Understanding the Windfall Elimination Provision

What is the Windfall Elimination Provision?

The Windfall Elimination Provision (WEP) is critical for financial professionals to understand. It’s a Social Security rule that reduces a worker’s Social Security retirement or disability benefits if they also have pension benefits from work where they did not pay Social Security taxes. The WEP was introduced in 1983 to prevent “double-dipping” from both a government pension and Social Security. In other words, the provision prevents certain workers from collecting full Social Security benefits in addition to a governmental pension if they have not paid into Social Security for a significant portion of their career.