As Elon Musk sounded the alarm about a potential Social Security collapse due to liquidity issues, President Joe Biden, less than 15 days before leaving office, signed a groundbreaking law increasing Social Security payments for both active and retired public employees. This legislation, known as the Social Security Equity Act, is set to bring significant changes. Discover who will benefit and all the essential details.
“The bill I am signing today is centered around a straightforward idea: Americans who have worked hard all their lives to earn a living honestly should be able to retire with economic security and dignity. That’s the entire purpose of the Social Security system,” stated Biden during a signing ceremony in the East Room of the White House on January 5, 2025.
During the event on Sunday, Biden emphasized, “By signing this bill, we are expanding Social Security benefits for millions of teachers, nurses, and other public employees, along with their spouses and survivors. This translates to an estimated average increase of $360 per month.” This significant boost aims to provide a more secure financial future for those who have dedicated their lives to public service.
The Social Security Fairness Act aims to eliminate the reduction of Social Security benefits for individuals entitled to public pensions from work not covered by Social Security, as explained by the SSA. Here are the two key provisions that have been removed:
Key Changes in the Social Security Fairness Act
1. Elimination of the Windfall Elimination Provision (WEP): The Windfall Elimination Provision (WEP) previously reduced Social Security benefits for individuals who also received pensions from jobs not covered by Social Security, such as certain public sector positions.
2. Government Pension Offset (GPO) Adjustment: The Government Pension Offset (GPO) was responsible for reducing spousal or survivor benefits from Social Security if the individual received a public pension from employment not covered by Social Security.
It is estimated that the Social Security Fairness Act will benefit around three million people who have worked in jobs not covered by Social Security, especially those receiving public pensions. This includes employees of state, local, or federal governments who have their own pension systems instead of contributing to Social Security.
Those who have served in local, state, or federal government roles that are not covered by Social Security, such as public school teachers, police officers, firefighters, federal government employees, judges, and others, often face unique challenges regarding their retirement benefits.
Understanding the Impact on Government Employees
Individuals who receive pensions from jobs where they did not contribute to Social Security—like many government or public service positions—had previously experienced reductions in their Social Security benefits due to the Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO).
For those who combine a public pension with Social Security benefits, under the previous law, their Social Security benefits were frequently reduced. Fortunately, this reduction will no longer occur with the introduction of the new legislation.
Benefits for Spouses and Survivors:
- People relying on Social Security benefits as spouses or survivors
- Previously faced reductions due to the GPO
- Will now see a positive change
The Social Security Administration has announced these important updates. If you receive a public pension and are interested in applying for benefits, you can easily submit your application online at ssa.gov/apply or schedule an appointment. If you have previously applied for Social Security benefits and your benefits are partially or fully compensated, the SSA has stated that there is no need for further action except to ensure that they have your current mailing address and up-to-date direct deposit information.