['Compensation']
['Social Security']
12/06/2023
Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.
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(a) General—(1) Terms used in this section.(i) Government pension means any monthly periodic benefit (or equivalent) you receive that is based on your Federal, State, or local government employment.
(ii) Noncovered employment means Federal, State, or local government employment that Social Security did not cover and for which you did not pay Social Security taxes. For the purposes of this section, we consider your Federal, State, or local government employment to be noncovered employment if you pay only Medicare taxes.
(iii) Spouse's benefits are Social Security benefits you receive as a wife, husband, widow(er), mother, father, divorced spouse, or surviving divorced spouse.
(2) When reduction is required. We will reduce your spouse's benefit for each month that you receive a government pension based on noncovered employment, unless one of the exceptions in paragraph (b) of this section applies. When we consider whether you receive a government pension based on noncovered employment, we consider the entire month to be a month covered by Social Security if you worked for a Federal, State, or local government employer in a position covered by Social Security for at least 1 day in that month and there was no noncovered employment that month under the same pension plan.
(b) Exceptions. The reduction does not apply:
(b)(1) If you are receiving a Government pension based on employment for an interstate instrumentality.
(b)(2) If you received or are eligible to receive a Government pension for one or more months in the period December 1977 through November 1982 and you meet the requirements for Social Security benefits that were applied in January 1977, even though you don’t claim benefits, and you don’t actually meet the requirements for receiving benefits until a later month. The January 1977 requirements are, for a man, a one-half support test (see paragraph (c) of this section), and, for a woman claiming benefits as a divorced spouse, marriage for at least 20 years to the insured worker. You are considered eligible for a Government pension for any month in which you meet all the requirements for payment except that you are working or have not applied.
(b)(3) If you were receiving or were eligible (as defined in paragraph (b)(2) of this section) to receive a Government pension for one or more months before July 1983, and you meet the dependency test of one-half support that was applied to claimants for husband’s and widower’s benefits in 1977, even though you don’t claim benefits, and you don’t actually meet the requirements for receiving benefits until a later month. If you meet the exception in this paragraph but you do not meet the exception in paragraph (b)(2), December 1982 is the earliest month for which the reduction will not affect your benefits.
(b)(4) If you would have been eligible for a pension in a given month except for a requirement which delayed eligibility for such pension until the month following the month in which all other requirements were met, we will consider you to be eligible in that given month for the purpose of meeting one of the exceptions in paragraphs (b) (2) and (3) of this section. If you meet an exception solely because of this provision, your benefits will be unreduced for months after November 1984 only.
(b)(5) If, with respect to monthly benefits payable for months after December 1994, you are receiving a Government pension based wholly upon service as a member of a uniformed service, regardless of whether on active or inactive duty and whether covered by social security. However, if the earnings on the last day of employment as a military reservist were not covered, January 1995 is the earliest month for which the reduction will not affect your benefits.
(6) If you are receiving a government pension and the last 60 months of your government employment were covered by both Social Security and the pension plan that provides your government pension.
(i) If the last day of your government employment was after June 30, 2004 and on or before March 2, 2009, we will apply a transitional rule to reduce the last 60-month requirement under the following conditions:
(A) You worked 60 months in Federal, State, or local government employment covered by Social Security before March 2, 2004, and you worked at least 1 month of covered government employment after March 2, 2004, or
(B) You worked fewer than 60 months in government employment covered by Social Security on or before March 2, 2004 and you worked the remaining number of months needed to total 60 months after March 2, 2004. The months that you worked before or after March 2, 2004 do not have to be consecutive.
(ii) We will always reduce your monthly spouse's benefit if you receive a government pension based on noncovered employment and you later go back to work for a Federal, State, or local government, unless:
(A) Your final 60 months of Federal, State, or local government employment were covered by Social Security; and
(B) Both your earlier and later Federal, State, or local government employment were under the same pension plan.
