A Social Security provision primarily of interest to employees and retirees under CSRS is the “government pension offset,” which could affect Social Security benefits they might receive as a spouse or survivor. The offset will reduce the amount of your Social Security spousal or survivor benefits by two-thirds of the amount of your other annuity. In other words, if you get a monthly CSRS annuity of $1,200, two-thirds of that, or $800, must be used to offset your Social Security spousal or survivor benefits. In many cases this severely cuts or even eliminates the Social Security benefit.
However, there are certain exceptions to the offset provision:
- Any state, local or military service employee whose government pension is based on a job where he or she was paying Social Security taxes on the last day of employment. (Some government entities were not initially covered by Social Security, but chose to participate in Social Security at a later date.)
- Anyone whose non-Social Security benefit is not based on his or her own earnings (that is, survivor beneficiaries).
- Anyone who received or who was eligible to receive a government annuity before December 1982 and who meets all the requirements for Social Security spouse’s benefits in effect in January 1977.
- Anyone who received or was eligible to receive a federal, state or local government pension before July 1, 1983, and was receiving one-half support from her or his spouse.
- Federal employees, including CSRS-Offset employees, who are mandatorily covered under Social Security.
- Federal employees who chose to switch from CSRS to the Federal Employees’ Retirement System (FERS) on or before December 31, 1987, well as those employees who were allowed to make a belated switch to FERS through June 30, 1988. (Federal employees who chose to switch from CSRS to FERS during the open season between July 1, 1998, and December 31, 1998, need five years under FERS to be exempt from the Government Pension Offset.)