Social Security - Public Pension And Social Security Example

Wife is turning 66 years old in 2017. She retired a couple of years ago with a pension from a career in public works in which she did not contribute to Social Security through payroll deductions. Her pension amount is $3,000 per month. The wife also worked in private industry for several years and she accumulated enough credits to qualify for a social security retirement benefit of $800 per month beginning at age 66.

Q: Can the wife have her social security benefit reduced since she is also receiving a government pension?

Yes. Her social security benefits may be reduced due to something called the Windfall Elimination Provision (WEP). However, there are limitations to how much can be excluded and no more than half of the pension amount may be reduced.To learn more about WEP, go to www.socialsecurity.gov/retire2/wep-chart.htm

Q: Will Wife be eligible to receive spousal benefits or survivor benefits based on (H)’s working record?

The wife may be eligible to receive spousal or survivor benefits on her husband’s earning record provided she qualifies. The wife’s retirement benefits are governed by WEP (above question), but any eligible survivor or spousal benefits fall under the guidance of the Government Offset Provision, which can reduce or even eliminate any social security benefits. The specific rule is that social security benefits cannot be reduced by more than two-thirds of the government pension amount. But in our example, two-thirds of $3,000 per month is $2,000 per month, which exceeds her social security benefit of $800. She would not be eligible to receive any social security spousal or survivor benefits.

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