Two members of Congress, Kevin Brady (R-Texas) and Richard Neal (D-Mass.), have proposed legislation to change the manner by which Social Security cuts the benefits of some retirees. At issue is the Windfall Elimination Provision, or WEP. Although WEP can affect many different Social Security beneficiaries, it mostly pertains to people who have worked in the public sector.
Avoiding an Unfair Result
For those workers who have a government pension, Social Security reduces the amount of retirement benefits. The idea is that it would be unfair to permit such workers to get a full government pension plus a full Social Security retirement. Such public sector workers as firefighters and teachers do not pay into Social Security during their working years. In addition, some State workers have the option to chose to pay into Social Security if the state they work in does not offer their own pension plan.
No Easy Answer When Workers Do Both Public and Private Sector Work
The problem comes when workers split their time between private employers and government jobs. How Social Security calculates the WEP for these workers is complicated and based on their own formulas. Essentially, if a worker has at least 30 years of work in which they paid Social Security taxes, there is no set-off. After that Social Security applies a sliding scale. The most Social Security can reduce a worker’s benefit as of 2019 is $463 per year.
No Revision Is Likely, But Keep Track
Because Congress can’t agree on anything, it is unlikely that there will be a meaningful revision of WEP. One easy solution is to have public-sector employees pay into Social Security they way private-sector employees already do. I would keep an eye on this because it is a method to bring more money into Social Security at a time when it is always in financial straits. That said, many public-sector workers are in unions and they would assuredly fight any proposal that would reduce the take-home pay of their members.
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