(over)

Windfall Elimination Provision 2014

Your Social Security retirement or 

disability benefits may be reduced

If you work for an employer who does not 

withhold Social Security taxes from your 

salary, such as a government agency or an 

employer in another country, any pension you 

get based on that work may reduce your Social 

Security benefits.

The Windfall Elimination Provision affects 

how the amount of your retirement or disability 

benefit is calculated if you receive a pension 

from work where Social Security taxes were 

not taken out of your pay. We use a modified 

formula to calculate your benefit amount, 

resulting in a lower Social Security benefit than 

you otherwise would receive.

When your benefits may be affected

The Windfall Elimination Provision 

primarily affects you if you earned a pension in 

any job where you did not pay Social Security 

taxes and you also worked in other jobs 

long enough to qualify for a Social Security 

retirement or disability benefit.

For example, this provision affects Social 

Security benefits when any part of a person’s 

federal service after 1956 is covered under 

the Civil Service Retirement System (CSRS). 

However, federal service where Social Security 

taxes are withheld (Federal Employees’ 

Retirement System) will not reduce your Social 

Security benefit amounts.

The Windfall Elimination Provision may 

apply if:

•	 You reached 62 after 1985; or

•	 You became disabled after 1985; and

•	 You first became eligible for a monthly 

pension based on work where you did not pay 

Social Security taxes after 1985, even if you 

are still working.

Why we use a different formula

Social Security benefits are intended to 

replace only a percentage of a worker’s 

pre-retirement earnings. The way Social 

Security benefit amounts are figured, lower-paid 

workers get a higher return than highly paid 

workers. For example, lower-paid workers could 

get a Social Security benefit that equals about 

55 percent of their pre-retirement earnings. The 

average replacement rate for highly paid workers 

is about 25 percent.

Before 1983, people who worked mainly in 

a job not covered by Social Security had their 

Social Security benefits calculated as if they 

were long-term, low-wage workers. They had 

the advantage of receiving a Social Security 

benefit representing a higher percentage of their 

earnings, plus a pension from a job where they 

did not pay Social Security taxes. Congress 

passed the Windfall Elimination Provision to 

remove that advantage.

How it works

Social Security benefits are based on the 

worker’s average monthly earnings adjusted 

for inflation. We separate your average earnings 

into three amounts and multiply the amounts 

using three factors. For example, for a worker 

who turns 62 in 2014, the first $816 of average 

monthly earnings is multiplied by 90 percent; 

the next $4,101 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 shows the percentage 

used depending on the number of years of 

substantial earnings. If you have 21 to 29 years 

of substantial earnings, the 90 percent factor is 

reduced to between 45 and 85 percent.

Windfall Elimination Provision
To see the maximum amount 

your benefit could be reduced, visit 

www.socialsecurity.gov/retire2/wep-chart.htm.

Some exceptions...

The Windfall Elimination Provision does not 

apply if:

•	 You are a federal worker first hired after 

December 31, 1983;

•	 You were employed on December 31, 1983, by 

a nonprofit organization that did not withhold 

Social Security taxes from your pay at first, 

but then began withholding Social Security 

taxes from your pay;

•	 Your only pension is based on railroad 

employment;

•	 The only work you did where you did not pay 

Social Security taxes was before 1957; or

•	 You have 30 or more years of substantial 

earnings under Social Security.

The Windfall Elimination Provision does 

not apply to survivors benefits. However, 

benefits may be reduced for widows or 

widowers because of another provision of 

the law. Ask for Government Pension Offset

(Publication No. 05-10007).

...and a guarantee

If you get a relatively low pension, you 

are protected. The reduction in your Social 

Security benefit cannot be more than one-half 

of the amount of your pension that is based on 

earnings after 1956 on which you did not pay 

Social Security taxes.

Contacting Social Security

For more information and to find copies 

of our publications, visit our website at 

www.socialsecurity.gov or call toll-free, 

1-800-772-1213 (for the deaf or hard of hearing, 

call our TTY number, 1-800-325-0778). We 

treat all calls confidentially. We can answer 

specific questions from 7 a.m. to 7 p.m., 

Monday through Friday. Generally, you’ll have 

a shorter wait time if you call during the week 

after Tuesday. We can provide information by 

automated phone service 24 hours a day.

We also want to make sure you receive 

accurate and courteous service. That is why we 

have a second Social Security representative 

monitor some telephone calls.

Year Substantial earnings

1937–1954 $900

1955–1958 $1,050

1959–1965 $1,200

1966–1967 $1,650

1968–1971 $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

Year Substantial earnings

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 $20,475

2013 $21,075

2014 $21,750

Years of substantial

earnings Percentage

30 or more 90 percent

29 85 percent

28 80 percent

27 75 percent

26 70 percent

25 65 percent

24 60 percent

23 55 percent

22 50 percent

21 45 percent

20 or less 40 percent

Social Security Administration

SSA Publication No. 05-10045

ICN 460275

Unit of Issue - HD (one hundred)

Printed on recycled paper January 2014 (Recycle prior editions)