WEP, the Windfall Elimination Provision, affects people who worked in a Social Security exempt, government or non-profit job and who also worked in a job that collected Social Security. Recently, we received a question from a blog reader who is in this position:
“I have approximately 20 “good years” of Social Security taxed income. I currently am employed by a non-profit government utility and have been since 2001, so I haven’t contributed to Social Security. I plan on working in my current position another 7 years and then retire. I work seven days on and seven days off so I have time to obtain a part time job. I’m hoping to work enough at the part time job to qualify for additional Social Security quarters. Is this legal? Can I earn an additional $10,000 annually to obtain additional service years for Social Security while working my primary job that is exempt?”
This individual is alluding to the Windfall Elimination Provision without actually naming it. We’ve written other blog posts that explain WEP in detail, but here are a few items that are relevant to this individual’s question.
For some people subject to WEP, it appears to Social Security that these people made less money throughout their careers than they actually did. To compensate for this, Social Security reduces the benefit amount paid to these individuals. This reduction is made regardless of the income amount that was actually earned in the non-Social Security job. In 2017, WEP will reduce a benefit by $442.50.
WEP automatically takes effect if the individual has 20 or fewer years of substantial Social Security taxed income. For 2017, SS considers an annual income of $23,625 substantial. Also, for every year after 20 years that the individual earns a substantial income, the WEP reduction diminishes. After 30 years of substantial earnings, WEP is completely eliminated.
Back to the Question
How does all this relate to the reader’s question? Is it legal to work a part time job that contributes to Social Security to reduce the impact WEP has on your SS benefit? Yes, this is perfectly legal. There is no problem with working simultaneously in the public and private sector.
As to taking a part time job that earns $10,000 annually, this won’t do much to help the reader reduce the Windfall Elimination Provision. Unless the part time job pays what Social Security considers substantial earnings, WEP will still be in place.
For a more in-depth discussion on this topic, please use the play button below.