TN 6 (08-07)
GN 04030.100 Reopening When Windfall Elimination Provision (WEP) is Involved
The rules of administrative finality apply to initial determinations involving WEP the same as to any other initial determination. (See GN 03101.040 and GN 03101.070 for a definition of initial determination.)
Since WEP is not a deduction event and the decision to impose WEP is not a computation factor, it is NOT affected by subsequent changes in the claimant’s pension amount (see RS 00605.360 and RS 00605.405).
B. Situations involving reopening and Windfall Elimination Provision (WEP)
The following is intended to clarify how to apply the rules of administrative finality to WEP cases. For additional information on WEP Post-Entitlement Alerts, see RS 00605.374.
1. Initial adjudicator does not address non-covered pension (WEP)
When we initially entitled someone to benefits, there was information in the file that the claimant was entitled to a pension not covered by Social Security and the claimant’s PIA should have been calculated using the Windfall Elimination Provision (WEP). However, the adjudicator did not address the non-covered pension in any way and no paragraph was included in the award notice.
SSA's notice of entitlement is a notice of an initial determination on all issues which were before the adjudicator. Therefore, an initial determination has been made on the WEP; i.e., the adjudicator has “determined,” albeit erroneously, that WEP is not an issue or does not apply in this case.
If more than 4 years after the date of the notice of the initial determination we discover the error, we cannot correct the error since the end result of revising the record would be unfavorable to the claimant (GN 04010.020).
If we discover the error within 4 years of the notice of the initial determination, we can reopen the earlier initial determination based on having an error on the face of the evidence. We can recalculate the claimant’s PIA using the WEP formula. The change is effective with the first month the claimant is entitled to both a non-covered pension and Social Security benefits. The WEP PIA should be calculated using the amount effective at the time the claimant first became entitled to both a non-covered pension and Social Security.
2. Claimant is receiving a non-covered pension but answered “NO” to the non-covered pension question
At the time of the interview, the claimant is receiving a non-covered pension and when asked if he is currently entitled to a pension from work not covered under SSA, he answers “NO” to this pension question.
In this situation, the claim should be developed for fraud or similar fault (GN 04020.010).
If fraud or similar fault is established, reopen and revise the initial determination back to the date when the claimant became entitled to both a non-covered pension and SSA benefits.
If fraud or similar fault cannot be established, determine if the claim can be reopened based on the good cause criteria in GN 04010.001. If good cause is established and all the reopening requirements are met, reopen and revise the determination back to the date the claimant became entitled to both a non-covered pension and SSA benefits.
3. Adjudicator did not address WEP issue - subsequent auxiliary files
Same situation as subsection 1, above where claimant who alleged receipt of a non-covered pension was entitled to benefits but the adjudicator did not address receipt of a non-covered pension when entitling the claimant.
More than 4 years after the date of the notice of the initial determination, a subsequent auxiliary files for benefits. At that time, we discover our failure to include the non-covered pension amount when calculating the PIA.
REMINDER : If the error was discovered within 4 years of the date of the initial award notice, we can correct the PIA on record.
4. Unverified pension amount is incorrect
On his application, the NH tells us he is receiving a non-covered pension of $400 per month effective May 2001. We fail to confirm or are not required to verify the amount or the date of entitlement and merely compute the WEP PIA using his allegation.
NOTE: It is not required to verify the non-covered pension amount unless the WEP Guarantee is an issue (see RS 00605.366C – Verification of Pension Amount and Eligibility and RS 00605.370 – WEP Guarantee).
Five years later we find out it should have been $500 per month and it was effective in January 2001. We are bound by the initial determination which was made using $400 per month in May 2001, regardless of whether the WEP guarantee applies or what paragraph was included in the notice.
If we would have discovered the error within 4 years from the date of the initial determination and established an affirmative action in writing, we could have reopened and revised the determination based on having new and material evidence.
If the non-covered pension amount is lower or the guarantee applies and the end result of reopening the claim would be favorable, the claim can be reopened and revised if good cause can be established (see GN 04010.001 and GN 04030.100B.7.).
NOTE: If fraud or similar fault is established, the claim could be reopened based on the unrestricted reopening policy in GN 04020.010.
