Legislative Update: March 2014

Legislative Update: March 2014

Two Provisions That Can Reduce Or Eliminate Social Security Benefits

By Jessie Gibbons, Legislative Assistant

The odds are high that someone you know is receiving lower Social Security benefits than they deserve.  Two federal laws – the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) – affect millions of our nation's dedicated teachers, firefighters, peace officers, and other public servants by unfairly reducing or eliminating their earned Social Security benefits.

These laws affect state or local government workers in twenty-six states and teachers in fifteen states, because their employers do not withhold Social Security taxes from their salaries.  The GPO affects public servants who are entitled to Social Security spousal or survivors benefits based on the work history of a husband or wife.  Often, the benefits to which they are entitled are eliminated altogether.  The WEP affects those public servants who have earned pensions from their state or local government, but have also paid into Social Security through previous employment.  Their earned Social Security benefits are often unfairly reduced by one-half or more.

For example, one Maine resident worked in the private sector, paying into Social Security for fifteen years before she returned to the teaching profession.  Her earned Social Security benefits would have totaled $700 a month.  However, due to the WEP, she receives only $120 each month from the program.  She is also unable to collect Social Security spousal benefits due to the GPO, even though her spouse paid into the system throughout his entire career.  In retirement, she must rely almost entirely upon her teaching pension, which is modest since she spent only a decade in the profession.  She told the National Education Association, "If I had known the severe financial penalty I was to pay for returning to teaching, I don’t think I would have done it."

Millions of other public servants find themselves in similar situations, often too late to do much about it.  To reconcile this inequity, The Senior Citizens League (TSCL) enthusiastically supports the Social Security Fairness Act (S. 896 and H.R. 1795), a bill that would repeal both provisions and grant public servants the retirement security they deserve.  The bill was introduced by Senator Mark Begich (AK) in the Senate, and by Rep. Rodney Davis (IL-13) in the House.  So far, it has gained significant traction in both chambers. In the House, it recently reached one hundred co-sponsors, and in the Senate, nearly twenty lawmakers have signed on in support of it.

Throughout the remainder of the 113th Congress, TSCL will continue to urge Members of Congress to pass the Social Security Fairness Act since we believe strongly that it would go far in ensuring the retirement security of millions of seniors.  To aid us in our efforts, we encourage you to contact your elected officials to request their support for S. 896 and H.R. 1795.