JANUARY 1999 - There
are two federal laws that may reduce your SS benefits. One of them
affects the way your SS benefits are figured. This law is known as the
Windfall Elimination Provision ("Windfall"). The second law affects SS
benefits you receive as a spouse or widow(er) and is referred to as the
Government Pension Offset ("GPO"). Here’s how they work - to the
detriment of certain public retirees.

Windfall Provision

Windfall modifies the formula used to figure your SS benefits, reducing
the amount that you will receive each month. The modified formula
applies to you if both of the following conditions are met: you reach
age 62 after 1985 and first become eligible after 1985 for your monthly
public pension.

You are considered
eligible to receive a pension if you meet the requirements for a
pension, even if you continue to work (i.e., 20/more yrs. of service
under age 55; 10 or more yrs. over age 55). If you were eligible for
your public pension before 1986, then the Windfall does not apply to

SS benefits are based on the
retiree’s average monthly earnings adjusted for inflation. Under the
formula, your average earnings are separated into three amounts and
each amount is multiplied by using three different factors. For
example, for a retiree who was eligible for his pension before 1986,
the first $477 of his average monthly earnings is multiplied by 90
percent; the next $2,398 is multiplied by 32 percent; and the remainder
by 15 percent.

The 90 percent
factor is reduced in the Windfall’s modified formula and phased in for
retirees who reached age 62 between 1986 and 1989 and not eligible for
their pensions before 1986. For those who reach 62 in 1990 or later and
not eligible for their pensions before 1986, the 90 percent facto is
reduced to 40 percent.

There are
exceptions to this rule. For example, the 90 percent factor is not
reduced if you have 30 or more years of "substantial" earnings (as
defined by Social Security) in a job where you paid SS taxes. If you
have 21 to 29 years of substantial earnings, the 90 percent factor is
reduced to somewhere between 45 and 85 percent.

with relatively low pensions are protected because the reduction n the
SS benefits under the modified formula cannot be more than on-half of
that part of the public pension attributable to earnings after 1956.

Government Pension Offset

GPO will reduce the amount of your Social Security spouse’s or
widow(er)’s benefits by two-thirds of the amount of your public
pension. In other words, if you get a monthly pension of $600,
two-thirds of that, or $400, must be used to offset your Social
Security spouse’s or widow(er)’s benefits. If you’re eligible for a
$500 widow (er)’s benefit, you’ll receive $100 per month from Social
Security ($500-$400+$100).

following are exempt from the GPO. Any retiree who received or was
eligible to receive a public pension before December 1982 and who meets
all the requirements for SS spouse’s benefits in effect in January
1977. Also, any retiree who received or was eligible to receive a
public pension before July 1, 1983, and was receiving one-half support
from her or his spouse.

Even if you do not receive cash benefits on your spouse’s record, you can still get Medicare at age 65.