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Teachers Using Loophole
By:
Associated Press
WASHINGTON (AP) -- More than 4,800 public school teachers in Texas and
Georgia used a Social Security loophole to qualify for increased benefits
that during their lifetimes could amount to about $450 million,
congressional investigators said Thursday. Benefits are usually payable to the spouses of retired, disabled or
deceased workers covered by Social Security. A 1977 law reduced those
spousal benefits for state and local government workers who also receive a
pension from work not covered by Social Security. But the law allows workers to avoid that reduction in benefits if they
are covered by both Social Security and their government pension during
their last day on the job, the General Accounting Office said in a report. The investigators said 4,795 teachers in Texas and 24 in Georgia have
used this loophole, transferring briefly to jobs covered by Social Security
before retiring. In Texas, the teachers typically worked a single day in clerical or
maintenance jobs before retiring, paying about $3 in Social Security taxes,
the GAO said. In Georgia, teachers worked a year in another teaching
position in a school district covered by Social Security. Officials in both states told the GAO that use of the exemption would
likely grow as more people become aware of it, the report said. Teaching
associations and Web sites have been spreading information on how to use the
exemption, the GAO said. The investigators said they did not have time to confirm if government
workers outside of Texas and Georgia were using the loophole, but the
exemption could be used in about 2,300 government retirement plans in other
states. ``Equal treatment under Social Security is impeded when over 4,800 people
are changing jobs at the last moment, and even switching from teaching to
janitorial work, in order to take advantage of a loophole,'' said Rep. Clay
Shaw, R-Fla., who requested the report. Shaw said he has proposed
legislation to address the problem. The GAO said Congress should change the rules allowing the last-day
exemption by setting a longer minimum time period to avoid abuses. FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Action on Aging distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
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