How the Social Security Fairness Act Is Increasing Benefits for Millions of Public-Sector Workers

The Social Security Administration (SSA) recently announced that it has started sending retroactive payments to around 3.2 million Americans. These people will receive extra benefits because of a new law called the Social Security Fairness Act.

What is the Social Security Fairness Act?

The Social Security Fairness Act was passed by Congress in December, during the final days of their session. This new law aims to fix what many considered an unfair rule that limited Social Security benefits for some public-sector workers. It specifically changes two rules: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)

The WEP and GPO rules were created to stop people from "double-dipping"—or collecting both Social Security and government pension benefits at the same time, if they worked in both public and private jobs.

• Windfall Elimination Provision (WEP): This rule reduced Social Security benefits for people who worked in both private-sector jobs (where they paid into Social Security) and public-sector jobs (where they paid into a pension but not Social Security). For example, a teacher who worked in a school system for several years and then took a part-time job in the private sector would have their Social Security benefits reduced because of the WEP. The purpose of WEP was to make sure people didn’t get too much in benefits when they had both a pension and Social Security.

• Government Pension Offset (GPO): The GPO affected spouses or surviving spouses of people who worked in government jobs that didn’t pay into Social Security. The GPO reduced or completely eliminated the Social Security benefits for these spouses to stop them from receiving both full Social Security benefits and a government pension.

Why the Change?

The reason for getting rid of the WEP and GPO rules was that many felt these rules unfairly hurt public-sector workers. These workers, like teachers, police officers, firefighters, and other government employees, often had take a lower salary with the expectation to have good retirement benefits. The WEP and GPO had reduced their benefits in ways that seemed unfair, especially for those who paid into Social Security during part of their careers.

The Social Security Fairness Act was created after strong support from public-sector unions and lawmakers. They argued that the WEP and GPO were affecting too many people who had earned Social Security benefits in some way.

How This Affects the 3.2 Million People

Under the new law, the WEP and GPO rules have been removed. This means that people who were previously affected by these rules will now receive higher Social Security benefits. Around 3.2 million people, including retirees, spouses, and surviving spouses, will benefit from these changes.

The SSA has already started sending retroactive payments to these individuals to make up for the lower benefits they received before the law was passed. These retroactive payments are a key part of the law, ensuring that those impacted will be paid for the months or even years they were underpaid because of the WEP and GPO rules.

The Benefits of the New Law

• Increased Benefits for Retirees: For individuals whose benefits were reduced by the WEP, the average monthly increase will be around $360. This will help retirees who had their Social Security benefits reduced due to their public-sector work history.

• More for Spouses and Surviving Spouses: The GPO repeal will also result in significantly higher monthly payments for spouses and surviving spouses. Depending on their situation, some individuals could see their payments increase by as much as $700 per month.

• Retroactive Payments: The retroactive payments, which started going out in February 2024, will ensure that those who were affected by the WEP and GPO provisions are compensated for the period before the law was changed. By the end of March 2024, everyone who is owed retroactive payments should have received their backpay.

How Will This Impact You?

If you or someone you know works in a public-sector job or is a spouse or surviving spouse of a public-sector worker, it's important to check if you're eligible for these retroactive payments and increased benefits. The SSA will send notices to those affected, showing the amount of retroactive payments and any changes to monthly benefits.

For most people, no action is needed. The SSA is taking care of the payments, and you should see the increased benefits in your bank account starting with the March Social Security payments, which will be paid in April.

The Social Security Fairness Act is a big step for millions of public-sector workers who were facing reduced Social Security benefits because of the WEP and GPO. By removing these rules, the law ensures that people who work in both public and private sectors or are married to someone with a government pension are treated fairly and receive the benefits they earned.

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