WEP Repealed: Japanese Pensions No Longer Cut US Benefits

Updated October 2026: The Social Security Fairness Act, signed January 5, 2025, ended the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Social Security benefits payable for January 2024 and later are no longer reduced by WEP because you receive a Japanese pension. This article has been rewritten to reflect the repeal. (Source: SSA, Social Security Fairness Act)

Introduction: WEP Has Been Repealed

For people who have worked in both the United States and Japan, retirement income is a major concern. Until recently, if you received both U.S. Social Security and a Japanese public pension (such as Kosei Nenkin or Kyosai Nenkin), the Windfall Elimination Provision (WEP) could reduce your U.S. benefit.

That changed when the Social Security Fairness Act was signed into law on January 5, 2025. The Act ended WEP and the Government Pension Offset (GPO). December 2023 was the last month they applied, so benefits payable for January 2024 and later are not reduced by either rule. The Social Security Administration (SSA) lists people whose work had been covered by a foreign social security system among those whose benefits increase under the law.

This article explains what WEP was, what changed with the repeal, and what Japanese pension recipients should check now.

Fundamentals: Social Security and WEP

What Is the U.S. Social Security System?

Social Security is the U.S. public social insurance program that provides retirement, disability, and survivor benefits. When you work in the U.S. and pay Social Security taxes (FICA), you earn “credits.” You generally need 40 credits (about 10 years of work) to qualify for retirement benefits.

Your retirement benefit is based on your Primary Insurance Amount (PIA), which is calculated from your Average Indexed Monthly Earnings (AIME) over your 35 highest-earning years. The PIA formula is progressive: it replaces a higher share of earnings for lower earners.

What Was the Windfall Elimination Provision (WEP)?

WEP reduced the PIA of people who also received a pension based on work not covered by U.S. Social Security (a “non-covered pension”). Japanese Kosei Nenkin and Kyosai Nenkin are based on work not covered by U.S. Social Security, so many Japanese pension recipients were affected.

The idea behind WEP was that a person with a short U.S. work history looks like a low earner to the U.S. system and receives a higher replacement rate. The Social Security Fairness Act removed this adjustment for benefits payable for January 2024 and later.

Detailed Analysis: How WEP Worked and What Changed

How WEP Was Calculated (for Reference)

The standard PIA formula applies three factors to three segments of AIME:

90% of AIME up to the first bend point
32% of AIME between the first and second bend points
15% of AIME above the second bend point

Under WEP, the 90% factor was reduced based on your years of substantial earnings in the U.S. (“years of coverage”). With 20 or fewer years it was 40%. It rose by 5 points per year, from 45% at 21 years to 85% at 29 years, and with 30 or more years it stayed at 90% (no WEP effect).

What Changed

No WEP reduction from January 2024: Receiving a Japanese pension no longer reduces your U.S. Social Security benefit. Your PIA is calculated with the standard 90%, 32%, and 15% factors.
Retroactive payments: If your benefits for January 2024 or later were reduced by WEP or GPO, you are owed the difference for those months. SSA reports that as of July 7, 2025, it had completed more than 3.1 million payments totaling $17 billion.
GPO also ended: The Government Pension Offset, which reduced spouse’s and survivor’s benefits, was repealed by the same law.

What Did Not Change: The U.S.-Japan Social Security Agreement

The U.S.-Japan Social Security Agreement was never a way to avoid WEP. Its two main roles continue after the repeal:

Preventing dual coverage: It keeps you from paying into both countries’ social security systems for the same work.
Totalization: If you do not have enough U.S. credits to qualify for regular benefits, you may qualify for a partial U.S. benefit based on both U.S. and Japanese credits. You need at least six U.S. credits (generally one and one-half years of work) to have your Japanese credits counted.

Case Studies: Before and After the Repeal

The examples below compare benefits before and after the repeal. The bend point is a simplified assumption, so the amounts are illustrative only.

