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Are some kinds of employees not covered by Social Security?

Yes. Overall, about 90 percent of U.S. wage earners are covered by Social Security, meaning they pay into the Social Security system via payroll or self-employment taxes. “Non-covered” employees include:

  • Some state, county and municipal employees, who are covered by state-funded pension plans rather than Social Security.
  • Employees of the U.S. government who were hired before 1984, the year federal agencies came under the Social Security umbrella. These longtime federal employees get pensions under the old Civil Service Retirement System. 
  • Railroad employees, who are covered by a separate pension system that came into being in the 1930s, around the same time as Social Security.
  • Foreign nationals who work in the United States for their home governments or for some international organizations, such as the United Nations. (U.S. citizens who work in the United States for foreign governments — say, an American employed by the French Embassy in Washington — do pay Social Security taxes and are covered.)

Contrary to a persistent urban legend, members of Congress are covered by Social Security. Like other U.S. government employees, they’ve paid into the system since 1984.

Keep in mind

  • While the jobs listed above are not covered by Social Security, the people who fill them may have accumulated enough earnings in part-time or second-career jobs in the private sector to qualify for both a non-covered pension and Social Security retirement benefits. They may, however, see their Social Security payments reduced under an element of Social Security law called the Windfall Elimination Provision.

Published October 10, 2018

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