Possible WEP/GPO repeal [WEP / GPO repealed - How will affect you?]

[Harry Livermore]

Keep in mind that nobody's getting something for free.

As illustrated upthread, with a little modification by me:
2 best friends, born on the same day, go to work in a factory at 18, on the same day, work side by side for the same pay, and contribute the exact same amount in FICA taxes:
Person A works for 20 years and then loafs on the couch until retirement
Person B works for 20 years and then teaches in a public school system that does not pay into SS
They file for SS on the same day, at FRA.
Person A gets $1800 per month in SS
Person B gets $1200 per month in SS
They were in, and out, of the SS for the exact same amount of time. "The Public" was not "cheated" out of anything. The same amount of FICA tax was contributed.
Yes, admittedly, person B has "more resources for a secure retirement". But those resources, and the chapter of their lives that enabled those resources, should not impact previously earned SS benefits. To illustrate THAT point:
Add person C to the mix. A third "bestie" whose profile matches the other two, and who started and finished work at the factory on the same dates. Same FICA taxes contributed. Same unadjusted benefit on the annual statement. Person C's spouse was a high-earner, and since they did not need the money, all of Person C's earnings went into a rental property. It now spins off $1000 per month, in addition to the $1800 per month in SS collected by person A.
Should we reduce person C's SS? The net effect on the SSA, the Treasury, and the solvency of the program are the same in all three cases. But only in the case of person B do we oddly single them out for a reduction because "they already have enough".

And that's just an illustration of WEP. I have not touched on GPO, which could mean that person B gets NOTHING in survivor's benefits when their spouse predeceases them. Persons A and C get THE FULL AMOUNT.

WEP and GPO were oddly specific provisions in hodgepodge of changes to SS in the 1980s, which included raising FICA taxes, raising FRA, and introducing taxation of benefits. They were highly punitive to a small number of people without much influence, and thus were just accepted with a shrug.
[Unnecessary comments removed by admin LadyGeek]
Cheers

[Harmanic]

One way we were planning to reduce the impact of GPO was to joint annuitize the pension with our youngest child, which would have reduced the pension payments and the GPO while creating a pension that would last our child's lifetime.

Now we can skip that strategy and just take the higher payments without the impact of GPO.

[rkhusky]

+1. I wish this bill had a provision to wean these states that opted out of SS to force them back in. Would make things seem more fair. The fact that people who never worked a day in their life can get spousal and survivor benefits is what messes things up, but there is a need for that. So maybe this will just be a perk for government workers now. Hopefully more states don't start dropping out of SS now for state workers. That's going to dry up the trust fund even faster.

I don't mean to be argumentative, but the state systems are just like SS in that they are "pay as you go". Without younger workers contributing, they will quickly become insolvent, and millions of current retirees will be left hanging. The state systems also predate the creation of SS, and I presume those workers, and state legislatures, thought their in-house public systems were superior to SS... and this predating, and state sovereignty, is what allowed these categories of workers to be exempt. I'm not sure that new exemptions would remain unchallenged.
Cheers

There’s really no problem regarding people fully on the state pensions or SS. The problem arises on how to fairly mix the two. SS has its bend points, which favor lower earners. I don’t know if state pensions have similar bend points. If there’s no correction, then people who work 50/50 under SS and a state pension would get a higher payout compared to someone who works 100% under one system for the same wages and same contribution to the pension systems. I presume the former rules were intended to correct for that.

[BD w/ Kung-Fu Grip]

Keep in mind that nobody's getting something for free.

As illustrated upthread, with a little modification by me:
2 best friends, born on the same day, go to work in a factory at 18, on the same day, work side by side for the same pay, and contribute the exact same amount in FICA taxes:
Person A works for 20 years and then loafs on the couch until retirement
Person B works for 20 years and then teaches in a public school system that does not pay into SS
They file for SS on the same day, at FRA.
Person A gets $1800 per month in SS
Person B gets $1200 per month in SS
They were in, and out, of the SS for the exact same amount of time. "The Public" was not "cheated" out of anything. The same amount of FICA tax was contributed.
Yes, admittedly, person B has "more resources for a secure retirement". But those resources, and the chapter of their lives that enabled those resources, should not impact previously earned SS benefits. To illustrate THAT point:
Add person C to the mix. A third "bestie" whose profile matches the other two, and who started and finished work at the factory on the same dates. Same FICA taxes contributed. Same unadjusted benefit on the annual statement. Person C's spouse was a high-earner, and since they did not need the money, all of Person C's earnings went into a rental property. It now spins off $1000 per month, in addition to the $1800 per month in SS collected by person A.
Should we reduce person C's SS? The net effect on the SSA, the Treasury, and the solvency of the program are the same in all three cases. But only in the case of person B do we oddly single them out for a reduction because "they already have enough".

And that's just an illustration of WEP. I have not touched on GPO, which could mean that person B gets NOTHING in survivor's benefits when their spouse predeceases them. Persons A and C get THE FULL AMOUNT.

WEP and GPO were oddly specific provisions in hodgepodge of changes to SS in the 1980s, which included raising FICA taxes, raising FRA, and introducing taxation of benefits. They were highly punitive to a small number of people without much influence, and thus were just accepted with a shrug.
I agree that SS needs some tweaks to remain solvent. But these were bad provisions in the law. Good riddance.
Cheers

You forgot person D, who works the same 20 years as A and B, but then continues with SS-covered wages at the same salary as person B for 20 more years. That person does not receive double person A's SS benefit, and between SS and pension, receives significantly less than person B.

[rkhusky]

Keep in mind that nobody's getting something for free.

