August 11, 2022

Progress to Repeal the Windfall Elimination Provision

Democrats Abroad is encouraged by the advancement of the Social Security Fairness Act (H.R.82) which would repeal the Windfall Elimination Provision (WEP). WEP has unfairly and disproportionately impacted Americans abroad, particularly seniors who paid into Social Security and deserve to receive a fair amount in retirement.  Some beneficiaries only learn of WEP after they have retired, and the reduced benefits substantially affect their financial standing in later years.

What is the Windfall Elimination Provision?
WEP has been in effect since 1984. WEP is a modified benefit formula designed to remove the unintended advantage, or “windfall,” of the regular benefit formula for certain retired or disabled workers who spent less than full careers in Social Security covered employment and who are also entitled to pension benefits based on earnings from jobs not covered by Social Security.  WEP impacts nearly 2 million people currently drawing Social Security benefits, predominantly U.S. government employees. 109,911 individuals living outside the U.S. who paid into U.S. Social Security as well as the equivalent in the country where they live are also unfairly hit by WEP.

How is the Windfall Elimination Provision problematic for Americans abroad?

  • Up to 50% of a person’s Social Security benefit can be reduced by WEP.
  • WEP isn’t calculated until a person actually begins to draw on their Social Security benefits, when it can catch them off guard as they retire, leaving them less to live off of than they had planned for.

How has the bill advanced and what are the next steps for passing the bill?
The bill was introduced in the House on January 1, 2021 with 18 co-sponsors but now has 294, as well as strong bi-partisan support. Rule XV, Clause 3 of the House of Representatives is that if a bill achieves 290 co-sponsors but has not advanced via committee, the sponsor can motion for a floor vote. It will then be up to House leadership to schedule a vote. From 2019-21, ten bills passed through the House this way. The Senate companion bill (S. 1302) will also need to pass for it then to go to the President to sign into law.

Democrats Abroad Supports the Repeal of WEP
Democrats Abroad welcomes the overwhelming Congressional support of the Social Security Fairness Act (H.R.82) to provide relief for Americans abroad negatively impacted by WEP. This is a major step to address one of the many inequalities that Americans abroad experience, recognize the disproportionate and unfairness, especially for seniors who can be particularly financially vulnerable as they retire and age. The bill has achieved bi-partisan support and will mean a fair calculation for those that paid into Social Security and deserve to receive a fair amount in retirement.

If the bill passes, what does this mean for Americans abroad who have been impacted by WEP?
Anyone who has their Social Security payments reduced due to WEP would have their payments recalculated by Social Security. Payments could increase by as much as 50%.

Will Americans abroad receive back payment of benefits already made that were reduced by WEP?
If the bill passes, no. Payments would only be adjusted going forward.

What are the chances the bill will pass?
Given the information we have at hand, timing for consideration of the bill is not certain or guaranteed. If the bill were to pass, the Social Security Administration estimates that it would not be able to pay out the full amount that people are entitled from 2034. Without a way to fund full entitlement benefits beyond 2034, it is difficult for Congress to justify the passage of the bill, even given the inequality and unfairness of the lower payments a subsection of the population currently suffer from. The Senate companion bill (S. 1302) has 40 co-sponsors and will also need to pass. Even given these barriers to passing the bill, the fact that the bill has advanced this far is still a great achievement to be championed.

How can I help repeal WEP?
Write and call your Members of Congress and ask them to help pass the bill! Click here for instructions.

Democrats Abroad Advocacy Work
WEP is one of many areas of U.S. law that discriminate against Americans abroad. DA continues to advocate for tax fairness including a residence based taxation system and an exemption from FATCA reporting for accounts held in the country that Americans live in abroad. These legislative fixes to U.S. laws would enable everyday working and middle class Americans abroad the opportunity to participate fully in lawful financial activities from which whom are often currently excluded. Some of the issues that Americans abroad suffer discriminatory barriers from include starting and running a small business, saving for retirement, and obtaining a bank account with which to pay normal household bills.

To stay up to date on the repeal of WEP, sign up for the Seniors Caucus newsletter here.

More information on the Windfall Elimination Provision:

More news coverage on the advancement of H.R. 82: