Bills aim to lessen Social Security's WEP penalty

Two bipartisan pieces of legislation aim to reduce the impact of the Social Security “windfall elimination provision,” which reduces benefits for those who also draw benefits from a retirement program that does not include Social Security, such as CSRS.

Enacted into law in 1983, the WEP formula was created to adjust Social Security worker benefits because retirees sometimes earned a higher retirement benefit than their work history supported, consequently giving them a "windfall" of benefits.

Sen. Ted Cruz (R-Texas) and Reps. Kevin Brady (R-Texas) and Richard Neal (D-Mass.) have introduced companion bills in the House and Senate that will permanently repeal the use of the formula—that the lawmakers call unfair to public service workers—and replace it with a new one.

Cruz and Brady wrote a joint opinion piece in the Dallas Moring News explaining the need  to eliminate the use of WEP.

“The WEP was originally put in place with the intention to prevent this windfall from happening. Instead of creating a fair formula, however, the newly-created WEP forced all public servants who also paid into Social Security into an arbitrary, one-size-fits-all reduction in benefits, with not all public employees being treated equally,” they wrote, adding that, “Additionally, retired public servants often did not know that they would be affected by the WEP until they claimed Social Security benefits, since the reduction did not show up in their Social Security statements. This is a poor way to compensate the dedicated men and women who are engaging in the important work…”

The lawmakers have proposed the use of a new formula that calculates worker benefits using each worker's total lifetime earnings, and then adjusts for the proportion of earnings that came from a job that pays into Social Security.

Also included in the legislation is a call to offer rebates of $100 per-month for workers already affected by WEP, and $50 per-month for those receiving a spousal benefit from Social Security. 

The Senate version of the bill here, and the House version is available here.

Reader comments

Tue, Nov 6, 2018 SAM USA

Everyone who 'paid for' coverage in CS and SS are entitled to receive the benefits that they have 'Paid For'. If CS employees are to only receive half of SS that they paid for (WEP) then what half of what they and their employers contributed into SS should be returned to them. EVERYONE is supposed to be treated EQUALLY and the SAME under the US Constitution.

Fri, Oct 19, 2018

These bills would continue to penalize those eligible to retire before 2024. $100 a month is inadequate. No expensive was spared for the tax reform. Why is it too expensive to fix this fairly for the middleclass persons that the WEP affects!!??

Wed, Oct 17, 2018

Thank you for your bill to repeal WEP. I am retired civil service and also paid into ss PLEASE HELP US. Retirees annuity isn't that much anyway.

Mon, Oct 15, 2018 Houston, tx

Eclectic not year ploy. This will die after midterms!!

Sun, Oct 14, 2018 Kate

I worked in private sector and earned my 40 quarters. I paid full SS the whole time. I am losing 2/3 of my SS due to the WEP. Please help me to receive the SS I earned. Thank you.

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Edward A. Zurndorfer Certified Financial Planner
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