When Can Your Social Security Benefits Be Reduced?

In earlier articles we talked about the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).  These two rules within the Social Security Administration’s procedures reflect reductions to Social Security benefits for receiving pension benefits from a job where your salary is not subject to Social Security withholding.  Usually these are federal, state, or local government jobs, including teaching jobs at public institutions.  The WEP applies to your own Social Security benefit and pension, while the GPO applies to your spousal or survivor’s Social Security benefit and your own pension.

The WEP may impact you if you are receiving a pension from a non-covered government job and you also are qualified to receive Social Security benefits based upon your own record.  The same holds true for Spousal benefits – if you are receiving a government pension and are eligible for Spousal benefits, these can be reduced by the WEP.  Survivor’s benefits are NOT subject to the WEP.  For 2010 the maximum WEP reduction is $355.50, but it can be much less (even eliminated) depending on how long you worked in the Social Security-covered job and how much money you made there.

The GPO may impact you if you are receiving a pension from a government job and are qualified to receive Survivor’s benefits based upon your spouse’s or ex-spouse’s record.  Your Survivor benefit may be reduced by an amount equal to two-thirds of the amount of your pension.

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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  • My mother, age 91, had an investment redeemed in 2015 and reported a large capital gain. Otherwise, her income has remained constant from investments. She collects on my father’s social security after he died in 2014 and does not receive a pension. She received a letter from Social Security advising that since her income increased in 2015, they were cutting her benefits by over $300/mo. Is this legit and can she appeal based on the fact that the income was a one time deal?

    • I wonder if this reduction is due to an increase in Medicare premiums? If that is the case, you can appeal the premium amount, explaining that the increase to income was a short-term “one-off” event. This may reduce the Medicare premium for her.

      Other than that, I don’t know why an increase to income would have an effect on her SS benefits.

  • my son social security benefits was reduced without receiving any notice and he has mental issues. Is this acceptable or should I seek further information concerning this matter.

  • hello my is Rodney and I would like to inquire about my son social security benefits that that was previously reduced and he’s having problems paying his rent. He never received any information concerning his check would be reduced. He has mental issues and been off his medication for nearly a year but again he has received any information or notice that his social security check would be reduced.Is there anything I can do to resolve this matter. Respectfully Submitted….

  • Great Article. I also can be helpful here 🙂 BTW, if anyone needs to fill out a SSA-7008, I found a blank fillable form here https://goo.gl/nYrHSk

  • Jim,

    My taxable income in 2014 increased substantially, due to ordinary dividends. My income for 2015 dropped back to normal. In January 2016, my SS benefits dropped more than $200 per month. Why is this and when will they pick back up to normal?


  • My 95 year old mother says her Social Security was just reduced because she sold her house three years ago and this ‘income’ somehow reduced the amount of her social security check. I’m not so sure this is what is happening. She certainly isn’t working anywhere, and besides, at 95 she’s well over the age where SS WOULD be decreased if she worked.

    Ever hear of anything like this? Or do I need to ask her more questions?

    • If this house wasn’t her primary residence for 2 of the previous 5 years (prior to the sale) and there was a gain on the sale of the home, she probably had capital gains on the sale which increased her income.

      As a result of this increased income, her Medicare premium probably went up, and likely substantially if the additional income was substantial.

      You need to review the transaction (and engage a tax preparer or CPA if necessary) to make sure that the home sale was handled correctly. If the income was correctly reported, there’s not a lot that can be done about this increase to her Medicare premium, although you might try contacting Medicare to explain the situation and request relief from the increase. At the very least you want to find out how to reduce this premium in the future if it doesn’t automatically reduce.


      • Thank you JB.

        I’ll have to see if she got a statement showing that her Midicare was increased.

        She lived in that house since 1956, so it was definitely her ‘primary residence’, with no other real estate ownership.

        • So likely the tax return was not prepared correctly. After amending the return (which I assume you’ll need to do) then you’ll have to go back to Medicare to explain the situation and have her premium reassessed.

