Signed into law on the 5th January 2025, the Social Security Fairness Act marks a significant achievement, in the history of Social Security benefit payments. The goal of this law is to address the past inequities and provide financial relief for millions of American citizens.
Understanding the Social Security Fairness Act: The WEP and GPO
The Act effectively repeals two provisions namely the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), in order to modify the Social Security benefits of those who earn a pension from employment that is not covered by Social Security, such as in specific government positions,
The idea of the WEP was to keep these people from getting a “windfall” by getting full Social Security payments in addition to a full pension. However, detractors said that WEP frequently unjustly decreased payments for several public employees, such as police officers and teachers, who had previously contributed to Social Security through other jobs.
In a similar vein, spouses, widows, and widowers who also received a government pension had their Social Security payments impacted by the GPO. Due to the GPO, Social Security spousal or surviving benefits were cut by two-thirds of the government pension amount, sometimes leaving recipients with much less money.
In addition to their pensions, retirees from the public sector and their spouses will now get the entire benefits. Benefits paid after December 2023 are being retrospectively covered by the SSFA. This implies that qualified retirees and their spouses will receive a payment to make up the difference between their 2024 benefits and a monthly rise that will take effect in 2025 and subsequent years.
Who is eligible for retroactive payments and monthly increases?
Are the retroactive payouts and increases for 2025 and beyond available to all retirees in the public sector? No, there are conditions that you must fulfil. Benefit increases under this new law are limited to retirees, their spouses, or surviving spouses who get pension benefits based on labour not covered by Social Security.
Approximately 72% of state and local public employees are employed in Social Security-covered employment, which is exempt from WEP and GPO and requires them to pay Social Security taxes, according to the SSA. The Act will not result in a benefit increase for such people.
What steps should you take?
-Beneficiaries must ensure that they check their online account to see how these changes affect your benefits. The SSA provides online services to help you check your benefits
– Ensure that you contact the SSA if you have any questions or queries. They can guide you through the process and provide information on retroactive payments.
– It is important to be aware and knowledgeable about all the payments that you are entitled to.
– If you indecisive about what to do, consult with a financial advisor to assist you in making informed decisions about your future retirement.
Keep updated
In the meanwhile, retirees should register a “my Social Security account” to get information directly from the SSA regarding when payments will be made and when monthly benefits will be increased for difficult situations.
If you need to change your critical information, you can utilize the account. It is the simplest and fastest method to update your SSA address or direct deposit details. There is no need to visit a local SSA office or wait on hold. To log in or register, go to social security website.
Looking Ahead
It can be noted that the Act marks a significant change in the history of Social Security benefits. It assures citizens that they will indeed receive financial support from addressing past inequities. Beneficiaries must ensure that they take necessary steps to secure their financial benefits.