Social Security Benefits Update
The Social Security Fairness Act, which was recently passed in January 2025, eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). This change is expected to benefit nearly 2.5 million people in the U.S., particularly those who receive pensions from non-Social Security-covered employment, such as certain government jobs.
Social Security changes by the recent legislation:
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- Windfall Elimination Provision (WEP): Previously, this provision reduced Social Security benefits for individuals who worked in jobs not covered by Social Security and also received a pension from that work. The WEP modified the formula used to calculate Social Security benefits, often resulting in lower benefits for those affected.
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- Government Pension Offset (GPO): This rule affected Social Security benefits for individuals who received a government pension and were eligible for Social Security spousal or survivor benefits. The GPO reduced these benefits by two-thirds of the government pension amount, which could significantly decrease or eliminate the benefits for some individuals.
Impact of the Act:
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- Beneficiaries: The removal of these provisions means that individuals, such as teachers, police officers, and firefighters, who have public pensions, will now receive full Social Security benefits.
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- Financial Impact: On average, individuals can expect their monthly Social Security payments to increase by about $360.
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- Retroactive Application: The changes are retroactive to January 2024, meaning eligible individuals will receive full payments from that date.
This legislative change is a significant step towards ensuring fair treatment for public service workers who have contributed to both Social Security and non-covered employment pensions.
