What is the Social Security Fairness Act and how will it impact Social Security benefits?
Managing Director, Head of Wealth Planning and Advice, J.P. Morgan Wealth Management
- In a landmark action, former President Biden signed into law the "Social Security Fairness Act," effectively repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
- This change marks a significant shift in the landscape of Social Security benefits, promising to impact millions of Americans who have been subject to these provisions.
- The Social Security Fairness Act is intended to add to the amount of Social Security benefits received by millions of Americans to aid in their retirement funds.
In a landmark action, on January 5, 2025, former President Biden signed into law the "Social Security Fairness Act," effectively repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). This change, retroactive to January 1, 2024, marks a significant shift in the landscape of Social Security benefits, promising to impact millions of Americans who have been subject to these provisions.
Understanding WEP and GPO
The Windfall Elimination Provision (WEP) was introduced to adjust the Social Security benefits of individuals who receive a pension from work not covered by Social Security, such as in certain government jobs. The rationale was to prevent these individuals from receiving a "windfall" by collecting both a full pension and full Social Security benefits. However, critics argued that WEP often unfairly reduced benefits for many public servants, including teachers and police officers, who had also paid into Social Security through other employment.
Similarly, the Government Pension Offset (GPO) affected the Social Security benefits of spouses, widows and widowers who also received a government pension. The GPO reduced Social Security spousal or survivor benefits by two-thirds of the government pension amount, often leaving beneficiaries with significantly diminished financial support.
Impact of the repeal
The repeal of WEP and GPO is poised to restore full Social Security benefits to those who have been affected by these provisions. Public sector employees, such as educators, law enforcement officers and other government workers, stand to benefit the most. Many of these individuals could see an increase in their monthly Social Security checks, providing them with greater financial security in retirement.
For those who have been receiving reduced spousal or survivor benefits due to the GPO, the repeal means they may soon access the full benefits they are entitled to, potentially alleviating financial strain for many families.
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Steps you can take
Given that Social Security benefits are only payable retroactively for six months, it is crucial for affected individuals to act promptly.
If you’ve registered with the Social Security Administration but are receiving reduced benefits as a result of either the WEP or the GPO, here are some steps to consider:
- Review your benefits: Check your Social Security statement to understand how the repeal may affect your benefits. The Social Security Administration (SSA) provides online tools and resources to help you assess your situation.
- Contact the SSA: Reach out to the SSA to inquire about adjustments to your benefits. They can provide guidance on how the repeal impacts your specific circumstances and assist with any necessary paperwork.
- Consult a financial advisor: Consider speaking with a financial advisor to understand the broader implications of the repeal on your retirement planning. They can help you make informed decisions about your financial future.
- Act quickly: Since the law is retroactive to January 1, 2024, and benefits are only payable retroactively for six months, it is important to act swiftly to ensure you receive any back payments you are entitled to.
Call to action for government and public sector employees
If you are a former government or public sector employee who hasn’t previously registered with the Social Security Administration (SSA), it is crucial to take immediate action to ensure you receive the benefits you are entitled to following the repeal of the WEP and GPO.
- Register with the SSA: If you have not yet registered, create a "my Social Security" account on the SSA's official website. This account will allow you to access your Social Security statement, review your earnings record and understand how the repeal may impact your benefits.
- Verify your earnings record: Once registered, carefully review your earnings record to ensure all your work history is accurately reflected. This is especially important for those who have worked in both covered and non-covered employment.
- Schedule an appointment with the SSA: Contact the SSA to schedule an appointment, either in person or over the phone, to discuss your specific situation. The SSA can provide personalized assistance and help you navigate any necessary steps to adjust your benefits. With the reduction to this workforce recently, callers may experience a longer wait time than usual.
- Stay informed: Keep abreast of any updates or additional guidance from the SSA regarding the implementation of the Social Security Fairness Act. This will ensure you are aware of any changes that may affect your benefits.
The Social Security Administration has a page dedicated to compliance with the Social Security Fairness Act, which you can access at https://www.ssa.gov/benefits/retirement/social-security-fairness-act.htmlOpens overlay.
By taking these steps, government and public sector employees can ensure they are fully informed and prepared to take advantage of the benefits restored by the repeal of the WEP and GPO.
The repeal of the WEP and GPO represents a significant victory for many Americans who have long advocated for fairer Social Security treatment. By acting promptly, affected individuals can maximize their benefits and secure a more stable financial future.
Frequently asked questions
The Social Security Fairness Act is a new law as of January 5, 2025, that effectively repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The WEP and the GPO reduced the Social Security benefits of individuals who receive a pension from work not covered by Social Security, such as in certain government jobs, and reduced Social Security spousal or survivor benefits by two-thirds of the government pension amount, respectively.
The Social Security Fairness Act is intended to add to the amount of Social Security benefits received by millions of Americans to aid in their retirement funds. Previously, due to provisions of the WEP and GPO, the Social Security benefits of millions of otherwise eligible Americans were reduced, and the Social Security Fairness Act is a step toward providing these contributions toward retirement benefits.
The Social Security Fairness Act went into effect on February 25, 2025. This means that by February 25, 2025, people whose Social Security benefits were previously impacted by the provisions of WEP and GPO will begin to receive retroactive benefit payments.
The Social Security Fairness Act will be retroactive. This change, retroactive to January 1, 2024, marks a significant shift in the landscape of Social Security benefits, promising to impact millions of Americans who have been subject to these provisions.
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Managing Director, Head of Wealth Planning and Advice, J.P. Morgan Wealth Management
