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Social Security Windfall Elimination Provision (WEP) |
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Note: After this article was written the Social Security
Administration issued their Acquiescence Ruling concerning
application of the 8th Circuit decision. Click the following
link to read their decision:
UPDATE FROM SSA - FEDERAL REGISTER
Social Security Acquiescence Ruling (AR) 12–X(8); Petersen v.
Astrue, 633 F.3d 633 (8th Cir. 2011); Whether a National Guard
Technician Who Worked in Non-covered Employment Is Exempt From
the Windfall Elimination Provision (WEP)—Title II of the Social
Security Act
Explaining
the 8th Circuit Court of Appeals WEP Decision
Decision Will Have A
Significant Impact on Technician Retirement Calculations
by Ben Banchs
New Orleans, LA (April 9, 2012) – In
February of 2009 the 8th Circuit Court of Appeals ruled that a
person who retires as a Dual-Status Technician of the Army or
Air National Guard is excepted from the Windfall Elimination
Provision (WEP). Even though the case was decided over 3 years
ago, it just recently made its way to the forefront, and over
the last few weeks several members and outside organizations,
including NGAUS and EANGUS, asked us to weigh in on the meaning
of the decision, and the potential impact it would have on
retired Dual-Status Technicians.
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To summarize, the Court ruled that
due to the "unique" requirements of the National Guard
Dual-Status Technician program, that a person employed as a
Dual-Status Technician performs work “as a member of” the
uniformed services, and is therefore not subject to WEP.
Detailed Explanation of WEP and How it Affects Dual-Status
Technicians
So what is the meaning of the Court's ruling? Basically, that
individuals who retire as Dual-Status Technicians should not
have their Social Security benefits adjusted under the WEP. This
would have meant that, in 2010, a Technician's Social Security
retirement benefit would have been reduced by approximately
$380.50 per month, or $4566 for the year. This is a significant
amount of money lost over the course of a normal retirement.
Prior to the court challenge, the Social Security Administration
(SSA) had consistently held that despite the various military
requirements imposed upon National Guard Technicians, the fact
that Technicians are defined as “Federal civilian employee[s]”
necessarily means that their work was “by” a member of the
uniformed service and not “as” a member of the uniformed
service, and were, therefore, subject to the WEP.
The 8th Circuit Court of Appeals disagreed with the SSA and
found that the law (USC 415(a)(7)(A)) only requires that the
service be "as" a member of the uniformed service, and that
Dual-Status Technician pensions meet the limited requirements of
the statute. Due to these unique requirements imposed on
National Guard Technicians, the court ruled against the SSA.
This case will have a significant impact on the way Dual-Status
Technician retirements are calculated, especially within the 8th
Circuits jurisdiction. The Appeals Court decision is unambiguous
in that Dual-Status Technician employment is work performed “as”
a member of a uniformed service, not “by” a member of a
uniformed service. This simple distinction is all that is
statutorily required to be exempt from the WEP.
Questions & Answers
Q1: Who does the 8th Circuit Appeals Court decision
apply to?
A1: The 8th Circuit’s decision is binding only in those States
under their jurisdiction. These are: Arkansas, Iowa, Minnesota,
Missouri, Nebraska, North Dakota, and South Dakota.
If you’re a retired Dual-Status Technician of the Army or Air
National Guard, and you live in a State covered by the 8th
Circuit’s decision, we recommend that you immediately contact
your respective Social Security office to find out how to claim
your retirement benefits.
Q2: When does the decision become effective, and is it
retroactive?
A2: The decision becomes effective immediately. In this case,
the decision was rendered February 23, 2009. However, since the
court did not address retroactivity, the SSA can apply the
decision with discretion. In the absence of a retroactive order,
it is unlikely the SSA would make such adjustments due to the
magnitude of cost.
Q3: How is the SSA dealing with the courts decision?
A3: According to Roger Moore, the attorney that successfully
argued the Petersen case, the SSA did not appeal the circuit
court’s decision. Moore writes that all cases which his firm is
currently handling are in the “process of being approved.”
(National Organization of Social Security Claimants'
Representatives [NOSSCR] Magazine, Volume 34, No.1, Pg. 23-24).
Moore goes on to say that it is unclear whether “the SSA is
approving all WEP cases on a nationwide basis or not.”
Q4: How does the 8th Circuit ruling affect States
outside of their jurisdiction and what should I do?
A4: Legally, the 8th Circuit’s decision is not binding on the
rest of the U.S. This means that the SSA can continue applying
the WEP to Dual-Status Technicians outside of the 8th Circuit’s
territory. However, in the absence of any other contradictory
Circuit Court case law, the 8th Circuit's decision is highly
persuasive, and retired Technicians should, at the very least,
ask their local SSA office for clarification.
Related Items:
- 8th Circuit Court Ruling:
http://www.ca8.uscourts.gov/opndir/11/02/092374P.pdf
- NOSSCR Magazine article:
http://workerscompensationwatch.com/wp-content/uploads/2012/02/NOSSCR-Article.pdf
- CRS Study on WEP:
http://aging.senate.gov/crs/ss11.pdf
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