Starting in April, nearly three million Social Security beneficiaries in the United States will see an increase in their monthly payments due to the elimination of two provisions that had long reduced their benefits. This adjustment comes with the implementation of the Social Security Fairness Act, a law enacted by former President Joe Biden shortly before leaving office.
The removal of these regulations will mainly impact retirees who previously worked in public sector jobs where they did not contribute to Social Security and, under previous rules, saw significant reductions in their checks. The Social Security Administration (SSA) has confirmed that, in addition to increased payments in April, many will also receive retroactive payments in March.
What Changes with the Social Security Fairness Act
The new law eliminates two key provisions:
- Windfall Elimination Provision (WEP): This affected approximately two million retirees who worked in the public sector without paying into Social Security but were also entitled to benefits from other jobs where they did contribute. This provision reduced their payments, an issue that is now resolved.
- Government Pension Offset (GPO): This impacted 800,000 beneficiaries, primarily widows or widowers receiving a pension from a public sector job where they did not pay Social Security taxes. The rule significantly reduced survivor benefits, in some cases almost eliminating them entirely.
How Payments Will Be Affected and Who Will Receive More Money
The SSA has confirmed that, with the elimination of these provisions, beneficiaries will receive adjustments to their payments starting in April. However, the exact amount will vary based on factors such as work history and the type of benefit received.
Additionally, many beneficiaries affected by these reductions before 2024 will receive a one-time retroactive check in March, covering the amounts they missed out on since the law took effect.
To illustrate the impact of this change, the SSA provided an example: A retiree with a $3,000 pension from a public sector job who was also entitled to $2,100 in Social Security benefits from a deceased spouse. Under the previous rule, two-thirds of their pension were deducted from their survivor benefits, leaving them with only $100 in Social Security payments. With the new law, this reduction is eliminated, and they will receive the full amount.
The SSA has assured that most payments will be processed automatically but has warned that some more complex cases may take longer to resolve. Beneficiaries will receive a mailed notice detailing their new payment amounts and any potential retroactive payments.