A good article article written by Gerelyn Terzo discusses how the LOSAP benefit interacts with Social Security. You can read it by clicking this link: https://247wallst.com/personal-finance/social-security/2026/09/04/he-fought-fires-for-40-years-social-security-counted-0-of-it-but-his-town-built-him-a-separate-retirement-benefit/
The quick synopsis is:
- LOSAPs are excluded from Social Security wages
- A monthly LOSAP payment doesn’t count against the earnings test limit, letting someone collect a LOSAP benefit without it reducing the Social Security benefit.
- The IRS treats LOSAP as gross income, which can result in someone’s total combined income exceeding the threshold where Social Security benefits become taxable.
Enjoy and thank you Gerelyn for the great read!