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Info Seeker
Posts: 1
Registered: ‎04-24-2014

Re: HR 711 Social Security Windfall Provision

Message 1 of 8 (1,891 Views)

My wife is also affected by the WEP program. She paid into SS for 10+ years, but the last 20 have been with a school district that didn't pay into SS. The monthly dollar amount indicated on her yearly SS statement at full retirement age would be cut 50% according to the WEP calculator or the SS website.

She was counting on her Texas Teachers retirement pension AND her SS benefits. Scratch that idea it seems.........

Valued Social Butterfly
Posts: 8,617
Registered: ‎08-18-2008

Re: HR 711 Social Security Windfall Provision

Message 2 of 8 (2,091 Views)

retiredtraveler wrote:

 

 I'm slow --- just not understanding the basics. Is it 'double dipping' or is it a penalty? If one works enough quarters to draw SS, then works for 'x' number of years at something that does not pay SS taxes, are the SS benes based only on the income that had SS taken out, or is there an extra reduction in benefits simply because the person worked for an employer who did not pay into SS?


As you know the SSA figures benefits by PIA formulas.

 

Those folks who have both earnings covered by SS and earnings not covered by SS because they worked somewhere where there was another type of retirement, mainly those working in some government capacity have their PIA figured a little differently.

 

This might help - 

Social Security Administration - Windfall Elimination Provision

 

" Before 1983, people whose primary job wasn’t covered by Social Security had their Social Security benefits calculated as if they were long-term, low-wage workers. They had the advantage of receiving a Social Security benefit representing a higher percentage of their earnings, plus a pension from a job for which they didn’t pay Social Security taxes. Congress passed the Windfall Elimination Provision to remove that advantage.

 

Under the provision, we reduce the 90 percent factor in our formula and phase it in for workers who reached age 62 or became disabled between 1986 and 1989. For people who reach 62 or became disabled in 1990 or later, we reduce the 90 percent factor to as little as 40 percent."

Trusted Social Butterfly
Posts: 7,094
Registered: ‎02-14-2008

Re: HR 711 Social Security Windfall Provision

Message 3 of 8 (2,102 Views)

"...There are many people affected by it - by how much is determined by how long and at what salary they worked for jobs that did NOT pay into the Social Security system....".

 

I'm slow --- just not understanding the basics. Is it 'double dipping' or is it a penalty? If one works enough quarters to draw SS, then works for 'x' number of years at something that does not pay SS taxes, are the SS benes based only on the income that had SS taken out, or is there an extra reduction in benefits simply because the person worked for an employer who did not pay into SS?


Just think. The world was built by the lowest bidder.
Valued Social Butterfly
Posts: 8,617
Registered: ‎08-18-2008

Re: HR 711 Social Security Windfall Provision

[ Edited ]
Message 4 of 8 (2,154 Views)

There are many people affected by it - by how much is determined by how long and at what salary they worked for jobs that did NOT pay into the Social Security system. 

 

This SSA page will explain it further to you and I think you can even figure it from this page.

 

SSA: How the Windfall Elimination Provision Can Affect Your Socisl Security Benefit

 

As far as legislation to change the calculation - it will never go completely away but some legislation has been introduced to change how it is figured.

 

H.R. 711 is dead because we have now changed Congresses from the 114th to the 115th.  It would have to be reintroduced with a new number and begin the process again.

 

Rep. Sam Johnson also put a new calculation for the WEP in his Social Security Solvency Proposal H.R.  6589 (it was item 3) 

 

SSA Actuary Letter to Rep. Sam Johnson (R-Tx) On H.R. 6489

(see page 7)

From the link-

"Replace the current-law Windfall Elimination Provision (WEP) with a new calculation for most OASI and DI benefits based on covered and non-covered earnings, phased in for beneficiaries becoming newly eligible in 2023 through 2032."

 

However it would also have to be re-introduced into the new 115th Congress.

