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The Social Security Fairness Act and Next Steps

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What Beneficiaries Need to Know

The Social Security Fairness Act was signed into law on January 5, 2025, repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), retroactive to January 1, 2024.

What Was the Windfall Elimination Provision (WEP)?

The WEP, signed into law in 1983, reduced social security benefits for beneficiaries who both qualified for social security on their own work record and received a “non-covered” pension. A non-covered pension is a pension earned while working in a job in which the beneficiary did not contribute to social security, typically including certain public sector workers as well as certain individuals who earned international pensions. Additionally, spouses were indirectly affected by WEP. This is because spousal social security benefits were based on the social security benefit of the spouse after their benefit had been decreased by the WEP.

What Was the Government Pension Offset (GPO)?

The GPO, signed into law in 1977, reduced spousal and survivor social security benefits for beneficiaries who received a “non-covered” pension by two-thirds of their pension benefit amount. In some cases, the GPO may have fully eliminated spousal or survivor social security benefits. Those affected also typically include public sector workers. GPO didn’t affect social security benefits earned by these individuals on their own work record, although those benefits could have been decreased by the WEP.

When Will Social Security Benefits Increase?

The Social Security Administration (SSA) has indicated they will pay a one-time benefit by the end of March 2025. Because the Social Security Fairness Act is retroactive to the beginning of 2024, this payment encompasses the total cumulative amount affected beneficiaries would have received dating back to January 1, 2024. The SSA also indicated that monthly benefits will be adjusted for affected beneficiaries going forward beginning with the March 2025 payment, which will be distributed in April.

However, not everyone will receive their one-time payment or updated monthly benefits in this timeframe as the SSA noted that complex WEP and GPO situations may require more attention. It’s unclear which cases will be deemed complex or how long the process will take. Finally, once processed, the SSA will mail a notice to beneficiaries regarding their retroactive, one-time payment and an additional notice regarding their updated monthly benefit amount.

Next Steps for Beneficiaries Already Receiving Social Security Benefits

Some beneficiaries, including spouses and survivors (widows/widowers), are already receiving monthly social security benefits that were reduced by the WEP or GPO. For these beneficiaries:

  • No immediate action is required and the SSA should automatically process one-time retroactive payments and the updated monthly benefit amounts to their bank accounts on file.
  • After the payments are processed and the corresponding letters have been received, you should verify the benefit amounts were updated properly.
  • Work with your tax preparer to adjust your estimated tax payments and tax withholding as needed.
  • It’s also a good idea to update your financial plan with the new social security benefit amounts.

Next Steps for Beneficiaries Affected by GPO Who Are Not Receiving Social Security

For some spouses and survivors, it’s possible their social security benefits were eliminated under GPO. As such, they may have never previously filed for social security benefits but may now be eligible for spousal or survivor benefits after the passage of the Social Security Fairness Act. This includes divorced spouses who were married to their former spouse for at least 10 years and haven’t remarried. For these beneficiaries:

  • File for social security as soon as possible. You can file for benefits online at www.ssa.gov/apply or by calling 800-772-1213. If calling the number, say “Fairness Act” when asked why you’re calling. This isn’t applicable to the WEP which may have reduced, but didn’t eliminate, social security benefits, including benefits for spouses and survivors.
  • After the claim is processed, it’s work with your tax preparer to adjust your estimated tax payments and tax withholding as needed.
  • It’s also a good idea to update your financial plan with the new social security benefit amounts.

Next Steps for Beneficiaries Who Have Not Filed for Social Security

For beneficiaries who would’ve been previously affected by the WEP or GPO and haven’t yet filed for their social security benefits, no immediate action is required. Upon filing for social security, WEP and GPO will no longer be applicable.

For these beneficiaries, it’s a good idea to update your financial plan with the new social security benefit amounts.

Could You Use Help?

Everyone’s situation is different, and new laws can make it challenging to navigate the continuously changing financial landscape. An experienced Creative Planning advisor can help ensure you make the most of your Social Security benefits as well as help ensure you receive the full benefits that you’ve earned. We work with clients on a wide range of retirement decisions and scenarios. To learn more, please schedule a call with a member of our team.

https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html?tl=2%2C5
https://www.ssa.gov/family

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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