The Congressional Research Service reports that 1.8 million Americans have their Social Security benefits reduced by the Windfall Elimination Provision (WEP) that takes effect if you have a pension during retirement from a job that didn’t participate in FICA payroll-tax withholding. About 3% of Americans are affected by the WEP.
Congress passed the law in 1983, at the same time they raised the full retirement age. Those who paid Social Security tax on at least 30 years of “substantial earnings” will not be affected by this reduction in benefits in retirement. However, if a retired person receives a pension as a result of wages that didn’t count toward Social Security, their Social Security benefits could be reduced by as much as 50% of their pension from non-covered employment.
The Social Security Administration has a WEP Chart available on their website to help those who may be affected by this law to estimate how much their Social Security benefits may be reduced. The best way to find out if WEP applies to your situation, or how much of a reduction you’ll receive in Social Security benefits, is to contact the Social Security Administration directly. Their 24-hour toll-free number is 1-800-772-1213. Social Security representatives are available from 7 AM until 7 PM Monday through Friday.