5. We take no action on report of non-covered pension
An NH states on his application that he is eligible and has filed for his non-covered pension but has not yet received any payments. We verify his allegation and do not include his non-covered pension amount when calculating his PIA.
When he is awarded his pension, he sends us a copy of his award letter. We file it in the folder and do not recalculate his PIA.
Five years later, we discover the award letter and realize our mistake. Since we never made an initial determination and did not send a notice of an initial determination on the receipt of his non-covered pension award, we can recalculate his PIA to include WEP effective the first date it should have been imposed. (See GN 04001.030 regarding the failure to make a determination.)
6. Non-covered pension awarded after initial entitlement
At some date after the initial determination of entitlement to Social Security benefits, a claimant becomes entitled to a non-covered pension.
We can make a new initial determination and include the pension amount when recalculating her WEP PIA the first month she is entitled to both Social Security and a non-covered pension.
Even if we are not advised of the award until many years after the pension award, we can still make an initial determination on this issue, since one was not previously made, and recalculate her PIA to include WEP the first possible month she is concurrently entitled to Social Security and a non-covered pension.
In addition, if the claimant tells us when the pension award is made but we do not make an initial determination based on the report, (and thus, do not send a notice of an initial determination), we can recalculate her PIA whenever we discover the error (retroactive to the first possible month of offset.) (See GN 04001.030 regarding the failure to make a determination.)
7. WEP initially used in calculating PIA in error and over 4 years have passed since the initial determination was made
SSA initially applied WEP in an initial determination and discovers after 4 years that the WEP PIA should not have been used. If there was an error on the face of the evidence, the determination can be reopened under the unrestricted reopening rules since correction would be advantageous (GN 04020.080). However, if there is new and material evidence, we cannot reopen under the unrestricted reopening rules of administrative finality but we can accept a reconsideration and re-examine the claim to determine if good cause for late filing exists. (See GN 03101.020A.4.)
If WEP was applied in error or if the NH met one of the exceptions to WEP (see RS 00605.362) and the amount of his PIA is incorrect, SSA can use good cause for late filing and correct the error by taking a reconsideration in these specific types of claims (see GN 03101.020 and GN 04040.001).
The basis for taking an appeal in this situation is that our notices do not give the person the information that was used to calculate the WEP PIA nor do they provide critical dates or explanations about possible exceptions to WEP.
Corrections can be made back to the date of initial determination provided the outcome is favorable to the NH.
If SSA discovers new and material evidence within 4 years of the notice of initial determination that the WEP should not have been used in calculating the NH’s PIA or if SSA discovers within 4 years the NH meets one of the exceptions to WEP, we can reopen and revise per GN 04010.030.
NOTE: Reconsiderations should be processed following the instructions regarding component responsibility contained in GN 03102.175.
For information on what constitutes a request for reconsideration, see GN 03102.100C.2.
Errors Discovered While Developing Cases Involving WEP Errors and Over Four Years Have Passed Since The Initial Determination Was Made
During development requests, SSA may discover new and material evidence that may affect whether we used the correct information in calculating the WEP PIA.
If errors are discovered within 4 years from the date of the initial determination that SSA should not have calculated a WEP PIA and an affirmative action in writing was established, SSA should reopen and revise the determination based on new and material evidence (see GN 04010.030).
If errors are discovered after 4 years from the date of the initial determination that we should NOT have calculated a WEP PIA, SSA should send a reconsideration to the claimant and use good cause for late filing of an appeal. Good cause can be used in these cases. (See GN 04030.100B.7.) Explanations should be provided to the NH about the possible error in the PIA. SSA should explain that in order to correct the error, the NH must file a reconsideration.
These reconsiderations should be processed using the instructions in GN 03102.175 regarding component responsibility.
8. AERO alerts and recomputations/recalculations involving WEP received after 4 years from the date of the initial determination
When an Automatic Earnings Reappraisal Operation (AERO) alert is received after 4 years from the date of the initial determination, do not revisit or re-examine the initial determination, only re-examine the factors used in computing the initial PIA (bend points, ELY, base years, reduction factors, etc.).
A decision to impose WEP, GPO or PDB is not a computation factor (see RS 00605.405). The original PIA is protected by Administrative Finality and subject to the normal rules for reopening.
