Government Pension Offset (GPO)

The Government Pension Offset (GPO) is a provision that affects Social Security spousal and survivor benefits for individuals who receive a pension based on their own work in a federal, state, or local government job that was not covered by Social Security. Under the GPO, the Social Security spousal or survivor benefit is reduced by two-thirds of the amount of the government pension.

For example, if a retired government worker receives a $3,000 monthly pension from non-covered employment, their Social Security spousal or survivor benefit would be reduced by $2,000 (two-thirds of $3,000). If the spousal benefit they would otherwise receive is less than $2,000, it would be completely eliminated by the GPO.

The GPO applies to spousal and survivor benefits only — it does not affect the worker's own Social Security benefit (that is covered by the separate Windfall Elimination Provision). The GPO can affect a surviving spouse's financial security significantly, particularly in cases where the surviving spouse was counting on both their government pension and a Social Security survivor benefit.

Certain exceptions to the GPO may apply. For instance, if you receive a government pension based on work that was covered by Social Security — such as a federal FERS employee who paid Social Security taxes — the GPO would not apply. The GPO also does not apply if the government employment occurred before December 1982 under certain conditions.

Like WEP, the GPO has been the subject of legislative proposals to repeal or reform it. Understanding whether the GPO affects your situation could be important for accurately projecting retirement income, especially for couples where one spouse has a government pension.