As illustrated upthread, with a little modification by me:
2 best friends, born on the same day, go to work in a factory at 18, on the same day, work side by side for the same pay, and contribute the exact same amount in FICA taxes:
Person A works for 20 years and then loafs on the couch until retirement
Person B works for 20 years and then teaches in a public school system that does not pay into SS
They file for SS on the same day, at FRA.
Person A gets $1800 per month in SS
Person B gets $1200 per month in SS
They were in, and out, of the SS for the exact same amount of time. "The Public" was not "cheated" out of anything. The same amount of FICA tax was contributed.
Yes, admittedly, person B has "more resources for a secure retirement". But those resources, and the chapter of their lives that enabled those resources, should not impact previously earned SS benefits. To illustrate THAT point:
Add person C to the mix. A third "bestie" whose profile matches the other two, and who started and finished work at the factory on the same dates. Same FICA taxes contributed. Same unadjusted benefit on the annual statement. Person C's spouse was a high-earner, and since they did not need the money, all of Person C's earnings went into a rental property. It now spins off $1000 per month, in addition to the $1800 per month in SS collected by person A.
Should we reduce person C's SS? The net effect on the SSA, the Treasury, and the solvency of the program are the same in all three cases. But only in the case of person B do we oddly single them out for a reduction because "they already have enough".

And that's just an illustration of WEP. I have not touched on GPO, which could mean that person B gets NOTHING in survivor's benefits when their spouse predeceases them. Persons A and C get THE FULL AMOUNT.

WEP and GPO were oddly specific provisions in hodgepodge of changes to SS in the 1980s, which included raising FICA taxes, raising FRA, and introducing taxation of benefits. They were highly punitive to a small number of people without much influence, and thus were just accepted with a shrug.
I agree that SS needs some tweaks to remain solvent. But these were bad provisions in the law. Good riddance.
Cheers

You forgot person D, who works the same 20 years as A and B, but then continues with SS-covered wages at the same salary as person B for 20 more years. That person does not receive double person A's SS benefit, and between SS and pension, receives significantly less than person B.

Right. The SS bend points have higher earners subsidizing the SS payout of lower earners. By allowing people to opt out of SS for part of their career and pay into an alternative system, they can be higher earners who don’t subsidize lower earners. They, in fact, look like lower earners in both systems and get subsidized by the higher earners in both systems (if the state systems have similar bend points).

[Harry Livermore]

Keep in mind that nobody's getting something for free.

As illustrated upthread, with a little modification by me:
2 best friends, born on the same day, go to work in a factory at 18, on the same day, work side by side for the same pay, and contribute the exact same amount in FICA taxes:
Person A works for 20 years and then loafs on the couch until retirement
Person B works for 20 years and then teaches in a public school system that does not pay into SS
They file for SS on the same day, at FRA.
Person A gets $1800 per month in SS
Person B gets $1200 per month in SS
They were in, and out, of the SS for the exact same amount of time. "The Public" was not "cheated" out of anything. The same amount of FICA tax was contributed.
Yes, admittedly, person B has "more resources for a secure retirement". But those resources, and the chapter of their lives that enabled those resources, should not impact previously earned SS benefits. To illustrate THAT point:
Add person C to the mix. A third "bestie" whose profile matches the other two, and who started and finished work at the factory on the same dates. Same FICA taxes contributed. Same unadjusted benefit on the annual statement. Person C's spouse was a high-earner, and since they did not need the money, all of Person C's earnings went into a rental property. It now spins off $1000 per month, in addition to the $1800 per month in SS collected by person A.
Should we reduce person C's SS? The net effect on the SSA, the Treasury, and the solvency of the program are the same in all three cases. But only in the case of person B do we oddly single them out for a reduction because "they already have enough".

And that's just an illustration of WEP. I have not touched on GPO, which could mean that person B gets NOTHING in survivor's benefits when their spouse predeceases them. Persons A and C get THE FULL AMOUNT.

WEP and GPO were oddly specific provisions in hodgepodge of changes to SS in the 1980s, which included raising FICA taxes, raising FRA, and introducing taxation of benefits. They were highly punitive to a small number of people without much influence, and thus were just accepted with a shrug.
I agree that SS needs some tweaks to remain solvent. But these were bad provisions in the law. Good riddance.
Cheers

You forgot person D, who works the same 20 years as A and B, but then continues with SS-covered wages at the same salary as person B for 20 more years. That person does not receive double person A's SS benefit, and between SS and pension, receives significantly less than person B.

... and MAY receive less than person C who invested in real estate. Or "tech bros" that get free RSUs.
The bend points guarantee a less than equal outcome for all who participate in SS. What we all do outside of this scheme, private sector pensions, state pensions, thrifty living/ sensible investing, should not affect benefits earned under the system.
It was a bad law, good riddance.
Cheers

[Harry Livermore]

I don't mean to be argumentative, but the state systems are just like SS in that they are "pay as you go". Without younger workers contributing, they will quickly become insolvent, and millions of current retirees will be left hanging. The state systems also predate the creation of SS, and I presume those workers, and state legislatures, thought their in-house public systems were superior to SS... and this predating, and state sovereignty, is what allowed these categories of workers to be exempt. I'm not sure that new exemptions would remain unchallenged.
Cheers

There’s really no problem regarding people fully on the state pensions or SS. The problem arises on how to fairly mix the two. SS has its bend points, which favor lower earners. I don’t know if state pensions have similar bend points. If there’s no correction, then people who work 50/50 under SS and a state pension would get a higher payout compared to someone who works 100% under one system for the same wages and same contribution to the pension systems. I presume the former rules were intended to correct for that.

