Prior to January of this year, close to three million Social Security beneficiaries were recipients of reduced benefits due to having non-covered pensions provided to them by their employers. This cohort of beneficiaries were public sector employees and due to either the Government Pension Offset (GPO) or the Windfall Elimination Provision (WEP), their benefits had been reduced.
Subsequently, earlier this year in the first week of January, President Joe Biden officially signed into law the Social Security Fairness Act which effectively repealed both the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). Since both the WEP and the GPO had been repealed by this new legislation, the 3 million or so beneficiaries who were faced with reduced benefits would now have their full benefits restored to them. In addition to this, the impacted public sector employees also qualified for a lump sum retroactive payment to make up for the reduction in their benefits dating back to January 2024.
On July 7th, the Social Security Administration (SSA) announced that all Social Security Fairness Act cases have officially been processed. Here is everything you need to know.
What is the Social Security Fairness Act?
Due to either the GPO or the WEP, the following public sector workers had their benefits reduced as per the SSA:
- 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 WEP and the GPO were both introduced to the Social Security program so as to better the finances of the program. Under the WEP, workers who received government pensions had their Social Security benefits reduced. This provision also undid an error in the formula used to calculate benefits which caused government workers to be considered as low earners resulting in a much larger benefit than they were entitled to.
The GPO was also introduced to help better the finances of the program and as a result, the spouse or surviving spouse of the worker with a non-covered pension had their benefits reduced. As such, now that the SSFA has been signed into law, these qualifying individuals will also receive a once off retroactive payment to makeup for the shortfall in their benefits. This retroactive payment will only cover the difference in benefit payments dating back to January 2024, however.
SSA makes rapid progress with SSFA cases
When signing the SSFA into law, the Biden Administration estimated that it would take more than a year to adjust all of the impacted claims. The SSA, on the other hand, said that it should have all claims adjusted by early November of this year. In the interim, Frank J. Bisignano had been appointed as the new SSA Commissioner in May, and at this time, he shared that he was aiming to have all SSFA cases cleared by July.
The agency began making payments in February and the bulk of the SSFA cases had been streamlined since it had been adjusted through the use of an automated system. The remaining, more complex cases which had to be adjusted manually by an agent were also processed relatively fast. Subsequently on July 7th, the agency put out an update on its website sharing that all SSFA cases have successfully been processed.
The agency considered this as one of its recent key milestones as it had completed this task five months ahead of schedule. As such, Commissioner Bisignano noted the following in the update: “My top priority is to transform SSA into a model of excellence—an organization that operates at peak efficiency and delivers outstanding service to every American. The American people have waited long enough for better service, and they deserve the absolute best from their government. I am deeply grateful to our dedicated employees who are already making this turnaround a reality.”