From Federal News Network:
… The Social Security Fairness Act, introduced by Rep. Rodney Davis (R-Ill.) and sponsored by Rep. Abigail Spanberger (D-Va.) now has more than 290 co-sponsors, more than enough to force a House floor vote.
The bipartisan legislation would eliminate two provisions of the 1935 Social Security Act that reduce or eliminate the Social Security benefits of more than 2 million retirees.
One is the Windfall Elimination Provision (WEP), which reduces the Social Security benefits of local, state and federal retirees who worked in Social Security-covered employment — i.e. private-sector jobs — and also received a government annuity from their non-Social Security-covered government employment.
The other provision is the Government Pension Offset (GPO), which reduces the Social Security benefits of spouses, widows and widowers with pensions from a federal, state or local government job. …
Spoiler alert: This stands little or no chance of passing the Senate in this Congress.
This would help of one my family greatly, but I've told my sister not to count any chickens. The US government can throw around billions, but seems to care little for the retiree who contributed decades to both FICA and our State pension. At least she did qualify for Medicare.
ReplyDeleteIf she contributed for decades to FICA she'd be getting some retirement from SSA. If she had 30 years of coverage, there would be no WEP reduction.
DeleteIf all she qualified for was Medicare, she isn't being reduced at all due to WEP.
They should focus on improving things for those that need it…not those with extra sources of income.
ReplyDeleteThis is a bad idea. Gov workers and spouses receive very generous pensions. SS benefits heavily favor short term or low pay workers. For example a worker with $1000 average monthly earnings gets about 90% of that sum in monthly benefits at normal retirement age. Steady middle class workers and their families do not get such a good deal because SS pays about 40% or less of average monthly benefits above that amount
ReplyDeleteI rarely see anyone argue the merits of these provisions. From my casual reading, it seems like they were passed for good reasons, that is, to prevent people from getting a windfall. But my relatives and friends who are subject to these provisions, all of whom have good government pensions, don't care about the merits.
ReplyDeleteI guess Upton Sinclair's famous quote applies here:
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Precisely. These non-covered government workers would be getting 90% of their average FICA taxable monthly wages back in the form of their Social Security benefit without the WEP. The average covered American gets around 40%. The WEP pins the non-covered government workers' replacement rate of their FICA taxes at the same 40%, so despite all the crying to the contrary, it is 100% fair and equitable!
DeleteWhile both the GPO and the WEP provisions could be tweaked to make them more accurate and fair, they are both valid provisions. Total elimination would be a mistake.
ReplyDelete