Government Pension Oset
Government Pension Oset
A law that affects spouses andwidows or widowers
I you receive a pension rom a ederal,state or local government based on workwhere you did not pay Social Security taxes,your Social Security spouse’s or widow’s orwidower’s beneits may be reduced. Thisact sheet provides answers to questionsyou may have about the reduction.
How much will my Social Securitybenefits be reduced?
Your Social Security beneits will bereduced by two-thirds o your governmentpension. In other words, i you get a month-ly civil service pension o $600, two-thirdso that, or $400, must be deducted romyour Social Security beneits. For example,i you are eligible or a $500 spouse’s,widow’s or widower’s beneit rom SocialSecurity, you will receive $100 per monthrom Social Security ($500 – $400 = $100).I you take your government pensionannuity in a lump sum, Social Security stillwill calculate the reduction as i you choseto get monthly beneit payments rom yourgovernment work.
Why will my Social Securitybenefits be reduced?
Beneits we pay to wives, husbands,widows and widowers are “dependent’s”beneits. These beneits were establishedin the 1930s to compensate spouses whostayed home to raise a amily and whowere inancially dependent on the workingspouse. But as it has become more com-mon or both spouses in a married coupleto work, each earned his or her own SocialSecurity retirement beneit. The law hasalways required that a person’s beneit as aspouse, widow, or widower be oset dollaror dollar by the amount o his or her ownretirement beneit.In other words, i a woman workedand earned her own $800 monthly SocialSecurity retirement beneit, but she wasalso due a $500 wie’s beneit on her hus-band’s Social Security record, we could notpay that wie’s beneit because her ownSocial Security beneit oset it. But, beoreenactment o the Government PensionOset provision i that same woman wasa government employee who did not payinto Social Security, and who earned an$800 government pension, there was nooset and we were required to pay her aull wie’s beneit in addition to her govern-ment pension.I this government employee’s work hadinstead been subject to Social Securitytaxes, any Social Security beneit payableas a spouse, widow or widower wouldhave been reduced by the person’s ownSocial Security retirement beneit. Inenacting the Government Pension Osetprovision, Congress intended to ensurethat when determining the amount ospousal beneit, government employ-ees who do not pay Social Security taxeswould be treated in a similar manner tothose who work in the private sector anddo pay Social Security taxes.
When won’t my Social Securitybenefits be reduced?
Generally, your Social Security beneitsas a spouse, widow or widower will not bereduced i you:• Are receiving a government pension thatis not based on your earnings;• Are a state or local employee whose gov-ernment pension is based on a job whereyou were paying Social Security taxes— on the last day o employment andyour last day was beore July 1, 2004;