This provision, or WEP, reduces your
First, you should understand a few things about how the
* The WEP applies to pensions based on your earnings from non-
* The pension is your own, not your spouse’s or someone else’s. In other words, receiving a survivor pension from a non-covered job does not trigger the WEP. (However, another reduction called the Government Pension Offset may come into play.)
* The SSA uses the amount of pension you receive per month for calculation. If you receive payments on a different schedule, such as quarterly or in a lump sum, the SSA translates them into a monthly amount.
WEP impact calculation. Two figures determine how much the WEP reduces your benefit: 50% of the amount of your pension and the maximum WEP reduction for the year (
If half of the pension is more than
The SSA lowers the maximum WEP reduction if you paid
Below are a couple examples to help explain how this works.
Example 1. Rick is due to receive a lump sum pension from his work for the state government. This lump sum benefit calculates to a monthly pension amount of
Rick began receiving
Example 2. Brad worked alongside Rick for several years. However, Brad, being a more highly skilled worker, has a pension coming from the state government in the amount of
Reducing his benefit by
Example 3. Freddy worked the exact same job as Brad, earning the monthly pension of
Since Freddy had substantial earnings for more than 20 years, the maximum WEP reduction decreases from
For the calculation, we reduce Freddy’s
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