Summary
Social Security spousal benefits were established in the 1930s to help support wives who are financially dependent on their husbands. It has since become more common for both spouses in a couple to work, leading to more cases in which both members of a couple are entitled to Social Security or other government pensions based on their own work records. Social Security does not provide both a full retired-worker and a full spousal benefit to the same individual.
Two provisions are designed to reduce the Social Security spousal benefits of individuals who are not financially dependent on their spouses because they receive benefits based on their own work records. These are
The dual entitlement rule requires that 100% of a Social Security retirement or disability benefit as a covered worker is subtracted from any Social Security spousal or widow(er)'s benefit an individual is eligible to receive. The GPO reduces Social Security spousal or widow(er)'s benefits by two-thirds of the retirement or disability pension from noncovered government employment. The GPO does not reduce the benefits of the spouse who was covered by Social Security. In December 2023, 745,679 Social Security beneficiaries (about 1% of all beneficiaries) had spousal or widow(er)'s benefits reduced by the GPO.
Opponents contend that the GPO is imprecise and can be unfair. Defenders argue it is the best method currently available for preserving the spousal benefit's original intent of supporting financially dependent spouses and for eliminating an unfair advantage for spouses working in non–Social Security–covered employment compared with spouses working in Social Security–covered jobs (who are subject to the dual entitlement rule).
Background
In general, Social Security spousal and survivor benefits are paid to the spouses of retired, disabled, or deceased workers covered by Social Security. The basic spousal benefit equals 50% of a retired or disabled worker's benefit and the basic survivor benefit equals 100% of a deceased worker's benefit.
Spousal and widow(er)'s benefits, which Congress created in 1939 and 1950,1 are intended for individuals who are financially dependent on a working spouse. For this reason, but also because of the costs, Social Security does not provide both full worker and full spousal (or survivor) benefits to the same individual. For persons who qualify for both a Social Security worker benefit (retirement or disability) based on their own work history and a Social Security spousal (or survivor) benefit based on a spouse's work history, the dual entitlement rule effectively caps total benefits at the higher of the worker's own benefit or the spousal (or survivor) benefit. The dual entitlement rule has been in law since 1939, when Congress created benefits for eligible wives and widows. The Government Pension Offset (GPO) is analogous in purpose to the dual entitlement provision and applies to individuals who qualify for both a retirement or disability pension based on their own non–Social Security–covered government work and a Social Security spousal or survivor benefit based on a spouse's work in Social Security–covered employment.2 The GPO was originally established in 1977. It replaced an earlier dependency test for spousal and survivor benefits that had been in law since 1950. The dual entitlement rule and the GPO share the same intent—to reduce the Social Security spousal and survivor benefits of individuals who are not financially dependent on their spouses because they receive their own retired-worker or disabled-worker Social Security benefits, or their own non–Social Security pension benefits.
Social Security Covered and Noncovered Work
A worker is covered by Social Security if he or she works in covered employment and pays into Social Security through the Federal Insurance Contributions Act (FICA) taxes or Self-Employment Contributions Act taxes, or both, on wages and/or self-employment income. To be eligible for a Social Security retired-worker benefit, a worker generally needs 40 earnings credits (10 years of Social Security–covered employment).3 Disabled workers are generally required to have worked fewer years, depending on the age at which the worker became disabled.4 Approximately 94% of workers are covered by Social Security in 2024.5 The majority of noncovered positions are held by government employees: most federal employees hired before 1984 and some state and local government employees.6 Nationwide, approximately 72% of state and local government employees were covered by Social Security in 2019.7 However, coverage varied from state to state. For example, approximately 95% of state and local employees in New York were covered by Social Security, whereas less than 3% of state and local employees in Ohio, and about 3% in Massachusetts, were covered.8
The Dual Entitlement Rule and the GPO
The GPO is intended to approximate Social Security's dual entitlement rule. Both provisions are intended to reduce the Social Security benefits of spouses or widow(er)s who are not financially dependent on their spouses because they receive retirement or disability benefits based on their own work records.
Without the dual entitlement rule, a couple with two earners covered by Social Security would receive two full primary benefits as well as two full spousal or widow(er)'s benefits. The Social Security dual entitlement rule requires that a beneficiary effectively receive the higher of the Social Security worker's benefit or the spousal or widow(er)'s benefit, but not both. The total benefit received by a worker consists of his or her own worker benefit plus the excess of the spousal or widow(er)'s benefit (if any) over his or her own benefit—not the sum of the two benefits. So, in cases where the spousal or widow(er)'s benefit is higher than the worker's own benefit, the worker receives his or her own worker benefit plus the reduced spousal or widow(er)'s benefit, which is the difference between the spousal or widow(er)'s benefit and the worker's own benefit (100% reduction). In cases where the worker's own benefit is higher than the spousal or widow(er)'s benefit, the worker receives only his or her own benefit (i.e., the spousal or widow[er]'s benefit is reduced to zero).
Table 1 demonstrates how the Social Security dual entitlement rule is applied to spouses.
|
John |
Mary |
||
|
Social Security monthly worker benefit (based on worker's earnings record) |
$2,000 |
$900 |
|
|
Maximum Social Security monthly spousal benefit (based on spouse's earnings record, equal to 50% of the spouse's Social Security worker benefit) |
$450 |
$1,000 |
|
|
Actual Social Security spousal monthly benefit paid (subtract worker benefit from spousal benefit; $0 if worker benefit is larger) |
$0 |
$100 |
|
|
Total (worker and spousal) Social Security monthly benefits paid to John and Mary |
$2,000 |
$1,000 |
|
Source: Illustrative example provided by the Congressional Research Service (CRS).
