Social Security Fairness Act
On January 5, 2025, the Social Security Fairness Act of 2023 was signed into law. This legislation repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). So, what does this mean, and will it impact you?
The WEP and GPO rules were in place for anybody eligible to receive a Social Security benefit, who also built a non-covered pension as a teacher, fire fighter, police officer, federal employee, or some state employees. A non-covered pension is where you do not pay in to Social Security while building your pension. Upon retirement they begin collecting their pension and may also collect a Social Security benefit. If impacted, they would receive a WEP reduction on their own Social Security benefit based on their pension. Those who were eligible for a spousal benefit or surviving widow benefit through Social Security, who also built a non-covered pension, would receive a GPO reduction of their spousal or widow Social Security benefit based on their pension. The repeal of these two provisions is good news for anybody eligible for a Social Security benefit, who also built a non-covered pension over their career.
If you are collecting a Social Security benefit and are impacted by the WEP and GPO rules you may have already received notice about your benefit increasing (and some extra money). The repeal to the law has been retroactively applied to January 2024. So many have already received a lump sum payment (for the retroactive increase) in addition to a new higher monthly payment. However, not all cases are automatically adjusted.
If you are someone who never filed for Social Security because of your pension or you are married (or were married) to someone with a Social Security benefit but never filed for a spousal or widow benefit yourself, you may need to make an appointment with Social Security and see if you are now eligible for a benefit. In some cases, the timing of when you filed your benefit versus when your spouse filed may also warrant a trip to the Social Security office. They will be able to review your record, and your spouses’ record, to see if there is an adjustment to be made to your benefit.
For those who have not filed for their benefit yet, there is nothing you need to do at this time. You will receive your full benefit upon filing and will not have to worry about the WEP or GPO reductions.
Overall, the passing of the Social Security Fairness act is good news for teachers, fire fighters, police officers, federal employees, and state employees with non-covered pensions. Most people will automatically see the adjustment to their payments and lump sum retroactive payment. If you think you should have received an increase, or you are unsure, it might make sense to reach out to us and Social Security to confirm you are receiving the correct benefit.
Whitney Kelley, CFP®
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