Because an employee can earn a maximum of four credits per year, you must have worked in a job in which you paid Social Security taxes for at least 10 years or 40 quarters to meet Social Security eligibility requirements.
However, if your spouse is eligible for a Social Security pension, you might be eligible for a spousal or widow/er benefit.
Many educators in Texas have been misinformed or are unaware of Social Security laws that can affect their retirement.
The following questions and answers present the facts about Texas educators and Social Security. However, all employees eligible for a government pension—such as that provided by the Teacher Retirement System (TRS)—who are also eligible for Social Security benefits are subject to two offset rules that can reduce the amount of Social Security benefits they may be eligible to receive: To be eligible for a Social Security pension benefit, you must be at least 62 years old and have a minimum of 40 Social Security credits.
The percentage increases from 40 percent to 90 percent as an individual’s years of substantial earnings increase from 20 to 30.
For example, a person who has paid Social Security taxes on substantial earnings for 20 or fewer years will have the first 6 of his AME multiplied by 40 percent, whereas a person with 26 years of substantial earnings will have the first 6 of his AME multiplied by 70 percent, and so on up to 30 years.
The WEP modifies this formula for employees who are eligible for a government (TRS) pension by multiplying the first 6 of the AME by a smaller percentage that is based on the number of years the person paid Social Security taxes on substantial earnings (a designated amount adjusted yearly to reflect economic trends).However, some government employees, including Texas educators, work in jobs that pay into government pension programs (such as TRS) rather than Social Security.Because these employees have little or no Social Security-covered employment, it appears that they are dependent on their spouses when in reality they are not.Anyone filing for spousal benefits who is not eligible for a pension would have their spousal benefits reduced by the entire amount of their personal Social Security benefit, effectively providing them with the greater of the two benefits.Those affected by the GPO, such as Texas educators, have their spousal benefits reduced by two-thirds of their pension, instead of 100 percent of their personal Social Security benefit.The standard formula for figuring Social Security benefits averages a person’s pre-retirement earnings by dividing total pre-retirement earnings by 35 years, then dividing that amount by 12 to find the average monthly earnings (AME).The dollar amounts in the formula vary yearly according to inflation.Anyone who applied for spousal or widow/er Social Security benefits before April 1, 2004, can gain exemption from the GPO by working their last day before retirement in a position covered by both Social Security and their government pension system (TRS).ATPE encourages members to schedule appointments with their local Social Security offices and meet with benefits counselors to investigate their options and situations thoroughly before making any decisions. You will not lose your spousal Social Security benefits as long as you maintain your status as a retiree under TRS.Contact your local Social Security office for complete information on which benefits you are eligible to receive.Texas educators eligible for both a spousal or widow/er Social Security benefit and their own TRS pension benefit are subject to the Government Pension Offset (GPO).