In this example, both John and Mary have worked enough years in Social Security–covered positions (i.e., paid into Social Security) to qualify for Social Security retirement benefits. John has earned a monthly Social Security worker benefit of $2,000. His wife Mary has earned a monthly Social Security worker benefit of $900. Both John and Mary are also eligible for spousal benefits based on the other's earnings: John is eligible for a $450 monthly spousal benefit, and Mary is eligible for a $1,000 monthly spousal benefit. Under the dual entitlement rule, John will not be paid a spousal benefit because his $2,000 worker benefit based on his own earnings is higher than and more than offsets the potential $450 spousal benefit. Mary's worker benefit of $900 must be subtracted from her potential $1,000 spousal benefit, and only the difference of $100 is paid as a spousal benefit. In total, Mary will receive $1,000 monthly—$900 as a Social Security worker benefit and $100 as a Social Security spousal benefit. The Social Security benefits received by the couple would total $3,000 per month.
If John were to predecease Mary, Mary would then be entitled to a monthly widow's benefit of up to 100% of John's monthly amount.9 Mary would continue to collect her own benefit of $900 monthly, and that amount would offset the potential $2,000 monthly widow's benefit based on John's work history. Thus, Mary would receive a Social Security worker benefit of $900 and a Social Security widow's benefit of $1,100 (or $2,000-$900), for a total monthly benefit of $2,000.
Because most workers are in Social Security–covered employment, the dual entitlement scenario is more common than the GPO among two-earner couples. In 2022, approximately 7.5 million out of 48.6 million Social Security retired-worker beneficiaries, or about 15%, were dually entitled.10
Government Pension Offset Formula
The Social Security spousal or widow(er)'s benefit of a person who also receives a pension from government employment (federal, state, or local) that was based on work not covered by Social Security is reduced by a provision known as the Government Pension Offset (GPO).11 The GPO reduction to Social Security spousal and widow(er)'s benefits equals two-thirds of the pension from noncovered government employment. If the pension from noncovered work is sufficiently large in comparison to a person's Social Security spousal or widow(er)'s benefit, the GPO may eliminate the entire Social Security spousal or widow(er)'s benefit.
In December 2023, 745,679 Social Security beneficiaries (about 1% of all beneficiaries) had spousal or widow(er)'s benefits reduced fully or partially by the GPO (this figure does not include persons who were eligible for spousal or widow(er)'s benefits but were deterred from filing for them because of the GPO).12 The GPO does not affect the amount of the Social Security benefit a worker may receive based on his or her own work in Social Security–covered employment, but it does limit the amount that can be paid to his or her spouse or widow(er) who has worked in non–Social Security–covered employment.
Table 2 provides an example of how the GPO is applied, assuming that John worked in Social Security–covered employment while Mary spent her full career in state or local government employment that was not covered by Social Security.
|
John |
Mary |
|
|
Social Security retired- or disabled-worker monthly benefit (based on worker's earnings record) |
$2,000 |
— |
|
Non-Social Security–covered (government) monthly retirement or disability pension |
— |
$900 |
|
Maximum Social Security spousal monthly benefit eligible to receive (based on spouse's earnings record, equal to 50% of the spouse's Social Security retired-worker benefit) |
— |
$1,000 |
|
Reduction in Social Security spousal monthly benefit due to GPO (equals 2/3 of the non–Social Security–covered pension: $900*2/3=$600) |
— |
$600 |
|
Actual Social Security spousal monthly benefit paid (subtract 2/3 of non–Social Security–covered worker's pension from Social Security spousal benefit: $1,000-$600=$400) |
— |
$400 |
|
Total monthly retirement benefits paid to John (Social Security only) and Mary (Social Security plus pension from noncovered employment) |
$2,000 |
$1,300 |
Source: Illustrative example provided by CRS.
Note: Dashes means not applicable.
In this example, John worked enough years in Social Security–covered employment to qualify for a monthly Social Security retired-worker benefit of $2,000. His wife, Mary, is not eligible for a Social Security retired-worker benefit because she worked in a non–Social Security–covered government position and did not contribute to Social Security. Instead, Mary is eligible for a $900 government pension based on her work in a non–Social Security–covered position. Mary is also eligible for a Social Security spousal benefit of up to $1,000 based on John's work history. Under the GPO, Mary's potential Social Security spousal benefit is reduced by an amount equal to two-thirds of her non–Social Security–covered government pension (or a reduction of $600), and the difference of $400 ($1,000-$600) is paid to her as a Social Security spousal benefit. In total, Mary will receive retirement benefits of $1,300 per month: $900 from her noncovered pension and $400 from her Social Security spousal benefit.13
If John predeceased Mary, then two-thirds of her $900 noncovered pension ($600) would be used to partially offset the $2,000 Social Security benefit she would be eligible for as a widow based on John's work history. She would receive a $1,400 monthly widow's benefit from Social Security (in addition to her $900 monthly noncovered pension benefit).
Table 3 highlights the differences between the dual entitlement rule and the GPO.
|
Dual Entitlement Rule |
Government Pension Offset |
|
Applies to individuals who qualify for both (a) a Social Security worker benefit (retirement or disability) based on their own work history in Social Security–covered employment and (b) a Social Security spousal or widow(er)'s benefit based on their spouse's work history in Social Security–covered employment. Dually entitled beneficiaries effectively receive the higher of the worker benefit or the spousal or widow(er)'s benefit. Specifically, the Social Security dual entitlement rule requires that 100% of a Social Security retirement or disability benefit earned as a worker be subtracted from any Social Security spousal or widow(er)'s benefit one is eligible to receive. Only the difference, if any, is paid as a spousal or widow(er)'s benefit and is added to the beneficiary's own worker benefit. Under the dual entitlement rule, a Social Security spousal or widow(er)'s benefit may be reduced to zero. |
Applies to individuals who qualify for both (a) a government pension based on non–Social Security–covered government employment and (b) a Social Security spousal or widow(er)'s benefit based on a spouse's Social Security–covered employment The GPO reduces Social Security benefits that a person receives as a spouse or widow(er) if he or she also has a federal, state or local government pension based on work that was not covered by Social Security. The GPO reduction to Social Security spousal or widow(er)'s benefits is equal to two-thirds of the noncovered retirement or disability government pension. Under the GPO, a Social Security spousal or widow(er)'s benefit may be reduced to zero. |
Source: Table compiled by CRS.
