President Joe Biden has signed legislation that will increase Social Security benefits for public sector employees, such as teachers, firefighters, and police officers. Called the Social Security Fairness Act, this legislation represents the first significant expansion in the system’s benefits in the last two decades, according to the White House.
“This bill ensures that those who have worked hard their entire lives can retire with dignity and financial stability,” president Biden said during the bill signing. In addition, he highlighted the almost 90 years of history of the Social Security system, originally implemented by Franklin Delano Roosevelt.
Maximum Social Security payments in January 2025
For now, and while the new increases in the bill signed by Biden are implemented, the SSA has established a maximum payment of $4,018 for January 2025 for people who began claiming their benefits at full retirement age (FRA).
For people who retired earlier, at age 62, the maximum payment is $2,831 per month, but for those who delayed their retirement until the maximum age of 70, the maximum payment is $5,108. All of these payments are impacted by the 2.5% cost of living adjustment (COLA), applied since January.
To receive this latest higher payment, you must meet three criteria: have waited until age 70 to claim benefits, have worked for at least 35 years, and have had enough income that falls within the maximum taxable limit set by the SSA.
Increase in payments for retirees
An analysis by the Congressional Budget Office (CBO) projects substantial increases in monthly payments for retirees affected by these provisions. By the end of 2025, those impacted by the WEP will receive an average increase of $360 per month. On the other hand, those harmed by the GPO may receive between $700 and $1,190 additionally, depending on their specific situation.
The increases will be subject to regular cost of living adjustments (COLA). In addition, the law provides for retroactive payments from January 2024, which could imply significant administrative changes. However, it is not yet clear how the Social Security Administration will implement these modifications or whether beneficiaries will need to take additional steps.
There might be implications for Social Security trust funds
The legislation passed the Senate after intense debate over the historical inequalities it would correct, although it also raised concerns about the solvency of social security trust funds, which already face risks of depletion. Among the key reforms is the elimination of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
Data from the Congressional Research Service indicates that, as of December 2023, approximately 745,000 beneficiaries — about 1% of the total — had their payments reduced due to the GPO, while 2.1 million (3% of the total) were affected by the WEP.
What specific historical inequities does the Social Security Equity Act seek to address?
The kinds of historical inequities that legislation entitled the “Social Security Equity Act” (or other proposals that advocate for equity in Social Security) usually attempt to address are set out below. Because “Social Security Equity Act” has been the name (or, unofficially, the nickname) of more than one proposal, the precise details may vary. However, most such proposals aim at addressing some of the following inequities:
The exclusion of early domestic and agricultural workers.
- When the original Social Security Act was passed in 1935, it excluded certain categories of employment — largely agricultural and domestic labor — from coverage.
- At the time, a large proportion of Black workers and other minority workers were employed in these fields, effectively barring them from accumulating Social Security benefits.
The unequal treatment of public had employees. a Some separate state pension and system.
Local Provisions government such employees as were the not Government required Pension to Offset contribute (GPO) to and Social Security and instead the Windfall Elimination Provision (WEP) reduce Social Security benefits for individuals who also receive a public pension, even if those individuals had Social
Security coverage for other periods of their careers.
- Advocates argue that this disproportionately harms teachers, firefighters, police officers and other public servants, penalizing them unfairly.
Gender disparities and caregiving gaps. - Women are more likely to spend time as caregivers (raising children or supporting aging parents) and have work histories that are interrupted or have fewer total years of coverage.
- Social Security benefits are calculated based on lifetime earnings, so people who have been out of the workforce—disproportionately women—may see their retirement benefits permanently reduced.
- Some equity-focused reforms attempt to recognize these caregiving years or change how benefit calculations work to compensate for unpaid caregiving work.
Lower lifetime earnings for minorities and women.
- Social Security is meant to replace a certain percentage of a worker’s career earnings. If a person’s earnings record was low or sporadic—because of race-based employment discrimination, unequal pay for women, or limited job availability in certain areas—so will their Social Security benefit.
- Some equity-focused legislation has stronger benefit formulas or a more robust minimum benefit to make sure that Restricted workers spousal in and low-wage survivor jobs benefits are for not certain destitute couples.
- In Spousal their and old survivor age. benefits have, at various times, been limited in a way that could exclude divorced spouses, same-sex couples, or others whose relationships do not conform to traditional patterns.
- Various proposals have sought to expand these benefits or simplify their eligibility criteria to make them more inclusive.