 

IF Social Security reform legislation comes about in the next couple of years, a new formula might be included.   But I would not hold my breath because even if they do legislate to compute it another way, it most likely will not affect current or close to retirees and the benefit will still be reduced even under any new legislation.

 

We won't ever get away from this - it got changed in 1983 because it was deemed as "double dipping" - A salary at any one time in your working life is either in the SS system by contributions being paid or it is not and most likely you put money into some other municipal / government retirement plan but what is for sure is that your government employer did not participate in the SS system of withholding and match of payroll taxes so it does not count towards your benefit.

 

If if you are getting a Pension from a  municipality or government entity -'there is also the Social Security - Government Pension Offset

 

 

 

 

Regular Social Butterfly
Posts: 388
Registered: ‎05-25-2009

Re: HR 711 Social Security Windfall Provision

Message 5 of 8 (2,164 Views)

Are you writing about the "PERS" system?

 

If so, I continue to get statements from them when I worked in CO 20 years ago for 6 months that show I am eligible to receive those retirement benefits. Perhaps the offset is equal to "other income" when receiving SS between full retirement age and partial retirement age (dependent on year of birth)?

 

 

Phil Harris, actor and showman, to John Fogerty of CCR: “If I’d known I’d live this long, I’d have taken better care of myself.”
Info Seeker
Posts: 3
Registered: ‎01-11-2017

Re: HR 711 Social Security Windfall Provision

Message 6 of 8 (2,173 Views)

Apparently, it does not matter how much one contributes, what matters is whether you worked for an organization at any time during your work history that did not pay into Social Security. The amount that is deducted is 40% regardless of one's contributions. It could be that a person worked 10 years for a state that did not pay into SS, another 10, 20 or even 30 years for a company that did pay into SS. The individual is penalized for the period of time they worked for an institution or organization that did not pay into the system, which is very unfair. There is actually a Bill that is before Congress to have this changed; therefore, it would seem that our lawmakers also see something wrong with this law.

Trusted Social Butterfly
Posts: 7,094
Registered: ‎02-14-2008

Re: HR 711 Social Security Windfall Provision

Message 7 of 8 (2,193 Views)

"...The WP Law has nothing to do with how long or how much you paid into SS; it is mainly based on the fact that there was a time when you might have worked for a county/state that did not contribute and because of that the individual is penalized....".

 

Ok. I'm confused. You're stating that WP has nothing to do or how much you paid into SS. At the same time, you're stating you worked for some period of time where you (the state) did not contribute. How can it be both ways?  

 

"....If you receive a pension from an employer who did not withhold Social Security tax from your paychecks, the Windfall Elimination Provision is designed to ensure that your Social Security benefits are calculated in a manner that reflects how much you earned during your working lifetime, as well as how much you're receiving in pension income...".

   What is unfair about this?


Just think. The world was built by the lowest bidder.
Info Seeker
Posts: 3
Registered: ‎01-11-2017

HR 711 Social Security Windfall Provision

Message 8 of 8 (2,209 Views)

I have just discovered that when I apply for SS next year I will not be entitled to a full benefit due to the fact that when I worked for the county in one state, that state failed to contribute to SS. I will have contributed the number of years once I become eligible, but because the state I previously worked in did not pay into SS, I am affected by the Windfall Provision, which states that SS can deduct 40% of my benefit.  I conducted some research and found that a Bill had been introduced into Congress last February which would allow those civil servants whose states did not pay into SS to have the Windfall Provision omitted. I would like to know if there are other AARP members affected by the Windfall Provision, and if so, will AARP advocate for those affected to have the Bill passed. I have made calls to my local congressman and was told my message would be passed on. I believe it is a shame that there are several elderly people who have worked as civil servants but who will only generate half of their benefits as a result of the Windfall Provision. The WP Law has nothing to do with how long or how much you paid into SS; it is mainly based on the fact that there was a time when you might have worked for a county/state that did not contribute and because of that the individual is penalized.