Social Security/GPO
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The Government Pension Offset (GPO) was enacted in 1977 when Congress decided someone with both a government pension and a survivor/dependent benefit violates the “dual entitlement” rule. It reached the conclusion by equating the government pension with a Social Security retirement benefit. If Congress had determined that the government pension is comparable to a pension from a private sector employment or Social Security covered work for state or local government, the “dual entitlement” rule would not have been an issue. The Congress chose not to equate the public service and the private sector pensions.
The original purpose of the dependent/survivor benefit was to provide additional income to help a financially dependent spouse when a working spouse becomes disabled or dies. The GPO causes unintended harm to the surviving spouse when the dependent/survivor benefit is reduced. Those individuals most likely affected by the GPO are women who spent time raising families and working outside the home in professions or careers to supplement the household income. A high percentage of those affected are women, whose loss in benefits oftentimes reduces their retirement benefits to a life of poverty. Some of the supporters of the Social Security Fairness Act, which would repeal the GPO & WEP, estimate that the percentage of women affected by the offsets is close to 73 %.
The Windfall Elimination Provision (WEP) was enacted in 1983. It causes employees outside the Social Security system to lose a significant share of their Social Security benefit. For instance, the WEP affects the teaching profession as a whole. Some individuals in Social Security covered employment may wish to make a career change and enter the teaching profession, but are unable to do so because their Social Security benefits will be offset. Some educators move from a position where they pay into the Social Security system, only to find that those benefits will be offset because they moved to a position in a state that does not pay into the Social Security system. Some teachers pay Social Security in one career and then go into the teaching profession as a second career, not realizing that their earnings from their first career will be adversely affected by their Kentucky teacher pension.
Currently, there is a move by some representatives and senators in Congress to address the offsets through congressional action. The Social Security Fairness Act, which has been introduced by Representative Howard Berman (CA) and Senators Susan Collins (ME) and Dianne Feinstein (CA), would permanently repeal the GPO and WEP. Already there is a move by some representatives and senators to reintroduce the repeal effort in the 2011 Congress.