AR 12-1(8): Rescinded

Effective Date: August 27, 2012 Publication Date: August 27, 2012 Federal Register Vol. 77, No. 166, page 51842 Correction Notice: September 5, 2012 Federal Register Vol. 77, No. 172, page 54646

Rescinded by Federal Register Notice Federal Register Vol. 87, No. 180, page 57246 effective September 19, 2022

Acquiescence Ruling 12-1(8)

Issue: Whether a National Guard technician who worked in

noncovered employment under the Civil Service Retirement System

(CSRS) is subject to the WEP.

Statutory and Regulatory Citation: Section 215(a)(7)(A)(III) of

the Social Security Act, 42 U.S.C. 415(a)(7)(A); 20 C.F.R. 404.213(e)(9) .

Circuit: Eighth (Arkansas, Iowa, Minnesota,

Missouri, Nebraska, North Dakota, and South Dakota).

Applicability of Ruling: This ruling applies to

determinations or decisions, at all levels of administrative review, i.e.,

initial, reconsideration, administrative law judge (ALJ)

hearing, and Appeals Council.

Description of Case: Mr. Petersen was a technician

with the National Guard from 1972 to 2000. The National Guard Technician

Act of 1968, Pub. L. No. 90-486, codified at 32 U.S.C. 709, made

technicians with the National Guard civil service employees of

the United States Government. Some technicians, like Mr.

Petersen, have “dual status” because they are not only civilian

employees but also military members of the National Guard. Mr.

Petersen received a civilian pension from the CSRS for his work

as a National Guard technician. His work as a technician was

not covered by Social Security, and Social Security taxes were

not withheld from his pay. Thus, his CSRS pension is based

wholly on noncovered civil service work.

s” because they are not only civilian

employees but also military members of the National Guard. Mr.

Petersen received a civilian pension from the CSRS for his work

as a National Guard technician. His work as a technician was

not covered by Social Security, and Social Security taxes were

not withheld from his pay. Thus, his CSRS pension is based

wholly on noncovered civil service work.

Mr. Petersen applied for Social Security retirement

benefits in 2006. Social Security found that he was entitled to

benefits but informed Mr. Petersen that his benefit amount would

be reduced in accordance with the WEP. The agency denied his

request for reconsideration. He requested a hearing by an ALJ,

and the ALJ found that Mr. Petersen's benefits should not be

reduced because of the WEP. The Appeals Council then reviewed

the ALJ's decision on its own motion and subsequently issued a

decision finding that Mr. Petersen's benefits were subject to

reduction under the WEP. The Appeals Council's decision was the

agency's final decision.

Mr. Petersen requested judicial review of the agency's

final decision in accordance with 42 U.S.C. 405(g). On February

23, 2009, the district court issued a decision finding that his

benefits were not subject to the WEP because 42 U.S.C.

415(a)(7)(A)(III) exempts from the WEP those retirement payments

based on service as a member of a uniformed service. The

district court found that Mr. Petersen's National Guard

technician service qualified him for this exception. The

Government appealed the district court's decision to the United

States Court of Appeals for the Eighth Circuit.

Holding:

ct to the WEP because 42 U.S.C.

415(a)(7)(A)(III) exempts from the WEP those retirement payments

based on service as a member of a uniformed service. The

district court found that Mr. Petersen's National Guard

technician service qualified him for this exception. The

Government appealed the district court's decision to the United

States Court of Appeals for the Eighth Circuit.

Holding:

The Court of Appeals noted that “dual status” National Guard

technicians must maintain military membership in the National

Guard and are also required to wear their uniform, even when

performing civilian technician work. The Eighth Circuit held

that, as a result of “these unique National Guard technician

requirements imposed upon him, Petersen performed his work ‘as a

member of’ the Nebraska Air National Guard.” Consequently, the

Eighth Circuit found that Mr. Petersen qualified for the

exception to the WEP for work performed “as a member of the

uniformed services.”

