Social Security benefits play a vital role in supporting their monthly income. Most people are familiar with the annual cost-of-living adjustment (COLA), which is a standard method used to ensure Social Security payments keep up with inflation.
However, there’s another way your Social Security benefits could increase, and it doesn’t involve COLA. In fact, a new proposed law could bring changes that might increase the amount you receive, depending on your situation.
The Social Security Fairness Act
On the heels of a recent proposal, two U.S. Congress members—Garret Graves, a Republican from Louisiana, and Abigail Spanberger, a Democrat from Virginia—introduced the Social Security Fairness Act. This bill aims to make Social Security benefits more flexible, especially for people who are receiving less than they deserve because of certain provisions in the law.
The two provisions in question are the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). If this bill is passed, it could mean higher Social Security payments for some beneficiaries.
Understanding the Windfall Elimination Provision (WEP)
The WEP impacts individuals who have worked in jobs not covered by Social Security. This could include federal employees, public school teachers, police officers, and others who have worked in jobs with their retirement plans instead of paying into the Social Security system. The WEP was introduced in 1983 to prevent “windfall” benefits, where someone could collect Social Security benefits from both their job’s pension plan and the SSA.
The problem arises because someone who has contributed less to Social Security may end up with a higher benefit than someone who has contributed more. Essentially, the WEP reduces Social Security benefits for people who have pensions from other sources but didn’t pay into Social Security for those years.
The Government Pension Offset (GPO)
The GPO, on the other hand, affects spouses or survivors who are entitled to both Social Security benefits and pensions from government jobs. It reduces the amount of Social Security a person can receive if they are also receiving a pension from a job not covered by Social Security. This often affects widows, widowers, or others who rely on their spouse’s Social Security benefits.
While both the WEP and GPO were designed to prevent “double-dipping” into Social Security, these provisions have caused frustration for many workers who feel they are being unfairly penalized.
Who Will Be Affected by These Changes?
The Social Security Fairness Act targets two main groups of people. First, it benefits individuals who work jobs not covered by Social Security and who rely on another pension or retirement plan for their income. Second, it targets individuals who are receiving Social Security benefits based on a spouse’s work but also have a government pension.
For example, government employees (like teachers or federal workers hired before 1984) and those working in certain jobs that don’t pay into Social Security could be directly impacted. According to estimates, the GPO currently affects about 1% of Social Security claimants, while the WEP impacts 3% of beneficiaries.
If the bill passes, these provisions will be eliminated, potentially allowing affected workers to see an increase in their monthly payments.
When Will These Changes Take Effect?
Currently, the Social Security Fairness Act has passed through the House of Representatives with overwhelming support, with a vote of 327-75. The next step is for Congress to review and approve the measure in January 2025. If approved, the Social Security Administration (SSA) will begin recalculating benefits starting from January 2024, with changes reflected in payments made in 2025.
While this is still in the early stages, many are hopeful that this bill will provide much-needed relief to those who the WEP and GPO have negatively impacted.
Conclusion
If you’re someone who has worked in a job not covered by Social Security or if you’re a spouse or survivor who has been affected by the Government Pension Offset, the Social Security Fairness Act could bring some positive changes.
While it’s not yet law, it’s definitely something to keep an eye on. If passed, it could lead to higher Social Security benefits for many people starting in 2025. Be sure to stay informed and check back for updates as the situation evolves.
In the meantime, take advantage of any other opportunities to maximize your Social Security benefits. Don’t hesitate to reach out to a financial advisor if you have questions about how these changes might affect your circumstances.
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Archer Bannister is a journalist with 4 years of experience covering hard-hitting stories. Currently working with Mikeandjonpodcast, Archer specializes in delivering timely and in-depth updates on a variety of topics, including crime news, politics, and national issues affecting the USA. His expertise and dedication to delivering accurate, impactful news make him a trusted voice for audiences seeking to stay informed on critical topics.
