Laws that Affect Social Security Benefits

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There are two provisions of law that affect the Social Security benefits of many Federal employees. They are:

  1. The Windfall Elimination Provision
    Social Security benefits based on your own work. If you have Federal service that was not covered by Social Security, you may be subject to a law known as the Windfall Elimination Provision. This may reduce the amount of your Social Security benefit based on your own employment. The Windfall Elimination Provision applies to people who receive pensions based on work that was not subject to Social Security (such as CSRS) and who have less than 30 years of "substantial earnings" under Social Security. Under this law, the Social Security Administration uses a modified formula that results in a lower Social Security benefit.

    You need to earn quite a bit more to be credited with a year of "substantial earnings" than it takes to be credited with a year of regular credit. For example, in 1996, with earnings of $2560, you receive 1 year of credit, but it takes $11,625 to be considered "substantial earnings".may apply to you regardless of whether you retire under CSRS, CSRS Offset, or FERS.

    Most agencies use software packages to do annuity estimates. These programs also normally compute Social Security benefits, including the adjustment for the Windfall Elimination Provision, if applicable. If you think this provision will apply to you, you should ask your agency if it can compute the benefit for you, using the earnings statement you receive from the Social Security Administration.

  2. The Government Pension Offset Provision
    Social Security benefits based on your spouse's earnings. The Government Pension Offset provision of the Social Security laws affects Social Security spousal benefits. It only applies to people who are covered by CSRS (people covered by CSRS Offset are exempt from Public Pension Offset), or who transferred to FERS after the 1987 open season and retire before being in FERS for 5 years. Generally, the Government Pension Offset will not affect you if you will receive a Social Security benefit based on your own employment. If you are affected by the Government Pension Offset, your Social Security spousal or survivor's benefit will be reduced by an amount equal to two-thirds of the amount of your CSRS pension. For example, if you get a monthly CSRS pension of $600, two thirds of that, or $400, must be used to offset your Social Security spouse's or widow's benefits based on your husband or wife's Social Security.

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