What is the Windfall Elimination Provision?

The WEP’s effect was proportional: The more years in which you did “covered” work (in which you paid Social Security taxes), the less the provision cut into your benefits. If you had 30 or more years of covered work, the WEP did not apply.

Congress approved the Windfall Elimination Provision in 1983 as part of a larger package of Social Security reforms (including an increase in the full retirement age). The intent was to remove an unintended advantage for workers who collect non-covered pensions but also did some "covered" work in jobs that paid into Social Security.

Because relatively little of their lifetime income was reflected in their Social Security earnings records, these workers benefited from Social Security’s progressive formula for figuring retirement payments, which is weighted in favor of low-wage workers. In other words, someone who collected a healthy government salary for decades received the same advantage in Social Security calculations as did a longtime low-income worker.

The WEP compensated for this by tweaking the formula for people also receiving non-covered pensions in a way that reduced their Social Security retirement benefits. Critics of the provision said it penalized public-sector workers who also paid into Social Security via other employment.

Another pension rule repealed

The Windfall Elimination Provision affected Social Security retirement and disability benefits. A separate rule, the Government Pension Offset (GPO), covered people who received spousal or survivor benefits in addition to a non-covered government pension.

The Social Security Fairness Act repealed both rules, and the SSA says it has also completed GPO-related adjustments and repayments. In all, the agency says it made 3.1 million retroactive payments totaling $17 billion to beneficiaries affected by the WEP and the GPO.