Many of those state plans require a MUCH higher contribution percentage, and all the way up past the FICA limit. How did SSA reimburse these state employees when WEP and GPO existed?
Cheers

[Harry Livermore]

Anyway, I have voiced my opinion, and do not wish to argue. I'll duck out now.
Cheers

[NYnative]

I’m somewhat confused by the chart for the maximum WEP penalty. I claimed SS in 2015 when I turned 65. I had 17 years of SS coverage from military service and a full time job for 10 years after I retired from the federal government. I don’t remember what the WEP was when I claimed, but it was substantial, but less than half of my benefit. When I looked at the maximum WEP penalty for 2024, I believe it was somewhere around $580 a month. Is that the amount of my penalty today or was it set in stone in 2015? I can’t find anything that explained whether the WEP max penalty changes each year or is frozen from the date you claimed. One person posted that their penalty is about $20K a year. I don’t understand how that’s possible if the max penalty now is about $580 a month. That comes to just under $7K a year. Can someone please explain this? Thanks.

[rkhusky]

There’s really no problem regarding people fully on the state pensions or SS. The problem arises on how to fairly mix the two. SS has its bend points, which favor lower earners. I don’t know if state pensions have similar bend points. If there’s no correction, then people who work 50/50 under SS and a state pension would get a higher payout compared to someone who works 100% under one system for the same wages and same contribution to the pension systems. I presume the former rules were intended to correct for that.

Many of those state plans require a MUCH higher contribution percentage, and all the way up past the FICA limit. How did SSA reimburse these state employees when WEP and GPO existed?
Cheers

And they get a much higher payout, some up to 100% of their salary. Perhaps the implementations of WEP and GPO weren’t the best, I don’t know the details, but there needs to be some sort of adjustment for allowing folks to opt out of paying into SS, with some gaming the system at the expense of others.

[NYnative]

SS is already in trouble due to changing age demographics. Allowing people to opt out would result in the total demise of the system. Some people want that - I am not one of them.

[Northern Flicker]

+1. I wish this bill had a provision to wean these states that opted out of SS to force them back in. Would make things seem more fair. The fact that people who never worked a day in their life can get spousal and survivor benefits is what messes things up, but there is a need for that. So maybe this will just be a perk for government workers now. Hopefully more states don't start dropping out of SS now for state workers. That's going to dry up the trust fund even faster.

I don't mean to be argumentative, but the state systems are just like SS in that they are "pay as you go". Without younger workers contributing, they will quickly become insolvent, and millions of current retirees will be left hanging.

I can't speak for all states, but that is false in the state where I live. The portfolio backing the public pension is audited regularly by an actuarial consulting firm, and when it has been found to be underfunded, a messy process of political wrangling and lawsuits has ensued to figure out how to shore it up. Public employees in the state where I live pay into SS also.

[The 19th hole]

There’s really no problem regarding people fully on the state pensions or SS. The problem arises on how to fairly mix the two. SS has its bend points, which favor lower earners. I don’t know if state pensions have similar bend points. If there’s no correction, then people who work 50/50 under SS and a state pension would get a higher payout compared to someone who works 100% under one system for the same wages and same contribution to the pension systems. I presume the former rules were intended to correct for that.

Many of those state plans require a MUCH higher contribution percentage, and all the way up past the FICA limit. How did SSA reimburse these state employees when WEP and GPO existed?
Cheers

+1 & thanks for all of the WEP/GPO posts.

[calwatch]

I’m somewhat confused by the chart for the maximum WEP penalty. I claimed SS in 2015 when I turned 65. I had 17 years of SS coverage from military service and a full time job for 10 years after I retired from the federal government. I don’t remember what the WEP was when I claimed, but it was substantial, but less than half of my benefit. When I looked at the maximum WEP penalty for 2024, I believe it was somewhere around $580 a month. Is that the amount of my penalty today or was it set in stone in 2015? I can’t find anything that explained whether the WEP max penalty changes each year or is frozen from the date you claimed. One person posted that their penalty is about $20K a year. I don’t understand how that’s possible if the max penalty now is about $580 a month. That comes to just under $7K a year. Can someone please explain this? Thanks.

I think it was explained upthread that the reduction was due to the GPO, not the WEP. Arguably the survivor benefit is most salient to those who get married. For people who never marry (or are not married for long enough), the survivor benefit never gets used.

Here is some further reading about Social Security coverage of local government employees: https://crsreports.congress.gov/product/pdf/R/R46961/2

I’m an elementary school teacher. Our certificated staff at the school where I work is around 30 people and there is not one single teacher under the age of 40 there. Most are over age 50. When I began teaching at this school a couple of decades ago, it was much more heterogenous in terms of age distribution of the staff and there were plenty of 20- and 30-somethings.

According to the numbers provided by The Commission on Teacher Credentialing, there were 19,639 new credentials issued in the state of California in 2020-2021. The number went down to 16,484 in 2021-2022. The most recent data, for 2022-2023, shows the number to have fallen to 14,636. These are some steep declines since the start of the pandemic.

Edsource.org had an article out a few days ago about this topic and they stated that the shortage is getting particularly bad at the elementary level. They wrote: That [2022-2023] is the second year that multiple-subject credentials, required to teach elementary school, have gone down substantially. The number declined by 15%, or 1,000 credentials, in 2022-23 and by 25% in 2021-22.

