The GPO reduces a spousal Social Security benefit by $2 for every $3 received from a retirement system, such as CSRS. Image: Andrii Yalanskyi/Shutterstock.com
By: FEDweek StaffSSA employees don’t always caution potential benefits filers who would be affected by the “government pension offset”—including many of those who retire under the CSRS system—about the GPO’s potential impact on their benefits and how they could lessen that impact, an inspector general report has said.
The IG performed its work in response to a disclosure from an SSA employee that some fellow employees were not following agency policy requiring they “document that they informed the claimant of the advantages and disadvantages of filing” at one time vs. another for Social Security spousal benefits.
The GPO reduces a spousal Social Security benefit by $2 for every $3 received from a retirement system, such as CSRS, that doesn’t include Social Security. In many cases the impact is to eliminate the spousal benefit from a spouse’s Social Security-covered earnings.
The IG report gave as an example someone entitled to a $1,500 monthly benefit under CSRS or other system not including Social Security who would be entitled to a spousal Social Security benefit of $1,200 a month if claiming it at full retirement age (currently 66 and eight months) but only $1,000 a month if claiming at age 62. By waiting until full retirement age, that person would receive $200 a month in spousal benefits from Social Security starting at that point, while by claiming at age 62, the person never would receive a spousal benefit.
In a review of 71 cases that the employee presented to the IG, auditors found that 58 “appeared to have filed—and SSA adjudicated—disadvantageous claims for spouse’s benefits”; 11 would not have received more in benefits by waiting; and the other two were not eligible to delay claiming for spousal benefits because they had filed for benefits based on their own Social Security-covered earnings.
“We estimate the 58 claimants for whom SSA processed disadvantageous claims would have received an additional $695,780 had they delayed filing their claims until their FRA,” the auditors said. On average they would have been entitled to additional benefits for 101 months, it said, adding that 42 were still living as of earlier this year while 16 had died.
“We reviewed SSA’s electronic records for these 58 claimants and found no evidence that SSA employees: explained the advantages and disadvantages of filing an application; informed the claimants that their filing decision may adversely affect their current or future benefits; and documented the claimants’ filing decision in the Remarks section of the application, as required,” it said.
The IG said it plans to ask the SSA to verify the conclusions and determine whether the claimants should be notified that they may withdraw their prior claims for spouse’s benefits and file new claims. It also said it plans to continue looking into that issue beyond the cases the employee identified.
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