          It’s going to likely be a long, slow road. Good luck.


    • If your employment at the state was not covered by Social Security taxes, the pension might cause a reduction of a maximum of $413 per month (for 2015) or 50% of the pension amount, whichever is lower.


  • So does reduction affect the spouse who wasn’t a teacher? I’m a teacher but my husband wasn’t. When he gets his SOC Sec., will it be reduced or only would it be reduced when given to me if he predeceased me?

  • Jim, Thank you for clarifying the SSA process for spousal benefits. I just hope they don’t reduce or eliminate my own benefit as I have become to depend on it for the past 13+ years, and after all these years, I have lost much of the paperwork on how it was determined. Have a good year, and thank you again for the much needed service you provide. Hal

  • Hello Hal –

    The way your situation is being handled by SSA is correct. The GPO provides that your Spousal or Surviving Spouse benefit is reduced by 2/3 of your government pension. Therefore, if the Spousal benefit is less than 2/3 of your government pension, there is no Spousal benefit payable.

    Hope this helps you to understand it a bit better –


  • Jim, I am 77 in June & my wife is 63. Social Security determined my benefit as a husband would be $617.60, in addition to the benefit of $395.10 on my own earnings record. I started receiving my benefit in 1997, when I retired from the Federal government and applied for spouse’s benefits in 2011. Social Security states that they cannot pay me the spousal benefit, however, because two-thirds the amount of my government pension is equal to or larger than the monthly Social Security benefit. “Government Pension Offset.” Thank you for your help. Hal

  • Hal,

    I need more information in order to answer your question.

    Spousal benefit amounts depend upon your age, your spouse’s age, the amount of your own benefit, the amount of your spouse’s benefit, and (in your case) the amount of any non-covered benefits.

    That information should be enough for me to review your facts and let you know what I think…


  • Jim, I recently applied for spousal benefits and was informed that Social Security could not pay me because two-thirds the amount of my government pension is equal to or larger than the monthly Social Security benefit. Is this correct. Hal

    (Sorry about the error in submitting the question on 11 April. It came out as “Jim said.”)

  • Jim, I recently applied for spousal benefits and was informed that Social Security could not pay me because two-thirds the amount of my government pension is equal to or larger than the monthly Social Security benefit. Is this correct. Hal

  • Ruth –

    When you are receiving a pension from a governmental entity, your Social Security payments can be reduced due to the Windfall Elimination Provision. However, if you have had several years of earnings subject to Social Security and the earnings were “substantial”, your reduction could be eliminated or at least reduced.

    You can find out more about the substantial earnings provision in the article “Windfall Elimination Provision

    Hope this helps –


  • Hi Jim, I am very confused. I am divorced from a retired Foreign Service employee from the “old system” He retired and I am getting his
    spousal pension of $1981 per month. I presently work as a nurse and pay into social security. I have been told that when I choose to retire my social security payments will be less since I am getting his government pension. Can you shed some light on this for me? I have been reading all your articles, but still am confused. I am 60 years old and do not see how I can retire if my Social security will be reduced. Thank you so much. Ruth Dumont

  • Yes – if it is less than 12 months since you started receiving benefits you can withdraw and repay the prior benefits. If it is past 12 months since you started receiving benefits, you’ll need to work with the SSA to determine what the impacts will be for you.

    The SSA has methods to deal with a situation after 12 months – but it’s not the same as the withdraw and re-pay that is now only available within the first 12 months. Typically this will mean resetting your beginning date or some other change to your record. Work with your SSA office locally or call their hotline for more details.

    Hope this helps –


  • I’m not an expert on Disability Benefits, but as far as I can tell from reading up on the matter, your state of residence doesn’t seem to have an impact on the benefit.

    I’d suggest calling the Social Security office and ask them, that should get you the most valid answer…

    If anyone reading this has additional information to offer, please do so.


  • If a person receiving ssdi moves from NJ to NC can the benefits be reduced because of lower cost of living index in NC?

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