Changes to Watch for With the Social Security Fairness Act

There is a lot of concern right now about the future of Social Security, so let’s focus on what we do know. Based on a law signed by then-President Biden on January 5, 2025, the Social Security Fairness Act (SSFA) will institute some changes to who receives Social Security and what those benefits look like.

This will mainly impact former public service workers who receive pensions — the great news for them is that their payments will go up. Of course, this is outside of the usual cost of living increase for Social Security that is provided each year based on the consumer price index.

Basically, the SSFA repealed the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which had been the law since 1983. These provisions had limited the Social Security benefitspaid to teachers, firefighters, nurses, police officers and others working in the public sector, as well as the benefits available to their spouses.

Under the new provisions, almost 3 million people will see an increase in their Social Security benefits. The restrictions on benefits had been based on the fact that those workers receive a pension.

A Bipartisan Effort to Change Social Security Benefits

The law went into effect following decades of lobbying from groups representing those employees. And at a time when bipartisan efforts are increasingly rare, this had the support of both parties, with three-quarters of the Senate and an overwhelming majority of the House of Representatives voting to pass the bill.

The impact will be immediate. In addition to increasing future benefits, qualifying retirees will receive a lump sum payment dating back to December 2023, reports CNBC. That amount will vary depending on a retiree’s benefits, but the Social Security Administration has indicated it could be thousands for some.

Now all Social Security benefits will be calculated using the same formula.

“Our organization has spent decades lobbying for the repeal of the WEP and GPO,” Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, said in a statement following the bill’s passage. “We endorsed the Social Security Fairness Act — and are gratified to finally see this legislation enacted and signed by the president.”

Will the New Law Impact Your Benefits?

The only people who will be impacted are those who’ve held public sector employment and/or earned a pension through that job or current spouses or surviving spouses of those who held such jobs.

If you are confused or concerned about how your benefits could be impacted, contact Jay today. He can help you get the up-to-date information you need as you build your retirement budget and plan for your golden years.