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Re: Social Security: The Windfall Elimination Provision (WEP) - 2019 CRS Report

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@RichardcS169850 

 

I am gonna have to breakdown your post in some paragraphs to understand what you are saying and respond.  I added the numbers to correspond to my response.

 


@RichardcS169850 wrote:

 

1.  This is discrimination because many other SS Trust Fund (SSTF) beneficies receive income in their retirement from investments in bank accounts, insurance policies, securities, real estate and royalties.  They are not penalized even though the earnings (yield) on those investments have been exempt from SS because they are not "earned income".  

 

2.  For instance, my pension is from the City of Miami Firefighters and Police Officers Retirement Trust (Trust) for work that was not covered by social security.  Understood.  Like many of my colleagues I do receive SS because I worked other jobs.  HOWEVER, the pension received from the Trust is the result of my payroll contributions that during my career was between 8.5% of pay to 10.5% of pay.  

 

3.  During earlier years the contribution was "after-tax" dollars and in later years (1986 forward?) is was "pre-tax" dollars.  It is not a gift; not a windfall; it is a return on my investment into that Trust.  A glance at the investments made by the trustees of the Trust resembles that of a mutual fund.  I legitimately purchased benefits on a personal level via the Trust as well as I paid for my SS benefit (in most cases, so did employers of mine) through other work not for the City of Miami.  

 

4.  At a minimum, and I must review the acutal figures with the SSA, I have lost $50K+ since I retired with SS.  This is due to the WEP.  I consider this biased and discriminatory tax not levied on the others I enumerated prior.  For it to be fair, those illucidated prior who dont have their 30 years of significant earnings (The term the SSA used with me in communications prior.) should have their SS benefit reduced!  

 

5.  The amounts exacted from me by the WEP is not returned to my Trust.  My Trust benefit amount is not taken from the SS Trust Fund.  It is the annuity from the investment I made to my Trust.  

 

6.  What actually is going on here is other beneficiaries of SS enjoy the benefit of having a larger balance in the SS Trust Fund which enables increases in benefits as reviewed by Congress.  That larger balance is a result, in part, from my having an unfair tax exacted from me by Congress from my earned SS retirement benefit! 

 

 


1.  Social Security withholding tax, and matched by the employer, is only based on earned income.  Been that way from the get-go.  The formula for figuring benefits is based on earned income for which has been taxed at the employee/employer level during the working years, not any other type of income.

 

2.  The benefit formula is based on earned income for which Social Security payroll taxes were paid by the employee and the employer.  If you made earned income for which NO Social Security payroll taxes were paid by you and then matched by the employer - those earnings are not covered in the benefit formula.

 

3.  We are only discussing Social Security payroll taxes - employee and employer - not income taxes.  Again, if your annual earned income during your working years (every year) had Social Security taxes paid on the amount by you as the employee and matched by your employer - those wages are included in your benefit computation.

 

4.  Social Security Benefit calculation is progressive in nature due to the bend points.  As a benefit, you are given a higher % of your average earning below a certain level, the % of benefit received goes down the higher your average salary - the reason for this is to help replace the earnings of those more in need rather those who were higher wage earners.

 

5.  The only reason the WEP reduction is in place is because it represents a more accurate average earnings benefit calculation for those who worked under a NON-Social Security system job - meaning they and their employer paid NO Social Security taxes on those earnings and thus does not count towards a benefit - you had something else designed by your employer to take its place - government pension.

 

6.  If a person during their working career had both earned income wages that were covered under the SS system AND those that were not for some years - the benefit formula has to be adjusted so that you are not classified as a low income earner who gets a bump from the progressive benefit formula (see # 4 above).

 

Is this WEP formula fair - pretty close - fairer than the old method of giving you a bump in benefits because the old formula figured your benefits based on being a low income earner rather than just someone who had other wages NOT covered by the SS program.

 

If you want a bigger benefit - one that is NOT just adjusted for only your earned income for those 10 - 30 years where you worked a job covered by the SS system and you want to continue with your pension from a job that was NOT covered by the SS system - in order to figure your benefit just like everybody else - then just go back and figure up your Social Security withholding tax - for yourself and the portion that should have been paid by your employer - for all those earnings which were NOT covered by the SS program - and then ask the government where they want you to send the check for all of this money, enclose a corrected W-2 for each year, indicating "Social Security" wages and they will put it into the system along with your money and BAM - no more WEP.

Yea, like government employees with this condition would want to send in all this "back tax" - a lot of money.

 

 

.

 

 

* * * * It's Always Something . . . Roseanne Roseannadanna
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Re: Social Security: The Windfall Elimination Provision (WEP) - 2019 CRS Report

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@GayleO746308 

If you paid Social Security tax on 30 years of substantial earnings you are not affected by SSA.gov - WEP Chart.

