From Scotusblog:
Wednesday’s argument in Babcock v Kijakazi will take the justices deep into the intersection of the Social Security Act and a host of statutes defining the obligations and compensation of National Guard workers. This will definitely not be the most closely watched case of the month — but the court’s resolution of the arcane question in the case may determine how much money certain veterans can receive in retirement benefits.
At the highest level of generality, the case involves an exception from a “windfall elimination provision” of the Social Security Act. To understand the issues before the justices, it is enough to know that Congress has adopted a statute designed to eliminate what it regards as “windfalls” that some workers would receive – unjustly large Social Security awards that would flow to workers who spent a substantial share of their working years in jobs not covered by Social Security. The exception to the windfall-elimination provision describes some payments to which that provision doesn’t apply – employees for whom Congress would tolerate what it generally would regard as a windfall. Specifically, the exception protects any “payment based wholly on service as a member of a uniformed service,” a defined term that includes among other things the Army National Guard of the United States. To put that another way, the “uniformed-services exception” at issue here allows members of uniformed services a windfall Social Security payment that is barred for members of the general public.
The question before the court is whether the benevolence of that uniformed-services exception reaches dual-status military technicians who serve in the National Guard. Those technicians provide a variety of services involving the equipment and supplies of the National Guard. Although they are paid as civilian employees, they routinely wear military uniforms and are obligated to maintain membership with an appropriate rank in the state National Guard where they are located, which carries with it (by law) membership in the Army National Guard of the United States. …
3 comments:
Is it a serious concern if some public pensions are not setoff against social security benefits? I'm not saying Congress can't choose to require it, but I'm genuinely curious whether the costs in administering the WEP is worth it. Has any study put a dollar figure on how much setoff is occurring?
It's not hard and doesn't really add any "cost" to the program. It's developed when the app is filed and it's a set reduction by formula, not a moving figure such as GPO. While it is possible to keep working and reduce WEP, it doesn't happen that often because the limit for substantial wages is fairly high at this point.
This issue has been around for a long time. We faced it back before I retired from SSA over 11 years ago.
The issue revolves around the fact that these National Guard technicians receive 2 pensions when they retire. The pension for their service in the National Guard does not invoke the WEP provision. That has never been in dispute.
The issue is the pension from their civilian employment with the National Guard. If that position was covered under FICA, then again there was no question that it is also exempt from WEP. But in some States (a relatively small number), these civilian National Guard positions are classified as non-covered, meaning no FICA taxes are paid on those wages.
SSA has always considered the two pensions separately, and if the civilian pension is from non-covered civilian employment it meets the definition of a non-covered pension that will invoke the WEP, based solely on the amount of that pension alone.
The contrary argument is that since the civilian employees are required to be members of the National Guard as a condition of their civilian employment, their civilian pension should also not cause WEP to apply, even if that employment was not FICA covered. I don't think anyone in SSA buys that argument. But, while some judges have upheld SSA's position, others have ruled otherwise. So, we'll finally get a definitive answer based on what the Supreme Court decides.
Post a Comment