On January 5, the President signed into law H.R. 82, the Social Security Fairness Act, which will increase social security benefits for almost 3 million retirees. The law repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), two longstanding provisions of the Social Security Act that have reduced or eliminated benefits for certain retirees and their spouses, including teachers, firefighters, police officers and others who receive public sector pensions.
The WEP reduced the Social Security benefits of retired federal workers and other public servants who spent a portion of their career in the private sector in addition to a federal, state, or local government job where Social Security was not intended as an element of their retirement income. The provision impacted roughly 2 million individuals. According to the Congressional Budget Office, eliminating the WEP will increase payments for affected beneficiaries by an average of $360 per month.
The GPO impacts Social Security payments for the spouses and surviving spouses of individuals who receive a government pension. The provision affects about 750,000 beneficiaries nationwide. Ending the GPO will raise monthly benefits by an average of $700 for 380,000 recipients with benefits based on living spouses. And for the 390,000 surviving spouses receiving widow or widower benefits, the increase would average $1,190.
These payments will be retroactive to January 2024.
While this is a big win for many retirees who have had their social security checks reduced by these provisions, the enactment of this bill is expected to increase the deficit by almost $196 billion over the next decade, pushing the Social Security Trust Fund to insolvency six months earlier than the currently estimated year of 2038.
