President Biden signed legislation Sunday expanding Social Security benefits for millions of retired public service workers, enabling teachers, firefighters, police officers and others who receive pensions to also receive full benefits each month. What is the Social Security Fairness Act and what impact will it have on Social Security benefits in 2025?
In 1935, President Franklin D. Roosevelt signed the Social Security Act, a federal safety net for elderly, unemployed, disabled and disadvantaged Americans, into law. The law stipulated payment of benefits to retirees over age 65 based on lifetime payroll tax contributions.
But until 2025, a later provision of the law, enacted in the 1970s, prevented public service workers who receive pensions from also receiving full Social Security Benefits. A law to amend the much-maligned provision has been in the works for years.
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On December 21, 2024, the Senate and the U.S. House of Representatives passed the bipartisan Social Security Fairness Act (SSFA) that should boost the benefits of millions of Americans. President Biden signed it into law on Sunday.
The new law is expected to result in an average monthly increase of $360 for more than 2.5 million recipients of Social Security. President Biden also stated that the beneficiaries will be compensated retroactively for 2024, receiving a lump sum worth thousands to make up for the lower benefits paid out last year.
What is the Social Security Fairness Act?
The Social Security Fairness Act of 2023, also known as H.R. 82, amends Title II of the Social Security Act by repealing the Government Pension Offset (GPO), enacted in 1977, and the Windfall Elimination Provision (WEP), enacted in 1983,
The WEP reduces Social Security benefits for workers who receive government pensions not covered by Social Security. The GPO is similar to WEP except that it affects the spousal and survivor benefits of someone receiving a non-covered pension.
Together, the GPO and WEP have historically prevented nearly three million former public service workers who receive pensions, like teachers, firefighters, police officers, postal workers and others, along with their spouses, from getting their full Social Security benefits each month.
The thought behind the two provisions was that if someone received a government pension they shouldn't also receive Social Security benefits under the same formula as a retiree with no similar pension. The Social Security Fairness Act repeals both measures.
Who is impacted by the Social Security Fairness Act?
More than 51 million retired workers received a Social Security check in August 2024.
The Social Security Fairness Act is meant to expand Social Security benefits for the nearly three million Americans who received public pensions. Workers impacted include those who worked in a public sector job and/or received a pension through public employment.
This provision will impacts state and local government employees who have worked a job(s) that required employees to pay into Social Security. Former public service workers should see a boost in their benefits now that the bill is signed into law.
Politics and the Social Security Fairness Act
The law has been long in the works, with the Senate first holding hearings on the policies in 2003. The U.S. House of Representatives ultimately voted to pass the Social Security Fairness Act on November 12, 2024. On Saturday, December 21, 2024, just after midnight, H.R. 82 passed the Senate. It headed to the White House on Sunday, Jan. 5, 2025, and was signed into law by President Biden.
The years of debate related to concerns about how a repeal might impact Social Security's waning funds. Democrats uniformly voted for the measure to pass. However, Republicans in the Senate were split evenly, with 20 voting for the bill and 20 voting against it. Republicans who spoke out against the bill worried that the measure would accelerate Social Security’s projected insolvency by about six months. Senate supporters of the bill argued that while the trust fund shortfall must be addressed, the bill shouldn’t be delayed at the expense of retirees with public pensions.
After approval in the U.S. House in November, Senate approval came at about 12:15 a.m. on Saturday, December 21. According to the Social Security Fairness Act text, now that the bill has been signed into law, the legislation's effective date will apply to benefits payable for months after December 2023.
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