On January 5, President Biden signed the Social Security Fairness Act that repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) provisions of Social Security, retroactive to January, 2024.

These provisions affected individuals (and beneficiaries) who receive a pension from a job that was exempt from Social Security tax withholding, and who also worked for at least 10 years in jobs for which those taxes were withheld.

WEP

WEP impacts certain public sector workers at the federal, state and local levels whose retirement systems are not part of the Social Security system. This often includes police officers and firefighters.

When you work under Social Security, your benefit is based on the highest-paid 35 years you worked. For the years you worked outside of Social Security, your earnings are given a value of zero. This has the impact of reducing your Social Security benefit substantially when compared to a worker who did no work outside Social Security.

Naturally, if a worker receives a lower Social Security benefit, that also impacts the spousal benefit and survivor benefit based on his/her work record as well. So, as a result of WEP provisions, spouses of workers who receive a pension from work exempt from Social Security have also been receiving lower benefits than spouses of workers who do not.

Under the provisions of the Social Security Fairness Act, both workers and their spouses are entitled to higher benefits.

GPO

GPO provisions impact spousal benefits and survivor benefits of the workers who receive pensions from work outside Social Security. GPO reduces these benefits by two-thirds of the pension that a worker receives from work outside Social Security. In many cases, the reduction can eliminate spousal benefits and survivor benefits completely. For example, assume you receive a pension of $1,500/month; your spousal benefit would be reduced by two-thirds, or $1,000/month. So, if you would be entitled to a $1,200/month survivor benefit, you would only be entitled to a benefit of $200/month. If your spousal benefit or survivor benefit was $1,000/month, or less, because of GPO provisions, you would not be entitled to any benefit.

As a result of the Social Security Fairness Act, there will no longer be a two-thirds reduction in spousal benefits or survivor benefits.

According to the Congressional Research Service (CRS), 3% of Social Security recipients had been impacted by WEP; the estimate is 2.1 million recipients. By December 2025, CRS estimates that monthly payments on average would increase by an average of $360/month; by December 2033, the increase would be an average of $460/month.

CRS estimates that 1% of Social Security recipients, or 745,679, would be impacted by GPO on average. Spousal benefits would increase by $700 on average by December 2025, and by $800 by December 2033; for survivor benefits, the benefits would increase by $1,190 on average by December 2025, and by $1,520 by December 2033.

Retroactive effect

The law specifies that full payment of the increases associated with the repeal of these provisions will be retroactive to January 2024. (My assumption is that no additional benefits will be paid for benefits lost prior to January 2024.)

As of now, the Social Security Administration (SSA) has not established an implementation plan. SSA has indicated that if you have previously filed for a Social Security benefit, and SSA already has your mailing and deposit information, no action is required now on your part.

My recommendation: After the SSA has indicated it has developed an implementation plan, I recommend that you establish an appointment either by phone or in person at a local SSA office to ensure that the agency has up-to-date information regarding your personal information and your expected benefits.

Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com.