Can You Collect a Federal Pension and Social Security?

Don’t expect to receive your entire Social Security benefit if you receive a public pension from the federal, state, or local government. Heres how to protect your retirement.

Maybe you had two careers. Are you relying on Social Security and a public pension? You were a government employee at one job, meaning that the Social Security payroll tax did not apply to your earnings. You contributed to the Social Security system while working in the private sector. You will receive your public pension upon retirement, but don’t expect to receive your entire Social Security benefit.

If you worked for a federal, state, or local government and received a pension for wages that Social Security did not cover, you will be entitled to a reduction in your Social Security benefits under federal law. Reductions also apply to government pensioners’ claims for Social Security survivor or spousal benefits.

Yes, you can collect a federal pension and Social Security benefits. However, the amount of your Social Security benefits may be reduced if you are also receiving a pension from a government job where you did not pay Social Security taxes. This reduction is known as the Government Pension Offset (GPO).

Here are some key things to know about the GPO:

  • It only affects your Social Security benefits as a spouse, widow, or widower. It does not affect your own retirement benefits based on your work history.
  • The amount of the reduction depends on two-thirds of your government pension. For example, if your government pension is $600 per month, your Social Security benefits as a spouse, widow, or widower will be reduced by $400 per month.
  • There are some exceptions to the GPO. You will not have your benefits reduced if you:
    • Receive a government pension that is not based on your own earnings.
    • Are a federal, state, or local government employee and your government pension is from a job for which you paid Social Security taxes.
    • Are a federal employee who switched from the Civil Service Retirement System (CSRS) to the Federal Employees’ Retirement System (FERS) after December 31, 1987, and meet certain other requirements.
    • Received, or were eligible to receive, a government pension before December 1982 and meet all the requirements for Social Security spouse’s benefits in effect in January 1977.

Here are some additional resources that you may find helpful:

If you have any questions about the GPO or your Social Security benefits, you can contact the Social Security Administration at 1-800-772-1213.

Frequently Asked Questions

Here are some frequently asked questions about the GPO:

  • How do I know if I am affected by the GPO?

You will be affected by the GPO if you are receiving a government pension from a job where you did not pay Social Security taxes and you are also eligible for Social Security benefits as a spouse, widow, or widower.

  • How much will my Social Security benefits be reduced?

The amount of the reduction will depend on two-thirds of your government pension. For example, if your government pension is $600 per month, your Social Security benefits as a spouse, widow, or widower will be reduced by $400 per month.

  • Are there any exceptions to the GPO?

Yes, there are a few exceptions to the GPO. You will not have your benefits reduced if you:

  • Receive a government pension that is not based on your own earnings.

  • Are a federal, state, or local government employee and your government pension is from a job for which you paid Social Security taxes.

  • Are a federal employee who switched from the Civil Service Retirement System (CSRS) to the Federal Employees’ Retirement System (FERS) after December 31, 1987, and meet certain other requirements.

  • Received, or were eligible to receive, a government pension before December 1982 and meet all the requirements for Social Security spouse’s benefits in effect in January 1977.

  • Can I still get Social Security benefits from my own work?

Yes, you can still get Social Security benefits from your own work. However, your own benefits may be reduced due to the Windfall Elimination Provision (WEP).

  • Where can I get more information about the GPO?

You can get more information about the GPO from the Social Security Administration website or by calling 1-800-772-1213.

The public pension “penalty”

David Walrath, a California Retired Teachers Association lobbyist, says many government employees dont realize their Social Security will be squeezed until they apply. “People will get their annual statement with a benefit number, but theyre not told theyre subject to an offset,” says Walrath, with the consulting firm of Murdoch, Walrath & Holmes, in Sacramento, California.

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The “windfall elimination provision” (WEP) and the “government pension offset” (GPO) are the two regulations that apply to government workers. When applying for Social Security spousal and survivor benefits, government pensioners are covered by the GPO while workers are covered by the WEP.

If you have ever held a job for which Social Security was not provided, you should familiarize yourself with the two rules. Certain federal, state, and local employees have made Social Security contributions, while others have not. Additionally, if the years you worked for a government agency are listed on your Social Security statement as having $0, that could mean you fall under one of the two rules.

“The WEP and GPO provisions were initially designed to address perceived inequities in the Social Security system regarding individuals who received both a government pension and Social Security benefits based on other employment,” Michèle Walthert, Managing Director & Head of Advisor Success at Wealthspire Advisors tells Kiplinger. “However, they can disproportionately affect certain groups, such as individuals who worked in both the public and private sectors over their careers (State and local government employees, including teachers, firefighters, and police officers tend to be among those most affected by the WEP and GPO).”

First, lets look at the windfall elimination provision (WEP). To comprehend how the Work Experience Program operates, one must be aware of how Social Security determines benefits. The average monthly income for the years that a person paid into Social Security is taken into consideration. Benefits are meant to replace a portion of an employee’s pre-retirement income. Compared to workers with higher incomes, those with lower incomes receive a larger percentage of their earnings replaced.

The Social Security Administration employed a formula up until the middle of the 1980s that classified government employees as low-wage workers even though they may have only contributed to the system for a short while. Public employees therefore received their government pension in addition to a disproportionately large Social Security benefit. In 1983, Congress ended this so-called windfall.

Under the windfall elimination provision, Social Security benefits for workers (and eligible family members) are reduced if the worker receives a pension based on earnings from employment not covered by Social Security. However, the WEP includes a guarantee that this reduction in benefits can never exceed more than one-half of the noncovered pension, or the maximum monthly reduction limit for 2024, which is $587. You can use a WEP calculator at www.socialsecurity.gov to figure out how the WEP will impact your benefits specifically.

Furthermore, government pensioners who have contributed to the Social Security system for 30 years or more are exempt from the windfall provision. Additionally, it does not apply to employees who receive a private or military pension.

The government pension offset (GPO) will also result in reductions for a government pensioner who applies for spousal or survivor benefits based on the Social Security earnings record of their spouse. Generally speaking, a spouse’s benefit is approximately 2050 percent of their husband’s or wife’s income if that exceeds what the spouse would receive based on their work record. A survivor generally receives 100% of a deceased spouses benefit.

However, your Social Security spousal or survivor benefit will be diminished by two-thirds of your government pension if the government pension offset is applicable. For instance, if a person receives a $900 noncovered pension each month, $600, or two-thirds of that amount, is subtracted from their Social Security spousal benefit. Additionally, your benefit may be reduced to zero if the government pension exceeds your Social Security benefit by two-thirds.

Do federal employees get a pension and Social Security?

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