The Social Security Fairness Act: How Benefits Are Changing For Some Public Sector Workers and Spouses
Signed into law on January 5, 2025, the recently passed Social Security Fairness Act eliminates two provisions that previously reduced Social Security benefits for around 3.2 million public sector workers and spouses.1
Considering this is the first major piece of legislation impacting Social Security in over two decades, it’s important for those in or near retirement to understand what’s changing, who’s affected, and what to expect moving forward.
The GPO and WEP Explained
As part of this recent legislation, two provisions have been eliminated. These include the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), both of which were originally designed to prevent what lawmakers once considered “double-dipping” by public sector employees who receive a government pension.2
The WEP reduced Social Security benefits for individuals who worked in both covered (Social Security-taxed) and non-covered (government pension) jobs. Around 2 million people were impacted by WEP, or 3.1% of Social Security beneficiaries.3
Meanwhile, the GPO reduced or eliminated Social Security payments for surviving spouses and widows who also received a government pension. Those who were impacted were required, under this provision, to deduct two-thirds of their civil service or government pension from their spousal Social Security benefits. Around 734,000 individuals were impacted.4
Who Is Going to Benefit?
The Social Security Fairness Act will primarily impact public sector employees including:
- Teachers
- Firefighters
- Police officers
- Federal employees (covered by the Civil Service Retirement System)
However, the Social Security Administration emphasizes that not every public sector employee may be impacted—only those who receive a pension based on work that’s not covered by Social Security are likely to see an increase in benefits.1 The majority (around 72%) of state and local public employees already work in Social Security-covered positions, meaning they were not impacted by WEP or GPO prior to this legislation.
The Congressional Budget Office estimates that, on average, monthly benefits for impacted employees will increase by:5
- $360 for individuals previously affected by WEP
- $700 for spouses impacted by GPO
- $1,190 for surviving spouses affected by GPO
Expect Processing and Implementation Delays
The SSA does not yet have an estimated timeline of when an impacted individual’s benefits will be adjusted. However, benefits will be recalculated retroactively, beginning on January 1, 2024.
Those already receiving Social Security benefits are likely to see automatic increases and a lump-sum payment for retroactive benefits (though again, the timeline is not yet available). It is, however, unclear if individuals who never applied for spousal or survivor benefits will be eligible for retroactive payments dating back to 2024.
If you’re someone who may be entitled to benefits as a result of this legislative change, you may want to apply for social security retirement benefits as soon as possible.
While this legislation creates a meaningful increase in benefits for millions of public workers and beneficiaries, we’re likely to see possible delays due to a few contributing factors. First, general funding constraints and staffing shortages at the Social Security Administration slow down processing times, especially when it comes to changes as widespread as this.
In addition, some critics of the recent legislation are concerned about Social Security’s solvency and the estimated $196 billion this change will cost over the coming decade.6 It’s possible we could see this law challenged or delayed before major changes go into effect.
What Does This Mean for Your Retirement Planning?
If your Social Security benefits were previously affected by the GPO or WEP, this new law could impact your retirement income plans. However, given the uncertainties surrounding retroactive payments and processing delays, it’s important to be proactive and check in on the status of these changes regularly.
Review your benefits for changes, and check the SSA’s website for announcements or updates. Delays and potential changes are expected. You may want to speak with a financial advisor, as they can help you navigate changes to your retirement income strategically.
Our team at Northstar Financial Planning is here to help answer questions you may have about your Social Security benefits and discuss other aspects of your retirement income. While a boost in monthly benefits is certainly a welcomed change, it’s important to be strategic with your spending and prepared to make the most of your income sources in retirement.
To learn more, schedule a Discovery Meeting with one of our fiduciary CERTIFIED FINANCIAL PLANNER™ professionals today.