 

Even under the WEP you get credit for the time that you did work under wages covered by Social Security.  Look at the chart.  The ONLY thing that the WEP did / does was/is to change the way a person's benefit was figured - now it is actually based on your earnings covered under the SS system rather than figuring you as a LOW WAGE earner, who get a progressive bump in their benefits due to the bend point computation..

* * * * It's Always Something . . . Roseanne Roseannadanna
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Re: Social Security: The Windfall Elimination Provision (WEP) - 2019 CRS Report

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I, too, strongly urge AARP to support the Equal Treatment of Public Servants Act of 2019 (H.R. 3934). Teachers, policemen, firemen are under paid from the start. With the Social Security Windfall Elimination Provision the federal government penalizes Social Security benefits for these workers because they were required to be part of a local or state retirement plan with low benefits. However, many of these people worked second jobs throughout their working career that did pay Social Security, yet they can't claim full benefits because they did not earn enough for 40 credit required to retire. This is wrong on so many levels. 

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Re: Social Security: The Windfall Elimination Provision (WEP) - 2019 CRS Report

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The May 14, 2019 CRS report does not answer all the questions and appears to be biased.  The WEP actually should be the basis for a discrimination lawsuit.  As a member of AARP for 26 years I DEMAND AARP TO FILE THE SUIT NOW.  I DEMAND AARP TO LIVE UP TO ITS CLAIMS OF BEING THE ADVOCATE FOR SENIORS.  

 

This is discrimination because many other SS Trust Fund (SSTF) beneficies receive income in their retirement from investments in bank accounts, insurance policies, securities, real estate and royalties.  They are not penalized even though the earnings (yield) on those investments have been exempt from SS because they are not "earned income".  For instance, my pension is from the City of Miami Firefighters and Police Officers Retirement Trust (Trust) for work that was not covered by social security.  Understood.  Like many of my colleagues I do receive SS because I worked other jobs.  HOWEVER, the pension received from the Trust is the result of my payroll contributions that during my career was between 8.5% of pay to 10.5% of pay.  During earlier years the contribution was "after-tax" dollars and in later years (1986 forward?) is was "pre-tax" dollars.  It is not a gift; not a windfall; it is a return on my investment into that Trust.  A glance at the investments made by the trustees of the Trust resembles that of a mutual fund.  I legitimately purchased benefits on a personal level via the Trust as well as I paid for my SS benefit (in most cases, so did employers of mine) through other work not for the City of Miami.  At a minimum, and I must review the acutal figures with the SSA, I have lost $50K+ since I retired with SS.  This is due to the WEP.  I consider this biased and discriminatory tax not levied on the others I enumerated prior.  For it to be fair, those illucidated prior who dont have their 30 years of significant earnings (The term the SSA used with me in communications prior.) should have their SS benefit reduced!  The amounts exacted from me by the WEP is not returned to my Trust.  My Trust benefit amount is not taken from the SS Trust Fund.  It is the annuity from the investment I made to my Trust.  What actually is going on here is other beneficiaries of SS enjoy the benefit of having a larger balance in the SS Trust Fund which enables increases in benefits as reviewed by Congress.  That larger balance is a result, in part, from my having an unfair tax exacted from me by Congress from my earned SS retirement benefit! 

 

I AM ASKING FOR AARP TO FILE THE SUIT NOW.  I AM ASKING AARP TO LIVE UP TO ITS CLAIMS OF BEING THE ADVOCATE FOR SENIORS.

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Social Security: The Windfall Elimination Provision (WEP) - 2019 CRS Report

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This is a 2019 report on the Social Security Windfall Elimination Provision done for Congress by the Congressional Research Service.

 

It explains it all as clearly as it can be explained -

Congressional Research Service 02/07/2019 - Social Security: The Windfall Elimination Provision (WEP...

 

I am just copying and pasting the Table of Contents on this report so you can see what is within it and the value that reading it may give to those involved in the WEB.  It is 15 pages but many pages are tables and others just give the number of people affected by it.  PLEASE READ IT.

Since I don't seem to be getting through, maybe the CRS (Congressional Research Service) report will help.  Plus it gives the arguements for and against the WEB and it briefly describes the Legislation that has been introduced on the subject - for this year as well as last year.

 

Contents

  • Introduction
  • Background on the Social Security Benefit Formula
  • How the Windfall Elimination Provision Works
  • The Number of People Affected by the WEP
  • Legislative History and Rationale
  • Arguments FOR the WEP
  • Arguments AGAINST the WEP
  • The WEPs Impact on Low-Income Workers
  • Legislative Activity on the WEP in the 116th Congress (2019 - 2020)
  • Legislative Activity on the WEP in the 115th Congress (2017 - 2018)

 

* * * * It's Always Something . . . Roseanne Roseannadanna
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