If you worked in a job that was not covered under Social Security, e.g., some Federal, State, or local government employment, the pension you get based on that work may reduce your Social Security benefits. Your benefit can be reduced under one of two provisions.

 The first, called "government pension offset," applies only if you receive a government pension and are eligible for Social Security benefits as a spouse or widow(er). Under this provision, your Social Security benefit may be reduced by two-thirds of the amount of your government pension. There are several exceptions to this rule.  For more information, see the Social Security Administration’s GPO page or the GPO calculator.

The other provision, called the "windfall elimination provision," affects how your Social Security retirement or disability benefits are figured if you also receive a pension from work not covered by Social Security. The formula used to figure your benefit amount is modified, giving you a lower Social Security benefit.

Social Security benefits are based on a worker's average monthly earnings adjusted for inflation. When Social Security figures your benefits, Social Security separates your average earnings into three amounts and multiplies the figures using three factors. For example, for a worker who turns 62 in 2007, the first $680 of average monthly earnings is multiplied by 90 percent; the next $3,420 is multiplied by 32 percent; the remainder by 15 percent.  For more information, see the Social Security Administration’s Online WEP Calculator.

Under the windfall elimination provision, Social Security figures your benefit under a modified formula in which the 90 percent factor is reduced to 40 percent. There are exceptions to this rule. For example, the 90 percent factor is not reduced if you have 30 or more years of "substantial" earnings in a job where you paid Social Security taxes. If you have 21 to 29 years of substantial earnings, the 90 percent factor is reduced to somewhere between 45 and 85 percent.

 For more information, you should read the Social Security fact sheets "Government Pension Offset" (Publication No. 05-10007) and "The Windfall Elimination Provision" (Publication No. 05-10045). You can file for retirement benefits online.