At least at my school but likely at many others, there are tons of looming teacher retirements and there don’t appear to be very many folks waiting in the wings. Over the years, when someone has asked me about becoming a teacher, I highlighted all the usual perks (that it’s a fulfilling job with a nice amount of time off and comes with a pension at the end). However, I’ve told people who were considering a career change to factor in how it might impact their social security benefit (as this is something many people don't know much about). Everyone's situation is, of course, different but the WEP & GPO did serve as a deterrent for some people. Well, at least that barrier is now gone. I guess we'll see if it makes much of a difference in terms of the shortage.

I think the WEP is pretty low on the list in teacher retention issues. The high cost of living in the Bay Area and California, inflexible work schedule, and base pay compared to other things that talented educated folks could do are likely much more salient. As a non-covered employee when I look for other jobs, I tend to look for ones which also don't pay into Social Security, but more to avoid paying that tax and a pension contribution rather than concerns about the WEP. I would slightly consider a Social Security-covered position as a capstone to my career for a few years because the WEP is gone, but I would likely be doing something paid regardless.

[rkhusky]

Here is some further reading about Social Security coverage of local government employees: https://crsreports.congress.gov/product/pdf/R/R46961/2

Thanks. Very informative.

[Ron Ronnerson]

I’ve told people who were considering a career change to factor in how it might impact their social security benefit (as this is something many people don't know much about). Everyone's situation is, of course, different but the WEP & GPO did serve as a deterrent for some people. Well, at least that barrier is now gone. I guess we'll see if it makes much of a difference in terms of the shortage.

I think the WEP is pretty low on the list in teacher retention issues. The high cost of living in the Bay Area and California, inflexible work schedule, and base pay compared to other things that talented educated folks could do are likely much more salient.

While I was speaking more about the repeal of the WEP and GPO potentially helping with recruitment efforts as opposed to retaining current staff, I do agree that it's likely not as significant as some of the other items you mentioned such as the high cost of living in the area and the base pay (especially that of a starting teacher).

Anyway, due to a variety of reasons, many young, college-educated people just aren't going into teaching like they once were (at least around here). So if we can get some older folks who have maybe already made some money to join the ranks, perhaps it will help with the shortage at least a bit. For example, a middle-aged person currently working in the private sector and thinking about going into teaching might have previously been deterred from changing careers once they learned about the impact on their social security benefit. However, under the new system, not only would the person not be deterred, perhaps they'd even feel incentivized.

[VanGar+Goyle]

Right. The SS bend points have higher earners subsidizing the SS payout of lower earners. By allowing people to opt out of SS for part of their career and pay into an alternative system, they can be higher earners who don’t subsidize lower earners. They, in fact, look like lower earners in both systems and get subsidized by the higher earners in both systems (if the state systems have similar bend points).

I am still waiting for an example of someone who worked 40 quarters or 10 years, is below the first bend point, so getting a 90% credit in primary insurance amount (PIA) .
I want to know how many years before they get all the money that they paid into SS back. For some people it is 4 years, but if they are credited at 6x the top rate, it might be less than 2 years, even if they are high earners.

[ddbtoth]

Right. The SS bend points have higher earners subsidizing the SS payout of lower earners. By allowing people to opt out of SS for part of their career and pay into an alternative system, they can be higher earners who don’t subsidize lower earners. They, in fact, look like lower earners in both systems and get subsidized by the higher earners in both systems (if the state systems have similar bend points).

I am still waiting for an example of someone who worked 40 quarters or 10 years, is below the first bend point, so getting a 90% credit in primary insurance amount (PIA) .
I want to know how many years before they get all the money that they paid into SS back. For some people it is 4 years, but if they are credited at 6x the top rate, it might be less than 2 years, even if they are high earners.

I’ve got 31 quarters from summer jobs and work prior to my 35 years in public education. Retired last year with a pension from TRS, at 60 years of age. I guess, once SS gets their act together, I need to work 2.5 more years to get that money, is that right?

[tallguy3891]

I am still waiting for an example of someone who worked 40 quarters or 10 years, is below the first bend point, so getting a 90% credit in primary insurance amount (PIA) .
I want to know how many years before they get all the money that they paid into SS back. For some people it is 4 years, but if they are credited at 6x the top rate, it might be less than 2 years, even if they are high earners.

I’ve got 31 quarters from summer jobs and work prior to my 35 years in public education. Retired last year with a pension from TRS, at 60 years of age. I guess, once SS gets their act together, I need to work 2.5 more years to get that money, is that right?

There are other ways possible (and which could be more $ than on own record) if one does not have enough quarters of coverage on their own record (or even if one does), such as spousal benefits if now married, surviving spousal benefits, divorced spousal benefits. There are regs specific to each, good info at SSA.gov

[mbres60]

I am still waiting for an example of someone who worked 40 quarters or 10 years, is below the first bend point, so getting a 90% credit in primary insurance amount (PIA) .
I want to know how many years before they get all the money that they paid into SS back. For some people it is 4 years, but if they are credited at 6x the top rate, it might be less than 2 years, even if they are high earners.

I’ve got 31 quarters from summer jobs and work prior to my 35 years in public education. Retired last year with a pension from TRS, at 60 years of age. I guess, once SS gets their act together, I need to work 2.5 more years to get that money, is that right?

You don't need to wait. When dh retired he knew he had 36 quarters. He found a part time job and got his 40 quarters. You don't actually have to work "quarters". You need to earn $1810 to earn one quarter. $7240 within one year to earn 4 quarters. You could earn it all within 6 months or whatever. It just needs to be earned during the year.

[popoki]

Couldn't you start a business (even if it accomplishes nothing), pay yourself a salary, and withhold employer and employee social security to meet the 40 quarter rule?

[queenofthemadhouse]

My mother (80 yo) was impacted by the GPO.

