Helping Federal Employees and Annuitants Understand Their Benefits
Federal Employee's CSRS WEP Social Security Adjustment
The U.S. Senate passed H.R. 82, the Social Security Fairness Act, repealing the windfall elimination provision (WEP) and the government pension offset (GPO), voting 76-20 on the final passage. The House passed the bill by 327-75 on November 12. The bill is now on the President's desk, awaiting his signature.
If you accrued 40 quarters (10 years) of employment where social security payments were withheld you are eligible for benefits. Your Primary Insurance Amount (PIA), which is simply your Social Security payment, will be impacted. The Windfall Elimination Provision (WEP) can significantly reduce your Social Security payout.
Complete information with links to FREE online WEP calculators are listed below.
Many federal employees have held other jobs before, during, and after retirement including feds who served active military and/or Reserve and National Guard duty where earnings were subject to Social Security. If you aren’t sure if you are eligible you need to contact Social Security at 1-800-772-1213 or visit their excellent web site at www.socialsecurity.gov to register and print out your Social Security Earnings Report.
This provision reduces your Social Security benefits if you have less than 30 years of “substantial” coverage and earned a CSRS federal retirement benefit. Substantial earnings equaled $2,250 dollars in 1972 and $26,550 in 2021. A complete list of substantial years is included below.
If you receive a relatively low pension, you are protected. “Your Social Security reduced benefit cannot be more than one-half of that part of your pension based on your earnings after 1956 from which Social Security taxes were not deducted.”
The most your Social Security Benefit will be reduced with 20 years of substantial earnings in 2019 is $463
Social Security benefits are based on the worker’s average monthly earnings adjusted for inflation. They separate your average earnings into three amounts and multiply the amounts using three factors. For example, for a worker who turns 62 in 2021, the first $996 of average monthly earnings is multiplied by 90 percent; earnings between $996 and $6,002 by 32 percent; and the remainder by 15 percent. The sum of the three amounts equals the total monthly payment amount.
The 90 percent factor is reduced in the modified formula and phased in for workers who reached age 62 or became disabled between 1986 and 1989. For those who reach 62 or became disabled in 1990 or later, the 90 percent factor is reduced to 40 percent.
There are exceptions to this rule. For example, the 90 percent factor is not reduced if you have 30 or more years of “substantial” earnings in a job where you paid Social Security taxes. See the first table that lists the amount of substantial earnings for each year, the second table lists the percentage reduction for the number of substantial years from 21 to 30. The annual Social Security Earnings Reports, that you can download online from the Social Security site, includes all of your earnings information by year back to when you started working. You can use Social Securities WEP Calculator to determine your annuity.
To determine your number of substantial earning years use the Substantial Earnings Chart on this page and mark each substantial earnings year on your official Social Security Earnings Report. Count up the number of substantial earnings years and use the chart below to determine the amount that your payment will be reduced.
Note: Your Social Security Statement provides an estimate of your payment without any considerations for the WEP adjustment. CSRS annuitants must reduce the estimated benefit by the amount listed on the following table.
The following chart shows the WEP reduction in 2021 for 20 or less substantial years and for each substantial year up to 30. For example, if you have 25 substantial years of earnings your Social Security monthly payment will be reduced by $223. If you have a full 30 years of substantial earnings your payment will not be reduced.
| Years of Substantial Earnings (2021) | |
| Substantial Earnings Years | *Amount Payment Reduced |
| 20 or less | $498 |
| 21 | $448 |
| 22 | $398 |
| 23 | $348 |
| 24 | $298 |
| 25 | $249 |
| 26 | $199 |
| 27 | $149 |
| 28 | $99 |
| 29 | $50 |
| 30 | 0 |
* Important: The maximum amount may be overstated. The WEP reduction is limited to one-half of your pension from non-covered employment.
| Year | Substantial earnings |
|---|---|
| 1937-54 | $ 900 |
| 1955-58 | $1,050 |
| 1959-65 | $1,200 |
| 1966-67 | $1,650 |
| 1968-71 | $1,950 |
| 1972 | $2,250 |
| 1973 | $2,700 |
| 1974 | $3,300 |
| 1975 | $3,525 |
| 1976 | $3,825 |
| 1977 | $4,125 |
| 1978 | $4,425 |
| 1979 | $4,725 |
| 1980 | $5,100 |
| 1981 | $5,550 |
| 1982 | $6,075 |
| 1983 | $6,675 |
| 1984 | $7,050 |
| 1985 | $7,425 |
| 1986 | $7,875 |
| 1987 | $8,175 |
| 1988 | $8,400 |
| 1989 | $8,925 |
| 1990 | $9,525 |
| 1991 | $9,900 |
| 1992 | $10,350 |
| 1993 | $10,725 |
| 1994 | $11,250 |
| 1995 | $11,325 |
| 1996 | $11,625 |
| 1997 | $12,150 |
| 1998 | $12,675 |
| 1999 | $13,425 |
| 2000 | $14,175 |
| 2001 | $14,925 |
| 2002 | $15,750 |
| 2003 | $16,125 |
| 2004 | $16,275 |
| 2005 | $16,725 |
| 2006 | $17,475 |
| 2007 | $18,150 |
| 2008 | $18,975 |
| 2009 - 2011 | $19,800 |
| 2012 2013 2014 2015-2016 2017 2018 2019 2020 2021 |
$20,475 $21,075 $21,750 $22,050 $22,625 $23,850 $24,675 $25,575 $26,550 |
To estimate your WEP reduction use the Free software offered by FedRetireSoftware. The Social Security web site also offers a WEP calculator that you will need to enter all your past earnings taxed by Social Security, which are shown on your Social Security Statement. The Social Security office provides copies of your earnings statement upon request or you can download a version on the Social Security web site.