Rationale and Legislative History
The policy rationale for Social Security spousal benefits has been, since the creation of spousal benefits in the 1930s, to support spouses who are financially dependent on the working spouse. The dual entitlement rule has operated since 1939 as a gauge of financial dependence.
Parity Between Spouses Subject to the Dual Entitlement Rule and the GPO
The GPO is intended to place spouses and widow(er)s whose government employment was not covered by Social Security in approximately the same position as spouses whose jobs were covered by Social Security. Before the GPO was enacted in 1977, workers who received pensions from a government job not covered by Social Security could also receive full Social Security spousal or widow(er)'s benefits even though they were not financially dependent on their spouses. The scenarios below demonstrate why the law was changed.
Table 4 shows how the spousal benefit of the same individual, Mary, would vary under three scenarios: (1) as a dually entitled recipient of Social Security retirement and spousal benefits; (2) as the recipient of a noncovered government pension and Social Security spousal benefits before the GPO was enacted; and (3) as the recipient of a noncovered government pension and Social Security spousal benefits after the GPO was enacted. In all three examples, it is assumed that Mary is potentially eligible for a Social Security spousal benefit of $1,000 per month, computed as 50% of her husband's monthly Social Security benefit of $2,000.
As a dually entitled retiree, under the first scenario, Mary's $1,000 Social Security spousal benefit is reduced by her own Social Security retired-worker benefit of $900, leaving her with a net spousal benefit of $100 and a total (combined) Social Security benefit of $1,000. Under the second scenario (where Mary receives a noncovered government pension instead of a Social Security retirement benefit), before the GPO takes effect, Mary's Social Security spousal benefits are not reduced at all and she receives a full Social Security spousal benefit of $1,000, plus the noncovered pension of $900, for total monthly pension benefits of $1,900. Under the third scenario (after the GPO was enacted in 1977), Mary's Social Security spousal benefit is reduced by two-thirds of her $900 noncovered government pension, leaving her with a net Social Security spousal benefit of $400 ($1,000-$900*2/3) and a total monthly pension benefit of $1,300 ($900 from the noncovered pension + $400 from the Social Security spousal benefit).
Note that the reduction to Social Security spousal benefits is smaller under the GPO than it is under the dual entitlement rule: Mary receives monthly Social Security spousal benefits of $100 under the dual entitlement rule, compared with $400 under the GPO. Her total monthly retirement benefits are $1,000 under the dual entitlement rule, compared with $1,300 under the GPO. For those under the dual entitlement rule, the Social Security spousal benefit is reduced by one dollar for every dollar of Social Security retirement benefits based on their own work histories in Social Security–covered employment. For those under the GPO, however, the Social Security spousal benefit is reduced by approximately 67 cents for every dollar of a pension from noncovered government employment.
Table 4. Mary's Spousal Benefit Under Three Scenarios: Dual Entitlement Rule, Before GPO Enactment, and After GPO Enactment
|
Mary works in Social Security–Covered Position |
Mary works in Non-Social Security–Covered Position |
||
|
Dually Entitled |
Before GPO Enactment |
After GPO Enactment |
|
|
Social Security retired-worker monthly benefit (based on own earnings record) |
$900 |
$0 |
$0 |
|
Non-Social Security–covered monthly pension |
$0 |
$900 |
$900 |
|
Maximum Social Security spousal monthly benefit eligible to receive (based on spouse's earnings record), equal to 50% of the spouse's Social Security retirement benefit |
$1,000 |
$1,000 |
$1,000 |
|
Reduction in spousal monthly benefit due to dual entitlement rule (equal to worker's Social Security retired-worker benefit) |
$900 |
— |
— |
|
Reduction in Social Security spousal monthly benefit due to GPO (equals 2/3 of non–Social Security–covered pension) |
— |
— |
$600 |
|
Actual Social Security spousal monthly benefit paid |
$100 |
$1,000 |
$400 |
|
Total monthly retirement benefits paid to Mary (Social Security spousal benefit plus either (a) Social Security retired-worker benefit or (b) noncovered pension) |
$1,000 |
$1,900 |
$1,300 |
Source: Illustrative example provided by CRS.
Notes: Dashes are used to represent scenarios in which either the dual entitlement rule or the GPO are not applicable. For example, in the dual entitlement scenario, Mary does not receive a noncovered government pension and, thus, the GPO does not apply.
The GPO was originally established in 1977 (P.L. 95-216) and replaced an earlier dependency test for spousal benefits that had been in law since 1950.14 The 1977 law provided that 100% of the noncovered government pension be subtracted from the Social Security spousal or widow(er)'s benefit. If the original legislation had been left intact, individuals affected by the dual entitlement rule and the GPO would have been treated identically because, in both cases, the Social Security spousal or widow(er)'s benefit would have been reduced by 100% of the pension from noncovered employment.
The GPO's two-thirds offset rule was established by the Social Security Amendments of 1983 (P.L. 98-21), which made a number of amendments to Social Security. One section of the House version of this law proposed that the amount used in calculating the offset be one-third of the noncovered government pension. The Senate version contained no such provision and would therefore have left standing the 100% offset that existed at the time. The conferees adopted the House bill except that the offset was fixed at two-thirds of the noncovered government pension.15
In 2019, approximately 6.5 million state and local government workers (28% of all state and local government workers) were in non–Social Security–covered positions.16 A government worker who does not pay into Social Security may potentially be affected by the GPO if he or she is entitled to a Social Security spousal or widow(er)'s benefit based on a spouse's or ex-spouse's work in Social Security–covered employment.
