WEP: New Reform Bill Filed

WEP: New Reform Bill Filed
Kevin Brady (R-TX) and Richie Neal (D-MA)

Brady & Neal Seek Compromise With H.R. 6933

In a positive sign that blind partisanship can be set aside for the greater good of the country, new federal legislation was filed in the final days of September that, if passed, would mark the first step toward resolving the unfairness of the Social Security Windfall Elimination Provision (WEP) since the law’s creation in 1983.

The bill, H.R. 6933, is cosponsored by House Ways and Means Chairman Kevin Brady (R-TX) and Committee’s Ranking Member Richard Neal (D-MA). Brady and Neal have a long history of a friendly working relationship, often bridging the partisanship that has come to define this era of American politics.

H.R. 6933 was developed over the past two years, following the defeat of H.R. 711 in 2016. While similar in some respects to its predecessor, H.R. 6933 represents an effort at further compromise on the issue of WEP. The new bill is a first attempt to create a transition period for those public workers with many years of substantial earnings under Social Security.

In the past, the transition period has been referred to as the “30 Year Rule”, that enables a public employee working outside of Social Security can become exempt from the WEP if they achieve 30 or more years of substantial earnings under Social Security. The scenario largely applies to public employees working two or more jobs, as well as those entering public service later in life as a second career. In 2018 the threshold for substantial earnings under Social Security is $23,850.

A major concern of Mass Retirees, our coalition partners and our allies continues to be finding a way to fairly resolve the issue of those active public employees negatively impacted by the change in the 30 Year Rule. Anyone already retired is grandfathered under the current law, which exempts public retirees, with at least 30 years of substantial earnings, from the WEP.

As we have indicated numerous times over the past several years, the current proposal does not involve the Government Pension Offset (GPO). The Republican Leadership has insisted on addressing WEP and GPO as two separate issues within different legislative proposals, with the WEP being the initial focus.

What's In H.R. 6933

Under the proposal contained within H.R. 6933, public retirees impacted by the WEP and eligible for Social Security before January 1, 2025 will receive a monthly rebate for a portion of the benefit lost to WEP. The rebate is currently proposed at a flat $100 a month ($1,200 a year) to be paid within the monthly Social Security benefit. It would begin January 1, 2020 and grow with inflation in perpetuity.

In order to be considered “eligible” for Social Security you must be at least 62 years old and have forty or more quarters (10 years) of covered service under Social Security. Whether or not a retiree chooses to collect Social Security is not a factor when determining eligibility.

For everyone first eligible to collect Social Security on or after January 1, 2025 a new proportional formula will be used to correctly calculate Social Security benefits based on time spent working under Social Security, vs. time spent working in non-covered service. Beginning in 2025, this new formula will apply to all future beneficiaries.

In addition, the bill also requires the Social Security Administration to include information relative to non-covered service on personal statements and benefit estimates. The fact that current Social Security statements do not include information relative to WEP is a source of great confusion and anger for those impacted.

It should be noted that in filing H.R. 6933, Brady and Neal have indicated that they view the proposal as a work in progress, rather than a final offer. In fact, Brady, in his statement accompanying the bill’s filing, noted that there remains “room for improvement.”

“There are two main areas of this proposal that we hope to improve upon. First, we hope to increase the initial rebate beyond the $100 per month currently contained within the bill. We have many members who have witnessed their Social Security benefit reduced by over $400 a month, so there is certainly room for improvement,” said Association Legislative Director Shawn Duhamel.

“Second, is the fact that the current transition period for ending the 30 Year Rule for new retirees does not go far enough. H.R. 6933 has a six-year transition, which the 2025 date represents. We would like to see the time extended so that anyone nearing retirement age, who has been playing by the rules, working multiple jobs while paying into Social Security and their public pension system is not unfairly harmed.”

“Getting this bill filed and an official proposal on paper is a big step forward. I thank both Richie Neal and Kevin Brady for their commitment to finding a way to bring relief to the victims of WEP. It is not easy to craft a proposal that satisfies our fellow stake holders and will also have enough votes to pass both the House and Senate,” explains Association President Frank Valeri. “Now that a real proposal has been filed, my hope is that the deal can be struck this year to pass a bill before the end of the lame duck session in December.”

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