survivor benefits
May 25, 2016 | by Chris Stein, CFP®, Finance Instructor at Colorado State University
Do the GPO or WEP Transfer to Survivors?

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Question from this week deals with the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) provisions of Social Security, and more specifically how they apply when the affected spouse passes away.  We received the following question from a reader:

“My husband recently passed away at the age of 67.  He mostly worked for our local school district where he did not earn Social Security, but before he worked there he earned a Social Security benefit at another job.  He has been collecting his school district pension, but only a very small Social Security benefit since he was subject to WEP.  I am listed as the beneficiary of his school district pension, and I also have my own Social Security benefit from working.  I am 65 now and am wondering what happens when I turn on my Social Security next year.  Since I am now getting my husband’s school pension will my Social Security be reduced by WEP or the GPO provisions?”

First let me remind everyone that we have posted several articles here on www.HelpWithMySocialSecurity.com covering the basics of WEP and GPO.  If you, or your spouse, have earnings from a job that opted out of Social Security, it is highly recommended you do a simple search on the site to read the basics of how these two provisions affect your SS benefits.

For this case I have some good news.  WEP and GPO are triggered due to the recipient of benefits having worked in a “non-covered” job.  Non-covered means the earnings from that job were not covered under the Social Security system.  In this case the husband worked for a school district that opted out of SS and instead funded a pension plan.  The husband’s SS benefit he earned from other work was affected by WEP due to his school district job.  If he had tried to collect a spousal benefit on his wife’s record those benefits would be reduced by the GPO.  Both of these are due to HIS participation in a non-covered job.

The wife did NOT participate in a non-covered job, and is therefore immune from the effects of the WEP and GPO.  When she begins collecting her SS benefits, the fact she is collecting this school district pension as a survivor does NOT reduce her Social Security benefits in any way.  She is allowed to collect both.  Her husband’s WEP and GPO classification does NOT transfer to her.

In this situation there is a clear advantage to one spouse having a government pension and the other a SS benefit.  If they both had SS benefits the survivor would keep receiving just the larger of the two.  In this scenario the surviving widow collects BOTH with no reduction.  As much as those affected complain of WEP and GPO, this is a case where those people make out much better than their SS participating countrymen.

WEP and GPO are some of the most misunderstood aspects of Social Security so we encourage anyone who believes they may be affected to reach out to us if they have any question about how these provisions may affect their, or their spouse’s, Social Security claiming strategy.

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