Social Security Fairness Act: What It Means for You

For many retirees, Social Security benefits are typically calculated based on their earnings history, which reflects the income on which they paid Social Security taxes. However, individuals who worked in jobs not covered by Social Security (such as teachers, police officers, or certain government employees) often had their benefits reduced due to two provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These provisions were designed to address the issue of workers receiving pensions from non-Social-Security-covered employment, effectively reducing or even eliminating their Social Security benefits.

How the WEP and GPO Worked:

The WEP reduced benefits for individuals who had both a non-covered pension and earned enough Social Security credits from other work to qualify for benefits. This could reduce the amount of Social Security benefits they were entitled to based on their work history. The GPO, on the other hand, affected spousal or survivor benefits, reducing them for individuals who received pensions from non-Social-Security-covered jobs. In some cases, the GPO could eliminate spousal benefits entirely, depending on the amount of the pension.

What Has Changed?

As of January 2025, the Social Security Fairness Act has repealed both the WEP and GPO provisions, meaning individuals who were previously impacted by these reductions can now expect to receive their full Social Security benefits going forward. This is a significant change, especially for individuals whose spousal benefits were reduced to $0 under the GPO or who saw their own benefits reduced due to the WEP. Additionally, because the repeal is retroactive to January 2024, affected individuals should receive retroactive payments to cover any benefit reductions during that time.

What Does This Mean for You?

If you were affected by the WEP or GPO, you can now expect an increase in your Social Security benefits, which could have a significant positive impact on your retirement income. In many cases, this could be hundreds or even thousands of dollars per year.

For those whose spousal benefits were reduced or eliminated due to the GPO, now is the time to file for those benefits. Many individuals may have never filed for spousal benefits, assuming they would not receive them due to the GPO. With the repeal of the GPO, these benefits are now available, and filing for them could increase your overall retirement income.

Who Needs to Take Action and What Should You Do?

• If you were affected by the GPO and never filed for spousal or survivor benefits, now is the time to file. You may be eligible for retroactive benefits, so don’t delay in submitting your application to claim what is rightfully yours.
• If you were impacted by the WEP, your benefits should now be fully restored, and you may see an increase in your monthly Social Security payments. If you haven't already, it’s important to check your Social Security statement to see the new, full benefit amount you are entitled to. For those who delayed claiming Social Security to increase their benefits, this repeal could result in a significantly higher monthly payment.
• For those already receiving benefits, you should receive retroactive payments to make up for the reduced benefits received since January 2024. Be sure to verify your Social Security records and ensure your direct deposit and contact information are up-to-date to facilitate these payments.
• For new applicants, if you haven’t yet filed for Social Security or spousal benefits, and are eligible to take benefits, you should review your Social Security strategy to see if the new changes brought about by the repeal of the WEP and GPO alter your strategy to maximize benefits.

Key Takeaways:

• If you were impacted by WEP or GPO, expect to see your Social Security benefits increase, and file for any spousal or survivor benefits that were previously unavailable.
• Retroactive payments will be issued for any benefit reductions since January 2024.
• If you haven’t already filed for benefits, now is the time to review your strategy.

Though the repeal of the WEP and GPO simplifies retirement planning for those impacted, it’s important to remain aware of any future changes to Social Security, as the sustainability of the program remains uncertain. For more information or assistance in adjusting your retirement strategy, reach out to your Van Hulzen financial advisor to explore how these changes may benefit you and to ensure your retirement plan is aligned with what matters most.

Sources:

• Social Security Administration. "Social Security Benefits." www.ssa.gov.
• U.S. Congress. "Social Security Fairness Act of 2024." www.congress.gov.

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