If I receive a government pension, how will this affect my Social Security benefits?

If you worked in a job that was not covered under Social Security (e.g., some Federal, State, or local government employment) the pension you get based on that work may reduce your Social Security benefits.

Your benefit can be reduced under one of two provisions. The first, called government pension offset, applies only if you receive a government pension and are eligible for Social Security benefits as a spouse or widow(er). Under this provision, your Social Security benefit may be reduced by two-thirds of the amount of your government pension. There are several exceptions to this rule.

The other provision, called the windfall elimination provision, affects how your retirement or disability benefits are figured if you also receive a pension from work not covered by Social Security. The formula used to figure your benefit amount is modified, giving you a lower Social Security benefit.

Social Security benefits are based on a worker`s average monthly earnings adjusted for inflation. When the S.S.A. figures your benefits, they separate your average earnings into three amounts and multiply the figures using three factors. For example, for a worker who turns 62 in 1999, the first $505 of average monthly earnings is multiplied by 90 percent; the next $3,043 is multiplied by 32 percent; the remainder by 15 percent.

Under the windfall elimination provision, the S.S.A. figures your benefit under a modified formula in which the 90 percent factor is reduced to 40 percent. There are exceptions to this rule. For example, the 90 percent factor is not reduced if you have 30 or more years of substantial earnings in a job where you paid Social Security taxes. If you have 21 to 29 years of substantial earnings, the 90 percent factor is reduced to somewhere between 45 and 85 percent.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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