city hall building, social securityMore than 2 million former government workers face significant cuts in their Social Security because they had a government job that included a pension. The decreased payouts are the result of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), two statutes that prevent retirees from receiving payments from both social security and public sector pensions. 

Cuts significantly affect retirement life

According to Reuters, a government worker who retired in 2016 expecting to receive monthly Social Security payments of $976 would actually get only $548 because of WEP. That is based on calculations done by the Congressional Research Service. Under the GPO rule, cuts can be even more substantial for Social Security payments to spouses and those receiving survivor benefits.

Why have GPO and WEP?

Social Security benefits are based on a progressive formula. Workers who have a low average for their lifetime earnings qualify for higher benefits than people with higher average lifetime earnings. This formula does not take into consideration the difference between people with a low income and people who worked some of their career with a job that is not covered by Social Security. Many people who worked state or federal jobs fall into the latter category because their job included a government pension plan.

The purpose of WEP is to balance the benefits and prevent government workers who had higher paying jobs and a government pension from receiving the same Social Security benefits as low wage earners who worked in private sector jobs.

According to the Social Security Administration, the GPO rule affected about 652,000 former government workers in 2015 and 1.7 million beneficiaries saw cuts due to WEP.

The Equal Treatment of Public Servants Act of 2015

Texas Republican Kevin Brady chairs the Ways and Means Committee. He sponsored a bill to reduce WEP’s penalty by half. This bill was later revised to push any reduction in cuts to 2026. Also, the later draft reduces the WEP penalty by only 14 percent. The National Active and Retired Federal Employees Association is hoping the bill will return to Representative Brady’s original version for approval, but would like to see a complete repeal of WEP and GPO.

A Chicago Social Security attorney can advise people who think their benefits may be affected by WEP or GPO. Anyone who worked only in jobs that are not covered by Social Security should receive a letter explaining that they are not eligible.