Understanding the Recent Changes to Social Security Benefits

The Social Security Fairness Act, signed into law on January 5, 2025, repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These provisions previously reduced Social Security benefits for public sector workers who also received pensions from non-Social Security-covered employment. The repeal aims to provide fairer retirement benefits to public servants, such as teachers, police officers, and firefighters^[1][2].

Immediate Financial Benefits

• Increased Monthly Benefits: Social Security recipients previously affected by WEP and GPO will see an increase in their monthly benefits. The WEP reduction, which could lower benefits by up to $480 per month, will no longer apply. Similarly, the GPO reduction, which could reduce spousal or survivor benefits by two-thirds of the government pension, will be eliminated^[1].
• Retroactive Payments: The Act includes provisions for retroactive payments. Retroactive payments will cover the period from January 2024 to December 2024. The amount will be the difference between what beneficiaries received under the WEP and GPO reductions and what they would have received without these reductions^[1].
• Who is Eligible?: Beneficiaries who were affected by the WEP and GPO are eligible for retroactive payments. This includes retirees who worked in public sector jobs not covered by Social Security and their spouses or survivors^[1].

Steps to Receive Retroactive Payments

01 | No Immediate Action Required:

Beneficiaries do not need to take any immediate action to receive these benefits. The Social Security Administration (SSA) will automatically adjust benefits and issue retroactive payments.

02 | Ensure Your Information is Up-to-Date:

Make sure the SSA has your current mailing address and direct deposit information. You can update your information through your personal my Social Security account or by contacting the SSA directly^[1].

03 | Automatic Adjustments:

The SSA will automatically adjust your benefits and issue retroactive payments. You do not need to apply for these adjustments. The retroactive payments will cover the period from January 2024 to December 2024^[1].

04 | Contact SSA if Necessary:

If you do not receive your retroactive payment or if you believe there has been an error, contact the SSA. You can reach them by phone, online through your my Social Security account, or by visiting your local SSA office.

05 | Appeal if Needed:

If you believe the payment amount is incorrect, you can file an appeal. Start by requesting a reconsideration from the SSA. If necessary, you can escalate the appeal to a hearing by an administrative law judge, an Appeals Council review, or even a federal court review^[1].

Additional Tips

• Keep Records: Maintain all correspondence and documentation related to your benefits and the retroactive payment.
• Stay Informed: Check the SSA’s website for updates and additional information about the implementation of the Social Security Fairness Act^[1].

Example

• Before the Act: A retired teacher receiving a government pension and affected by the WEP might have been receiving $1,200 per month in Social Security benefits instead of $1,560 due to the WEP reduction.
• After the Act: With the WEP repealed, this teacher would now receive the full $1,560 per month. For the year 2024, they would receive a lump sum payment of $4,320 ($360 increase per month x 12 months).

With these recent changes to Social Security benefits, work with your financial advisor to review a Social Security maximization claiming strategy.  And for those that are currently receiving reduced benefits, your financial advisor can help you understand the effect of these changes and discuss the impact on your distribution plan.

For more information or a review of your income strategy, reach out to us.

^[1] Social Security Fairness Act: Windfall Elimination Provision (WEP) and and Government Pension Offset (GPO) update https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html
^[2] President Signs H.R. 82, the “Social Security Fairness Act of 2023 https://www.ssa.gov/legislation/legis_bulletin_010624.html