I have a hard time understanding why the Social Security Administration considers it "double dipping" when I worked and paid into Social Security for many years and acquired my 40 quarters to be eligible for Social Security at retirement. I also worked for 16 years for Yuba County Dept of Social Services, where we did not pay into Social Security, but we paid into CALPERS. When I retired I was told that my Social Security benefits would be decreased by taking the amount of my CALPERS pension and dividing it into 3, and whatever 2/3 of that amount was would be deducted from my Social Security Benefits. How is this double dipping? If I didn't work for Yuba County I would have gotten my full Social Security benefits, but because I did, they can reduce it drastically. Can you please help me understand this??? I could understand if I did not earn my 40 quarters, but I did.

Hi. First of all, the Social Security Administration (SSA) isn't to blame. SSA simply administers the provisions that are passed into the Social Security law by Congress. One of those provisions is the Windfall Elimination Provision (WEP), which can cause a person's Social Security retirement benefit rate to be calculated using a less generous computation formula if the person also receives a pension based on wages they earned that weren't subject to Social Security taxes (https://www.ssa.gov/pubs/EN-05-10045.pdf). The actual WEP calculation is much different than what you describe as having been told, though.

Congress's explanation for enacting WEP is basically as follows:

The Social Security benefit formula is progressive, replacing a greater share of career-average earnings for low-paid workers than for high-paid workers. The regular formula was intended to help workers who spent their careers in low-paying jobs, by providing them with a benefit that is relatively higher in relation to their career-average earnings in covered employment than the benefit that is provided for workers with high career-average earnings.

Before 1983, people whose primary job wasn’t covered by Social Security had their Social Security benefits calculated as if they were long-term, low-wage workers. They had the advantage of receiving a Social Security benefit representing a higher percentage of their earnings. Also they had a pension from a job for which they didn’t pay Social Security taxes. The WEP is intended to remove this unintended advantage, or “windfall”, that the regular Social Security benefit formula provided to workers who also had pensions from non-covered employment.

Best, Jerry