TN 29 (06-16)

Citations:

Social Security Act, Section 202(k)(5)

20 CFR §404.408a

A. Background for Government Pension Offset

The Social Security amendments of 1977 (P.L. 95-216) include an offset provision to reduce the Social Security spouse's benefit of workers who receive a federal, state, or local pension based on earnings from non-covered government employment. The Government Pension Offset (GPO) applies to a spouse's Social Security benefit for any month the spouse receives a pension based upon his or her own government employment not covered under Social Security. For a definition of a spouse, see GN 02608.100B in this section.

B. GPO Definitions

• Eligible

  Eligible means a person meets all the requirements for entitlement to benefits but has not filed.

• Entitled

  Entitled means a person has applied for benefits and has proven his or her rights to them for a given period.

• Government

  For GPO purposes, Government means:

  Federal - The United States Government, including military service as explained in RS 01901.480.

  State - The 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of Northern Mariana Islands.

  Local - A political subdivision including wholly owned instrumentalities, but not including interstate instrumentalities. For a description of political subdivision, see SL 30001.316.

• Offset

  Offset is a reduction of spouse's benefits due to the receipt of a federal, state, or local government pension.

  Partial GPO

  Partial GPO is the partial reduction of the spouse's Social Security payment amount because of the GPO calculation, but the payment is not reduced to zero. Two-thirds of the amount of the pension is less than the spouse's Social Security benefit payable.

• Pension

  A pension is a periodic or lump sum payment received from an employer’s retirement or disability plan, which is payable because of retirement or a permanent disability. The payment can be from either a defined benefit or defined contribution plan (e.g., 401(k), 403(b), or 457) and based upon the spouse’s non-covered earnings while in the service of a federal, state, or local government.

• Spouse

  A spouse is any wife, widow, husband, widower, divorced wife or husband, surviving divorced wife or husband, mother, father, surviving divorced mother or father, young husband or wife who has a child of the numberholder in care, or a deemed spouse.

• Total GPO

  Total GPO is the reduction of the spouse's Social Security payment amount to zero because of the GPO calculation. Two-thirds of the pension is equal to or more than the spouse's Social Security benefit payable.

C. GPO Application

1. When GPO applies

The GPO applies to a spouse’s benefit for any month the spouse receives a pension based on his or her government employment not covered under Social Security.

The GPO applies for the month the pension is payable for, not the month the spouse actually receives the payment. For GPO, the pension payments may be periodic, in a lump sum, or a combination of both.

The GPO applies only to the portion of the pension based on government employment for pensions based on a combination of government (not private) and private (non-government) employment. For information about pension payments that may be based both on government and private employment, see GN 02608.400C.2.

a. Pension not paid monthly

If payment is made in a lump sum, proration applies as though it is received monthly over a lifetime, or if applicable, over a specific period as explained in GN 02608.400D.

b. Exceptions to GPO

Exceptions to GPO may apply as explained in GN 02608.101 through GN 02608.107.

c. Windfall elimination provision may apply

If the spouse is entitled to retirement (RIB) or disability (DIB) benefits on his or her own social security number, the Windfall Elimination Provision (WEP) may be applicable to the computation of the primary insurance amount (PIA) on his or her RIB or DIB record. For more information about WEP, see RS 00605.360.

2. When GPO does not apply

Do not apply GPO when:

1. The pension payer suspends the pension to the beneficiary because of a return to work (i.e., the beneficiary is not receiving a pension), or

2. The entitlement to the pension ends or terminates, the pension is not payable, and the beneficiary is no longer receiving a pension, or

3. The proration of a lump sum payment based on a specified period ends.

Obtain evidence of a pension suspension or termination from the pension payer.

If the beneficiary starts receiving a pension again, develop for GPO.

D. Amount of GPO

To determine the amount of the monthly pension and the months for which it is payable, see GN 02608.400.

1. Pension eligibility date is July 1983 or later.

The GPO amount is two-thirds the amount of the monthly pension rounded up to the nearest dime for all months for which spouse's benefits are payable.

2. Pension eligibility date is June 1983 or earlier.

The GPO amount is 100 percent of the pension for spouse's benefits payable for November 1984 and earlier and two-thirds the amount of the monthly pension rounded up to the nearest dime beginning with benefits for December 1984.