Signing the Social Security Fairness Act into law had been one of former President Joe Biden’s final acts in office before stepping down. In January of this year, the Social Security Fairness Act had officially come into effect and as a result, both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) were repealed.
By repealing both the WEP and the GPO, a cohort of some 3 million public sector employees would be able to enjoy a bit of extra financial relief as their full benefits would now be restored to them. Here is everything you need to know.
What is the Social Security Fairness Act?
Under the WEP, public sector employees such as teachers, firefighters, police officers, or certain federal employees, had their Social Security benefits reduced due to their employers providing them with a pension not covered by Social Security. The GPO, on the other hand, reduced the benefits for the spouse or surviving spouse of the public sector worker. Both provisions had initially been introduced with the goal of maintaining the financial health of the program.
“Even if you qualify for your own small Social Security benefit, you may also qualify for a larger spousal benefit. Assuming that you are at full retirement age, spousal benefits are equal to 50% of your spouse’s Social Security benefit. Survivor benefits are equal to 100% of the deceased spouse’s Social Security,” Mass Retirees General Counsel Bill Rehrey explained. “Also, keep in mind that you may also be eligible through a divorced spouse, so long as you were married for 10 years or longer.”
In addition to having their full benefits restored, the impacted beneficiaries will also qualify for a lump sum retroactive payment dating back to January 2024 to make up for the reduction in benefits. The SSA began sending out these payments and adjusting the impacted claims in February with the goal of completing this task by early November.
SSFA cases processed ahead of schedule
A July 7th update on the SSA blog revealed that all SSFA cases had successfully been processed five months ahead of schedule. The SSA paid around $14 billion in retroactive payments to some 3.1 million individuals. While having their full benefits restored, as well as receiving a retroactive payment will provide financial relief to the impacted beneficiaries, these increased payments appear to be placing an additional financial burden to the program which had already been struggling to begin with, according to the latest annual report from the Social Security Board of Trustees.
“We continue to hear from members who have not only received large lumpsum payments but are now receiving a monthly benefit that had previously been significantly reduced or eliminated by WEP/GPO. This has truly been a ‘lifechanging’ event for the 3.1 million retirees who had been harmed by WEP/GPO,” stated Mass Retirees CEO Shawn Duhamel. “We have also heard from many members who did not realize that they are now eligible for Social Security benefits. If you think you might be eligible, then it is a good idea to apply.”
According to the SSA’s update, since the SSFA came into effect, the agency “also received over 278,000 new claims from people with pensions from work not covered by Social Security. The agency further notes that it has “processed 92% of these new claims so far. If you filed a new claim after the law took effect, we may still be working to process your application.”
“Another important point is that we are aware that SSA continues to take a narrow view of retroactive benefits, when applied to those retirees previously impacted by the GPO. Unless there is a written record of having previously applied for benefits, SSA is not making the payment retroactive to 1/1/2024 and instead making the benefit retroactive six months from the date of the new application,” added Duhamel. “We disagree with this interpretation, as it is unfair to those retirees who received a verbal denial from SSA. However, absent congressional action or a successful legal appeal, the decisions of SSA are final.”