In January, the Social Security Fairness Act officially came into effect and as a result, several million beneficiaries who were previously penalized, had their full benefits restored to them. By signing the Social Security Fairness Act into law, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) were effectively repealed. The impacted beneficiaries previously had their benefits reduced due to the provisions of either the GEP or the WEP since they had received a pension from their employer that was considered non-covered by Social Security.
Subsequently in February, the Social Security Administration (SSA) began working on processing and adjusting all the impacted beneficiaries’ claims, and as of the first week of July, the SSA confirmed that all Social Security Fairness Act cases have been processed. Here is everything you need to know.
Social Security Fairness Act cases processed ahead of schedule
Under the provisions of either the WEP or the GPO, public sector workers would be subject to a reduction in their benefits. Both of these provisions were initially introduced with the aim bettering the financial health of the program. As such, public sector workers who had received pensions from their government employers that were not covered by Social Security were faced with reduced benefits.
Now that the Social Security Fairness Act is law, approximately 3 million public sector workers — including teachers, firefighters, police officers, certain federal employees, and spouses or survivors — will now have their full benefits restored to them. In addition to this, the impacted beneficiaries will also qualify for a once off lump sum retroactive payment to make up for the reduced benefits. The retroactive payment will date back to January 2024, and the SSA began rolling out these payments in February.
When former President Joe Biden signed the Social Security Fairness Act law, the Biden Administration estimated that the processing of all of these cases and retroactive payments would take upwards of a year to be completed. Earlier in the year, however, the SSA projected that it would complete processing all Social Security Fairness Act cases by early November of this year. In the interim, Frank Bisignano had been appointed as SSA Commissioner in May, and at the time, Bisignano stated that he aimed to have all cases processed by July.
The SSA Commissioner’s goal was subsequently achieved and according to a July 7th update on the SSA blog, the agency had “completed sending over 3.1 million payments, totaling $17 billion, to beneficiaries eligible under the Social Security Fairness Act (SSFA), 5 months ahead of schedule.”
In a press release SSA Commissioner Frank Bisignano stated the following: “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
SSFA worsening the program’s long-term funding?
The latest annual report from the Social Security Board of Trustees has revealed that the projected shortfall of the combined trust funds has moved up a year to 2034. If the combined OASDI trust fund becomes insolvent at the projected date, an automatic 19% benefit cut will be triggered. According to the trustees, the program’s finances have worsened due to three factors, with the Social Security Fairness Act cited as the first reason.
“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,” the trustees wrote.