At the beginning of the year, the Social Security Fairness Act came into effect after being signed into law by former President Joe Biden. The Social Security Fairness Act actively repealed both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). As a result, around 3.2 million public sector workers now have their full benefits restored to them.
Both the WEP and the GPO were introduced to the Social Security program decades ago with the aim of better maintaining the financial health of the program. Under these two provisions, public sector workers had their benefits reduced if they had received non-covered pensions from their employers. The spouses of these workers also had their benefits reduced.
As of January 2025, however, both of these provisions have been repealed due to the Social Security Fairness Act being signed into law. In addition to having their full benefits restored, the impacted public sector workers will have also qualified for a one time, lump sum retroactive payment dating back to January 2024. Here is everything you need to know.
Why were benefits reduced for some?
Under the Windfall elimination Provision, public sector workers had their benefits reduced if they had received a non-covered pension from their employers. This reduction would come into effect despite the fact that these individuals had been paying into the Social Security payroll tax as a result of income earned from other jobs.
The Government Pension Offset, on the other hand, reduced benefits for spouses or surviving spouses of these public sector employees who had non-covered pensions of their own. Both the WEP and the GPO were introduced to the Social Security program in the hopes of better maintaining the financial health of the program thereby preventing the potential of a shortfall.
What happens now that the Social Security Fairness Act is law?
As one of his final acts in office, former President Joe Biden signed into law the Social Security Fairness Act and with this act, brought to an end the WEP and the GPO. As a result, all impacted public sector workers will now have their full benefits restored. According to the SSA, the impacted cohort amounted to around 3.2 million individuals and included:
- teachers, firefighters, and police officers in many states;
- federal employees covered by the Civil Service Retirement System; and
- people whose work had been covered by a foreign social security system.
The amount by which each respective beneficiary’s check will increase differs from person to person. Some may only see a few hundred dollars more in their checks, while others could see even up to $1,000 more per month in benefits under the Fairness Act. Additionally, the impacted individuals will also receive a once-off retroactive lump sum payment to make up for the reduced benefits. This retroactive payment will only date back to January 2024.
While the SSA aimed to have all Fairness Act cases processed by early November, this goal had been achieved five months ahead of schedule. According to a previous SSA update, the agency began issuing payments and adjusting claims in February and as of July 7th, all Social Security Fairness Act cases have been processed.
Trustees cite Fairness Act as reason for accelerated financing issues
According to the Social Security annual trustees’ report, the OASI trust fund is projected to become insolvent by 2033. This would then trigger an automatic 23% cut to benefits, and as such, the trustees are urging lawmakers to make a sustainable change to the program now.
Amongst its reasoning for the accelerated shortfall, the report cites the Social Security Fairness Act and its subsequent retroactive payments. According to the SSA, $14.8 billion in retroactive payments was paid to the impacted beneficiaries.
The trustees wrote that the impact of the Fairness Act had been the primary contributor to the change in the trust fund depletion dates.
“The Social Security Fairness Act, as enacted on January 5, 2025, repealed the Windfall Elimination and Government Pension Offset provisions of the Social Security Act. The repeal of these provisions increased projected Social Security benefit levels for some workers, relative to projected benefit levels in last year’s report. The impact of this legislation on the OASI Trust Fund was the primary contributor to the change in the combined OASDI fund depletion date this year,” as per the annual report.