An AERO recalculation is a revised initial determination. The time period for reopening a recalculation is based on the date of the initial determination not the date of the “later” revised initial determination (see RS 00605.401B.2.).
A recomputation is a new initial determination, based on new computation years. The time period for reopening a recomputation is based on the date of the new initial determination which included the new computation years (see RS 00605.401B.1.).
NOTE: Before any actions are taken, carefully review the case in question to see if an error is present. Before any adjustments/corrections are made, an affirmative action in writing needs to be established since a computer-generated alert is not considered an affirmative action in writing for Title II. (See GN 04001.050B.)
9. Examples involving reopening, Windfall Elimination Provision (WEP) and AERO alerts
a. AERO alert received within 4 years of the initial determination involving WEP
Mr. Booth became entitled in 05/1994. His PIA was initially computed without considering the WEP even though we had information regarding his non-covered pension in 05/1994. His PIA of $750 was erroneously established because it ignored the fact that WEP applied. In 05/1997, an AERO alert is received.
Upon reviewing the claim, the CA notices the error and prepares a written statement explaining the error. This statement serves as the affirmative action in writing and is required before any determination can be reopened. This statement should be recorded electronically on the MCS Report of Contact (RPOC) screen or using the Paperless Processing Center (PPC) Form SSA-553.
The CA then corrects the error and recalculates the PIA considering the WEP. The new WEP PIA is $575 and is effective the date Mr. Booth was initially entitled in 05/1994.
b. AERO alert received after 4 years of the initial determination involving WEP
Mr. Sutherland became entitled to benefits in 10/1996. His PIA was initially computed without considering the WEP. His PIA of $525 was erroneously established because it was not calculated considering the WEP even though we had information relating to his non-covered pension in 10/1996.
In 11/2000, his PIA is $591 as a result of yearly cost of living increases.
On 11/15/2000, an AERO alert is received. Upon reviewing the claim, the CA identifies the error and prepares a written statement explaining the error. However, since no action was taken on the erroneous PIA within four years (and none of the factors that would permit unrestricted reopening apply), the PIA determination is final and cannot be reopened.
Since we can not consider WEP, we must compute the AERO PIA as if the WEP did not apply.
The recomputed non-WEP PIA of $620 will be effective 01/00, based on the 1999 earnings.
Record a special message to the MBR explaining the PIA is protected by administrative finality.
c. AERO alert received involving WEP after 4 years of the initial determination and the revised initial determination is less than 4 years old
Mrs. Brooks received her initial award notice on 02/02/2000 stating she became entitled to benefits effective 02/2000. Her PIA was initially computed without considering the WEP even though her non-covered pension information was in file in 02/2000. Her PIA of $600 was erroneously established because it did not consider WEP.
In 07/2001, an AJS run granted Mrs. Brooks 7 DRCs. The date of the revised initial determination is 07/11/2001.
In 10/2004, her MBA is $726 as a result of yearly cost-of-living increases and the 7 DRCs.
On 10/29/04, an AERO alert was received. Upon reviewing the claim, the CA notices that her PIA should have considered WEP.
Since the error was not discovered within 4 years of the date of the initial award notice, the erroneous PIA remains the same. The PIA cannot be corrected because the 4-year-period for correcting a revised initial determination is counted from the date of the initial determination, 02/02/2000.
In 12/2004, a COLA increase of 2.7% is allocated and established on the erroneous PIA. The COLA increased the MBA to $745.60. COLA increases are established on this claim because the error was not discovered within 4 years.
d. AERO alert received on record and WEP cannot be imposed under administrative finality
Mr. Waters became entitled to benefits in 06/1996. At the time his PIA was established without considering the WEP even though we had information regarding his non-covered pension in file in 06/1996. The error was discovered in 02/2002. His 2002 PIA of $888 cannot be corrected because the error was discovered after 4 years from the date of his initial award notice.
In 10/2002, an AERO alert is received that includes additional earnings from 2000 that will increase his PIA to $902.
Since the initial determination was made in 06/1996 that WEP did not apply and the error was not discovered within 4 years from the date of the initial award notice, the AERO alert can be processed and Mr. Water’s PIA should be recomputed to $902.
A WEP PIA should not be imposed in this case because the rules regarding administrative finality do not permit this case to be reopened and revised.