At 84, Evelyn Paternostro spends her days working part-time as a cashier at Dollar Tree. For decades, she dedicated her life to education, serving as a teacher and principal in Louisiana. But despite years of public service, he now struggles to make ends meet.
“People in the shop ask me all the time, ‘Are you doing this for fun? Why aren’t you retired?'” he said. “Because I need to eat.”
After her husband’s death, Paternostro discovered she couldn’t collect her Social Security benefits because of a pair of federal policies called the Windfall Elimination Provision and the government pension offset.
These provisions reduce or eliminate Social Security benefits for millions of Americans if they receive a public pension that did not withhold Social Security tax. Retired teachers, firefighters and other public servants are some of the most affected.
“I was very blindsided,” he said. “I knew I was going to have a teacher’s retirement. I was going to be part of the Louisiana Teachers Retirement System. And I never really thought about my husband’s income and what that would mean for me.”
Kati Weis/CBS News
Who is affected?
Nearly 2.8 million people in the United States are affected by WEP and GPO. Its effects extend to all state, county, municipal and special district employees in 26 states. Teachers in 13 of those states, including specific districts in Kentucky and Georgia, are also feeling its impact.
In Massachusetts and some districts in Rhode Island, not all municipal employees, but only teachers are affected.
The goal of these two programs in the 1980s was “so that there would be no way to ‘dip’ into both a federal pension and Social Security.” explains Jill Schlesinger, CBS News business analyst.
The Windfall Elimination Provision affects people who qualify for Social Security benefits through their job, but also receive a pension from another job where they have not paid into Social Security .
You can reduce your Social Security contributions by up to half the value of your pension.
For example, Michelle Cosgrove’s benefits were cut in half, from $866 a month.
Cosgrove spent the first half of her career as a paralegal, contributing to Social Security, before staying home to raise her children.
She later became a public school teacher in the San Francisco Bay Area, paying CalSTRSpension fund for California educators. However, his retirement plans took an unexpected turn when he discovered the intricacies of the pension system.
When he retired, Cosgrove’s reduced payments affected his ability to pay bills and cover expenses.
The other program, the government’s pension offset, hit Cosgrove even harder after her husband, Mike, dies in 2022. Despite working in the private sector for decades and contributing to Social Security, her benefits were in largely inaccessible to her because of the GPO. Mike, a welding supervisor, was diagnosed with a rare cancer at the age of 52, but continued to work until his health took a turn for the worse. He died at the age of 63.
If the pension beneficiaries are widows or widowers of someone who received Social Security benefits, that pension beneficiary may have reduced survivor benefits or no benefits at all.
“If I had just stayed home and done nothing, I would have gotten all the money,” Cosgrove said. “If I had known that, I might not have gone into teaching. I would have chosen something different.”
GPO mainly affects women, with 83% of people affected by GPO being women, according to GPO data. Congressional Research Service.
“When you see the GPO numbers are high, it’s because a lot of those people were probably teachers and married someone who worked a Social Security job,” said Joslyn DeLancey, vice president of the Association of Connecticut Education. “They’re not going to get spousal Social Security. … It’s such a messy and nuanced thing.”
Paternostro estimates he would have received $2,500 a month in Social Security benefits, about $300,000 over the past decade.
“That’s a lot of money,” he said. “That’s more money than I can imagine.”
But those policies caused a different kind of discomfort for Dede Ruel, a retired school psychologist in Illinois.
He said he recently received a letter from Social Security informing him he owed more than $13,000, reducing his Social Security checks by 21 percent.
According to a CBS News analysis of federal data, these policies are one of the most common reasons for Social Security overpayments, which have totaled more than $450 million in fiscal years 2017-2021.
“I’ve been trying to appeal it through their process and I’ve been denied at every level,” Ruel said.
Bipartisan support for the Social Security Equity Act
The Social Security Equity Lawone of the most bipartisan bills in Congress this session, aims to repeal WEP and GPO.
The House voted a approve the legislation November 12 The Senate is expected to do so vote on the Social Security Equity Law this week
Social Security is projected to run out of funds by 2035 unless there is a change costs and income of the fund system
Although supporters of the Social Security Fairness Act argue that it will only deplete the Social Security fund six months earlier than expected, some critics believe there are better solutions, suggesting that states should to restructure their retirement systems to address root causes rather than relying on federal administrations. corrections
“Many of the critics say this is going to cost a lot of money, almost $200 billion over the next 10 years.” explains Schlesinger. “Critics say there’s a reason we force people to pay into the Social Security system. These are two separate systems. If we have to fix Social Security, let’s fix it. We don’t just do a repeal that is essentially a Band-Aid.”
Rep. Garret Graves, a Louisiana Republican who spearheaded the bill, said: “People should get benefits based on what they paid into the system. That should be largely based on the formula. I understand efforts in the 1970s and 1980s, but the overcorrection has probably cost those people $600 to $700 billion in profits.”
Devin Carroll, a financial planner, encounters many clients who are “completely caught off guard.” Carroll often directs his clients to use the Social Security Administration WEP calculatora tool that calculates benefits taking into account the impact of WEP.
Carroll explains that figuring out future Social Security benefits can be a challenge. The benefit formula includes “flexion points,” which are adjusted annually based on wage inflation.
These adjustments are crucial because the actual WEP reduction amount is determined in the year a person turns 62.
“You have to make some projections, some assumptions about future inflation, both price inflation and wage inflation,” Carroll explained. “Once you do that, you can start working on it and use a calculator like the SSA that will do a lot of that for you and tell you what your adjusted WEP should be for your retirement age benefit.”
Carroll can also see firsthand the impacts of these provisions. His daughter-in-law is a teacher in Texas and his son is a firefighter in Texas.
“In essence, this money has been stolen from all of us for all these years,” Paternostro said. “It’s not fair.”
contributed to this report.