Starting in April 2025, nearly three million Social Security beneficiaries across the United States will experience an increase in their monthly benefits.
This adjustment comes as a result of the Social Security Fairness Act, signed into law by former President Joe Biden just before leaving office.
This new legislation will primarily benefit retirees who had previously seen their benefits reduced due to two provisions that long affected their payments.
Key Changes Under the Social Security Fairness Act
The Social Security Fairness Act brings significant changes by eliminating two long-standing provisions that had reduced benefits for some beneficiaries. These provisions were:
Windfall Elimination Provision (WEP)
The WEP impacted approximately two million retirees who worked in public sector jobs where they did not contribute to Social Security. Although these workers were eligible for Social Security benefits from other jobs, the WEP significantly reduced their benefits.
With the new law, this provision has been eliminated, allowing these retirees to receive higher Social Security payments.
Government Pension Offset (GPO)
The GPO affected around 800,000 individuals, mainly widows and widowers who were receiving a pension from a public sector job where they did not pay into Social Security.
Prior to the law’s enactment, this provision could reduce survivor benefits, and in some cases, it nearly eliminated them entirely. The elimination of the GPO will result in higher survivor benefits for these individuals.
How Will Social Security Payments Be Affected?
Starting in April 2025, the Social Security Administration (SSA) will implement the new adjustments. This means that many beneficiaries who had their payments reduced under the previous rules will now receive higher amounts. However, the exact increase will vary depending on several factors, such as:
- The type of Social Security benefits the individual receives
- The work history of the beneficiary
- Whether the individual is receiving benefits due to their own work record or as a survivor
Additionally, beneficiaries who were affected by these provisions before 2024 will also receive a retroactive payment. This one-time retroactive check will be distributed in March 2025 and will cover the missed payments from the time the law took effect.
Example of the Impact on Benefits
To better understand how this change will affect payments, consider the following example provided by the SSA:
- Scenario: A retiree worked in a public sector job for many years and earned a $3,000 pension. They were also entitled to $2,100 in Social Security survivor benefits from their deceased spouse.
- Before the Change: Under the old rules, two-thirds of the pension amount was deducted from the survivor benefits, leaving the retiree with only $100 in Social Security payments.
- After the Change: With the removal of the Windfall Elimination Provision and the Government Pension Offset, the retiree will now receive the full $2,100 in Social Security benefits, which is a significant improvement.
Processing and Retroactive Payments
The SSA has confirmed that most beneficiaries will automatically see these changes in their April payments.
However, for more complex cases, the process may take longer. Beneficiaries will receive a notice in the mail that will detail their new payment amounts and any potential retroactive payments they are owed.
The Social Security Fairness Act marks a significant step in correcting long-standing issues related to public sector retirees and surviving spouses who were unfairly impacted by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).
The April 2025 adjustments will provide financial relief to nearly three million beneficiaries, ensuring they receive the full amount of benefits they are entitled to. With retroactive payments set for March 2025, many individuals will also receive compensation for past reductions. The SSA has committed to processing most changes automatically, with mailed notices ensuring transparency and clarity.
FAQs
When will the Social Security payment increase take effect?
The increase in Social Security payments will begin in April 2025.
Who is affected by the elimination of the WEP and GPO provisions?
Approximately two million retirees who worked in public sector jobs and 800,000 widows/widowers who received pensions from public sector jobs are most impacted by these changes.
Will I receive a retroactive payment for the missed benefits?
Yes, beneficiaries affected by the reduction in payments before 2024 will receive a one-time retroactive payment in March 2025.
How will I know if my payment has increased?
The SSA will send a notice by mail to all beneficiaries, detailing the new payment amounts and any retroactive payments.