With bipartisan proposal HR 82, Social Security retirees’ benefits may soon change greatly. The legislation, which seeks to eliminate some tax penalties against Social Security benefits, is moving into the House of Representatives.
Key Provisions of HR 82
Act Fairness Security Social, known also as HR 82 and her twin in Senate, S.597, is concerned with two vital aspects of social security: including the Windfall Elimination Provision (WEP) and the government pension offset (GPO). At present, some retirees, especially those who worked for public service or got pensions outside social security, have had their benefits reduced.
Both the WEP and GPO would be repealed by this bill—a measure that will guarantee public sector employees’ rights to full social security benefits.
What Are the WEP and GPO?
The Windfall Elimination Provision (WEP) is applicable for retired and disabled workers who draw both a Social Security benefit and a pension from jobs that are not covered by Social Security. As of December 2022, about 2 million retirees are affected by this provision, representing around 3% of all Social Security beneficiaries. This includes mostly retired workers contributing to alternative retirement systems as some state and local government employees as well as federal workers hired before 1984.
The Government Pension Offset (GPO) reduces benefits on the basis of pensions received from non-Social Security jobs by spouses or surviving spouses. Specifically, towards the end of 2022, around 734601 individuals saw their benefits reduced through GPO, which account for approximately 1% of Social Security beneficiaries.
Financial Impact of the Bill
Analysis made by CBO seems that HR 82 will cause a direct spending increase of about $98 billion from 2024 to 2029 and an almost $196 billion rise for the period between 2024 and 2034. This increased expenditure will mainly be driven by higher payments of social security benefits to those currently affected by WEP and GPO. Additionally, some individuals who get multiple benefits, such as Social Security and Supplemental Nutrition Assistance Program (SNAP), might experience a decrease in their SNAP support because of the larger amount received under Social Security payments. Nevertheless, authorities have deemed the overall fiscal effect to be manageable, and hence statutory pay-as-you-go requirements will apply.
Uncertainty in Future Estimates
The budget effects of the bill are unsure in some areas. Future prediction of how many individuals will be impacted by the WEP and GPO is hard, including prediction of benefit reductions under existing law. However, nearly 300 co-sponsors from the House and 50 senators endorse it; thus, there is overwhelming bipartisan support to carry on with the legislation.
Public servants and lawmakers voice support
Supporters of HR 82 argue that public servants who dedicate their lives to serving their communities should not be penalized in terms of retirement. Senator Susan Collins (R-ME) pointed out that “public servants all over America have committed their careers to serving and protecting this great nation, only for them to suffer the consequences of a reduced retirement benefit as stipulated in the Windfall Elimination Provision and Government Pension Offset.”
Similarly, Senator Sherrod Brown (D-OH) added that this legislation would bring peace of mind to employees by guaranteeing that whatever benefits they have earned during public service will remain with them even after they are retired.
What’s Next?
Currently, Congress is considering the Social Security Fairness Act. A bipartisan group of lawmakers huddled on Capitol Hill on September 13, 2023, stressing the need to pass this important measure. In addition to that, the National WEP-GPO Repeal Taskforce is pushing for its approval.
If you are a retiree under Social Security, then you should know more about this law and how it affects you. Reach out to your representatives and have a say on this critical matter.
