As a result of the passage of the Social Security Fairness Act of 2023 (SSFA) (signed into law on January 5, 2025), it is now possible for a retiree in the Civil Service Retirement System (CSRS) to receive full spousal benefits based on a current spouse’s or a former spouse’s Social Security work record.
One of the provisions of the SSFA is the repeal of the Government Pension Offset (GPO). The GPO was a statutory provision in the law that reduced or more likely eliminated spousal/ex-spousal and widow/widower benefits paid by the Social Security Administration to any retiree who was covered by a government (federal, state or local) pension and who did not pay Social Security (FICA) taxes. This includes federal employees who retired under the Civil Service Retirement System.
This column discusses what current CSRS retirees eligible for Social Security spousal benefits should do in order to receive spousal or ex-spousal Social Security benefits.
How CSRS annuitants were affected by the GPO
Prior to the passage of the SSFA, married or formerly married CSRS annuitants were affected by the GPO. A CSRS retiree receiving a CSRS annuity (federal government pension in which the CSRS retiree was not covered by Social Security while employed in federal service), had any amount of their spouse’s/ex-spouse’s or widower’s Social Security monthly benefit reduced. In particular, any Social Security spousal/ex-spousal benefit or widow’s/widower benefit would be reduced by two-thirds of the CSRS retiree’s CSRS annuity. The following example illustrates the GPO on Social Security spousal benefits illustrates:
Example 1. Alexander, age 74, is a CSRS retiree. Alexander’s monthly CSRS annuity during 2024 was $6,000. Alexander is married to Cheryl, age 72, and who worked in private industry her entire life. During 2024, Cheryl received a monthly Social Security retirement check of $4,000 per month. Since Alexander and Cheryl are married and Alexander is not eligible for his own Social Security monthly benefit (he did not earn the minimum 40 credits of Social Security) he was eligible to receive a spousal Social Security benefit equal to half of Cheryl’s monthly benefit, or ½ of $4,000, or $2,000. However, due to the GPO, 2/3 of $6,000 equals $4,000 and when subtracted from $2,000, results in no monthly spousal Social Security benefit for Alexander.
Note that it makes no difference whether a married CSRS retiree is eligible for his or her own Social Security benefit when it comes to being eligible for a spousal or ex-spousal benefit. The only rule for a CSRS retiree to receive a spousal Social Security benefit is that the CSRS retiree must have been married to his or her spouse for at least one continuous year. To be eligible for an ex-spousal Social Security benefit, a CSRS retiree must be at least age 62 and have been married to the former spouse for at least 10 years, been divorced for at least two years from the former spouse and has not remarried.
The following example illustrates a widow/widower Social Security benefit:
Example 2. Doris, age 71, is a CSRS retiree whose monthly CSRS annuity during 2024 was $4,500. Doris was married to Harold who worked in private industry his entire life and died in January 2024 at the age of 75. At the time of his death Harold was receiving a monthly Social Security check of $4,800. When Doris went to apply for Harold’s Social Security monthly benefit (widow benefit), she was told by the Social Security Administration (SSA) that she, as a CSRS retiree, is subject to the GPO. Her widow benefit was therefore reduced as follows due to the GPO:
$4,800 (Harold’s monthly Social Security benefit) minus 2/3 of $4,500 (Doris monthly CSRS annuity)
or $4,800 minus $3,000 equals $1,800.
With the passage of the SSFA and the repeal of the GPO, Doris is eligible for the full widow benefit of $4,800.
What CSRS-covered retirees need to do in order to receive spousal/ex-spousal or widow/widower benefit
A CSRS-covered retiree may have never applied for a Social Security spousal benefit on a current or an ex-spouse’s Social Security work record. If that is the case, then the CSRS-covered retiree should do so as soon as possible. If a CSRS-covered employee’s spouse or former spouse is deceased, then the employee or retiree is eligible for the full amount of the deceased spouse’s Social Security. This is called a widow or widower benefit. To be eligible as a former spouse for a spousal benefit, the CSRS retiree must have been married to the former spouse for at least 10 years, been divorced from that spouse for at least two years, and not remarried before age 60. A surviving spouse can apply for a Social Security widow/widower benefit as early as age 60.
The most convenient way to apply for a Social Security spousal or ex-spousal benefit is online at https://www.ssa.gov/apply. For a widow/widower (survivor) Social Security benefit, an application cannot be made online and must be made by telephone. To apply by telephone or schedule an appointment, an applicant should call 1-800-772-1213, Monday through Friday, 8 am to 7 pm Eastern Time. If a CSRS employee or retiree has not yet applied or is not yet eligible, spousal and former spousal benefits may be payable retroactively for up to six months.
Advanced tax planning and Medicare Part B and Medicare Part D monthly premium considerations
While many CSRS employees and retirees welcome the additional income coming from the SSA as a result of the SSFA passage, there are some advance planning items for them to consider. Additional income may lead to higher income taxes, as well as a larger portion of monthly Social Security benefits being subject to federal (and in some cases, state) income taxes. The “widow/widower tax penalty,” moving from a married filing joint to a single filing income tax bracket in the year following the year of a spouse’s death, could significantly increase a widow’s or widower’s income tax burdens.
Income implications for 2025 may especially affect those CSRS employees or retirees receiving lump-sum refunds of Social Security benefits dating back to January 2024. High income Social Security beneficiaries who are enrolled in Medicare Part B (medical insurance) and Medicare Part D (prescription drug coverage) may also have to be concerned as to how the additional income will affect their future Medicare Parts B and D income-related monthly adjustment amount (IRMAA).
CSRS retirees are encouraged to speak with a qualified tax advisor with respect to how the additional Social Security monthly income will affect their current year and future year taxes. They also may want to discuss with their tax advisor what they can do to minimize the effect of the additional income on their future Medicare Part B and Medicare Part D IRMAA.