For many disabled people in New Jersey, Social Security disability benefits can be a major source of income. Therefore, any change in the amount of monthly benefits can have a significant effect on their lives. In certain situations, however, the Social Security Administration can reduce a recipient’s benefits. One situation where this can happen is with the Windfall Elimination Provision.
The Windfall Elimination Provision applies to those people who have worked with an employer that did not deduct Social Security taxes but paid into a pension plan. Some examples of these employers are certain government agencies or an employer who is located in another country. The SSA will consider the pension earnings from these sources when determining benefits and can adjust that recipient’s SSD benefits.
In addition, the Windfall Elimination Provision may also apply if a person became disabled after 1985 and started receiving their pension after that same year without paying Social Security taxes thereafter. The person may still be working but the provision will still apply in that person’s case. The Windfall Elimination Provision may also apply for people who served under the Civil Service Retirement System after 1956. However, if the service fell under the Federal Employees’ Retirement System, SSD benefits would not be reduced since Social Security taxes are withheld in the FERS system.
There are some exceptions to this provision. For example, if the SSD benefits recipient started working as a federal employee after Dec. 31, 1983, the provision will not apply. Again, if an SSD benefits recipient was employed by a nonprofit organization, which did not deduct Social Security taxes, on Dec. 31, 1983 but started deducting Social Security taxes later, the provision will not apply. Besides these, there are some other situations in which the Windfall Elimination Provision does not apply.
The SSA’s rules and regulations pertaining to SSD benefits often looks simple on paper but when an applicant or recipient delves a little deeper, the person can face a number of challenges which can be overwhelming, especially when that person is already dealing with a disability. In such situations, it may be advantageous to engage the SSA with an experienced attorney.
Source: Social Security Administration, “Windfall Elimination Provision,” Accessed on May 29, 2015