HR 711 Social Security Windfall Provision

[m329635h]

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. 

[LunaBluewing]

Ohio here. Having NO choice in participating in this withdrawal from my paychecks; and the fact that Ohio has taken 6 months to fnalize my retirement pay amount, I have just been told that i will have to repay the over payments from social security anf lose all SS pay for 6 months. Which leaves my State retirement check my only income. It's not enough to pay the mortgage and the bills let alone just surviving. Food and gas cost money. I'm not sure but this may finally sink me.

And just for clarity the bill is no longer HR711.  It has been renamed and numbered to HR1205 Social Security Windfall Elimination Provision. It's been sitting in the Social Security subcommittee since February 21, 2017.

[GailL1]

---

@LunaBluewing wrote:

Ohio here. Having NO choice in participating in this withdrawal from my paychecks; and the fact that Ohio has taken 6 months to fnalize my retirement pay amount, I have just been told that i will have to repay the over payments from social security anf lose all SS pay for 6 months. Which leaves my State retirement check my only income. It's not enough to pay the mortgage and the bills let alone just surviving. Food and gas cost money. I'm not sure but this may finally sink me.

And just for clarity the bill is no longer HR711.  It has been renamed and numbered to HR1205 Social Security Windfall Elimination Provision. It's been sitting in the Social Security subcommittee since February 21, 2017.

---

Yes, I informed the group interested in this topic of the new 2017 legislative action in the post below yours and also started a new thread on this same board.

http://community.aarp.org/t5/Social-Security/Repealing-the-Social-Security-Windfall-Elimination-Prov...

Sorry for your dilemma - 

Were you unaware of this offset?

Guess you didn't plan for it.  

If you didn't pay enough and long enough into the SS system, your benefit would be reduced regardless of how the formula actually is applied.

[trishli]

I disagree with the response.  I am not the person being responded to, however.  But when we obtained our jobs at an Ohio university, we were NOT told we would have a deduction of ALREADY EARNED  Social Security benefits.  That was fraud and misleading to hire employees (mine was 2001)

and purposely not tell them that due to not paying into social security we would lose ALREADY EARNED benefits.  I myself had no reason to question this because we would be receiving a pension.  My pension however began at $784 and this is not enough to live on of course.  Why would we question about our 'earned' SS benefits at the time of hire.  We wouldn't.  So, it is not our dilemma, is is the dilemma of the employer for not being honest and upfront.  I am sorry, there no legal reason for this Windfall Elimination Provision being put into law in 1983. It was ONLY to shore up the social security trust fund and they took the money away from the workers who build up the social security fund, who worked for this money, they took it away from the people who did the work in order to increase the fund when the govt probably went into it and used it for other purposes.  These hard workers deserve to receive the money in benefits that they earned because and it doesn't even have to be 'becaue' their pension benefit was so small being most of us worked half our work lives in private industry and half under our state governments.    This was illegal, unfair, and fraudulent and this needs to be repealed.  It was not our duty to know about the social security heist, it was our employer's job to be honest and upfront.  Had they told us our Social Security would be cut by 50% (which mine was) and thousands of others, I would not have taken the job at my University at all.  And that is the very reason, they were seretive about this fact - they (our employers) knew all along they would take (illegally I might add) our already earned SS benefits the minute we retired.  I am now owed over $100,000 of lost benefits I should have received upon retirement from my college.  This needs to be repealed, and we all are going to take this much higher.

[JerryB325646]

What I find unfair is the substantial earnings provision.  I worked part-time after government service (FERS/CSRS) and was very close to the substantial earnings amount in that job.  For several of those years I was under, so I contributed to SS but don't get credit toward the WEP.  The years I was over the substantial earnings, I do get credit.  I now have 25 years of substantial earnings, so I am penalized for the 5 years under.  Had I known, I could have added extra hours and probably eliminated the WEP completely.  Please correct me if I am wrong on this.

[GailL1]

---

@JerryB325646wrote:

What I find unfair is the substantial earnings provision.  I worked part-time after government service (FERS/CSRS) and was very close to the substantial earnings amount in that job.  For several of those years I was under, so I contributed to SS but don't get credit toward the WEP.  The years I was over the substantial earnings, I do get credit.  I now have 25 years of substantial earnings, so I am penalized for the 5 years under.  Had I known, I could have added extra hours and probably eliminated the WEP completely.  Please correct me if I am wrong on this.

---

Yes, or you could have worked a bit longer to make up for those years where you did not have substantial earnings.  This would have even been better because the amount you were paid was probably higher at the end of your work career than at the beginning.

Everybody has to make a certain amount (determined annually) before earning a quarter of coverage or ( Social Security credit).

Social Security - Quarter of Coverage

.

[ds68389399]

Hello:  I am in the same boat.  What I recommend you do and ask people in your position to do the same:  write to Chairman Kevin Brady House Ways and Means Committee and tell him:  (1) you are "more than" the "20 years or less" provision for losing sums under the WEP grid chart and ask him, like I did and several others:  can you ask Senator Sherrod Brown and Congressman Rodney Davis to "repeal" any penalties under WEP for those with "more than 20 years of service."

The more people write in this situation, the better.  Please write and share with others like you, me who are similary situated.

[miken198311]

My wife and I are aslo affected by the GPO and WEP. How do we find out AARP's position on these two provisions? How do we get AARP to support elimination of both provisions?

---

@m329635h wrote:

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. 

---

[m329635h]

The most I believe AARP can do is to advocate for those affected by the Windfall Provision. Change has to come from Congress.

[GailL1]

On Feb 21,2017, Rep. Rodney Davis ( R-IL)  introduced H.R. 1205 - Social Security Fairness Act of 2017.  It's action would repeal both the Social Security Windfall Elimination Provision and the Pension Offset Provision.  On 03/06/2017 it was referred to the Subcommittee on Social Security. 

It currently has 148 co-sponsors - 111 Democrats and 37 Republicans.

H.R. 1205 - 115th Congress - Social Security Fairness Act of 2017

But no review from the CBO yet.

That's where it currently sits - 

With all the financial problems facing Social Security which have to be worked out, most likely, all legislation dealing with it will be looked at under some sort of total reform to shore up the whole system.  Until that happens, unless it is something that saves a lot of money in the system, I doubt it will get to the head of the long line of Bills that have been introduced to mend the system.

[bm30977308]

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.........

[GailL1]

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

[retiredtraveler]

"...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?

[GailL1]

---

@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."

[retiredtraveler]

"...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?

[m329635h]

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.

[WebWiseWoman]

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)?