Thanks, these responses are helpful. Would anyone by chance have any links to sources that discuss this? I was in the SSA office earlier this week (on an unrelated matter) and couldn't help but notice just how difficult it is to challenge or disagree with an opinion voiced by the employees there.
WEP Applicability
Citations:
Social Security Act as amended in 1983 — § Sections
215(a)(7) and
215(d)(3);
Regulations 20 CFR 404.213 and 404.243.
A. Background
The Social Security Amendments of 1983 (P.L. 98-21) includes a provision that eliminates “windfall” Social Security benefits for retired and disabled workers receiving pensions from employment not covered by Social Security. Under this provision, a modified benefit formula is used to determine the NH's primary insurance amount (PIA).
Social Security benefits are based on the monthly average of lifetime earnings. In the basic formula for figuring benefits, the first part of the average earnings is multiplied by 90 percent; the second part is multiplied by 32 percent; and any part of the average monthly wage remaining is multiplied by 15 percent. However, under WEP, the 90 percent factor is replaced by a factor ranging from 50 to 80 percent for workers who reached age 62 or became disabled between 1986 and 1989. For those who reach age 62 or become disabled in 1990 or later, the 90 percent factor is replaced by a factor ranging from 85 to 40 percent depending on the number of years of “substantial” earnings the NH has.
B. Definitions
1. A pension
A pension is a periodic or lump sum payment from an employer's retirement or disability plan, based on employer and/or employee contributions and based on eligibility factors such as age, length of service or earnings. Payments from either defined benefit (DB) or defined contribution (DC) plans may be considered pensions for WEP purposes. For a pension to cause WEP, the payment must be based on earnings for service that were not covered by Social Security. (For additional guidance on DC plans, see
RS 00605.364A.3. and
RS 00605.364B.1.)
2. Eligible
An individual is considered eligible when he or she meets all requirements for the pension except for stopping work or filing an application. (See
RS 00605.364B.)
3. Entitled
An individual is entitled to a pension when he or she has applied for benefits and has proven his or her rights to benefits for a given period of time. (See
RS 00605.364B.)
4. Years of Coverage (YOCs)
YOCs are substantial years of Social Security earnings. See chart in
RS 00605.362A.1.
C. Policy WEP application
1. When WEP is applicable
The formula for determining the PIA is modified when the following situation occurs:
- A worker becomes eligible for old-age insurance benefits after 1985; or
- A worker becomes eligible for disability insurance benefits after 1985; and
- For the same months after 1985 the worker is entitled to old age or disability benefits, the worker also becomes entitled to a monthly pension(s) for which he or she first became eligible for after 1985 and, the pension is based in whole or in part on earnings in employment which were not covered by Social Security.
NOTE: If the worker is entitled to spouse’s benefits on another social security number, the Government Pension Offset (GPO) may apply. For more information about GPO, see
GN 02608.100.
2. When PIA is recomputed to apply WEP
If the NH becomes entitled to an applicable pension after the MOET for RIB or DIB, the PIA is recomputed to apply WEP in the first month of the pension entitlement. However, the WEP is not recomputed due to changes, such as yearly increases, in the money amount of the pension.