Ask Rusty: WEP -- Windfall Elimination Provision

Dear Rusty: During my fi rst career, which lasted about 25 years, I worked for companies that withheld Social Security FICA taxes from my income. In my new second career my employer doesn’t take Social Security from my wages, but I’ll still be eligible for a company pension after 15 or so years of service. From my co-workers I’ve heard about something called “WEP” which could affect my Social Security benefi ts, but when they try to explain it

I get totally confused. Can you clarify? Signed: Changed Careers Dear Changed: If you work in your second career long enough to earn a pension, “WEP” will, indeed, affect your future Social Security benefi t. WEP, the Windfall Elimination Provision, applies to those who are entitled to a “noncovered” pension from an employer who did not withhold FICA Social Security taxes from their earnings, and who is also entitled to Social Security benefi ts from other employment which did.

Since the Social Security benefi t calculation is weighted to replace more income for lower-earning workers, dual-benefi t recipients were getting proportionately higher income replacement than truly low-income workers, causing Congress to enact WEP in 1983.


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