Social Security Fairness Act Could Change Retirement For Millions

March 14th, 2025 by Blake Pinyan

Background

Until now, individuals who did not contribute to the Social Security system for at least part of their careers have seen their Social Security benefits reduced due to the Government Pension Offset (GPO) and/or the Windfall Elimination Provision (WEP). This primarily affected state and local employees such as teachers, firefighters, police officers, and federal employees covered by the Civil Service Retirement System, as well as individuals whose work was covered by a foreign Social Security system that contributed to a public employer’s pension instead of Social Security taxes.

As a result, these individuals could see their Social Security benefits reduced or even eliminated—not only for themselves but also for spouses (current or divorced) or survivors. The WEP affects benefits based on a worker’s own earnings, while the GPO reduces the spousal or survivor benefits for those whose spouse (or former spouse) was entitled to full benefits.

From the government’s perspective, state and local employees contribute to and will eventually receive pensions that are considered a replacement for Social Security benefits.

To be eligible for Social Security personal retirement benefits:

• An individual must work for at least 40 quarters (10 years) in a job that contributes Social Security taxes.
• For spousal benefits, one must be married to an eligible Social Security recipient for at least one year.
• For divorced spousal benefits, one must have been married to an eligible Social Security recipient for at least 10 years, be currently unmarried, and have been divorced for at least two years.
• Survivor benefits require that the widow or widower was married to the deceased for at least nine months before their death.

The rationale behind these rules is that those who do not pay into the system should not be eligible for benefits. However, controversy has emerged over the years regarding individuals with blended careers – those who worked in both non-covered jobs (without paying Social Security taxes) and covered jobs (where they contributed for at least 10 years). These individuals are subject to the WEP, which disregards the income they earned in their non-covered employment, calculating benefits only on their covered employment earnings.

Additionally, spouses or survivors who wish to claim benefits often face reductions under the GPO if they worked in a non-covered job, have their own pension, and are also eligible for spousal or survivor benefits. In many cases, the GPO reduces Social Security spousal or survivor benefits by two-thirds of the pension amount, sometimes eliminating benefits entirely for those with substantial pensions but relatively low Social Security benefits.

Lastly, Social Security statements and online accounts did not previously estimate the impact of these reductions before an individual reached claiming age. Many beneficiaries were caught off guard when they received lower benefits than expected, with only a small disclaimer indicating the potential reduction. This has fueled calls for reform.

The Law

While still in office, President Biden signed the Social Security Fairness Act into law on January 5, 2025. This legislation repealed both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Additionally, the repeal is retroactive, meaning Social Security benefit payments will reflect these changes starting in January 2025. The last month WEP and GPO were in effect was December 2023.

This marks a significant victory for those affected, as more than 3.2 million retirees could see their monthly income increase by hundreds or even thousands of dollars – for life.

Individuals previously impacted by the WEP and/or GPO, as well as those who would have been affected in the future, will now receive their full Social Security benefits moving forward. Additionally, Social Security will issue retroactive payments to compensate for any benefit reductions that occurred in 2025, with payments dating back to January 1.

When To Expect Changes

On February 25, 2025, the Social Security Administration announced that it has been expediting retroactive lump-sum payments for those whose benefits were previously reduced. It also plans to increase monthly benefits starting in April 2025. Since Social Security benefits are paid one month in arrears, the April payments will reflect benefits for March.

The agency stated that most eligible individuals will receive their one-time retroactive payment by the end of March 2025, deposited into the bank account on file. Additionally, retroactive payments will be issued for Social Security recipients affected by the WEP or GPO who have passed away since January 2024.

Anyone whose monthly benefit is adjusted or who is eligible for a retroactive payment will receive a mailed notice from Social Security explaining the benefit change. However, most recipients will receive their retroactive payment two to three weeks before receiving their notice by mail.

For those subject to both the WEP and GPO, Social Security will apply the higher of their WEP-adjusted benefit (based on their own record) or their GPO-reduced spousal benefit.

Initially, the agency estimated that determining new monthly benefit amounts could take a year or more. However, it has since clarified that only complex cases requiring manual processing will experience delays. These cases must be reviewed individually to update beneficiary records and ensure accurate payments.

What To Do Now

Individuals whose Social Security benefits were reduced by the WEP or GPO generally do not need to take any action if the Social Security Administration (SSA) has their current mailing address and direct deposit information. Their monthly payments will be automatically adjusted starting in April 2025. If you need to update your address or direct deposit details, you can do so on the SSA’s website. The SSA recommends waiting until April before inquiring about the status of your retroactive or increased monthly payments.

If you have never applied for Social Security due to the WEP or GPO, you may need to file an application as soon as possible. Without filing, you may not receive the higher spousal or survivor benefits you are now eligible for. Your application date affects when benefits begin and how much you receive, based on the months eligible for retroactive payments.

To apply, visit SSA’s application page or call 1-800-772-1213 (Monday through Friday, 9:00 a.m. – 6:00 p.m. ET). When prompted with “How can I help you today?”, say “Fairness Act.” You will then be guided through a series of questions to connect you with a WEP-GPO-trained representative.

• Retirement or Spousal Benefits – Apply online.
• Survivor Benefits – Must be applied for by phone.

If you are on Medicare, your premium payments will be automatically deducted from your Social Security benefits.

How Much More Will I Get?

The amount you receive will vary based on several factors, including the type of Social Security benefit and the size of your pension.

• For those impacted by the WEP, the increase depends on the number of years you had earnings subject to Social Security taxes.
• For those affected by the GPO, the increase is based on the amount of your pension payment.

If You Haven’t Claimed Social Security Yet

If you have not yet claimed your Social Security benefits and would have been affected by the WEP and/or GPO, your benefit amount is straightforward. You will receive the amount shown on your Social Security statement if you claim at Full Retirement Age (FRA) since prior estimates did not factor in a reduction.

• Spousal benefits will be 50% of your spouse’s benefit at FRA.

If You Were Already Receiving Reduced Benefits

For those already claiming benefits before the Social Security Fairness Act, the recalculations for WEP and GPO adjustments are more complex. As previously mentioned, most payments are expected to be updated and take effect in April 2025.

Rather than manually calculating your new monthly benefit, it is generally best to wait until April when Social Security finalizes the adjustments.

Conclusion

The Social Security Fairness Act is a significant victory for retirees, with over 3.2 million individuals expected to see an increase in their income now that their Social Security benefits will no longer be reduced by the WEP or GPO.

Social Security provides a guaranteed, lifelong source of income and serves as the primary financial support for many retirees. This long-overdue change ensures that public sector employees can rightfully receive more of their hard-earned benefits without being penalized for having a pension. While it may have taken longer than it should have, as the saying goes—better late than never!