One’s own benefit reduces spousal benefit

Getting ready for retirement requires evaluation of all your sources of retirement income. Even if you worked for the government and didn’t pay the FICA tax on your earnings, you may be eligible for benefits from your spouse’s work under Social Security.

But when you receive both your own non-covered government pension and a Social Security spousal benefit, your Social Security benefit may be reduced. The Government Pension Offset reduces your Social Security benefit by two-thirds of your government pension.

Current law requires any beneficiary’s spouse, widow or widower benefit to be reduced by the dollar amount of their own retirement benefit. For example, if a woman earned her own $900 monthly Social Security benefit, but was due a $500 wife’s benefit on her husband’s record, we couldn’t pay the wife’s $500 benefit because her retirement benefit is larger.

Before enactment of the GPO, if the same woman was a government employee who didn’t pay into Social Security but earned a $900 government pension, there was no reduction. We would have paid her the full amount of wife’s benefit and she also received her full government pension. GPO ensures that we calculate the benefits of government employees who don’t pay Social Security taxes the same way as workers in the private sector who pay Social Security taxes. Applying the GPO in this ex- ample means since two-thirds of the government pension (two-thirds of $900 equals $600) is more than the wife’s benefit ($500), there is no wife’s benefit payable.