Generally, federal government employees hired before 1984 are covered by the Civil Service Retirement System (CSRS) and are not covered by Social Security; therefore, they may be subject to the GPO.17 Most federal workers first hired into federal service after 1983 are covered by the Federal Employees' Retirement System (FERS), which includes Social Security coverage. Thus, although FERS retirees are not subject to the GPO, they, like all covered workers, may be subject to the Social Security dual entitlement rule.
As of December 2023, 745,679 Social Security beneficiaries, or about 1% of all beneficiaries, had spousal or widow(er)'s benefits reduced by the GPO (not counting those who were potentially eligible for spousal or widow(er)'s benefits but were deterred from filing for them because of their expectation that the GPO would eliminate the spousal or widow(er)'s benefit). Of these persons subject to the GPO, 51% were spouses and 49% were widows and widowers. About 83% of all affected persons were women.18 Table 5 provides a breakdown of the affected beneficiaries by state and type of benefit.
Table 5. Number of Social Security Beneficiaries Affected by GPO, by State, Type of Benefit, and Offset Status, December 2023
|
State |
Total |
Type of Beneficiary |
Offset Status |
||
|
Spouses |
Widow(er)s |
Fully Offseta |
Partially Offsetb |
||
|
Total |
745,679 |
380,798 |
364,881 |
509,964 |
235,715 |
|
Alabama |
4,569 |
1,813 |
2,756 |
3,377 |
1,192 |
|
Alaska |
3,628 |
1,949 |
1,679 |
2,573 |
1,055 |
|
Arizona |
10,239 |
5,070 |
5,169 |
7,359 |
2,880 |
|
Arkansas |
3,233 |
1,444 |
1,789 |
2,327 |
906 |
|
California |
102,952 |
53,819 |
49,133 |
81,157 |
21,795 |
|
Colorado |
28,475 |
15,463 |
13,012 |
15,149 |
13,326 |
|
Connecticut |
9,928 |
5,559 |
4,369 |
8,475 |
1,453 |
|
Delaware |
800 |
307 |
493 |
601 |
199 |
|
District of Columbia |
1,914 |
434 |
1,480 |
1,583 |
331 |
|
Florida |
29,688 |
14,840 |
14,848 |
21,935 |
7,753 |
|
Georgia |
21,840 |
10,311 |
11,529 |
15,314 |
6,526 |
|
Hawaii |
2,002 |
1,041 |
961 |
1,508 |
494 |
|
Idaho |
2,507 |
1,361 |
1,146 |
1,886 |
621 |
|
Illinois |
47,713 |
25,087 |
22,626 |
39,040 |
8,673 |
|
Indiana |
4,941 |
2,263 |
2,678 |
3,608 |
1,333 |
|
Iowa |
1,914 |
896 |
1,018 |
1,425 |
489 |
|
Kansas |
2,337 |
1,038 |
1,299 |
1,576 |
761 |
|
Kentucky |
13,070 |
6,804 |
6,266 |
10,418 |
2,652 |
|
Louisiana |
40,673 |
19,820 |
20,853 |
23,281 |
17,392 |
|
Maine |
8,216 |
4,404 |
3,812 |
5,308 |
2,908 |
|
Maryland |
8,844 |
2,734 |
6,110 |
7,040 |
1,804 |
|
Massachusetts |
42,264 |
22,661 |
19,603 |
28,721 |
13,543 |
|
Michigan |
6,298 |
3,124 |
3,174 |
4,641 |
1,657 |
|
Minnesota |
4,746 |
2,278 |
2,468 |
3,797 |
949 |
|
Mississippi |
3,260 |
1,363 |
1,897 |
2,369 |
891 |
|
Missouri |
17,022 |
9,446 |
7,576 |
13,547 |
3,475 |
|
Montana |
1,408 |
678 |
730 |
972 |
436 |
|
Nebraska |
1,284 |
587 |
697 |
902 |
382 |
|
Nevada |
12,295 |
6,148 |
6,147 |
9,185 |
3,110 |
|
New Hampshire |
2,826 |
1,505 |
1,321 |
2,025 |
801 |
|
New Jersey |
4,126 |
1,643 |
2,483 |
3,441 |
685 |
|
New Mexico |
3,406 |
1,644 |
1,762 |
2,550 |
856 |
|
New York |
6,699 |
2,932 |
3,767 |
5,353 |
1,346 |
|
North Carolina |
8,404 |
3,744 |
4,660 |
6,129 |
2,275 |
|
North Dakota |
488 |
179 |
309 |
304 |
184 |
|
Ohio |
103,492 |
56,063 |
47,429 |
61,382 |
42,110 |
|
Oklahoma |
4,013 |
1,501 |
2,512 |
2,583 |
1,430 |
|
Oregon |
4,937 |
2,521 |
2,416 |
3,569 |
1,368 |
|
Pennsylvania |
7,417 |
3,104 |
4,313 |
5,596 |
1,821 |
|
Rhode Island |
2,168 |
1,175 |
993 |
1,771 |
397 |
|
South Carolina |
5,830 |
2,805 |
3,025 |
4,243 |
1,587 |
|
South Dakota |
829 |
428 |
401 |
597 |
232 |
|
Tennessee |
6,963 |
3,131 |
3,832 |
5,104 |
1,859 |
|
Texas |
103,530 |
53,300 |
50,230 |
55,096 |
48,434 |
|
Utah |
2,909 |
1,378 |
1,531 |
1,806 |
1,103 |
|
Vermont |
682 |
320 |
362 |
505 |
177 |
|
Virginia |
7,821 |
2,861 |
4,960 |
5,759 |
2,062 |
|
Washington |
7,115 |
3,537 |
3,578 |
5,168 |
1,947 |
|
West Virginia |
1,628 |
667 |
961 |
1,006 |
622 |
|
Wisconsin |
3,524 |
1,746 |
1,778 |
2,782 |
742 |
|
Wyoming |
635 |
340 |
295 |
408 |
227 |
|
Outlying areas and foreign countries |
18,177 |
11,532 |
6,645 |
13,713 |
4,464 |
Source: Social Security Administration, Office of Research, Evaluation and Statistics, February 2024, unpublished data.
