The Social Security Amendments of 1983 (P.L. 98-21) includes a provision that eliminates
“windfall” Social Security benefits for retired and disabled workers receiving pensions from
employment not covered by Social Security. Under this provision, a modified benefit
formula is used to determine the NH's primary insurance amount (PIA).
Social Security benefits are based on the monthly average of lifetime earnings. In
the basic formula for figuring benefits, the first part of the average earnings is
multiplied by 90 percent; the second part is multiplied by 32 percent; and any part
of the average monthly wage remaining is multiplied by 15 percent. However, under
WEP, the 90 percent factor is replaced by a factor ranging from 50 to 80 percent for
workers who reached age 62 or became disabled between 1986 and 1989. For those who
reach age 62 or become disabled in 1990 or later, the 90 percent factor is replaced
by a factor ranging from 85 to 40 percent depending on the number of years of “substantial” earnings the NH has.