A notable change may be on the horizon for nearly 3 million retirees in the US who have long been affected by rules that reduce their Social Security benefits.
The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), laws that have been reducing benefits for decades, are now in the crosshairs of lawmakers. A new bipartisan bill called the Social Security Fairness Act aims to repeal these provisions, potentially increasing benefits by as much as $1,190 for some retirees.
WEP and GPO
The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) have been controversial for years. Both laws were introduced to prevent so-called “double-dipping,” where retirees who worked in both Social Security-covered and non-Social Security-covered jobs would otherwise receive full benefits from both.
- WEP applies to workers who receive pensions from non-Social Security-covered public-sector jobs (such as teaching or firefighting), reducing their Social Security benefits. This provision has impacted almost 2 million retirees who had a career in jobs not taxed for Social Security.
- GPO, meanwhile, slashes spousal or survivor benefits for individuals who worked in jobs not covered by Social Security. This provision has been particularly harsh on survivors of government workers, often wiping out their expected benefits altogether.
These provisions have reduced Social Security checks for many retirees who, despite contributing to Social Security through other jobs, see their benefits slashed due to their pension income from jobs not covered by Social Security taxes.
What could change?
If passed, the Social Security Fairness Act would repeal WEP and GPO, potentially leading to substantial increases in Social Security benefits for affected retirees. According to a report from the Congressional Budget Office (CBO), repealing these provisions could lead to average monthly benefit increases of around $360 for those impacted by WEP and up to $1,190 for surviving spouses affected by GPO.
Representative Abigail Spanberger, serving Virginia’s congressional district, along with Congressman Garret Graves of Louisiana and people representing police, teachers, and other government employees, held a press conference recently outside the Capital building to highlight 206 signatures they have received on a discharge petition aimed at eliminating rules like WEP and GPO. Recently, a discharge petition garnered over 218 signatures, allowing lawmakers to push for a floor vote. This move could lead to a decisive vote on whether to eliminate these provisions.
“We have taken on, on a bipartisan basis, something that’s just completely unjust, that has been going on for over four decades,” Graves said. “This is a situation where you have some of the most important occupations, some of the most important contributors to our community, that are being discriminated against.”
The financial cost and legislative hurdles
While the proposed repeal offers some benefits for retirees, it comes with a hefty price tag; the CBO estimates that repealing WEP and GPO could cost nearly $196 billion over the next 10 years. Critics argue that this could accelerate the depletion of the Social Security trust fund, which is already projected to face a shortfall by 2033, potentially leading to reduced benefits for all Social Security recipients.
Opponents, including some within Congress, have raised concerns about how these changes would be funded. Congressman John Larson, who has been a strong advocate for Social Security reform, supports repealing WEP and GPO but insists that such changes should not come at the expense of the trust fund’s solvency. He has proposed a broader plan that includes raising the income cap on taxable Social Security earnings to pay for these adjustments.
How this affects retirees
If the Social Security Fairness Act passes, it will primarily benefit retired public workers who receive pensions from non-Social Security-covered employment. This includes teachers, police officers, firefighters, and other government employees. For surviving spouses of government workers, who have seen their Social Security benefits drastically reduced or eliminated by GPO, this bill could restore a much-needed source of income.
Currently, retirees affected by WEP and GPO often face difficult financial decisions in retirement. For instance, many public workers delay retirement to avoid losing Social Security survivor benefits due to GPO. Repealing these provisions would provide financial relief for those who have been unfairly penalized, allowing them to claim the Social Security benefits they earned throughout their careers.
