As you are probably aware, there’s a major benefit increase coming for around 2.1 million recipients. Cost around 200 billion over 10 years.

Who’s the lucky recipients? Mostly  State workers. They pay into their own retirement plan, not social security. However many are duel entitled because they also worked at least 10 years (40 credits) under social security.

For those duel entitled, 2 reductions apply:

1. WEP – windfall elimination provision

The WEP reduced the workers social security benefit by as much as $500 per month or half their social benefit,  whichever is lower.

2. GPO – government pension offset

Reduces spousal and widows benefits by 2/3 of the workers non-social security pension. For example, if a state teacher has a $3,000 per month pension, and their spouse dies, their widows benefit would be reduced by $2000 (2/3 of 3000). For many, this provision eliminates 100% of the widows benefit.

The Social Security Fairness Act was sign the into law by President Biden on January 6.  The Act repeals the Windfall Elimination Provisions (WEP) and Government Pension Offset (GPO) for payments payable in January of 2024 forward.

These changes will take time to implement while the Social Security Administration updates its systems to conform to the legislation.  New enrollees to Social Security may be paid full benefits during the transition.  However, those who have already filed for benefits and are impacted by either provision will not see an immediate change to their benefit amounts.  When system updates are completed, impacted beneficiaries will receive a retroactive payment for any increase in benefits that would have been payable back to January of 2024.

In addition to tech challenges, the act is ripe for legal challenges, so we’ll see how long it takes to actually implement.

To learn more about the Fairness Act click here.