We went online today to apply for her benefits. We completed the application, but after we completed it, I saw something that said 'benefits suspended'. Does that mean she applied back in the day and is effectively receiving a $0 benefit? She has been receiving Medicare and she remembers them telling her that her benefit was offset, but she doesn't know if they applied for her or if she just accompanied my father when he applied and that was an offhand comment.

I'm trying to figure out two things.

1) Will she get retroactive payments to 1/1/2024 or just back to 7/1/2024 (6 months worth)?

2) Will there be any delayed retirement credits since she's well past 70?

[warner25]

...Add person C to the mix... Person C's spouse was a high-earner, and since they did not need the money, all of Person C's earnings went into a rental property. It now spins off $1000 per month, in addition to the $1800 per month in SS collected by person A...

In this case, in addition having more investments / rental income, Person C might also get more out of SS than Person A because 50% of their high-earning spouse's PIA might be higher than their own PIA, right?

Assuming that the idea of spousal benefits was to provide for stay-at-home caretakers (who did unpaid but still economically valuable work, often without much of a choice back then), it's curious to me that spousal benefits work the way they do (being a function of the spouse's PIA) rather than being a reasonable fixed amount; like a UBI or non-zero floor that everyone can claim between ages 62-70, with every SS credit earned just goosing that amount upwards a bit. I wonder what the debate was like at the time.

...The fact that people who never worked a day in their life can get spousal and survivor benefits is what messes things up, but there is a need for that... Hopefully more states don't start dropping out of SS now for state workers...

This echoes what I've been saying too, that the biggest gains (in absolute terms) will be for folks who will go from zero to full spousal benefits, and that (all else being equal) having one spouse in a non-covered job now looks more attractive than having both spouses in SS covered jobs. I doubt that any state could implement a new non-covered system at this point, but could more workers be shifted under an existing one? I don't know. But this has made me realize that (again, all else being equal) it would be advantageous for my wife to take a non-covered job if she ever goes back to paid work for a few years.

[ddbtoth]

I’ve got 31 quarters from summer jobs and work prior to my 35 years in public education. Retired last year with a pension from TRS, at 60 years of age. I guess, once SS gets their act together, I need to work 2.5 more years to get that money, is that right?

You don't need to wait. When dh retired he knew he had 36 quarters. He found a part time job and got his 40 quarters. You don't actually have to work "quarters". You need to earn $1810 to earn one quarter. $7240 within one year to earn 4 quarters. You could earn it all within 6 months or whatever. It just needs to be earned during the year.

I just read that, thank you, and the other poster’s help.

[lereh]

someone above mentioned state pension systems having bend points. I doubt they do. They work more like traditional pension plans, the more you make the higher your pension. Years of service times some defined number of years highest salary times a defined percentage.

Hence the controversy. Are state pension plans in Social Security non-covered states, a replacement to Social Security or a traditional pension plan. Really they are both, so trying to parse it out is an impossibility. No set of rules that you design will be fair for everybody and prevent windfalls.

[rkhusky]

someone above mentioned state pension systems having bend points. I doubt they do. They work more like traditional pension plans, the more you make the higher your pension. Years of service times some defined number of years highest salary times a defined percentage.

Hence the controversy. Are state pension plans in Social Security non-covered states, a replacement to Social Security or a traditional pension plan. Really they are both, so trying to parse it out is an impossibility. No set of rules that you design will be fair for everybody and prevent windfalls.

In that case, it would only be under SS where you might be considered lower income than you truly are, and be subsidized by higher earners.

[lereh]

you could say the spousal benefit is a windfall, but what about for the married couple where the higher earner had a substantial income above the last point and thus was only getting $.15 on the dollar? On the one hand a windfall, and on the other, a subsidy being given.

Perhaps the only way to look at this is that Social Security is a form of UBI for old people, since it is capped just like UBI (after the second bend point benefits are extremely limited).

If it is UBI, then take it a step further and say it is per capita and that is why you get more if you have two people.

[lereh]

oh, and don’t forget it is taxed or at least 85% anyway for high earners. So Social Security gets some percentage of it back that is progressive.

I’m not sure how it all nets out, maybe somebody will do a study at some point.

[NYnative]

oh, and don’t forget it is taxed or at least 85% anyway for high earners. So Social Security gets some percentage of it back that is progressive.
I’m not sure how it all nets out, maybe somebody will do a study at some point.

Three errors here - the 85% taxation of SS kicks in for married couples at $44K. If that's who you consider high earners, I have a bridge in Brooklyn that I'm selling in pieces. Second, 85% of your SS is taxable when your married income exceeds $44K. It's not taxed at 85%, but at your highest tax rate. Third, none of your SS comes from the federal income tax - it all comes from the SS tax that's assessed in addition to the federal income and in a separate fund (some sort of earmark).

Just saying it helps if the info is correct.

[lereh]

your clarifications just further prove my point, some of any given perceived windfall from repeal of WEP/GPO gets paid right back in via the taxation of Social Security over defined thresholds.

The federal income tax on Social Security benefits, btw, does not go into the general fund, it goes back into the Social Security trust fund.

just saying. It helps if the info is correct.

bogleheads can be so pedantic.

[pahkcah]

My mother (80 yo) was impacted by the GPO.

We went online today to apply for her benefits. We completed the application, but after we completed it, I saw something that said 'benefits suspended'. Does that mean she applied back in the day and is effectively receiving a $0 benefit? She has been receiving Medicare and she remembers them telling her that her benefit was offset, but she doesn't know if they applied for her or if she just accompanied my father when he applied and that was an offhand comment.

I'm trying to figure out two things.

1) Will she get retroactive payments to 1/1/2024 or just back to 7/1/2024 (6 months worth)?

