If you worked in a job that was not covered under Social Security, for example some Federal, State, or local government employment, the pension you get based on that work may reduce your Social Security benefits.

Social Security calls this "Government Pension Offset" and it applies only if you receive a government pension and are eligible for Social Security benefits as a spouse, ex-spouse, or widow/widower.  Under this offset, Social Security will reduce your benefit by two-thirds of the amount of your government pension.  You must report all cost of living raises that increase your government pension to Social Security so that Social Security can adjust your benefit.

Example

Kate worked for the state government and her pension is $600 gross per month.  Two-thirds of her state pension is $400.  Her widow's benefit from Social Security is $1200 per month.  Social Security must reduce her widow's benefit by $400.  Kate's Social Security benefit amount is $800.

The most common exceptions to this rule apply if you:

• Are receiving a government pension that is not based on your earnings;

OR

• Are a state or local employee whose government pension is based on a job where you were paying Social Security taxes on the last day of employment and your last day was before July 1, 2004.

OR

• If your last day of employment was July 1, 2004 or later and you were paying Social Security taxes during the last five years of employment. Sometimes, less than five years may be required for people whose last day of employment falls between July 1, 2004, and March 2, 2009.