The recent approval of the Social Security Fairness Act in Congress marks a significant step forward for retirees in the United States. This new legislation aims to address gaps in the current system that prevent some retirees who receive government pensions from fully accessing Social Security benefits.
Thanks to a legislative process known as a “discharge petition,” which allows a bill to move from committee to the full floor of Congress without needing a prior report, the measure has advanced rapidly. If the bill is passed, millions of retirees could see an increase in their monthly payments.
New boost for Social Security benefits for retirees
This legislation has been spearheaded by two lawmakers from opposing parties: Democrat Abigail Spanberger and Republican Garrett Graves. Together, they managed to gather 218 signatures to move the bill forward, with 47 coming from Republicans and 171 from Democrats. With this support, the bill is now set to be voted on by the full Congress in just a matter of days.
In a joint statement, Spanberger and Graves emphasized the importance of this legislative milestone, noting that it is the first time since 2015 that a measure related to Social Security has moved forward using this type of procedure.
The impact of the Social Security Fairness Act
One of the main components of this new legislation is the removal of two provisions that have sparked debate for decades: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These rules currently limit the benefits that some retirees can receive, particularly those who worked in the public sector and did not pay into the Social Security system.
At present, it’s estimated that about two million Social Security beneficiaries are affected by the WEP, while roughly 800,000 retirees are impacted by the GPO. These provisions reduce the payments that these individuals should receive, despite having worked for years and contributed to other pension systems.
How does the Windfall Elimination Provision (WEP) affect retirees?
The Windfall Elimination Provision (WEP) reduces Social Security benefits for individuals who also receive pensions from jobs where they did not pay into the Social Security system. This applies to many retirees who worked for federal, state, or local government agencies and contributed to other retirement systems, such as the Civil Service Retirement System (CSRS).
The original intent behind the WEP was to prevent individuals from receiving what was perceived as a “double benefit” — that is, collecting a full pension from their public-sector job while also receiving full Social Security benefits. However, critics argue that this rule unfairly penalizes many retirees who contributed to both systems, only to see their Social Security payments reduced.
The elimination of the WEP would bring significant relief to many retirees who have seen their benefits cut for years. For those who began working before 1985 in jobs where they were not required to pay into Social Security, the WEP has led to substantial reductions in their monthly payments.
What is the Government Pension Offset (GPO)?
The GPO primarily affects retirees who receive Social Security benefits as spouses or survivors. This provision reduces the payments these individuals receive if they also collect a pension from a government job where they did not contribute to Social Security. Around 800,000 people, mostly retired federal, state, or local government workers, are currently affected by the GPO.
By eliminating this provision, spouses and survivors who are entitled to joint benefits would be able to receive the full amount they are due without the current reductions. This would be particularly beneficial for public sector employees who didn’t have the option to pay into the Social Security system during their working years.
How much will this increase in benefits cost?
If the new legislation is approved at the start of fiscal year 2025, the Congressional Budget Office (CBO) has estimated that it will cost approximately $196 billion over the next decade.
This figure reflects the economic impact of removing the GPO and WEP, as well as the resulting increase in benefits for millions of retirees.
Despite the cost, both Spanberger and Graves have highlighted that this is a matter of fairness for retired workers, many of whom have waited over 40 years for Congress to address this issue. Retirees in states like Virginia, Louisiana, and elsewhere have been particularly vocal in their support of this reform, seeking the benefits they believe their work has earned them.
What’s next for retirees?
As this measure moves forward in Congress, retirees should keep an eye on the potential final approval of the law. If passed, millions of beneficiaries would see a significant increase in their Social Security payments, especially those who have been impacted by the WEP and GPO provisions.