Q. I am a retired federal government employee since 2013. I paid into Social Security from 1966 through 1983 when the late President Ronald Reagan took all federal employees out of Social Security and placed us into Medicare. How do Medicare benefits help me? My time to apply is three months from April 2018. Will I be penalized due to receiving a very low Social Security check when I will be getting my Medicare card next year?
A. President Reagan didn’t take all federal employees out of Social Security in 1983. Federal employees weren’t covered by Social Security before 1983. Instead they were in the Civil Service Retirement System, which was — and still is — exempt from Social Security coverage. Only those federal employees first hired on or after Dec. 31, 1983, (or who had fewer than five years of CSRS coverage before Jan. 1, 1987) were automatically covered by Social Security under the Federal Employees Retirement System. What did change for all federal employees in 1983 is that they were now covered by Medicare Part A. To pay for that benefit, they had 1.45 percent deducted from their pay.
Any retiree who is receiving an annuity from a retirement system where Social Security deductions weren’t taken from his pay and has fewer than 30 years of substantial earnings under Social Security will have his Social Security benefit reduced because of the Windfall Elimination Provision of law. However, the WEP won’t have any effect on such a retiree’s entitlement to Medicare Part A, which he already paid for through payroll deductions.