The law of January 5, 2025, popularly known as the Social Security Fairness Act, was directed toward broadening Social Security benefits for certain classes of public sector employees. In particular, the Act did away with the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) which allowed a pensioner to suffer a reduction or total loss in their benefits because their employment was not covered by Social Security payments.
Who is affected by the repeal of WEP and GPO?
When WEP and GPO are removed, these are the employees that will benefit the most:
- Teachers, firefighters, and police officers in states
- Most Federal employees saving under the Civil Service Retirement System
- Individuals whose employment was covered under a foreign social security system
Previously, these provisions negatively affected approximately 3.2 million people receiving pensions based on their work not covered by Social Security.
Will every public worker see an increase in benefits?
Not necessarily. While the new law has been widely discussed as it pertains to public employees, only those employees whose Social Security benefits were reduced due to WEP and GPO will see an increase. Also, approximately 72% of state and local government employees find themselves in jobs subject to Social Security, meaning they pay the tax and their pensions were never at any point affected by WEP and GPO, that is, they received their full benefits.
How to determine if you’re eligible for increased benefits
If you’re uncertain about your eligibility for increased benefits under the new law, consider the following steps:
- Review your employment history: Determine if you worked in positions not covered by Social Security and received a pension from that employment.
- Check your Social Security statements: Look for any reductions in benefits due to WEP or GPO.
- Contact the Social Security Administration (SSA): Reach out to your local SSA office or visit their official website for personalized information.
When will the benefit increases take effect?
The SSA has initiated the process of adjusting benefits:
- Retroactive payments: The SSA began issuing retroactive payments in February 2025 to those affected by the repeal of WEP and GPO.
- Increased monthly benefits: Beneficiaries can expect higher monthly payments starting in April 2025.
Potential tax implications of increased benefits
With the increase in Social Security benefits, it’s essential to be aware of potential tax implications:
- Taxable income: A higher benefit amount may increase the portion of Social Security benefits subject to federal income tax.
- Tax brackets: The additional income could move some recipients into a higher tax bracket, affecting their overall tax liability.
- Medicare premiums: Increased income might impact Medicare premiums, particularly for those subject to Income-Related Monthly Adjustment Amounts (IRMAA).
It’s advisable to consult with a tax professional to understand how these changes may affect your individual tax situation.
Steps to take if you believe you’re eligible for increased benefits
If you think you’re entitled to higher benefits due to the repeal of WEP and GPO:
- Verify your information: Ensure that the SSA has your current mailing address and direct deposit information. You can check this through your personal “my Social Security” account online.
- Apply for benefits: If you haven’t applied for retirement, spouse’s, or surviving spouse’s benefits because of WEP or GPO reductions, consider filing an application now. The date of your application might affect when your benefits begin and the amount you receive.
- Contact the SSA: For specific questions or to verify your eligibility, reach out to the SSA directly. They can provide guidance tailored to your situation.
By understanding the nuances of the Social Security Fairness Act and taking proactive steps, you can ensure that you receive any benefits you’re entitled to under the new law.