Assumptions

Benefits start at Full Retirement Age (FRA)
AIME: $3,000 per month
First bend point: $1,000 (assumed)
Receiving a Japanese Kosei Nenkin pension

Standard PIA (current rule):
($1,000 × 90%) + (($3,000 – $1,000) × 32%) = $900 + $640 = $1,540

Case 1: 15 Years of Substantial U.S. Earnings

Before the repeal (WEP factor 40%): ($1,000 × 40%) + $640 = $1,040
January 2024 and later: $1,540
Difference: $500 more per month.

Case 2: 25 Years of Substantial U.S. Earnings

Before the repeal (WEP factor 65%): ($1,000 × 65%) + $640 = $1,290
January 2024 and later: $1,540
Difference: $250 more per month.

Case 3: 30 or More Years of Substantial U.S. Earnings

WEP never applied, so the benefit stays at $1,540 before and after the repeal.

The old WEP rules also had other adjustments, such as a limit tied to the amount of the non-covered pension. Check your actual amounts in SSA notices and your Social Security Statement.

What to Do Now

If you already receive benefits: SSA says no other action is needed if it has your current mailing address and direct deposit information. Update them if they have changed.
If you never applied because of WEP: You may need to file an application. The date you apply can affect when your benefits begin, and retroactivity for some retirement and survivor’s benefits is generally limited to six months before the month you apply, so apply promptly.
If you are planning for retirement: Rework any plan that assumed a WEP reduction.

Common Pitfalls

Assuming WEP Still Applies

Older articles may still say that a Japanese pension will reduce your U.S. benefit. WEP does not apply to benefits payable for January 2024 and later.

Never Filing an Application

If you skipped applying because of WEP, your benefits will not start until you apply, and retroactive months are limited.

Thinking the Social Security Agreement No Longer Matters

The agreement prevents dual coverage and lets you combine credits. It remains important regardless of the WEP repeal.

Not Checking Your Record

Review your earnings history and credits regularly on your Social Security Statement.

Frequently Asked Questions (FAQ)

Q1: Does WEP still apply?: A1: No. Under the Social Security Fairness Act, December 2023 was the last month WEP applied. Benefits payable for January 2024 and later are not reduced by WEP, even if you receive a Japanese pension.
Q2: Will I get back the amounts that were reduced?: A2: Months from January 2024 onward that were reduced by WEP or GPO are paid retroactively. SSA reports that it completed these payments by July 7, 2025. If you think you are owed a payment and have not received it, contact SSA.
Q3: I never applied because of WEP. Can I apply now?: A3: Yes. The date you apply can affect when your benefits begin, and some retirement and survivor’s benefits can be paid retroactively for only six months before the month you apply. Apply promptly if you may be eligible.
Q4: What about spouse’s and survivor’s benefits?: A4: The Government Pension Offset, which reduced spouse’s and survivor’s benefits, was also repealed. Benefits payable for January 2024 and later are not reduced by GPO.
Q5: Does the U.S.-Japan Social Security Agreement still matter?: A5: Yes. If you do not have enough U.S. credits, you may qualify for a partial U.S. benefit by combining U.S. and Japanese credits (at least six U.S. credits are required).

Conclusion: What to Check After the WEP Repeal

The Social Security Fairness Act ended WEP and GPO. U.S. Social Security benefits payable for January 2024 and later are not reduced because you receive a Japanese pension. If you already receive benefits, confirm that any retroactive payment arrived. If you held off applying because of WEP, consider applying soon.

Benefit amounts and the best time to apply depend on your situation. Check with SSA, or consult a professional familiar with U.S. and Japanese pensions and taxation.

#WEP Repeal #Social Security Fairness Act #Social Security #Japanese Pension #日米社会保障協定 #年金

TAX PREPARER SWITCH CAMPAIGN

Switch your tax preparer and get 50% off your U.S. tax return this year.

Show us last year's invoice and we take 50% off the fee (up to $500, first year only). Prepared and signed by an IRS Enrolled Agent, in English or Japanese.

See the switch campaign →
First time using a tax preparer? See our individual tax return service →