Notes: Includes persons entitled to spousal/widow(er)'s benefits only and those dually entitled to spousal/widow(er)'s and worker benefits.
a. Individual received no Social Security spousal or widow(er)'s benefit because the reduction in the Social Security spousal or widow(er)'s benefit (a reduction equal to two-thirds of the pension from noncovered government employment) was greater than the Social Security benefit itself. Either the noncovered pension was large, or the potential Social Security benefit was small (or both).
b. Individual received partial Social Security spousal or widow(er)'s benefits because the reduction in the Social Security benefit (a reduction equal to two-thirds of the pension from noncovered government employment) was less than the Social Security benefit itself.
In December 2023, the average noncovered government pension amount for persons affected by the GPO was $2,759 per month ($2,522 per month for women and $3,882 per month for men).19 The average pre-offset Social Security spousal benefit at that time was $1,110 per month ($1,190 per month for women and $729 per month for men).20 The average reduction caused by the GPO was $843 per month ($873 per month for women and $699 per month for men).21 The average Social Security spousal benefit component after applying the GPO was $267 per month ($317 per month for women and $30 per month for men).22 Among beneficiaries who were affected by the GPO in December 2023, 68% had their potential Social Security spousal or widow(er)'s benefit fully offset by the GPO reduction; that is, their potential Social Security spousal or widow(er)'s benefit was reduced to zero.23 Among those whose Social Security spousal or widow(er)'s benefit was partially offset by the GPO reduction, on average, the reduced Social Security benefit comprised about 43% of the total payment received (noncovered government pension plus reduced Social Security benefit).24
In comparison to the 734,601 beneficiaries affected by the GPO in December 2022,25 the dual entitlement rule affected approximately 7.5 million retired-worker beneficiaries. About 7.2 million (96%) of all affected beneficiaries were women.26 Wives made up 41% of all dually entitled retired workers, and widows made up 55%. Among dually entitled workers, the average Social Security total benefit (retired worker plus spouse or widow(er)'s benefit) received was $1,644.27 Of this amount, $939 was the retired-worker component of the benefit. The spousal or widow(er)'s benefit component was $706 (after reduction for dual entitlement).28 On average, among dually entitled retired workers, therefore, the spousal or widow(er)'s benefit comprised about 43% of the total Social Security benefit received.
Opponents argue that the GPO is not well understood and that it harms lower-wage workers. The GPO's defenders maintain that it helps ensure that only financially dependent spouses receive the Social Security spousal or widow(er)'s benefit, while curtailing what otherwise would be an unfair advantage for government workers who are not covered by Social Security.
Awareness of the GPO and Retirement Preparedness
The GPO's critics say that it is not well understood and that many affected by it are unprepared for a smaller Social Security benefit than they had assumed in making retirement plans. The provision's supporters say it has been law for more than 40 years (it was enacted in 1977); therefore, people have had ample time to adjust their retirement plans. P.L. 108-203, passed in 2004, included a provision that sought to ensure that SSA and government employers notify potentially affected individuals about the effect of the GPO and the Windfall Elimination Provision (WEP).29
Section 1143 of the Social Security Act (as amended) requires SSA to provide Social Security number holders with annual statements that contain certain information from their Social Security records.30 The annual statement is now referred to as the Social Security Statement or, more simply, as the Statement. In accordance with the law, the Statement advises the individual that participation in a retirement plan or receipt of a pension based on earnings for which he or she did not pay Social Security payroll taxes could result in lower Social Security benefits. The Statement provides a link to related information about the WEP and the GPO on SSA's website. Under current policy, annual Statements are available online for any individual who creates a "my Social Security Account" on SSA's web portal. SSA sends an email each year to "my Social Security Account" holders reminding them to check their annual Statements online. SSA automatically mails paper Statements annually to any individual who (1) is aged 60 or older, (2) has not yet claimed benefits, and (3) has not created a "my Social Security Account." A Statement is mailed three months before an individual's birthday. Individuals can also request a mailed paper Statement at any time.31
GPO Reduction Smaller Than Dual Entitlement Reduction
The reduction to Social Security spousal or widow(er)'s benefits is smaller under the GPO than it is under the dual entitlement rule. Those under dual entitlement face a 100% offset to spousal or widow(er)'s benefits for every dollar received from a Social Security retired-worker benefit, whereas those under the GPO face an offset to spousal and widow(er)'s benefits equal to two-thirds of a non–Social Security–covered pension. In the example shown in Table 4, in which comparable spouses each receive a $900 retirement benefit based on their own work histories, applying the dual entitlement provision's 100% offset results in a $100 monthly Social Security spousal benefit for Mary. Comparatively, Mary qualifies for a $400 monthly Social Security spousal benefit under the GPO's two-thirds offset.
Parity Among Social Security–Covered Workers and Noncovered Workers
The majority of state and local government workers, and federal employees hired since 1984, are covered by Social Security. Some argue that eliminating the GPO would be unfair to government employees in Social Security–covered positions, who would continue to be subject to the dual entitlement provision. As discussed above, for those under dual entitlement, the Social Security spousal or widow(er)'s benefit is reduced by one dollar for every dollar of Social Security retirement benefits based on their own work history in Social Security–covered employment. For those under the GPO, however, the Social Security spousal or widow(er)'s benefit is reduced by approximately 67 cents for every dollar of a pension from noncovered government employment.
There is disagreement about the original intention of the GPO, which was enacted in 1977. Some argue that the original purpose was to prevent higher-paid workers from reaping overly generous spousal or widow(er)'s benefits. Others contest this, saying that the GPO was never targeted to a particular income group.
