Hi Larry,
I have a question regarding WEP and GPO, which takes priority? My spouse will have an $1800/month pension at 66. Prior SS covered work gives her about a $900/mo. SS benefit at 65. We figure she could collect for a year, then start the pension and her SS is reduced to $450, since the max WEP reduction is half?. When I decide to start my SS, I will get about $3000 per month. Her spousal would be $1500/mo., but GPO would reduce that by $1200 (2/3 of pension), netting $300 per month correct? Will she have the option of staying with her own SS benefit and getting the slightly higher amount? Or will SSA automatically force using the spousal since it is the higher benefit before the reduction?
Thanks for your help,
Jay

Hi Jay. The Windfall Elimination Provision (WEP) applies only to Social Security retirement or disability benefits and the the Government Pension Offset (GPO) provision only applies to auxiliary (e.g. spousal) and survivor benefits. So, neither provision takes priority over the other because they apply to different benefit types. However, if a person is dually entitled (i.e. entitled to more than 1 benefit type simultaneously, WEP is applied to the person's own benefit rate first before calculating their excess spousal or survivor rate.

To illustrate, I'll use your stated benefit estimates to give you an example. Let's say that your wife starts drawing her own benefits before you start drawing your benefits. We'll assume that WEP would apply to your wife's benefit, and although the calculation is more complicated than your question implies, we'll say for example purposes that WEP reduces your wife's primary insurance amount (PIA) to $450. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing at full retirement age (FRA).

Then we'll assume that you subsequently file for your benefits and your PIA is $3000. Your wife's unreduced excess spousal benefit would then be calculated by subtracting her PIA of $450 from 50% of your PIA, leaving her with an unreduced excess spousal rate of $1150 (i.e. $1500 - $450). But, if your wife is drawing a government pension based on her earnings that were exempt from Social Security taxes and if her pension amount is $1800, her actual excess spousal payment would be reduced to zero. That's because GPO causes a person's spousal or survivor rate to be reduced by 2/3rds of the amount of their government pension, and 2/3rds of your wife's government pension amount in this example would be higher than her unreduced excess spousal rate (i.e. $1200 vs. $1150).

Our software (https://maximizemysocialsecurity.com/purchase) is fully capable of handling benefit calculations involving the WEP and GPO provisions, so you and your wife should strongly consider using the software to analyze all of your options so that you can determine your best strategy for maximizing your benefits.

Best, Jerry