The Windfall Elimination Provision (WEP) reduces your Eligibility Year benefit amount before it is reduced or increased due to early retirement, delayed retirement credits, cost-of-living adjustments (COLA), or other factors. The following examples show how the WEP reduction changes when the Eligibility Year (ELY) benefit is affected by other factors.

  • Retirement Examples: The monthly retirement benefits are increased or reduced based on your age after WEP reduces your Eligibility Year benefit.

    If you turn 62 in 2013 (ELY 2013) and you have 20 years of substantial earnings, WEP reduces your monthly benefit by $395.50.

    Your full retirement age is 66. If your full retirement benefit is $1,396, your Eligibility Year benefit after the WEP reduction would be $1,000.*

*Benefit amounts are rounded down to the nearest dollar.

  • COLA Example: The annual cost-of-living adjustment (COLA) is added to your monthly benefit amount after WEP reduces your Eligibility Year benefit.

    When you became disabled in 2013 (ELY 2013) WEP reduced your $1,396 Eligibility Year benefit to $1,000*.

    The following year, the 1.5% January, 2014 COLA increased your benefit by $15 ($1,000 x 1.5% = $15). If it were not reduced by WEP, your benefit amount would have increased by $20 ($1,396 x 1.5% = $20). The new benefit would have been $1,416* instead of $1,015. COLA increased the reduction for WEP from $395.50 to $401. ($1,416 - 1,015).

    *Benefit amounts are rounded down to the nearest dollar.

Note: The examples above apply only to benefits paid to the worker and do not include future COLA increases. The WEP reduction may be larger if family members qualify for benefits on the same record. However, the total WEP reduction is limited to one-half of the pension based on the earnings that were not covered by Social Security.