By Joan Hill
On January 5, 2025, the Social Security Fairness Act was signed into law, marking a major reform for public sector workers, including firefighters, police officers and teachers. This law eliminates two controversial provisions – the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — providing fairer Social Security benefits to millions.
Until now, the WEP has reduced Social Security benefits for those who spent part of their working careers in jobs that did not levy FICA taxes on their earnings. This “non-covered” employment included public-sector workers such as firefighters, police officers and teachers who also held private-sector jobs.
The GPO reduced Social Security benefits for spouses and survivors who also received pensions from federal, state, or local governments. This included widow, divorced widow, spousal, divorced spousal, child-in-care and parental benefits. Specifically, the GPO reduced Social Security benefits by two-thirds of the recipient’s non-covered pension or non-covered pension equivalent.
Who benefits from the Social Security Fairness Act?
Social Security recipients whose benefits were reduced by the WEP or the GPO, and those who would have been impacted in the future, will now receive their full benefits.
If your Social Security benefits were affected by the WEP, the increase you’ll receive depends on the number of years you had substantial income subject to Social Security taxes. If your benefits were impacted by the GPO, your increase will depend on the amount of public pension payments you receive.
The Congressional Budget Office (CBO) estimated that elimination of the WEP would increase monthly payments to affected beneficiaries by an average of $360. The CBO estimated the elimination of the GPO would increase monthly benefits by an average of $700 for recipients receiving benefits based on living spouses, and an average of $1,190 for surviving spouses receiving a widow or widower benefit.
Will benefit increases be retroactive?
Yes. The Social Security Fairness Act is retroactive to January 2024. Increases to payments for those who are eligible will apply to any benefit payments made after December 2023.
What is the implementation timeline of the Social Security Fairness Act?
The Social Security Administration is evaluating how to implement the new law. Several unknowns remain, such as:
- When increased benefits will begin;
- How the retroactive payments will be handled;
- Whether there will be an application process for the increase;
- Whether beneficiaries of WEP- or GPO-impacted Social Security recipients who died post-January 2024 are eligible for retroactive payments.
Stay tuned as information becomes available later this year. Hopefully, this web page will prove to be a good resource.
How can I maximize my benefits after the Social Security Fairness Act?
If you were affected by the Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO), it’s essential to calculate your new, higher benefit. The Social Security Administration (SSA) has occasionally made errors, so double-checking your updated benefit amount is important. Notably, individual Social Security statements never reflected WEP reductions, so you can refer to your statement to estimate your full, unreduced benefit. Visit www.ssa.gov/myaccount to sign in or create your account.
If you’ve already filed for retirement benefits — either your own or as a spouse or surviving spouse — and expect an increase due to the Social Security Fairness Act, no immediate action is required. However, ensure your mailing address and direct deposit information are accurate in the SSA’s system. Most updates can be made online via your personal “My Social Security” account.
For those who did not apply for spousal, divorced spousal, widow(er), or divorced widow(er) benefits because the GPO would have reduced your benefit to zero, you will need to file a claim to begin receiving these benefits. The SSA will not initiate payments for benefits not formally applied for.
Social Security allows individuals and spouses beyond full retirement age to claim retroactive benefits for up to six months (or 12 months in some disability cases). If you are filing for spousal or survivor benefits for the first time, you may be eligible for retroactive payments covering the six months prior to your filing date.
Additionally, consider whether a post-WEP or post-GPO spousal benefit might be larger than your current retirement benefit. In some cases, it may be advantageous to switch.
Finally, assess how additional income might impact your overall financial plan. Significant increases in benefits may result in higher tax liabilities or Medicare premium payments, so plan accordingly.
References
Henry-Moreland B. Social Security Fairness Act: Planning Considerations For the Repeal of the Windfall Elimination Provision (WEP) And Government Pension Offset (GPO)
Kotlikoff L. The Social Security Fairness Act May Mean Big Bucks If You Work(ed) in Non-Covered Employment and Even If You Don’t
About the author
Joan Hill is a freelance editor and writer with a background in financial planning. Connect with her on LinkedIn. Joan’s husband is a retired law enforcement officer and founder of LE Drones.
