CSRS Employees and Social Security

Guest post by David Fielder.

David Fielder is owner of Postal Benefits Group

Click below to see all of Davids’s Guest Posts.

One of the most common questions we receive in our seminars is from CSRS employees on their Social Security. While there aren’t a  lot of CSRS employees who qualified for Social Security there are enough that we felt it necessary to write this article. We have tried to simplify a very complex subject and explain it in a way you can understand.

Windfall Elimination Provision

The Windfall Elimination Provision was passed by the government because they felt CSRS employees were getting Social Security checks that were higher than they should be.    We don’t agree with this logic, but this is why the law was passed.  In a nutshell, the Windfall Elimination Provision reduces CSRS employees Social Security benefits based on how many years they had “Substantial Earnings” per the Chart below:

 

Year               Substantial earnings
1937-54 $ 900
1955-58 $1,050
1959-65 $1,200
1966-67 $1,650
1968-71 $1,950
1972 $2,250
1973 $2,700
1974 $3,300
1975 $3,525
1976 $3,825
1977 $4,125
1978 $4,425
1979 $4,725
1980 $5,100
1981 $5,550
1982 $6,075
1983 $6,675
1984 $7,050
1985 $7,425
1986 $7,875
1987 $8,175
1988 $8,400
1989 $8,925
1990 $9,525
1991 $9,900
1992 $10,350
1993 $10,725
1994 $11,250
1995 $11,325
1996 $11,625
1997 $12,150
1998 $12,675
1999 $13,425
2000 $14,175
2001 $14,925
2002 $15,750
2003 $16,125
2004 $16,275
2005 $16,725
2006 $17,475
2007 $18,150
2008 $18,975
2009 – 2011 $19,800
2012 $20,475

If you made at least the amount shown on the chart in a given year that year would be counted. If a CSRS employee worked 10 years from 1972-1982 and paid social security in those years and earned $7,000 in each of those years then the employee would have 10 years of “Substantial Earnings”.
Your Reduction
Now that we know how many years of substantial earnings we can find out how much our Social Security will be reduced by referring to another Social Security Chart. The following chart has years down the left-hand side. This is the year in which you turned 62. Find the year where you turn 62 and then find the years of substantial service and you will see the amount your Social Security is reduced.

 

Maximum Monthly Amount Your Benefit May Be Reduced Because Of The Windfall Elimination Provision (WEP) ELY = Eligibility Year: The year you reach age 62 or became totally disabled (if earlier).

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Using our example and assuming our employee turned 62 in 2011 they would have a reduction of $374.50 (using the 20 or less for years of substantial earnings). The more substantial earnings years you have the less the deduction from your social security.

Guest post by David Fielder.

David Fielder is owner of Postal Benefits Group

Click below to see all of Davids’s Guest Posts.