With the year coming to an end and a new administration set to enter office, the 118th Congress is in a race to the finish line to pass key legislation before it’s too late. One such piece of legislation includes the Social Security Fairness Act, which will level the playing field for public service employees who qualify for Social Security disability but do not receive the full amount they are owed due to their pension.
The act was passed in the House of Representatives with bipartisan support in November 2024. Now, Senate Majority Leader Chuck Schumer is pushing to get the Senate to vote on the matter before time runs out and supporters of the bill have to start over.
In this Article:
- What is the Social Security Fairness Act?
- What Will It Do?
- Support of the Social Security Fairness Act
- Criticism of the Social Security Fairness Act
- Expected Outcome if Legislation is Passed
What is the Social Security Fairness Act?
The Social Security Fairness Act would repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), allowing public service retirees to receive their full hard-earned Social Security benefits.
Federal employers who offer a pension plan may not withhold Social Security taxes from their employees. Government retirees who then receive pensions would not be eligible to receive Social Security benefits because they did not pay into it.
However, some public service workers may have done other private sector work and contributed enough Social Security taxes to be eligible for benefits. In this case, the WEP and the GPO would reduce the amount the employee or their spouse can receive- benefits they rightfully earned — simply because they are receiving a pension.
For example, a teacher may have worked a private sector job for several years before teaching or may have worked another part-time job for which they would have been paying Social Security taxes each paycheck. But WEP and GPO would limit the amount they can receive from Social Security benefits by up to 60%.
What Will It Do?
The Social Security Fairness Act, proposed by Louisiana GOP Representative Garret Graves and Virginia Democratic Representative Abigail Spanberger, has been decades in the making.
Repealing WEP would impact 2 million Social Security beneficiaries and for the GPO, nearly 800,000 retirees.
For instance, under the GPO, a spouse who receives a monthly pension of $2100 would see two-thirds of that deducted from their Social Security benefits. So if they receive $1500 in Social Security benefits, $1400 (or two-thirds) would be deducted, leaving them with only $100/month in Social Security benefits.
Under the Social Security Fairness Act, the same person would receive the entire $1500 of Social Security spousal benefit.
Support of the Social Security Fairness Act
The Social Security Fairness Act seems to have bipartisan support in the House of Representatives and the Senate. Some likened the WEP and the GPO to theft, as it essentially robbed public service employees of the benefits they put hard work into earning.
Supporters also fear that this is the Act’s best chance at getting passed before a republican majority Senate enters office, in which the path to victory appears less clear.
Criticism of the Social Security Fairness Act
While some believe the Social Security Fairness Act would right a wrong, others fear that the cost of the bill will be devastating to the underfunded Social Security trust fund, which is due to go bankrupt in 2034. Some Congress members who remain critical of the new law fear that it will accelerate the insolvency of the Social Security trust fund, as it will add nearly $200 billion dollars to the program over the next 10 years.
Other members of Congress believe that the WEP and GPO should be eliminated more responsibly, considering retirees in every state, as well as future retirees who may not have any benefits to rely on if the trust fund goes bankrupt.
Expected Outcome if Legislation is Passed
On December 18, 2024, the Senate voted to proceed to a final vote before the end of the year. If enacted, the Social Security Fairness Act would give millions of Americans access to benefits they couldn’t receive previously.
If you are a public sector retiree or spouse affected by this legislation, consider contacting an attorney about your benefits application. A Social Security attorney would know how to navigate the new legal territory if the law is passed.
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