Understanding the Social Security Fairness Act
For more than two decades, lobbyists have made concerted efforts to change the laws reducing Social Security payments for those receiving public pension benefits.
When officially signing into law the “Social Security Fairness Act” (HR 82) on January 5, 2025, then-President Joe Biden stated that “Americans who have worked hard all their life to make an honest living should be able to retire with economic security and dignity.”
This new Act eliminates two federal policies—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)—that had kept public pension recipients from collecting their full benefits and had lowered benefit amounts for their surviving spouses and family members. The Act is retroactive for benefits payable after December 2023, with a lump-sum payment expected to compensate for the difference in benefits to eligible recipients from 2024.
WEP and GPO had been in place for more than 40 years, reducing Social Security payments for many Americans. WEP affected people who earned a pension for work not covered by Social Security AND worked enough in covered jobs to qualify them for Social Security. WEP used their pension benefit to reduce (but not eliminate) their Social Security benefit. GPO affected people who earned a pension for work that was not covered by Social Security AND qualified for spousal Social Security benefits. GPO applied a reduction (or elimination) of their spousal Social Security benefit. The recently enacted law eliminates adjustments applied to Social Security benefits related to WEP and GPO.
How much should eligible individuals and/or their families expect?
The Congressional Budget Office estimates that the approximately two million people affected by WEP will see an increase in their benefit of an average of $360 per month by December 2025. It’s also estimated that the roughly 380,000 people affected by GPO will see an increase in their spousal benefit of an average of $700 per month by December 2025, and that the roughly 390,000 people affected by GPO will see an increase in their surviving spouse or widow/widower benefit of an average of $1,190 per month by December 2025.
Information on precisely when qualified recipients will receive the lump sum and/or an increase in their benefits has not yet been detailed. The administrative work required to process all of these changes, much of which will likely need to be done manually and on a case-by-case basis, may take upward of a year (or perhaps even longer) to complete.
The Social Security Administration is evaluating how best to implement the Act and will provide more information via its website when available. We recommend that you work with your Corient Wealth Advisor to verify the accuracy of your direct deposit information and mailing address associated with the SSA and with your “my Social Security account.” Your Advisor can also offer guidance on how best to utilize your lump-sum payment (if applicable) and increased monthly payouts. Other than ensuring your information on file is current, no further action is required by beneficiaries with respect to receiving the impending enhanced pension benefits.
ABOUT THE AUTHOR
Josh Larson, CFP
Josh is a Wealth Advisor in our Itasca, IL, office. He focuses on providing Advanced Planning solutions for unique and complex situations. He studied at Aurora University, earning degrees in Accounting and Business & Commerce. Josh is a CERTIFIED FINANCIAL PLANNER™ professional.
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