From old legislation being repealed to the appointment of a new commissioner at the Social Security Administration (SSA), 2025 has been a year of sweeping changes with regards to the Social Security program. There are currently over 70 million beneficiaries in the Social Security program, many of whom rely primarily on their benefit income to get by.
It is quite important for individuals living on a fixed income to ensure they remain up to date with all of the latest changes and updates with the program. As such, here are four of the more notable changes that have taken place regarding the Social Security program over the course of the year thus far.
The One Big Beautiful Bill Act
On July 4th, the One Big Beautiful Bill Act (OBBBA) had officially been signed into law at a ceremony at the White House. Included in the new legislation that spans over a thousand pages is a temporary senior tax relief, which sparked much controversy from an array of individuals including former SSA officials. Currently, up to 85% of Social Security income is subject to taxation if the recipient’s combined income exceeds a certain threshold.
Now, under the OBBBA and its tax relief, 90% of Social Security beneficiaries will now be exempt from paying taxes on their benefits. The White House and the SSA initially framed this this as the elimination of taxes on benefits for most, resulting in major confusion from beneficiaries and criticism from lawmakers and former SSA officials.
While taxes on benefits have not been eliminated, the OBBBA provides seniors aged 65 and older with an additional tax deduction of $6,000 for single filers and $12,000 for joint filers. For the deduction to apply, the single filer cannot have a MAGI that exceeds $75,000 and joint filers cannot have a MAGI exceeding $150,000. This tax break is temporary will only be in effect up until 2028.
Social Security Fairness Act
In January, the Social Security Fairness Act had officially come into effect and as result, a cohort of some 3 million public sector workers had their full benefits restored to them. This cohort previously had their benefits reduced due to either the Windfall Elimination Provision or the Government Pension Offset. Their benefits or their spouse’s benefits had been reduced under these two provisions due to the beneficiary having a non-covered pension.
Additionally, the impacted beneficiaries also qualified for a lump sum retroactive payment to make up for the reduced benefits dating back to January 2024. The SSA began adjusting claims and sending out retroactive payments in February, and as of July, all SSFA cases had successfully been processed five months ahead of schedule.
Cost of Living Adjustment
Each year, all benefit amounts are increased in proportion to year over year inflation and this is known as the Cost of Living Adjustment, or COLA. The annual COLA is implemented in order for the average benefit check to retain its buying power. For 2025, the COLA came in at 2.5% and as a result, all benefits were increased by that much in January.
The COLA is calculated using third quarter inflation data measured year over year. Throughout the year, however, experts often share projections for the next COLA so that seniors can have an idea of what to expect. For the 2026 COLA, estimates are currently sitting at 2.7%. however, the official COLA announcement will be made on October 15th once the third quarter CPI-W for 2025 becomes available.
Wage cap increase
In order to claim benefits when you retire, you will pay a portion of your earnings into the dedicated Social Security payroll tax throughout your working career. Since the SSA has a maximum payable benefit amount, the agency also has a maximum taxable earnings figure in place. This means that once your income exceeds the stipulated threshold, the excess will not be considered when you pay into the Social Security payroll tax.
In 2025, the wage cap is $176,100, however, according to estimates from the Social Security Board of Trustees, the wage cap will increase to $183,600 in 2026.