FEDweek

Closer Scrutiny for Windfall Penalty Pending

The Social Security Administration has agreed with an audit’s recommendation to apply closer scrutiny to benefits received by retired federal employees to determine if those benefits should be reduced by the windfall elimination provision.

The WEP reduces a Social Security benefit for those who covered by a retirement system that doesn’t include Social Security and who have fewer than 30 years of Social Security coverage above an annual dollar threshold. In the federal government realm, it primarily affects those under CSRS who have enough Social Security coverage through employment before, after—or through side earnings during—their federal careers to earn a benefit from that system; many of those years of earnings may fall below the threshold, however. The maximum reduction is nearly $500 a month.

An inspector general audit looked at a sample of 250 SSA beneficiaries also drawing a CSRS benefit over 2010-2014 and found 14 whose Social Security payments hadn’t been reduced as required—even though SSA had received data on their background from OPM–causing an overpayment of $372,000 total. Based on that sample, the report projected that SSA overpaid about $129 million to nearly 5,000 beneficiaries.

SSA agreed with recommendations to re-educate its staff regarding when the reduction should be applied and to allow re-opening of final benefits decisions when such overpayments are discovered.