Social Security Government Pension Offset (GPO): Planning for Retirement

Trisha Miller  | 

If you currently work in a government position that offers a pension plan, you could be affected by a couple of different laws that limit certain social security benefits. Many individuals who have put in years of service via their government or state position also qualify for social security retirement benefits, disability benefits, spousal or survivor benefits, and/or an untaxed pension. Those who qualify for social security benefits, in addition to a government pension, may have a hard time receiving their full benefit. Today, we’re going to talk about why, who is affected, how you might be able to get around it, and what other statutes are in place that might affect you.

What Is the Government Pension Offset (GPO)?

The Government Pensions Offset (GPO) is a law that attempts to prevent individuals from receiving more than one untaxed benefit from the government. This law was created in order to curb any possible inequalities between those who pay social security taxes throughout their career and do not receive an untaxed pension, and those who do not have to pay social security taxes on their retirement due to working in a government position. It is an attempt at reducing the appearance of dual benefits via social security and an untaxed pension.

Some individuals may receive an untaxed retirement pension due to their employment in a government field. Others may get survivor or spousal social security benefits each month at the age of retirement. The GPO was enacted to allow individuals to gain one retirement benefit, which means that if you qualify for both of these scenarios, your social security benefits may be drastically reduced or eliminated as a result.

Who the GPO Affects

The GPO only applies to individuals who qualify for both survivor or spousal social security benefits as well as an untaxed pension. If you have a pension plan through your place of work, or some other private pension, and you do pay social security tax on your retirement plan the GPO will not affect you. You must qualify for an untaxed pension plan as well as survivor or spousal social security retirement benefits.

Government Pension Offset Exceptions

The GPO also only affects individuals who are receiving spousal benefits due to their partner’s work history, or possibly the passing of their husband or wife. This, in combination with their own government pension plan, is what causes the GPO conundrum. However, if you receive your own social security benefits, based on your personal work history, as well as a government pension, you will not be affected by the GPO. You can continue to collect both payouts each month. Although, there are other statutes in place that can still make it difficult to obtain both of these benefits.

In addition, there is another scenario in which you may be able to get around the GPO. If you qualify for a government pension, but have not paid social security tax on it, you may transfer to another job that pays that tax. Yet, the catch here is that you must find a job that works with the same pension plan as your previous job, they just need to pay social security taxes for it. Lastly, you must work there and pay social security taxes for the last 60 months of your employment.

What Is the Windfall Elimination Provision (WEP)?

The Windfall Elimination Provision (WEP) is a program that, again, stops individuals from receiving two pensions or benefits. If you receive a government pension and also social security benefits, your benefits may be reduced under this law. You may also be affected if you worked at a government job for long enough to receive a pension and, in addition, you worked at a non-government job where you paid social security and now you qualify for another benefit as well. Essentially, in the eyes of the government, you qualify for two retirement plans.

Who is Affected by the Windfall Elimination Provision (WEP)?

This usually affects those who qualify for social security due to their own work history, but they also have gained a government pension. If you receive benefits through a spousal plan, see above in the GPO plan. However, as I mentioned, you may also be affected due to receiving a second benefit plan in addition to your government pension.

Basically, this means that you worked for an employer that offers non-taxed pension plans (usually a government agency). You worked there long enough to gain access to that pension, but now you’ve changed careers and that employer gives you a retirement plan in which you must pay social security taxes. By doing so, you may have paid enough social security taxes to qualify for social security retirement benefits or social security disability benefits. The government sees the pension and the additional benefit as two plans that overlap and they will likely reduce or eliminate your social security benefits as a result.

Can You Collect Social Security and a Pension?

You can absolutely qualify for social security benefits (spousal or via your own work history) and a pension as long as they are not both government plans. For example, if you have worked in a non-governmental agency and have qualified for a standard retirement plan, which means you also paid social security taxes, and you qualify for social security benefits, you will not be affected by these statutes.

In addition, if you work in a non-governmental workforce and have paid social security taxes on your retirement plan and you gain spousal or survivor social security benefits, you will not be affected. Finally, if you have a retirement plan that is not associated with your employer, meaning that it is a private pension or retirement plan, you will not be affected by these laws.

Understanding the GPO and WEP is incredibly important for individuals that hope to receive a government pension plan. You should do some research on your retirement plan in addition to the social security benefits that you may qualify for. Depending on your situation, retirement savings, pension, and qualifications, your benefit could be greatly reduced or possibly completely eliminated if the government feel that you are receiving double the benefits. If you’re thinking about retiring soon, now is a great time to look into how these laws could affect your retirement, before you get caught off guard and don’t have time to prepare.


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Trisha is a writer and blogger from Boise, ID. She is a dedicated vegan, an avid gamer, cat lover, and amateur SFX artist.

This post was updated May 8, 2018. It was originally published May 9, 2018.