Social Security Fairness Act: What Will Happen to Your Benefits Now That It’s Become Law?
Written by
Josephine Nesbit
Edited by
Zuri Anderson
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The Social Security Fairness Act (SSFA), which was signed into law by former president Joe Biden, eliminates rules that reduce Social Security benefits for those who also get income from public pensions.
Now that it’s become law, nearly three million teachers, firefighters, policeman and other public sector workers who receive pension income will see increases in their Social Security benefits, CNBC reported.
GOBankingRates outlined how this brand-new law will affect eligible Americans and their benefits.
What Is the Social Security Fairness Act?
“The Social Security Fairness Act fully repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO),” wrote Devin Carroll, CFP and owner and lead advisor at Carroll Advisory Group, in an email. “Historically, these provisions have affected individuals who receive a pension from work where they did not pay into Social Security.”
These provisions have been in place since 1983, he added.
According to Carroll, the WEP reduces benefits based on an individual’s own work record, while the GPO reduces spousal or survivor benefits that an individual has otherwise been entitled to receive.
For example, let’s say a teacher with a pension from their teaching job — which is not subject to Social Security taxes — also has a second job that qualifies them for Social Security benefits. Under WEP, Social Security benefits are calculated in a way that results in a lower benefit amount than the standard formula would provide.
GPO is similar to WEP; however, it impacts Social Security spousal and survivor benefits of someone receiving a pension from a job not covered by Social Security.
“With this repeal, all benefits will now be calculated using the same formulas and rules,” Carroll explained.
There have been previous proposals to address these provisions, but they were never passed.
“Unlike past proposals that sought to replace the WEP with an alternative calculation formula, this legislation eliminates the WEP entirely,” Carroll wrote. “Additionally, most previous proposals did not address the GPO, but the Social Security Fairness Act removes both provisions.”
Now that the bill was signed into law, adjusted payments will be retroactive to January 2025, the financial advisor said.
“However, it is not yet clear whether retroactive payments will be issued as a lump sum or distributed over time,” he added.
Will the New Law Affect You?
To determine whether the SSFA impacts you, the International Association of Fire Fighters (IAFF) recommends reviewing your employment history to determine if you worked in a public sector job and/or received a pension through your public employment. You should also contact the Social Security Administration to find out how these changes specifically impact your benefits.
The IAFF also recommends contacting your financial advisor for more detailed information about how these changes may affect your monthly benefits.
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