems/), and that would still be beneficial.

[CapeLinda]

Calwatch thanks for posting that link.Interesting read.

For those concerned re "windfalls" for certain people, lets not forget the system for widows only pays out one benefit and then claws back for those who worked outside SSA system either in US or outside the US. This results in less than one earned benefit less hundreds per month. There are plenty of us who are "generous" contributors to the general fund.

Very sad to hear those stories of 70+ year old widows who have had to go back to work due to not being eligible for spouses SSA. Hard to believe that was even considered legal and its taken so long to correct this major flaw in the system.

Cheers

Linda

[coachd50]

As a public school teacher in a state that does not pay into SS- this now increases my likelihood of working a second job in the summer as I am not forfeiting the SS deductions as I would have in the past.

[blueberry]

I'll be taking Social Security early. Starting this February!