Retired public employees like teachers, firefighters, and police officers may soon receive higher Social Security benefits, thanks to a new law.
The Social Security Fairness Act, signed by then-President Joe Biden on January 5, removed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).
These policies reduced or eliminated Social Security payments for over 3.2 million people who received public pensions from jobs not covered by Social Security taxes.
Who Will Benefit from the Change?
This change mainly benefits retired public workers whose jobs were not covered by Social Security, like some state teachers, police officers, firefighters, and federal employees under the Civil Service Retirement System.
However, it won’t affect all public workers because about 72% of state and local employees are covered by Social Security and already pay into the system. Those workers won’t see any increase in their benefits.
How Much Will Payments Increase?
The Social Security Administration (SSA) explained that the increase in monthly benefits will vary depending on the type of benefit and the amount of the person’s public pension.
Some people might see only a small increase, while others could receive over $1,000 more each month.
Retroactive Payments and Monthly Increases
SSA announced that retroactive benefits would be paid, and monthly payments would increase for people affected by WEP and GPO policies.
The change is retroactive to January 2024 and impacted beneficiaries will receive a one-time payment by the end of March.
Notices and Payment Timeline
SSA will mail two notices to affected beneficiaries. The first notice will confirm the removal of WEP or GPO, and the second will show the new monthly benefit amount.
Retroactive payments might arrive before these notices. SSA advises beneficiaries to wait until April to ask about their retroactive payment, as payments will be processed throughout March.
They should also wait until after receiving their April payment before inquiring about their new monthly amount.
Read More:
- The Reality of Social Security: Why It’s Risky to Rely on It Alone for Retirement
- Social Security Administration Offers Voluntary Buyouts Amid Looming Layoffs
Medicare Premium Adjustments
For those who have Medicare premiums deducted from their Civil Service Retirement System annuity and then apply for Social Security benefits, their premiums will now be deducted from their monthly Social Security payments.
Financial Impact on Social Security
The Committee for a Responsible Federal Budget stated that the Social Security Fairness Act would add $196 billion to the federal deficit over the next decade.
It is also expected to hasten the insolvency of Social Security’s main trust fund by six months.
This new law brings significant changes to Social Security payments for retired public workers, offering higher monthly checks and retroactive payments. Beneficiaries should stay informed about the timeline and impact on their payments.
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