Meritage Periodical January 2025

Prompting critical thinking and conversations around issues in our industry.
Not intended as personal financial advice.

The Social Security Fairness Act

The Social Security Fairness Act, H.R. 82, was signed into law on January 5, 2025. This act serves to repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) reductions to social security benefits due to a government pension.

For those not familiar with WEP and GPO, they have been part of law for over forty years. Both served to reduce Social Security benefits for those who were receiving government pensions. The WEP applies to most people who receive both a pension from noncovered work and Social Security benefits based on fewer than 30 years of substantial earnings in covered employment. The GPO reduces the Social Security spouse’s or widow(er)’s benefits of most people who also receive a pension based on federal, state, or local government employment not covered by Social Security. These rules affected former police officers, firefighters, teachers, certain nonprofit employees, and other types of government workers.

These reductions have been substantial for people with careers in both private and public employment, as well as their spouses. For perspective, the GPO reduced Social Security benefits by two-thirds of the government pension amount. For someone receiving a $1,500/month government pension, their Social Security benefits would be reduced by $1,000/month.

While the Social Security Fairness Act was just signed, it is applicable to benefits payable after December 2023. Though the Social Security Administration (SSA) is helping some affected beneficiaries now, the SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits.

If you have previously filed for Social Security benefits and they are partially or completely offset, you do not need to take any action at this time except to verify that the SSA has your current mailing address and direct deposit information if it has recently changed. Most people can do this online with their personal my Social Security account without calling or visiting Social Security. Visit www.ssa.gov/myaccount to sign in or create your account.

If you have not previously filed for Social Security benefits, are receiving a public pension and are interested in filing for benefits, you may file online at ssa.gov/apply or schedule an appointment.

There will also be updates on implementation of the Social Security Fairness Act on ssa.gov.

As always, if you have questions about your personal situation, we are happy to help.