Your Social Security income can be affected if you receive a pension from work not covered by Social Security. This is primarily due to two rules:
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Windfall Elimination Provision (WEP): The WEP can reduce your Social Security retirement or disability benefits if you receive a pension from an employer who did not withhold Social Security taxes from your salary, such as a government agency or an employer in another country. The WEP affects how your Social Security benefit is calculated, potentially resulting in a lower benefit amount. The formula used to calculate Social Security benefits is modified, reducing the percentage of your average indexed monthly earnings (AIME) that is converted into your benefit.
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Government Pension Offset (GPO): The GPO affects your Social Security spousal or survivor benefits if you receive a pension from a federal, state, or local government based on work where you did not pay Social Security taxes. If you're entitled to Social Security benefits as a spouse or widow/widower but also receive a government pension, the GPO may reduce your Social Security benefits by two-thirds of your government pension. In some cases, this can completely eliminate your Social Security spousal or survivor benefit.
