On January 5, 2025, the Social Security Fairness Act was signed into law, marking one of the most significant changes to Social Security benefits in decades. This legislation eliminates two provisions that had reduced benefits for millions of public sector workers for years.
What Is the Social Security Fairness Act?
The Social Security Fairness Act repeals two provisions that previously reduced Social Security benefits for certain retirees.
- The Windfall Elimination Provision (WEP): This reduced Social Security benefits for individuals who received pensions from jobs not covered by Social Security taxes.
- The Government Pension Offset (GPO): This reduced spousal and survivor benefits for individuals who received a government pension based on earnings not covered by Social Security.
These provisions had effectively penalized public servants who earned pensions from jobs where they didn’t pay into Social Security but also had other employment where they did contribute to the Social Security system.
Who Benefits from This Change?
The repeal affects approximately 3.2 million Americans who previously saw their benefits reduced. You may be impacted if you fall into one of these categories:
- Teachers in public school systems
- Firefighters and police officers
- Federal employees covered by the Civil Service Retirement System
- State and local government employees with pensions
- Workers whose employment was covered by a foreign social security system
For example, if you worked as a teacher for 30 years in a state that doesn’t participate in Social Security and also held summer jobs where you paid into Social Security, you’ll now receive your full Social Security benefits alongside your teacher’s pension.
How Your Benefits Will Change
If you’ve been affected by WEP or GPO, you can expect two significant changes to your benefits:
- Retroactive Payments
The Social Security Administration (SSA) began issuing retroactive payments in late February 2025. These payments cover the increase in benefits back to January 2024, when the WEP and GPO provisions stopped applying. According to data from the SSA, the average retroactive payment is approximately $6,710, though individual amounts vary based on your specific situation.
As of early March 2025, the SSA had already paid more than $7.5 billion in retroactive benefits to over 1.1 million people. Most eligible beneficiaries should receive their retroactive payment by the end of March 2025, deposited directly into the bank account the SSA has on file.
- Increased Monthly Benefits
Beginning with benefits earned in March 2025 (paid in April 2025), affected recipients will see an increase in their monthly Social Security payments. The Congressional Budget Office estimates an average monthly increase of $360 though some recipients may see increases of over $1,000 per month while others will see smaller adjustments.
What Actions Should You Take?
Based on your situation, here are some steps to consider:
If You’re Currently Receiving Social Security Benefits
- No action needed: The SSA will automatically adjust your benefits and issue any retroactive payments you’re entitled to receive.
- Watch for notices: The SSA will mail notices explaining any benefit changes or retroactive payments.
- Verify your information: Ensure your information with the SSA is accurate by visiting gov/myaccount.
If You Never Applied for Benefits Due to WEP/GPO
- Consider applying now: If you were eligible for Social Security benefits but never applied because of WEP or GPO reductions, you may want to apply now at gov/apply.
- Benefits calculation: The SSA will still collect pension information during the application process, but this won’t result in benefit reductions under the new law.
The Social Security Fairness Act represents a significant victory for public servants who previously saw their Social Security benefits reduced. While the increased benefits are certainly positive, we recommend that you work with a qualified financial advisor to understand the implications of the Social Security Fairness Act and adjust your financial plan accordingly.
Want to learn more? Contact us at Concentrum Wealth Management to get started.