2) Will there be any delayed retirement credits since she's well past 70?

DW and I have been trying to submit the online application for her to claim against my much higher SS payment. All we receive is a message that says, "We are sorry for the inconvenience, but we cannot process your request online."

My understanding is that WEP payments will be retroactive back to the beginning of 2024, and that GPO payments will go back 6 months. I don't believe delayed credits can be received after age 70, but I'm far from an expert. Per the SSA, "When you reach age 70, your monthly benefit stops increasing even if you continue to delay taking benefits." https://www.ssa.gov/benefits/retirement ... delay.html

Hoping someone more knowledgeable can respond.

[mbres60]

My mother (80 yo) was impacted by the GPO.

We went online today to apply for her benefits. We completed the application, but after we completed it, I saw something that said 'benefits suspended'. Does that mean she applied back in the day and is effectively receiving a $0 benefit? She has been receiving Medicare and she remembers them telling her that her benefit was offset, but she doesn't know if they applied for her or if she just accompanied my father when he applied and that was an offhand comment.

I'm trying to figure out two things.

1) Will she get retroactive payments to 1/1/2024 or just back to 7/1/2024 (6 months worth)?

2) Will there be any delayed retirement credits since she's well past 70?

DW and I have been trying to submit the online application for her to claim against my much higher SS payment. All we receive is a message that says, "We are sorry for the inconvenience, but we cannot process your request online."

My understanding is that WEP payments will be retroactive back to the beginning of 2024, and that GPO payments will go back 6 months. I don't believe delayed credits can be received after age 70, but I'm far from an expert. Per the SSA, "When you reach age 70, your monthly benefit stops increasing even if you continue to delay taking benefits." https://www.ssa.gov/benefits/retirement ... delay.html

Hoping someone more knowledgeable can respond.

Call them. We did and got a phone interview date near the end of February. The six month look back period starts from the date you call, not the date of the phone interview.

[HomeStretch]

A parent will benefit from this which is great as their high care expenses are quickly draining their portfolio. But the lump sum 2024 SS benefit payment received in 2025 will push the parent into IRMAA territory for one year. Hopefully an IRMAA redetermination will be allowed to exclude this one-time benefit. Their new annual SS benefit will be taxed at the 85% level so receiving two years in 2025 won’t impact that.

[pahkcah]

DW and I have been trying to submit the online application for her to claim against my much higher SS payment. All we receive is a message that says, "We are sorry for the inconvenience, but we cannot process your request online."

My understanding is that WEP payments will be retroactive back to the beginning of 2024, and that GPO payments will go back 6 months. I don't believe delayed credits can be received after age 70, but I'm far from an expert. Per the SSA, "When you reach age 70, your monthly benefit stops increasing even if you continue to delay taking benefits." https://www.ssa.gov/benefits/retirement ... delay.html

Hoping someone more knowledgeable can respond.

Call them. We did and got a phone interview date near the end of February. The six month look back period starts from the date you call, not the date of the phone interview.

We called multiple times. I'll leave out all the details, but one of the issues is that every time we were asked to state what we needed assistance with, the automated application incorrectly determined that we were looking for a copy of DW's benefit statement and sent us down a rabbit hole we couldn't get out of. We'll be back on the phone first thing Monday morning.

[clip651]

What leads you to expect that they are already prepared to deal with the changes now that WEP and GPO are gone? It was only signed into law a week ago.

[NYnative]

Trying to delete post.

[NYnative]

Given their normal workload, I don’t think anyone is going to see any back payments for at least 6 months. Especially since they are getting new leadership and all the turmoil that’s coming for the federal workforce.

[CenTexan]

What leads you to expect that they are already prepared to deal with the changes now that WEP and GPO are gone? It was only signed into law a week ago.

They are probably concerned about the 6-month look-back limit for receiving benefits.

Sadly, SSA could be more forthcoming with information - especially for those who did not apply for benefits due to GPO.

This is all they have on their website as of today: https://www.ssa.gov/benefits/retirement ... s-act.html. By not giving SOME BETTER information to the public, it leads to a lot of speculation from non-authoritative sources. (self-deleted a semi-political comment about social media platforms and fact-checking dismissals)

[clip651]

What leads you to expect that they are already prepared to deal with the changes now that WEP and GPO are gone? It was only signed into law a week ago.

They are probably concerned about the 6-month look-back limit for receiving benefits.

Sadly, SSA could be more forthcoming with information - especially for those who did not apply for benefits due to GPO.

This is all they have on their website as of today: https://www.ssa.gov/benefits/retirement ... s-act.html. By not giving SOME BETTER information to the public, it leads to a lot of speculation from non-authoritative sources. (self-deleted a semi-political comment about social media platforms and fact-checking dismissals)

What is the six month look back about? Does it apply to people trying to claim on behalf of the estate of someone who died in 2024??

The case I’m working with is parent 2 who died in 2024 and who may have been due survivor benefits from parent 1's record I for the month's before parent 2's death in 2024.

But since parent 1 died several years prior to that, it’s hard for me to understand exactly the impact was on parent 1 and then on parent 2 (I don't have access to parent 1's PIA, for example). I just know when alive, parent 2's teachers pension prevented them from getting spousal social security while parent 1 was alive, or survivors benefits after parent 1 died. Parent 1 had small social security (likely reduced by WEP if I understand correctly, but I'm not sure) plus another pension that hadn’t paid in to SS to complicate the scenario.

(edited in an attempt to improve clarity)

[Random Poster]

What leads you to expect that they are already prepared to deal with the changes now that WEP and GPO are gone? It was only signed into law a week ago.

