Dear Rusty: I am a retired Texas teacher receiving my State pension. I retired in February 2009, before the end of a “loophole” which affected my future Social Security. I had earned enough credits to receive Social Security benefits in addition to my Teachers Retirement System (TRS) pension. At 62 I began getting my SS benefit (reduced by my TRS pension).

My husband didn’t start his SS until last year, at which time I contacted Social Security so my benefits would “no longer be reduced” as per the TRS loophole. I have spoken with the local SS office three times and sent them the documents requested, but my SS payment remains the same! How do I bypass the local office to get my benefit increased to the amount I was told when I retired under this Texas loophole? Signed: Wanting My Increase

Dear Wanting: Your question requires some explanation of two SS rules known as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These rules affect anyone, like you, with a pension from an employer which did not participate in Social Security, and who is also eligible for Social Security benefits. WEP applies to your personal SS retirement benefit; GPO applies to any spousal (or survivor) benefit you might become entitled to.

There are 27 States (including Texas) which, to varying degrees, have exempted some State employees from paying into Social Security. But for employees who, nevertheless, also become entitled to SS benefits, either from other SS-covered employment or a spouse, WEP and GPO will affect their SS benefits. Both rules apply to you because you did not contribute to Social Security while you earned most of your TRS pension. Your SS retirement benefit was reduced by WEP and, since your husband is now collecting SS, you might be entitled to an additional amount as his spouse, depending on whether the GPO will apply. The GPO did originally contain a “loophole,” but the loophole didn’t work as you think it did.

When the GPO was first enacted in 1977, it included a rule known as the “last day exemption.” That rule stipulated that if, on your last day of employment prior to retirement, you contributed to both your non-covered pension and to Social Security under the same plan the GPO would not apply. State retirees in many of the 27 affected States took advantage of that loophole. That is, until Congress changed the GPO rule to eliminate the loophole.

A change in 2004 eliminated the “last day exemption” and replaced it with a rule saying that a GPO exemption would occur only if the employee contributed to both the non-covered pension and Social Security under the same plan every day for the last 5 years prior to retirement. A “transition” rule sometimes applied which allowed less than 5 years of contributions to both programs immediately prior to retirement. Each State decided if they would permit employees to take advantage of this option, which Texas did until just after you retired in 2009.

Your own WEP-reduced SS retirement benefit is not affected by, nor will it change because of any “loophole.” Based upon the dates you shared, the “last day exemption” for GPO doesn’t apply to you, but the changed rule may. The current rule permits a GPO exemption if you also contributed to Social Security under your TRS pension plan every day during the last five years of your TRS employment, or if the special “transition rule” applies to you. If that is the case, then you are, indeed, eligible for an exemption from the Government Pension Offset and your SS benefit will increase. But if not, the normal GPO spouse benefit reduction of 2/3rds of your TRS pension will be prorated and based only on the months you didn’t pay into Social Security.

Since you’ve already contacted Social Security several times and sent them the requested documentation, I know of no way to “bypass” your local SS office. But it might help to ask your Congressional Representative to intervene by contacting the SSA and request that your case be expedited.

Dear Rusty: I will be 65 in August of this year. If I start drawing Social Security on my 65th birthday, how will my Social Security check be affected if I continue working at my full-time job, and take home $1380 every two weeks, until I reach my full retirement age? Signed: Working Senior

Dear Working Senior: Social Security (SS) has an “earnings test” which applies to anyone who collects benefits before they have reached their full retirement age (FRA). There is also a “first year rule” which applies when someone claims benefits mid-year, prior to their full retirement age. The first-year rule says that if you exceed a monthly limit you aren’t entitled to benefits for that month, and that applies for each remaining month in the first year, after your benefits start. Then, starting in 2022, you’ll be subject to an annual earnings limit. Since you will reach your full retirement age in 2022, your annual limit that year will be a bit more than the 2021 FRA-year limit of $50,520 (the earnings limits change annually).

If you claim Social Security to start in August when you are 65, for the remainder of 2021 you’ll be subject to a monthly earnings limit of $1,580. And if your gross earnings for each remaining month in 2021 are more than that (and yours would be), then you won’t be entitled to Social Security benefits for the remaining months of 2021. For clarity, you would also have the option to request that the annual limit ($18,960 for 2021) be used instead of the monthly limit, but at your earnings level you would still be required to repay all of your 2021 benefits (using the annual limit would require you to repay $1 for every $2 you are over the limit).

When you file your income taxes next year, SS will discover you exceeded the 2021 earnings limit and require you to repay all benefits received in 2021. By “repay,” I mean they will give you an option to repay everything they paid you in 2021 in a lump sum, or they will withhold future benefits until they recover what you owe because you exceeded the monthly limit. Alternatively, you could request a less severe repayment plan, but you would need to negotiate that directly with Social Security.

Essentially, if you plan to continue working full time in 2021, it may be wise to simply delay claiming your Social Security for a while, because you will end up needing to return any benefits paid in 2021. You could still claim in August and then inform them you will exceed the limit; in which case they will simply withhold your benefits. But in any case, you won’t be eligible for SS benefits in 2021 at the earnings level you shared.

As explained above, your 2022 earnings limit will be more than the 2021 limit of $50,520 for those achieving FRA, and if you claim benefits to start in January 2022 that higher annual limit would apply. If you’re still working full time at the same earnings level, you probably will not exceed the 2022 annual limit, so your benefits wouldn’t be affected. But if you get a raise and exceed the 2022 limit, SS will want back $1 for every $3 you exceeded the limit by (the FRA-year rate). Of course, since the earnings limit goes away when you reach your full retirement age, you might also consider just waiting until your FRA to claim Social Security and completely avoid the earnings test.