The GPO's opponents argue that the provision hurts lower- and middle-wage workers, such as teachers, and in some circumstances throws these workers into poverty. Opponents also say that the GPO is especially disadvantageous for surviving spouses.
Evidence of the GPO's effect on low earners comes from SSA data on the program.32 While 68% of those affected by the GPO in December 2023 had their benefits fully offset, about 14% of those with noncovered pensions of less than $1,000 per month had their benefits fully offset, compared with 52% of those with monthly noncovered pensions between $1,000 and $1,999, 83% of those between $2,000 and $2,999, and nearly 100% of individuals with noncovered pensions over $3,000 per month.33 Among the group of individuals whose benefits were completely eliminated by the GPO, about 4% of this group had a noncovered pension amount lower than $1,000 per month.34 And among the beneficiaries who received some Social Security spousal or widow(er)'s benefit after GPO reduction (partially offset), about 56% of them had a noncovered government pension amount less than $1,000 per month, and almost 100% of them had a noncovered government pension amount less than $3,000 per month.35 Thus, if the noncovered pension amount is a reflection of the approximate earnings levels of individuals affected by the GPO, a greater percentage of those with lower earnings receive at least a partial Social Security benefit relative to the overall GPO-affected population.
Regarding concerns about pushing those affected by the GPO into poverty, in 2001, the poverty rate among those affected by the GPO was approximately 6.0%, whereas the poverty rate for those affected by the dual entitlement rule was approximately 8.9%.36 The poverty rate for all Social Security beneficiaries aged 65 and older was about 8.5%. For comparison purposes, the poverty rate for the general population at that time was approximately 11.3%.
Imprecision of the Two-Thirds Offset to Noncovered Government Pensions
Opponents point out that whatever the rationale for the GPO, reducing everyone's spousal or widow(er)'s benefit by two-thirds of their government pension is an imprecise way to estimate what the spousal benefit would have been if the government job had been covered by Social Security. If two-thirds of the government pension were in fact a good proxy for Social Security retirement benefits, there would be no significant difference in outcomes between the dual entitlement rule and the GPO. As noted above (see the previous section, "Impact on Low-Wage Workers"), however, there is great variation in outcomes. The GPO may lead to a smaller offset relative to the dual entitlement rule for low earners than for high earners.
Ideally, opponents argue, the way to compute the offset is to replicate the dual entitlement rule. Under the dual entitlement rule, the reduction to the spousal or widow(er)'s benefit is Social Security worker's benefit, that is, applying Social Security benefit formula to the spouse's all Social Security–covered earnings. To mimic that approach, in cases that the spouse's entire career was not covered by Social Security, the GPO reduction would be an amount equivalent to applying the Social Security benefit formula to all those noncovered earnings.37 All covered and noncovered earnings have been reported to SSA on Form W-2 since 1978.38 Although some initial records were incomplete or duplicative, sufficient earnings records over a worker's entire working life are now available to SSA. This data's availability means that the offset based on both spouses' covered and noncovered earnings is now an option for Congress to consider.39
Applying the GPO to Government Versus Private Pensions
Some question why the GPO does not apply to the spousal or widow(er)'s benefits received by private-sector workers' spouses, who may receive private, employer-sponsored pensions (defined benefit or defined contribution) in addition to Social Security benefits. Generally, the private-sector employment on which the private pension is based would be covered by Social Security. Therefore, the dual entitlement rule (which the GPO is meant to replicate) would instead reduce any Social Security spousal or widow(er)'s benefits for which a beneficiary might be eligible. As noted earlier, in many cases the dual entitlement rule would produce a larger reduction in spousal or widow(er)'s benefits than does the GPO.
Some argue that weakening or eliminating the GPO would be costly at a time when neither Social Security nor the federal budget is in sound financial condition. In 2022, the Congressional Budget Office (CBO) projected that eliminating the GPO would have cost $107 billion over the period FY2022-FY2032.40 Such a move could also lead to demands for repeal of the dual entitlement rule to ensure parallel treatment for those working in Social Security–covered employment. In 2003, SSA estimated that eliminating the dual entitlement rule would cost approximately $500 billion over a five-year period.41
Last Legislative Change: The GPO Last-Day Rule
A burgeoning controversy arose in the 108th Congress with the revelation that a growing number of state and local government workers had been making use of a little-known provision of the law that allowed them to escape the application of the GPO if they switched jobs at the very end of their government careers. That provision granted an exception to the GPO if, on the last day of one's government service, he or she worked in a Social Security–covered position. On August 15, 2002, the Government Accountability Office (GAO) released a report that found that, as of June 2002, 4,819 individuals in Texas and Georgia had switched to Social Security–covered positions to avoid having the GPO applied to their Social Security spousal benefits. The GAO projected that the cost to the program for these cases could be about $450 million.42
On February 11, 2004, the House of Representatives agreed to Senate amendments and passed H.R. 743, the Social Security Protection Act of 2003, which became P.L. 108-203.43 As discussed below, P.L. 108-203 eliminated the last-day exception clause by requiring those workers switching from noncovered positions to Social Security–covered positions to work in the covered position for at least 60 months (five years) before being exempt from the GPO.44 The new GPO provision became effective for Social Security spousal benefit applications filed after March 31, 2004.