Statement as to How Petersen Differs From the Agency's Policy:

The WEP is a modified formula for calculating the

retirement or disability benefits of a person who receives a

pension from noncovered work (i.e., work that is not defined as

employment for Social Security purposes and where Social

Security taxes were not deducted from the employee's pay). The

WEP applies to persons who attain age 62 or become eligible for

disability benefits after 1985 and who first become eligible for

a monthly payment (such as a civil service pension) after 1985

“which is based in whole or in part upon his or her earnings for

service which did not constitute ‘employment’ as defined in” 42

U.S.C. 410. 42 U.S.C. 415(a)(7)(A)(III). The WEP applies to

persons with noncovered employment in the CSRS which includes

the civilian employment of a “dual status” National Guard

technician

for

a monthly payment (such as a civil service pension) after 1985

“which is based in whole or in part upon his or her earnings for

service which did not constitute ‘employment’ as defined in” 42

U.S.C. 410. 42 U.S.C. 415(a)(7)(A)(III). The WEP applies to

persons with noncovered employment in the CSRS which includes

the civilian employment of a “dual status” National Guard

technician. A formula is used to compute the person's primary

insurance amount (PIA), which then is used to compute the amount

of the person's Social Security benefits. 42 U.S.C.

415(a)(7)(B); 20 C.F.R. 404.213(c) .

The formula results in a lower Social Security benefit.

Congress amended the WEP in 1994 in Pub. L. No. 103-296,

the Social Security Independence and Program Improvements Act of

1994 (the Independence Act). Section 308 of the Independence

Act, codified at 42 U.S.C. 415(a)(7)(A)(III), created a new

exemption from the WEP, which applies to “a payment based wholly

on service as a member of a uniformed service” as defined in 42

U.S.C. 410(m). We interpret the uniformed services exception to

the WEP to mean that only monthly payments based on military

service are exempt from the WEP. Under this interpretation,

monthly payments that are based on noncovered civilian public

employment, including that of National Guard technicians who

work under the CSRS, are not exempt from the WEP. Moreover, the

effect of the uniformed services exception to the WEP and the

regulatory provision found at 20 C.F.R. 404.213(e)(9) is to exempt from the WEP only military retirement pay based on

reserve inactive duty training (IDT). Other kinds of military

duty, such as active duty, already were not subject to the WEP

because they have been covered employment since 1956. The WEP

does not apply to noncovered work before 1957.

services exception to the WEP and the

regulatory provision found at 20 C.F.R. 404.213(e)(9) is to exempt from the WEP only military retirement pay based on

reserve inactive duty training (IDT). Other kinds of military

duty, such as active duty, already were not subject to the WEP

because they have been covered employment since 1956. The WEP

does not apply to noncovered work before 1957.

The legislative history of the uniformed services exception

to the WEP explains that the purpose of the exception was to

exempt military retired pay, based on noncovered IDT military

duty, from application of the WEP. The exception was not

intended to exempt any pension based on civilian work from

application of the WEP. The Court of Appeals declined to

consider the legislative history of the uniformed services

exception because it found there was no ambiguity to the

uniformed services exception.

Explanation of How SSA Will Apply the Petersen Decision Within

the Circuit:

Social Security old-age or disability applicants and

beneficiaries who receive a CSRS pension based on noncovered

work as dual status National Guard technicians, and who are

permanent legal residents of a State within the Eighth Circuit,

should have their Social Security benefits computed using the

normal PIA, rather than the WEP PIA described in 42 U.S.C.

415(a)(7) of the Act. A decisionmaker should not apply this AR

to an applicant or beneficiary who is not a permanent legal

resident of a State within the Eighth Circuit at the time of

making the determination or decision to apply the WEP. Before

we determine that the WEP does not apply, we must have evidence

that an applicant's or beneficiary's CSRS pension is based on

service as a dual status civilian technician with the National

Guard.