(7) If you are a former Federal employee and you receive a government pension based on work that included at least 60 months in employment covered by Social Security in the period beginning January 1, 1988 and ending with the first month you became entitled to spouse's benefits, whether or not the 60 months are consecutive), and:
(i) You worked in the Civil Service Retirement System (CSRS), but switched after 1987 to either the Federal Employees Retirement System (FERS) or the Foreign Service Pension System; or
(ii) You worked in the legislative branch and left CSRS after 1987 or received a lump sum payment from CSRS or another retirement system after 1987.
(8) You were a State or local government employee, or a Federal employee who worked in the CSRS but switched to the FERS before 1988, your last day of service was in covered employment, and
(i) You filed for spouse's benefits before April 1, 2004 and became entitled to benefits based on that filing, or
(ii) Your last day of service was before July 1, 2004,
(c) The one-half support test. For a man to meet the January 1977 requirement as provided in the exception in paragraph (b)(2) and for a man or a woman to meet the exception in paragraph (b)(3) of this section, he or she must meet a one-half support test. One-half support is defined in §404.366 of this part. One-half support must be met at one of the following times:
(c)(1) If the insured person had a period of disability which did not end before he or she became entitled to old-age or disability insurance benefits, or died, you must have been receiving at least one-half support from the insured either—
(c)(1)(i) At the beginning of his or her period of disability;
(c)(1)(ii) At the time he or she became entitled to old-age or disability insurance benefits; or
(c)(1)(iii) If deceased, at the time of his or her death.
(c)(2) If the insured did not have a period of disability at the time of his or her entitlement or death, you must have been receiving at least one-half support from the insured either—
(c)(2)(i) At the time he or she became entitled to old-age insurance benefits; or
(c)(2)(ii) If deceased, at the time of his or her death.
(d) Amount and priority of reduction—(1) Post-June 1983 government pensions. (i) If you became eligible for a government pension after June 1983, and you do not meet one of the exceptions in paragraph (b) of this section, we will reduce (to zero, if necessary) your monthly Social Security spouse's benefits by two-thirds of the amount of your government pension.
(ii) If you earned part of your pension based on employment other than Federal, State, or local government employment, we will only use the part of your pension earned in government employment to compute the GPO.
(iii) If the reduction is not a multiple of 10 cents, we will round it to the next higher multiple of 10 cents.
(2) Pre-July 1983 government pensions. (i) If you became eligible for a government pension before July 1983, and do not meet one of the exceptions in paragraph (b) of this section, we will reduce (to zero, if necessary) your monthly Social Security spouse's benefits as follows:
(A) By the full amount of your pension for months before December 1984; and
(B) By two-thirds the amount of your monthly pension for months after November 1984.
(ii) If the reduction is not a multiple of 10 cents, we will round it to the next higher multiple of 10 cents.
(3) Reductions for age and simultaneous entitlement. We will reduce your spouse's benefit, if necessary, for age and for simultaneous entitlement to other Social Security benefits before we reduce it because you are receiving a government pension. In addition, this reduction follows the order of priority stated in §404.402(b).
(4) Reduction not a multiple of $1.00. If the monthly benefit payable to you after the required reduction(s) is not a multiple of $1.00, we will reduce it to the next lower multiple of $1.00 as required by §404.304(f).
(5) Lump sum payments. If the government pension is not paid monthly or is paid in a lump sum, we will allocate the pension on a basis equivalent to a monthly benefit and then reduce the monthly Social Security benefit accordingly.
(i) We will generally obtain information about the number of years covered by a lump-sum payment from the pension plan.
(ii) If one of the alternatives to a lump-sum payment is a life annuity, and we can determine the amount of the monthly annuity, we will base the reduction on that monthly amount.
(iii) If the period or the equivalent monthly pension benefit is not clear, we may determine the reduction period and the equivalent monthly benefit on an individual basis.
(e) When effective. This reduction was put into the Social Security Act by the Social Security Amendments of 1977. It only applies to applications for benefits filed in or after December 1977 and only to benefits for December 1977 and later.
[49 FR 41245, Oct. 22, 1984; 50 FR 20902, May 21, 1985, as amended at 51 FR 23052, June 25, 1986; 60 FR 56513, Nov. 9, 1995; 80 FR 34050, June 15, 2015]
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