Government Pension Offset

GPO bills amend the Social Security Act to 1)provide that the reduction 
in Social Security benefits which are required in the case of spouses 
and surviving spouses who are receiving certain government pensions 
shall be equal to the amount by which the total amount of the combined
monthly benefit (before reduction) and monthly pension exceeds $1200 or 
2)eliminate the the GPO entirely.  Go to the MARFE website to learn what
you can do to help defeat the GPO offset.

How the Government Offset Provision Works 

The GPO was passed as part of the Social Security (SSA) amendments of 
1977. Prior to these amendments, there was a requirement that a male
must have received 1/2 support from his spouse before being eligible 
for spousal SSA benefits. The 1977 amendments removed this 1/2 support
requirement.

Most men were not affected, but thousands of male Federal workers, not
covered under SSA, would now be eligible for a spousal benefit. (These
workers did not qualify for their own SSA benefit and they no longer
had to meet the 1/2 support requirement.)

The legislative purpose of the GPO inclusion in the 1977 amendments was
to avoid this new financial burden on the SSA trust funds.  SSA has a 
rule that a person cannot receive both his/her own SSA benefit plus a 
full SSA spousal benefit.  This is the "dual entitlement" rule.

The GPO, enacted in 1977, treated government pensions and annuities as
though they were SSA benefits - this triggers the "dual entitlement" 
provision of the SSA Law.

The GPO, as passed, affects both men and women.  However, Congress provid-
ed a transition period of five years for women, i.e. those women, eligible
for their Federal annuity before December 1982, were exempt from the
GPO. However, male Federal workers had to be eligible for their annuity
before December 1982 AND have received 1/2 support from his spouse.

The GPO, as applied, affects 2/3 of the Federal worker's annuity. In 
other words, 1/3 of the annuity is exempt from the GPO; the remainder,
or 2/3, is subject to a dollar-for-dollar offset against the SSA payment.

The offset was effective beginning December 1982.

How does it Work? - An Example

Federal Annuity                    $900.00

SS benefit received by spouse,
based on spouse's work under SSA   $800.00

Federal annuitant's spouse benefit
before GPO applied                 $400.00

Federal annuitant's spouse benefit
after GPO applied against 2/3 of
the Federal annuity                 900 x 2/3 = 600
Since $600 is greater than $400, there is Zero (0) SSA spousal benefit
payable to the Federal annuitant.

Note:   If the spouse should pre-decease the Federal retiree, a larger 
SSA widow\er's benefit would be computed ($800). Federal retiree should
be entitled to $200 from SSA ($800 offset $ for $ by 2/3 of the Federal
Annuity- $600.

Additional Important Facts
The GPO refers to SSA benefits earned by the Federal retiree's husband
or wife, NOT any SSA benefit earned by the Federal retiree. This latter
situation is covered by the Windfall Elimination Provision (WEP) discuss-
ed elsewhere.
The GPO does not affect the spouse's own SSA benefit if the Federal retir-
ee should predecease the spouse, who then becomes eligible for a Federal
Survivor's annuity.  Neither the spouse's SS benefit nor the Federal 
Survivor's annuity are subject to offset.

Exceptions: 
1. The windfall reduction formula does not apply to federal survivor annuities. 
2. The reduction will not apply if a person has 30 years of substantial earnings as
   defined by Social Security. (NOTE: Workers who have 21-29 years of substantial
   earnings receive a lesser reduction.) 
3. Anyone who became eligible for his/her government annuity before 1986, or
   became 62 or disabled before 1986, is exempt. "Eligible" means a person meets the age
   and length of service requirements for immediate retirement. 
4. Federal employees mandatorily covered by Social Security on January 1, 1984 are
   exempt. 
5. Anyone whose only pension from noncovered employment is based on railroad
   employment is also exempt. 
6. People whose only pension is from noncovered employment prior to 1957 are
   exempt. 
7. Effective January 1, 1995, military reserve pensions are exempt. 

For those with relatively low government annuities, the legislation provides 
for a guarantee.  The guarantee is that the reduction of the Social Security benefit cannot be more than
one-half of the amount of that part of the government annuity attributable to earnings after
1956 not covered by Social Security.


GPO Legislative History:
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