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Social Security and Government Pension Offset

| September 23, 2022

The Social Security Government Pension Offset (GPO) is a law that affects spouses and widows or widowers. Under the GPO rules, the spousal benefits that are eligible to be paid to the spouse of a Social Security recipient may be reduced, and potentially eliminated entirely, based on the “non-covered” pension benefits that are received by the widow or widower. 

A “non-covered” pension is a pension benefit where the pension participant did not pay Social Security taxes during the working years in which they earned the pension credits.  The purpose of the law is to try to limit double dipping where a surviving spouse receives benefits from a pension and receives benefits from Social Security without paying into the Social Security system.  If the participant did not pay into Social Security, then their spousal benefits can be reduced by up to two-thirds of the amount of their non-covered pension benefits received.

For many families, upon the first passing of a spouse, the surviving spouse would receive the higher of the two Social Security benefits, therefore they would have some form of continued benefits from the Social Security system. However, if they are subject to the GPO, the surviving spouse may receive much less or even none, therefore requiring additional planning to make up for the short-fall or loss of benefits.