What is a Social Security offset?

A Social Security offset refers to a reduction in Social Security benefits that occurs when an individual is eligible for a government pension. This reduction is designed to account for the fact that certain government employees, such as those working in public service roles, might not have paid Social Security taxes on their earnings. As a result, when they retire and apply for Social Security benefits, their monthly benefits can be reduced based on their eligibility for the pension from their government employment. This offset ensures that individuals do not receive double benefits from both Social Security and a government pension related to the same employment periods.

The other options do not accurately define a Social Security offset. While an increase in benefits due to working non-taxed refers to a different scenario and is unrelated to offsets, the option regarding child support payments addresses a different financial aspect and not Social Security benefits. The adjustment for military service contributions similarly does not pertain to the definition of a Social Security offset, as it relates to how military service might affect retirement pensions and benefits rather than a reduction in Social Security benefits.