The Savings Game: Social Security Fairness Act awaits Biden’s signature
A few weeks ago, I wrote about the Social Security Fairness Act, a bill intended to give relief to individuals who earned a pension from work outside Social Security and who also had also done other work where they paid FICA taxes and therefore earned benefits from Social Security.
In late December, the Senate followed the lead of the U.S. House of Representatives and passed the bill, and President Joe Biden is expected to sign it into law.
This means that, starting retroactively to January 2024, individuals who receive a pension from work outside Social Security and who also have at least 10 years of wages from work covered by Social Security will receive a significant increase in Social Security benefits.
The bill repeals two regulations which reduces benefits for many Social Security beneficiaries. The two provisions are the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
As I indicated in my previous column, when an individual receives a pension from work outside Social Security, the Social Security Administration uses WEP to reduce their Social Security benefit. Now those individuals will receive a higher Social Security benefit.