Under the Gov Pension Offset, which type of benefits may be affected?

The Gov Pension Offset (GPO) primarily impacts spousal and survivor benefits. This provision reduces Social Security benefits for individuals who receive a pension from a federal, state, or local government job that did not withhold Social Security taxes.

When someone who has a government pension applies for spousal or survivor benefits, the GPO comes into play and may reduce those benefits. Specifically, the GPO deducts two-thirds of the amount of the government pension from the Social Security benefits that could be received. This can significantly lessen the financial support that the individual might depend on, particularly if they were counting on those spousal or survivor benefits as part of their retirement income planning.

Retirement and disability benefits are not affected by the GPO in the same way, as they are governed by different rules. Therefore, understanding the implications of the Gov Pension Offset is crucial for beneficiaries who are eligible for spousal or survivor benefits and also drawing a government pension.