Social Security: How Government Pension Could Negatively Affect Spousal and Survivor Benefits
The Government Pension Offset (GPO) affects spouses, widows and widowers with pensions from a federal, state, or local government job, says the Social Security Administration. In some instances, this could affect Social Security benefits.
The benefits formula penalized retirees who worked part of their career earning a pension instead of paying into the Social Security system, reports Advisor Perspectives. These losses could surpass $25,000 over a lifetime, with no fix in sight, according to a 2019 audit by the Office of the Inspector General. This was due to incomplete or inaccurate advice provided by the agency.
The report understated that if you are subject to the GPO, then claiming spousal or widow(er) benefits can be very costly.
“Widow(er)s have the option to withdraw their application for widow(er)’s benefits and reapply for benefits up to FRA to increase their monthly benefit amount as long as they repay any benefits they received,” says the audit report, as noted by Advisor Perspectives.
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However, there are some exemptions to the GPO, says the SSA. Your Social Security benefits as a spouse, widow or widower won’t be reduced if:
- Your government pension is not based on your earnings.
- Your government pension is from a federal, Civil Service Offset, state or local government job where you paid Social Security taxes and at least one of the following applies:
- You filed for and were entitled to spouse, widow or widower benefits before April 1, 2004.
- Your last day of employment was before July 1, 2004.
- You paid Social Security taxes on your earnings during the last 60 months of government service. Fewer than 60 months may be required for people whose last day of employment falls after June 30, 2004, but before March 2, 2009.
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