SSA's Office of Research, Evaluation, and Statistics provided unpublished data on beneficiaries affected by the GPO.
| 1. |
Wife's and widow's benefits were created in 1939, while husband's and widower's benefits were enacted in 1950. As a result of the Supreme Court's decision in Obergefell v. Hodges, the Social Security Administration is now able to recognize same-sex marriages and certain nonmarital legal relationships in all states, territories, and the District of Columbia. See CRS Report R41479, Social Security: Revisiting Benefits for Spouses and Survivors. |
| 2. |
The Government Pension Offset (GPO) is often confused with the Windfall Elimination Provision (WEP), which reduces Social Security benefits that a person receives as a worker if he or she also has a government pension based on work that was not covered by Social Security. For additional information on the Windfall Elimination Provision (WEP), please refer to CRS Report 98-35, Social Security: The Windfall Elimination Provision (WEP). |
| 3. |
A worker may earn up to four earnings credits per calendar year. In 2024, a worker earns one credit for each $1,730 of covered earnings, up to a maximum of four credits for covered earnings of $6,920 or more. Earnings credits are also called quarters of coverage. |
| 4. |
Social Security Administration (SSA), How You Earn Credits, 2024, https://best.ssa.gov/pubs/EN-05-10072.pdf. |
| 5. |
SSA, Office of Chief Actuary, Social Security Program Fact Sheet, January 2024, https://www.ssa.gov/OACT/FACTS/fs2023_12.pdf. |
| 6. |
See CRS In Focus IF11824, Social Security: Who Is Covered Under the Program? |
| 7. |
SSA, Office of Research Evaluation and Statistics (ORES), unpublished table, "Social Security and Medicare Coverage of Workers from their State and Local Government Employment in 2019." |
| 8. |
See CRS Report R46961, Social Security Coverage of State and Local Government Employees. The disparity in coverage among states occurs because, while Social Security originally did not cover any state and local government workers, over time the law has changed. Most state and local government employees became covered by Social Security through voluntary agreements between the SSA and individual states, known as Section 218 Agreements because they are authorized by §218 of the Social Security Act. Beginning in July 1991, state and local employees who were not members of a public retirement system or covered by a Section 218 agreement were mandatorily covered by Social Security. |
| 9. |
Technically, a widow(er)'s benefit is equal to up to 100% of the worker's Primary Insurance Amount (PIA). The worker's PIA is the benefit payable to the worker at full retirement age before any applicable reductions. The terminology used here is intended for ease of reference. For more information, see CRS Report R42035, Social Security Primer. |
| 10. |
SSA, Annual Statistical Supplement 2023, Table 5.G1 and Table 5.A1. The term dually entitled applies only to those who receive spousal or widow(er)'s benefits. If an individual's own worker benefit is greater than his or her spousal or widow(er)'s benefit, that person receives the higher worker benefit and is not considered dually entitled. Administrative data do not provide the number of people in this latter category. |
| 11. |
A pension in this setting is referred to as a periodic or lump-sum payment received from an employer's retirement or disability plan based upon the individual's noncovered earnings while in the service of a federal, state, or local government. The payment can be from either a defined benefit or defined contribution plan—for example, 401(k), 403(b), or 457. For more information, see SSA, Program Operations Manual System (POMS), "GN 02608.100 Government Pension Offset (GPO) Provision," at https://secure.ssa.gov/apps10/poms.nsf/lnx/0202608100. |
| 12. |
SSA, ORES, unpublished Government Pension Offset Table A, received by CRS in February 2024. |
| 13. |
In this example, John is not eligible for a Social Security spousal benefit because Mary's employment was not covered by Social Security. |
| 14. |
The dual entitlement rule has been in law since 1939, when spousal benefits were introduced. |
| 15. |
Effectively, the GPO offset formula assumes that two-thirds of the government pension is roughly equivalent to the Social Security retirement (or disability) benefit the spouse would have earned as a worker if his or her job had been covered by Social Security. |
| 16. |
SSA, ORES, unpublished table, "Social Security and Medicare Coverage of Workers from their State and Local Government Employment in 2019." |
| 17. |
Workers who switch from the Civil Service Retirement System (CSRS) to the Federal Employees' Retirement System (FERS) must work for five years under FERS to be exempt from the GPO. |
| 18. |
SSA, ORES, unpublished Government Pension Offset Table DE01, February 2024. |
| 19. |
SSA, ORES, unpublished Government Pension Offset Table G209, February 2024. Data are limited to those beneficiaries for whom the offset amount is available. |
| 20. |
SSA, ORES, unpublished Government Pension Offset Table G309, February 2024. Data are limited to those beneficiaries for whom the offset amount is available. Includes persons entitled to spousal/widow(er)'s benefits only and those dually entitled to spousal/widow(er)'s and worker benefits. For a dually entitled beneficiary, the pre-offset Social Security benefit is the difference between the larger spousal/widow(er)'s benefit and the smaller worker benefit. |
| 21. |
SSA, ORES, unpublished Government Pension Offset, Table G609, February 2024. Data are limited to those beneficiaries for whom the offset amount is available. |
| 22. |
SSA, ORES, unpublished Government Pension Offset Table G509, February 2024. Data are limited to those beneficiaries for whom the offset amount is available. Amounts may not add due to rounding. |
| 23. |
SSA, ORES, unpublished Government Pension Offset Table G105, February 2024. Data are limited to those beneficiaries for whom the offset amount is available. |
| 24. |
SSA, ORES, unpublished Government Pension Offset Tables G209 and G509, February 2024. Data are limited to those beneficiaries for whom the offset amount is available. |
| 25. |
SSA, ORES, unpublished Government Pension Offset Table DE01, February 2023. |
| 26. |
SSA, Annual Statistical Supplement, 2023, Table 5.G2, available at https://www.ssa.gov/policy/docs/statcomps/supplement/2023/5g.html#table5.g2. The term dually entitled applies only to those who receive spousal or widow(er)'s benefits. If an individual's own worker benefit is greater than his or her spousal or widow(er)'s benefit, that person receives the higher worker benefit and is not considered dually entitled. Administrative data do not provide the number of people in this latter category. |
| 27. |
SSA, Annual Statistical Supplement, 2023, Table 5.G3. |
| 28. |