SS already has all the numbers that they need to determine how much a recipient should be be paid now (and how much they are due for back pay for the previous year), considering that in a recipient’s award letter SS shows the full payment amount and then the reduced (due to GPO/WEP) amount that will actually be paid.

In my view, all SS needs to do is remove (or add back) the deduction amount (which is, again, already known by SS) from one’s benefit check, which surely can be done by unchecking some box in a computer program or deleting a line of code or something. It can’t be that difficult to do.

[queenofthemadhouse]

My mother (80 yo) was impacted by the GPO.

We went online today to apply for her benefits. We completed the application, but after we completed it, I saw something that said 'benefits suspended'. Does that mean she applied back in the day and is effectively receiving a $0 benefit? She has been receiving Medicare and she remembers them telling her that her benefit was offset, but she doesn't know if they applied for her or if she just accompanied my father when he applied and that was an offhand comment.

I'm trying to figure out two things.

1) Will she get retroactive payments to 1/1/2024 or just back to 7/1/2024 (6 months worth)?

2) Will there be any delayed retirement credits since she's well past 70?

DW and I have been trying to submit the online application for her to claim against my much higher SS payment. All we receive is a message that says, "We are sorry for the inconvenience, but we cannot process your request online."

My understanding is that WEP payments will be retroactive back to the beginning of 2024, and that GPO payments will go back 6 months. I don't believe delayed credits can be received after age 70, but I'm far from an expert. Per the SSA, "When you reach age 70, your monthly benefit stops increasing even if you continue to delay taking benefits." https://www.ssa.gov/benefits/retirement ... delay.html

Hoping someone more knowledgeable can respond.

Thanks. It looks like DRC are not for spousal benefits so not an issue in Mom’s case anyway since her entire benefit is spousal.

We filled out an online application with no issue, but I’m wondering now if we went down the right path, as others are saying they had to call.

I also wonder if the fact that her benefits were listed as suspended mean she was already in the queue.

[CenTexan]

SS already has all the numbers that they need to determine how much a recipient should be be paid now (and how much they are due for back pay for the previous year), considering that in a recipient’s award letter SS shows the full payment amount and then the reduced (due to GPO/WEP) amount that will actually be paid.

No - the award letter does not contain the non-WEP amount information. At least mine from March 2024 did not have it - which makes me glad I spent the (considerable) time doing my own calculations as a way to proof their math.

But surely they must have that in their system.

[ChrisC]

Call them. We did and got a phone interview date near the end of February. The six month look back period starts from the date you call, not the date of the phone interview.

We called multiple times. I'll leave out all the details, but one of the issues is that every time we were asked to state what we needed assistance with, the automated application incorrectly determined that we were looking for a copy of DW's benefit statement and sent us down a rabbit hole we couldn't get out of. We'll be back on the phone first thing Monday morning.

I'm WEP'd, and now since GPO has been removed, eligible for spousal benefits. Like you, I tried an online application for spousal and couldn't get completely processed that way -- this was before legislation was signed by the President, since SSA had indicated that you could submit an application for spousal benefits before or after the bill was signed! On December 27th, I called for an appointment at the local office -- I figured there might be a flood of applicants right after the bill was signed so it wouldn't hurt to start the process. I got through to a SSA representative from the Jamaica NY location after a 45 minute wait. She told me that since I was already collecting on my own record that the process for filing and completing spousal benefits had to be done by an appointment/interview with SSA and that SS was only doing phone appointment/interviews. The earliest date for an appointment was February 19, which I booked. A few days later I got a message from SSA confirming the appointment and the date I made contact with SSA. Additionally, the message stated:

"Here is what we will need for you or the person for whom you are applying: Bank statement or checkbook for the account where you would like the payments deposited.

Please be available near your phone approximately five minutes before your scheduled appointment time. If you are unable to keep your appointment, please contact us at the above number to reschedule your appointment.You should try to keep your appointment because our talk will help in filing the necessary application. We can't decide if you are eligible for benefits until you file an
application. And, the date you file an application can make a difference in the amount we can pay you. We can use the date you contacted us as your filing date for Social Security benefits if you file an application within 6 months of the date of this letter.
When you file an application, we will review the case and make a decision. If you do not agree with what we decide, you can appeal the decision.
You can also save time by completing your application at www.socialsecurity.gov online. Applying online is secure and confidential. You can enter information at your own pace and convenience.

You can apply online for:
• Retirement benefits,
• Disability benefits and complete disability report forms,
• Medicare, and
• Extra Help with Medicare Prescription Drug Plan costs.
If you finish your application online, please cancel your appointment by calling
1-800-772-1213 (TTY 1-800-325-0778). We will contact you if we need more
information."

You need to speak to a live person to get an appointment. I forgot how I got out of the automated messaging loop for telephone calls to SSA but I'm sure you'll figure it out.

I think SSA has all the information from me to process my application for spousal benefits (and to calculate the total "true up" payment to me for 2024 for my own retirement benefits, since WEP has been removed for retirement benefits starting December 2023, which gets paid in January 2024.) You might want to read Tammy Flanagan's recent article about the legislation and her last Q&A in the article:
https://www.govexec.com/pay-benefits/20 ... thor-river

[JakeyLee]

Answer to OP’s question, “how will this affect you?”
While working in law enforcement, I had approximately 25 years of employment where I didn’t contribute to SS. However, from previous jobs, and multiple part time jobs, I still have 48 quarters of SS contributions (12 years total). All I ever wanted was my smallish SS payments returns for those 48 quarters, just like any one else that qualified with similar contributions. Heck, my grandmother returned to work in her 50’s, after raising a family and taking care of grandchildren… and qualified with exactly 40 quarters. That’s extra cash made life livable for her and my grandfather in their retirement years.

