Will government workers facing Social Security cuts get relief?

Relief may soon be on the way for more than 2 million Americans who face big cuts in their Social Security benefits simply because they worked in government jobs that come with a pension.

The reductions stem from two little-understood rules, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Both are designed to prevent double-dipping from Social Security and public-sector pensions.

The cuts in benefits can be very sharp. Under the WEP, a worker retiring this year who might otherwise receive a $976 monthly Social Security benefit could see that chopped to $548, according to the Congressional Research Service. The GPO can result in even sharper cuts to spousal and survivor benefits.

Legislation has been introduced in both chambers of Congress that would repeal both WEP and GPO, but the plan that seems to have traction takes an incremental approach and focuses on WEP only.

The Equal Treatment of Public Servants Act of 2015, sponsored by Representative Kevin Brady, a Texas Republican who chairs the powerful Ways and Means Committee, initially aimed to reduce the WEP penalty by 50 percent.

But a revised version that surfaced in July pushes that relief back to 2026 and would only reduce the penalty by 14 percent, averaging $77 per month for future retirees. If applied in 2016, the proposal would help about 1.25 million beneficiaries.

The National Active and Retired Federal Employees Association would prefer full repeal but supported the original version of Brady’s bill. And the group is pushing back on the revisions.

WEP affected 1.7 million beneficiaries at the end of 2015, according to the Social Security Administration, while GPO impacted about 652,000. Learn more about the efforts to reform WEP and GPO in my Reuters Money column today.

If you think your Social Security benefits might be affected by WEP or GPO, check out this page of resources on the topic from the Social Security Administration.

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