Did you work for a government agency and not pay into Social Security?
By Kirk Larson
Social Security Western Washington Public Affairs Specialist
If you receive a pension from a government job in which you did not pay Social Security taxes, some or your entire Social Security spouse's, widow's or widower's benefit may be offset due to receipt of that pension. This offset is called the Government Pension Offset, or GPO.
Many people in Washington state and around the county do not pay into Social Security. Most Firefighters and Police Officers do not and many city employees do not.
Why will my Social Security benefits be reduced? Benefits we pay to spouses, widows, and widowers are “dependent” benefits. Set up in the 1930s, these benefits were to compensate spouses who stayed home to raise a family and were financially dependent on the working spouse. It’s now common for both spouses to work, each earning their own Social Security retirement benefit. The law requires a person’s spouse, widow, or widower benefit to be offset by the dollar amount of their own retirement benefit.
Congress created the GPO in 1977 to help ensure that spousal and widow(er) benefits of those with covered or non-covered lifetime earnings would be roughly equal. Under Social Security's dual-entitlement rule, spouses with their own covered earnings have their spousal benefits offset dollar-for-dollar by their own earned benefit. The GPO has a similar intention; the offset originally was dollar-for-dollar for non-covered pensions, but Congress reduced it to two-thirds in 1983.
The GPO will reduce the amount of your Social Security spouse's, widow's or widower's benefits by two-thirds of the amount of your government pension. For example, if you receive a monthly civil service pension of $600, two-thirds of that, or $400, must be used to offset your Social Security spouse's, widow's or widower's benefits. If you are eligible for a $500 spouse's benefit, you will receive $100 per month from Social Security ($500 - $400 = $100).
Some individuals are exempt from the offset. Generally, your Social Security benefits as a spouse, widow or widower will not be reduced if you:
• Are receiving a government pension that is not based on your earnings; or
• Are a federal, state or local government employee whose government pension is based on a job where you were paying Social Security taxes; and
o you filed for and were entitled to spouse’s, widow’s or widower’s benefits before April 1, 2004;
o your last day of employment (that your pension is based on) is before July 1, 2004; or
o you paid Social Security taxes on your earnings during the last 60 months of government service. (Under certain conditions, fewer than 60 months may be required for people whose last day of employment falls after June 30, 2004, and before March 2, 2009.)
If you need additional information regarding this rule, please read the Government Pension Offset factsheet available at www.socialsecurity.gov/pubs.
Kirk Larson is a Social Security Administration Public Affairs Specialist located in Seattle and serving Western Washington.