Last I checked the SS .gov website (4 years ago?), my SS payment at 62 was in the $500ish range. I figured WEP would have reduced my payments by at least $100. But I am still unclear, as the SS site and tools weren’t super helpful in regards to WEP.

So yeah, even if it’s only a hundred bucks, it’s helpful. And who knows, maybe I can wait it till 70, and really maximize that extra cash

[Soaky]

I’m somewhat confused by the chart for the maximum WEP penalty. I claimed SS in 2015 when I turned 65. I had 17 years of SS coverage from military service and a full time job for 10 years after I retired from the federal government. I don’t remember what the WEP was when I claimed, but it was substantial, but less than half of my benefit. When I looked at the maximum WEP penalty for 2024, I believe it was somewhere around $580 a month. Is that the amount of my penalty today or was it set in stone in 2015? I can’t find anything that explained whether the WEP max penalty changes each year or is frozen from the date you claimed. One person posted that their penalty is about $20K a year. I don’t understand how that’s possible if the max penalty now is about $580 a month. That comes to just under $7K a year. Can someone please explain this? Thanks.

The WEP amount is first computed at age 62 and adjusted every year after for COLA. My initial WEP was $384 set in 2012 (age 62). In 2016 (age 66) when I first received SS benefits, the WEP had increased to $403.20 due to cumulative COLAs since 2012 (1.05 x 384). Every year after that it was adjusted up by the cumulative COLA increases since 2012. In 2024 it was $518 ($384 x 1.35 cumulative COLA adjustments). So the COLA adjustments every year increased your benefits but they also increased your WEP.

[bsteiner]

... No set of rules that you design will be fair for everybody and prevent windfalls.

It's like the tax law. It's hard to make it fair, and what one person thinks is fair may be different from what another person thinks is fair. All you can do is take advantage of what the law allows.

[clip651]

Like you, I tried an online application for spousal and couldn't get completely processed that way -- this was before legislation was signed by the President, since SSA had indicated that you could submit an application for spousal benefits before or after the bill was signed!

Where did you find SSA indicating this?

Did it have any information for filing on behalf of deceased (in 2024) recipients whose estate may be eligible for payment??

[Ron Ronnerson]

Answer to OP’s question, “how will this affect you?”
While working in law enforcement, I had approximately 25 years of employment where I didn’t contribute to SS. However, from previous jobs, and multiple part time jobs, I still have 48 quarters of SS contributions (12 years total). All I ever wanted was my smallish SS payments returns for those 48 quarters, just like any one else that qualified with similar contributions. Heck, my grandmother returned to work in her 50’s, after raising a family and taking care of grandchildren… and qualified with exactly 40 quarters. That’s extra cash made life livable for her and my grandfather in their retirement years.

Last I checked the SS .gov website (4 years ago?), my SS payment at 62 was in the $500ish range. I figured WEP would have reduced my payments by at least $100. But I am still unclear, as the SS site and tools weren’t super helpful in regards to WEP.

So yeah, even if it’s only a hundred bucks, it’s helpful. And who knows, maybe I can wait it till 70, and really maximize that extra cash

My numbers are similar so they might give you a sense about the impact of the WEP, even though they won’t exactly match yours, of course.

I’ve worked as a teacher for the past 22 years and haven’t paid into social security during that time. Prior to that, I worked in private sector jobs (some of those years were during college when I didn’t work all that much). I have 46 quarters over 13 years. Like you, my social security benefit at 62 is around $500/month without the WEP in effect. The WEP would have changed it to around $200/month for me.

I had planned on taking social security at age 70 and getting around $375/month when the WEP was in effect. With the recent repeal, my plan has changed and I will probably start it at 62 (at $500/month). When my wife files at 70, her benefit would be around $2200/month and mine would go up to about $700/month due to spousal benefits.

The impact of the WEP in my case is not life-altering (as we’re talking about a few hundred dollars per month), but it does factor into my planning for the future at least a bit. That being said, I don’t turn 62 for another dozen years and wouldn’t be surprised if things change again at some point.

[clip651]

What leads you to expect that they are already prepared to deal with the changes now that WEP and GPO are gone? It was only signed into law a week ago.

SS already has all the numbers that they need to determine how much a recipient should be be paid now (and how much they are due for back pay for the previous year), considering that in a recipient’s award letter SS shows the full payment amount and then the reduced (due to GPO/WEP) amount that will actually be paid.

In my view, all SS needs to do is remove (or add back) the deduction amount (which is, again, already known by SS) from one’s benefit check, which surely can be done by unchecking some box in a computer program or deleting a line of code or something. It can’t be that difficult to do.

So, you think it should be easy for the federal government to implement this on short notice. Do you have any evidence that they plan to implement it (like have all the forms ready, have the phone and local SS office agents trained, have the calculations ready to go, are ready to send payments, etc) on short notice?

My assumption, being this is the federal goverment, we are around the holidays plus a federal holiday for a state funeral, plus an upcoming administration change all occurring in January, was that it would take a little while for this to filter down and be implemented.

I'll be happy if you are right and I am wrong. But if you are right, if anyone can point me to evidence that this is being implemented quickly please do so.

[Ron Ronnerson]

... No set of rules that you design will be fair for everybody and prevent windfalls.

It's like the tax law. It's hard to make it fair, and what one person thinks is fair may be difference from what another person thinks is fair. All you can do is take advantage of what the law allows.

This is nicely stated and exactly right. A number of comments in this thread demonstrate the point well.