President Joe Biden signed the Social Security Fairness Act into law on January 5, 2024, heralding a significant change for millions of Americans. The new legislation repeals two controversial benefit rules: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These rules previously reduced Social Security retirement benefits for certain public workers. The act intends to rectify these reductions and boost payments for over 3.2 million beneficiaries.
The WEP and GPO were originally enacted to prevent what was perceived as an "unfair" advantage, where workers could potentially receive both public pensions and Social Security retirement benefits. Under WEP, those who had pension benefits from jobs where Social Security taxes were not deducted received smaller Social Security checks. Similarly, the GPO affected individuals with public pensions by limiting or eliminating their access to spousal or survivor benefits under Social Security. The Fairness Act now allows public workers with government pensions to claim spousal benefits, even if their spouse's job was covered by Social Security.
"What Congress saw in passage of the Government Pension Offset rule back in 1977 was that public employees getting that public non-covered pension were being treated better than people whose work activity was under Social Security," said Kurt Czarnowski, a former Social Security Administration employee now in retirement planning consultancy.
With the enactment of this law, beneficiaries who were collecting Social Security checks prior to January 2024 will automatically see their monthly payments recalculated, with back payments delivered accordingly. The Congressional Budget Office estimates that eligible Americans could see monthly payments increase by as much as $1,190, depending on their circumstances. Most recipients will receive a one-time retroactive payment by the end of March 2024, with increased monthly benefits reflected in April.
"With the windfall provision, [your benefits] were never reduced to zero. You always get something," noted Czarnowski. "But with Government Pension Offset, it was possible for somebody to receive no benefits based on their spouse's, ex-spouse's or deceased spouse's work record."
For those not currently enrolled but eligible for back payments from January 2024 onward, the Social Security Administration (SSA) has assured that it will "immediately" begin distributing retroactive benefits and increasing monthly payouts. Beneficiaries can visit the SSA's dedicated website to learn more about the Fairness Act and track updates on the agency's progress.
"Social Security's aggressive schedule to start issuing retroactive payments in February and increase monthly benefit payments beginning in April supports President Trump's priority to implement the Social Security Fairness Act as quickly as possible," stated Lee Dudek, acting commissioner of Social Security.
Despite these changes, the SSA faces challenges in sustaining full benefit delivery. Current projections suggest that the agency can maintain full capacity only through 2035, without accounting for increased benefits under the new legislation. This timeline underscores the importance of addressing long-term funding solutions for Social Security.
The repeal of WEP and GPO marks a turning point for many public sector workers who felt disadvantaged by prior regulations. By enabling access to spousal and survivor benefits, the Social Security Fairness Act aims to provide equitable treatment for individuals across different employment sectors.