Employment which is not covered at all, and that which is covered for Medicare only,
may be the basis of a pension from earnings not covered for Social Security. This
may subject the person’s primary benefits to the WEP, and spousal benefits to GPO.
The Social Security Protection Act (SSPA) requires SSA to provide specific information
about WEP and GPO to persons whose records, “indicate a likelihood of noncovered employment.”
“Noncovered Employment” for Social Security purposes includes “un-posted” Non-Covered
Earnings (NCE), recorded in the MEF “Unposted Detail Segment” since 1978, and MQGE
which is “posted” in the MEF Posted Detail Segment.
Un-posted non-covered earnings are not included in the earnings shown on page 3 of the Statement.
There is at present no way to correct erroneous MEF Unposted Detail Segment details.
Lack of data prior to 1978
SSA has no records of NCE prior to 1978, when SSA switched from quarterly to annual
wage reporting and began processing Forms W2 for both SSA and IRS. Prior to 1978,
IRS passed to SSA quarterly reports of Social Security wages only. Statement recipients age 52 to 65 in 2006 were 24 to 37 years old in 1978 and can have significant
pre-78 NCE about which we know nothing. A person with NCE, but only prior to 1978,
may have vested rights to a pension from non-covered employment, but will not receive
the WEP paragraph intended for persons with non-covered earnings.
Earnings reported as not covered for Social Security are stored as “details” in the
Unposted Detail Segment of the MEF, but are not included in the MEF Summary Segment,
since these earnings are not used for insured status nor PIA computations.
State and Local wages, 1978 -- 1983
From 1978 to 1983, some States continued to report quarterly for covered workers, and also annually (W2s) for all workers, with the W2s coded and stored as UPNCE even for those with
the same wages posted quarterly, as covered state employment. Because of this, some
persons may have erroneous earnings details which would affect WEP and GPO issues.
Medicare Qualified Government Employment (MQGE)
Many people in employment not covered for Social Security, including federal employees,
began paying Medicare taxes in 1983. A Medicare amount on a Statement can be identified as MQGE if there is no Social Security amount for the year. If
the Social Security amount is less than the Social Security maximum, the amount of
Medicare wages in excess of the Social Security amount on a Statement can be recognized as MQGE if the individual had both covered and MQGE income that
year. However, if the Social Security amount is the maximum for the year, the “excess”
Medicare is not likely to be MQGE, but rather, wages above the Social Security maximum,
taxed for Medicare only. Such wages are stored as details with employment type “H”,
while MQGE has a “Q.” This can be verified by reading the MEF details on a DEQY query.
“Unposted” Non-covered Earnings (UPNCE)
Details recorded in the MEF “Unposted” Details Segment with the employment types shown
in the list below are considered NCE for the purpose of the WEP and GPO provisions
of the SSPA. If any such details are found, the Statement will include the WEP paragraph which mentions the maximum monthly benefit reduction
possible due to the WEP.
|Kind of Wages
||Employment Type Code
|State and Local
|State and Local Tips
|Limit of Liability State and Local
|State and Local Agricultural
|State and Local Limit of Liability Agricultural
Most non-covered wages from schools and police and fire departments have employment
type “A”. Many of the types listed above are extremely rare. Some common sources of
un-posted non-covered wages are work-study jobs for college students, and full or
part-time employment for religious or non-profit organizations which have not elected
to participate in Social Security.