SSA, Annual Statistical Supplement, 2023, Table 5.G3. The sum of components is not equal to the total due to rounding. |
| 29. |
The WEP reduces Social Security benefits that a person receives as a worker if he or she also has a government pension based on work that was not covered by Social Security. |
| 30. |
See Section 1143 of the Social Security Act (Social Security Account Statements) at https://www.ssa.gov/OP_Home/ssact/title11/1143.htm. |
| 31. |
See CRS Report R47183, The Social Security Statement. |
| 32. |
How an individual would be affected by the GPO versus the dual entitlement rule is determined by several key variables, including the relative earnings level of the individual, the timing of the worker's noncovered employment during his or her career, and the number of years in noncovered employment. The primary difference between outcomes among high and low earners is driven by the fact that a worker's Social Security benefit (the basis for the dual entitlement offset, which reduces the spousal benefit by 100% of this amount) is progressive, while pensions from noncovered government employment (the basis for the GPO reduction, which reduces spousal benefits by two-thirds of this amount) generally provide a pension that is the same fixed percentage of earnings regardless of the earnings level. As earnings rise, if the earnings are from noncovered employment then the pension from this employment rises proportionately; if the earnings are from covered employment, then the Social Security benefit, which is progressive, rises less than proportionately. Hence for high earners, the GPO offset to spousal benefits, which is two-thirds of noncovered pensions and which rises proportionately as income rises, becomes more significant than the dual-entitlement offset to spousal benefits, which involves a 100% offset to the Social Security benefit and which rises more slowly as income rises. In general, any combination of variables (such as earnings level, timing of noncovered employment, or number of years in noncovered employment) that increases the size of the noncovered government pension more than it increases the size of the Social Security benefit (assuming the same earnings were covered by Social Security) would make the dual entitlement rule more advantageous to an individual than the GPO. |
| 33. |
CRS calculations based on data provided by SSA's ORES, unpublished Table I, February 2024. The sample is limited to those beneficiaries for which the offset amount is available. |
| 34. |
CRS calculations based on data provided by SSA's ORES, unpublished Table I, February 2024. The sample is limited to those beneficiaries for which the offset amount is available. |
| 35. |
CRS calculations based on data provided by SSA's ORES, unpublished Table I, February 2024. The sample is limited to those beneficiaries for which the offset amount is available. |
| 36. |
Poverty rates were calculated by David Weaver, SSA's Office of Retirement Policy, using the March 2001 Current Population Survey (CPS). Poverty status is taken directly from the CPS and is thus subject to errors in the reporting of income. The sample for the GPO and dually entitled poverty rates only includes persons for whom SSA administrative records could be matched. The sample size for the GPO poverty rate is relatively small (130 cases). Poverty rates for the Social Security beneficiary population aged 65 and over and for the general population do not require matched data and are based completely on CPS data. Updated data for this comparison are not available. |
| 37. |
In cases that the spouse's career is split between covered and noncovered jobs, the GPO reduction would be the Social Security benefit based on total earnings subtracting the Social Security benefit based on covered earnings—that is, the part of Social Security benefits based on total earnings that are attributable to noncovered earnings. In this situation, the person might be entitled to both Social Security worker's benefits and spousal or widow(er)'s benefits (i.e., dully entitled), and the person might be affected by both the Windfall Elimination Provision (WEP) and the GPO. The person's Social Security worker's benefit might be reduced by the WEP, and the person's Social Security spousal or widow(er)'s benefit might be reduced by both Social Security worker's benefit (affected by the WEP) and the GPO reduction. For more information, see CRS Report R45845, Social Security: Beneficiaries Affected by Both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). |
| 38. |
Anya Olsen and Russell Hudson, "Social Security Administration's Master Earnings File: Background Information," 2009, Social Security Bulletin, vol. 69, no. 3, at https://www.ssa.gov/policy/docs/ssb/v69n3/v69n3p29.html. |
| 39. |
The President's Budget for FY2017 included a proposal to modify the GPO based on both spouses' covered and noncovered earnings. For more information, see https://www.ssa.gov/legislation/testimony_032216.html. |
| 40. |
CBO also estimated that, accounting for the interaction among Social Security provisions and other federal programs, eliminating the WEP and the GPO would have cost $183 billion over the period FY2022-FY2032. See CBO, Cost Estimate: H.R. 82, Social Security Fairness Act of 2021, September 20, 2022, https://www.cbo.gov/publication/58488. SSA's Office of the Chief Actuary projected that repealing the WEP and the GPO would have increased program costs by $146 billion over the period including 2022-2031. The estimates also show that the bill would have reduced the long-range actuarial balance (i.e., increase the net long-term cost) of the combined Social Security trust funds by 0.12% of taxable payroll. See letter from Stephen C. Goss, Chief Actuary, SSA, to the Hon. Rodney Davis and the Hon. Abigail Spanberger, U.S. House of Representatives, July 20, 2022, https://www.ssa.gov/OACT/solvency/DavisSpanberger_20220720.pdf. The projection was based on the intermediate assumptions of the 2022 Social Security trustees report. Taxable payroll is the total amount of earnings in the economy that is subject to Social Security payroll and self-employment taxes (with some adjustments). |
| 41. |
SSA, Memorandum from Bert Kestenbaum of the Office of the Chief Actuary, "Estimated Additional OASDI Benefit Payments from Proposals to Eliminate or Change the Dual-Entitlement Offset Provision—INFORMATION," April 17, 2003. SSA has not published a more recent estimate. |
| 42. |
U.S. General Accounting Office (now called Government Accountability Office), Report GAO-02-950, Revision to the Government Pension Offset Exemption Should Be Reconsidered, August 15, 2002. |
| 43. |
For more information on H.R. 743, see SSA's legislative bulletin on P.L. 108-203, http://www.socialsecurity.gov/legislation/legis_bulletin_030404.html. |
| 44. |
This five-year period for GPO exemption is consistent with that required of federal employees converting from CSRS to FERS. |
Document ID: RL32453