Social Security Fairness Act- Are You Eligible for Back Payments?

The Social Security Fairness Act introduces significant changes to Social Security payments for current and former public employees who had their benefits reduced due to “noncovered pensions.”

This legislation impacts millions of individuals who served in public roles, such as teachers, firefighters, and police officers, ensuring they receive larger payouts. Additionally, eligible recipients may receive back payments for all of 2024. The act eliminates two key provisions that previously reduced benefits for qualifying individuals.

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Combined with the recent Cost of Living Adjustment (COLA) for 2025, which adds a 2.5% increase to Social Security, Disability, and Supplemental Security Income (SSI) payments, this legislation is poised to improve financial stability for many Americans.

Below, we break down the provisions of the Social Security Fairness Act, its implications, and who stands to benefit.

What Is the Social Security Fairness Act?

The Social Security Fairness Act was passed by the House in November and signed into law by President Joe Biden on January 5. This legislation repeals outdated rules that limited Social Security benefits for public employees, resulting in higher payouts for affected groups.

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Specifically, the act eliminates the following two provisions:

Windfall Elimination Provision (WEP)

• Enacted in 1983, the WEP is a formula that adjusts Social Security benefits for individuals who receive “noncovered pensions” (pensions from employers who didn’t withhold Social Security taxes) and who also qualify for Social Security based on other earnings.
• The Congressional Budget Office (CBO) estimates the elimination of the WEP will increase benefits by an average of $360 for 2.1 million beneficiaries. By December 2033, this figure is projected to rise to $460 for 1.8 million recipients.

Government Pension Offset (GPO)

• Established in 1977 and adjusted in 1983, the GPO reduced Social Security benefits for spouses, widows, and widowers who also received government pensions.
• According to the CBO, eliminating the GPO will raise monthly benefits by approximately $700 for spouses and $1,190 for surviving spouses by December 2025. These amounts will increase to $860 and $1,520, respectively, by December 2033.

Impact of the Social Security Fairness Act

Although only about 4% of Social Security beneficiaries are directly affected by the WEP and GPO, the financial implications for those impacted households are significant.

The act ensures that affected individuals will see increased benefits beginning January 2024, with retroactive payments issued for qualifying beneficiaries.

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However, higher Social Security payments could result in reduced Supplemental Nutrition Assistance Program (SNAP) benefits for individuals who participate in both programs, as projected by the CBO.

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What Should Eligible Individuals Do?

Currently, the Social Security Administration (SSA) is working on implementing the changes introduced by the Social Security Fairness Act. More updates will be available on the SSA website as the rollout progresses.

If your Social Security benefits were previously reduced due to WEP or GPO, it’s recommended that you ensure your personal details are up to date in your Social Security account. You can:

• Update your mailing address and direct deposit information online through your my Social Security account.
• Call the SSA at 1-800-772-1213 for assistance.
• Visit your local SSA office for in-person updates.

The Social Security Fairness Act represents a monumental step toward equitable benefits for public employees previously disadvantaged by the WEP and GPO provisions. With higher payouts and retroactive payments for 2024, this legislation promises financial relief for millions.

However, it’s essential for affected individuals to stay informed about updates from the SSA and take necessary steps to ensure their account information is current.

As the changes roll out, this act marks a new era of fairness and financial security for those who have dedicated their lives to public service.

FAQs

What is the primary goal of the Social Security Fairness Act?

The act aims to eliminate the Windfall Elimination Provision and Government Pension Offset, which previously reduced Social Security payments for public employees with noncovered pensions.

How much can beneficiaries expect to gain from the repeal of WEP and GPO?

On average, the elimination of WEP will result in a $360 monthly increase in 2025, while GPO beneficiaries could see increases of up to $1,190 per month for surviving spouses.

Will back payments be issued for 2024?

Yes, retroactive payments for qualifying beneficiaries will cover the entirety of 2024.